Experts say securities price downward trend will continue

Financial experts believe that the securities market correction period has not finished yet, and that the securities prices may continue decreasing in the time to come, despite the good factors which back up the market recovery.

The stock market unexpectedly witnessed the sharp fall of the VN Index in the last trading session of the previous week. The VN Index lost 9 points and dropped to 440 points. Meanwhile, the HNX Index of the Hanoi bourse also decreased by 0.86 points to 74.58 points. As such, the VN Index, the main thermometer of the Vietnamese stock market, only increased in one trading session last week, while it dropped by 17 points, or 4 percent.

The domestic market wheeling in accordance with the world’s market

Finance experts believe that the domestic market is being influenced by the changes in the world’s economy and the investors’ caution amid the domestic macroeconomic performance. After the stock market witnessed continued stock price rises, investors have become more cautious when buying stocks.

General Director of SJC Securities Company, Huynh Anh Tuan, commented that the stock market last week saw the continued correction, but it seems that the process has stopped. However, in the last trading session of the last week, due to the negative impacts of the world’s market, the Vietnamese market saw sharper falls.

The global stock markets have been decreasing dramatically due to bad news and the worries which have been raised about the returning of the second global economic crisis.

Le Dat Chi, MA, Lecturer of the HCM City Economics University, the domestic macro economy still does not show positive factors that back up the market, except the consumer price index (CPI) increase slowdown in September to 0.82 percent. Meanwhile, the dong/dollar exchange rate fluctuation, the biggest worry for investors, has become more evident.

After a series of trading sessions which witnessed impressive stock index increases, the investors, who could gain some successes, have decided to “stop and wait”. Meanwhile, other investors still keep the “Wait-and-see” attitude. Therefore, the stock market still cannot help recover strongly.

The future unpredictable

When asked if the current downward trend will continue and how much longer it will continue, Chi said that the high inflation may return if the State Bank of Vietnam decides to pump more money to slash interest rates. Meanwhile, the drastic measures taken by the State Bank to force the interest rates down are still awaiting effects.

Analysts believe that the gold and the dollar prices prove to be the main challenges for the stock market for now.

The gold prices have been fluctuating all the time, while the domestic prices are always higher than the world’s prices (now the gap between the domestic and the world’s price has been widened to 4 million dong per tael). Meanwhile, the dollar price in the black market has been increasing, thus putting a hard pressure on the efforts to stabilize the exchange rate towards the end of the year.

Chi said that he can see the sighs showing that the 438 point level for VN Index and 74 point level for HNX Index prove to be not the last resistance thresholds. If the thresholds are broken, the VN Index would drop to 416 points, while HNX Index to 70 points.

According to FPT Securities, this week may not see big changes in the macro economy; therefore, the short term investors can consider disbursing money when the VN Index enters the support area of 430-435 points and selling when the VN Index marches towards the 470-475 point area.

Source: NLD

Tags: vietnam stock, Vietnam stock market, VNindex