Bullish momentum expected to remain

An investor watching stock movements on a digital board. — Photo baochinhphu.vn

HÀ NỘI — The Vietnamese stock market has witnessed an impressive trading week with listed companies starting to disclose their fourth quarter business results, while an extraordinary National Assembly session has provided positive supportive information.

Last week, the VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) closed Friday at 1,181.5 points, and the HNX-Index on the Hà Nội Stock Exchange (HNX) was last traded at 229.48 points. 

For the week, the former gained 2.32 per cent but the latter declined by 0.36 per cent.

The liquidity on HoSE reached VNĐ70.34 trillion (US$2.9 billion), down 28.4 per cent from the previous week. Meanwhile, the liquidity on the HNX decreased by more than 35.8 per cent to just over VNĐ5.8 trillion.

Foreign investors increased their trading activities and returned to net purchasing after two weeks of net selling. They net bought VNĐ586.2 billion on HoSE while net selling VNĐ38.71 billion on the northern exchange. 

According to experts from VNDirect Securities Corporation, the recent passage of two long-awaited and significant laws, the amended Land Law and the amended Law on Credit Institutions by the National Assembly is serving as a catalyst for the market's upward trajectory.

As a result, the banking sector, particularly State-owned commercial banks like BIDV (BID), VietinBank (CTG) and Vietcombank (VCB), continues to lead the rallies. 

Positive momentum also spread to other stock groups such as retail, steel and real estate industries, indicating a more favourable outlook.

This positive development was a notable improvement compared to the previous trading week, while foreign investors have had a consistent trend of net buying in recent sessions. 

Generally, the market's upward momentum remains intact with no signs of a reversal.

Moreover, listed companies start releasing their business performance of the fourth quarter of 2023 with promising results, which will help sustain the market's momentum and facilitate the rotation of funds among different stock groups.

Investors who may have missed the recent rallies of the banking industry can consider gradually allocating their investments into stock groups that have supportive information but have not experienced significant price increases yet. 

These groups include real estate stocks that benefit from the amended Land Law and securities stocks with positive fourth quarter business performance, said VNDirect. 

Meanwhile, experts from Saigon-Hanoi Securities JSC (SHS) said that in the short term, the market is moving positively and has formed a new short-term uptrend. 

However, the VN-Index is expected to encounter psychological resistance around the 1,200-point level and may experience fluctuations. A strong resistance level is anticipated around the 1,250-point range.

From a medium-term perspective, SHS maintains the viewpoint that after a strong recovery phase, the market is forming a new consolidation phase. 

The securities firm expects the VN-Index to range between 1,150 and 1,250 points. Due to the wide fluctuation range, the formation of a new consolidation phase is expected to take some time.

SHS said that the current macroeconomic situation in the country remains stable, and the newly enacted amended laws will require additional detailed guidelines and time to be implemented and evaluated for effectiveness. As a result, from a medium-term perspective, it is deemed appropriate for the market to seek a balance and accumulate during this period of consolidation.