VN-Index could encounter shaking pressure

 The VN-Index would encounter shaking pressure at the 1,110 (/-5) points

The market started Christmas trading with a positive gap of 3.7 points. Buying demand then picked up as large-caps recovered and gained well, such as MSN (5.4%), HPG (1.5%), SAB (0.8%), VCB (1.1%) and CTG (1.7%). These stocks added about 3.5 points in total to the index, supporting the market’s rise today. Furthermore, foreign net sales dropped to VND134.9bn (US$5.5mn), down 72% from the previous session.

Industrial Goods & Services performed the best today, with a 1.3% increase. Due to the Suez Canal blockage, freight rates and oil prices were expected to keep rising in the short term. As a consequence, transportation stocks such as HAH (3.9%), VOS (6.3%) and PVT (2.6%) maintained their strong upward trend.

However, Maersk announced that it will resume shipping in the Red Sea routes, which will ensure the volume and frequency of cargo traffic and trade from the EU to Asia. Moreover, India’s Adani Group plans to invest US$10bn in Vietnam (Details in our Macro Note), especially in seaports, green energy, power transmission, etc. Based on that, GMD (6.9%) hit its ceiling level at the start of the afternoon session.

PDR (2.8%) cleared their outstanding bond debt. They spent VND421.2bn (US$17.4m) to buy back the whole bond lot PDR12101 and VND37.5bn (US$1.5m) to buy bond lot PDR12204 before maturity. Clearing bond debt helped PDR lower its D/E ratio to 0.22 times, significantly below the average level of Vietnam’s real estate industry.

All sectors rose today, led by Energy (2.3%), Industrials (2.1%), and Consumer Staples (1.8%). Top index movers included VCB (1.1%), MSN (5.4%), GAS (2.4%), VHM (2.2%), and BID (1.8%). Top index laggards consisted of GVR (-0.3%), SVC (-5.2%), PGD (-2.4%), EIB (-0.3%), and S4A (-4.9%). Top three major put-through transactions were VHM with 29.2m shares (VND1255.1bn), EIB with 17.6m shares (VND324.6bn), and KDC with 2.4m shares (VND148.6bn).

Foreigner’s net sold on HOSE to the amount of VND80.8bn, while net bought on HNX to the amount of VND4.7bn. They mainly bought CTG (VND46.6bn), FUEVFVND (VND42.8bn), and BID (VND36.1bn); and mainly sold HPG (VND106.1bn), FUEVFVND (VND86.0bn), and VNM (VND55.1bn).

The creation of a long-legged doji candlestick pattern, according to KB Securities Vietnam (KBSV), indicated that while the two sides' trading condition is still displaying symptoms of struggle, the demand partially reflects a more proactive desire to engage at low price/support zones. Nevertheless, the rising momentum is not very compelling because industry groups and individual companies within industry groups are differentiating themselves, and liquidity is still kept at a low level.

As a result, KBSV anticipated that the VN-Index would encounter shaking pressure at the 1,110 (/-5) points vicinity of the near resistance. It is advised that investors refrain from pursuing during the initial stages of a recovery and instead think about flexible 2-way buying and selling in small amounts at the upcoming support and resistance levels, particularly the lower limit  of 1,080 (/-15) and and around 1,110 (/-5) points.