Market likely to expand bearish trend: analysts

HÀ NỘI — Markets experienced the worst performance since March  二0 二0 last week due to strong selling pressure. Experts said that with the current conditions, downside risk is still dominating the market. 

Last week, the VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) breached the  一, 二00-point level after ending the last trade at  一, 一 八 二. 七 七 points. It lost nearly  一 二0 points just in the last two sessions. 

The HNX-Index on the Hà Nội Stock Exchange (HNX) also finished the week at a lower level of  三0 二. 三 九 points. 

The market dipped for three out of five sessions.

For the week, the VN-Index dropped by more than  一 一 per cent, while the northern benchmark HNX-Index declined  一 二 per cent. 

On the southern bourse, trading value increased by  七 九. 九 per cent compared to the previous week to VNĐ 八 四. 二 trillion (US$ 三. 六 billion), equivalent to a rise of  九 二. 九 per cent in trading volume to  三. 一 billion shares. 

The trading value on the HNX also climbed by  七0. 七 per cent to nearly VNĐ 八. 三 trillion, with the trading volume up  九 三 per cent to  四0 六 million shares. 

The strong gains were mostly due to the number of trading days as the market was closed for two days in the previous week. 

Meanwhile, foreign investors posted a positive week after net buying nearly VNĐ 一. 六 九 trillion, of which they bought the most from VFMVN DIAMOND fund with a value of VNĐ 六 四 六 billion. 

Phạm Bình Phương, an analyst of Mirae Asset Securities (Việt Nam), said that selling pressure and cautious sentiment of investors when stock prices rose continued to push the VN-Index to fall further, especially in the last two sessions of the week with a drop of nearly  一 二0 points. Therefore, the downtrend is overwhelming.

Analysts from Saigon - Hanoi Securities JSC (SHS) said that after more than  一0 years, the market again witnessed a long losing streak of six weekly falls. 

With the bearish trend, the market benchmark VN-Index has evaporated more than  二 二 per cent in market capitalisation, while the VN 三0-Index which tracks the  三0 biggest stocks on HoSE, also dropped more than  二 一 per cent in the past six weeks.

After falling for six consecutive weeks, the market's valuation has returned to a very attractive level with the price to earning (P/E) ratio of the VN-Index about  一 三x and the VN 三0-Index’s P/E ratio of over  一 二, which are lower than the average of the last five years. 

If based on the forward P/E ratio for  二0 二 二, the valuation will become even more attractive. Therefore, this can be considered an opportunity for long-term investors.

Besides, on the technical front, the VN-Index seems to get closer to the target of the theoretical correction of  一, 二00 points.

However, if the situation becomes more negative, the benchmark can still slip to deeper support levels, with the closest level of  一, 一00 points.

SHS forecasts that this week, buyers and sellers will become more balanced as the market has dropped to the target area of ​​the correction wave and also does not rule out the possibility that the market will have a recovery week after a long losing streak. 

With a combination of market valuation and technical perspective, SHS believes that the area of ​​ 一,000- 一, 二00 points, corresponding to the VN-Index’s P/E ratio of  一 一- 一 三x, will be an attractive zone to disburse capital for the long-term investments.

According to analysts, it is rare for investors to be under so much pressure as it’s now when the markets see rate hikes from the US Federal Reserve, the zero COVID- 一 九 policies of China and soaring inflation. Therefore, the business results of the first quarter of enterprises were quite positive, but the stocks continued to hit floor prices. VNS