20160711_BSC_Vietnam Daily Review_EN_Risk ahead

Highlight

A day before the announcement of international arbitration ruling on the case of the Philippines against China over the East sea issue, the market had a sharply fall in the afternoon due to profit taking over all sectors, particularly in the recently rallied stocks. VN-Index was up after touching 665 pts in the morning session then fell and went sideways before falling sharply in the afternoon session as investors decided to take profit in order to avoid political risks which may follows conclusions of international arbitration on the East sea. Similar movement was seen on HNX and Upcom. Even when indices was in the green, decliners kept outnumbering gainers. Foreign investors returned as net buyers on HOSE at fairly value.

Recommendation

In the context that the major stock markets in the region gained, VN-Index went on the opposite direction and had one stronger correction than expected in the last report, trading volume rose sharply at the end of the session, along with reduced prices suggests that investors are psychologically cautious before the important information ahead such as the verdict of PCA on the South China Sea as well as related parties actions. The supports of the VN-Index are currently at 650 and 641, VN-Index has shown signs of worsening in the short term, therefore, investors are recommended to hold stock weights at low level and observe the reaction of the VN-Index at the support levels before making investment decisions.

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