20170602_BSC_Vietnam Daily Review_EN_Pressure from liquidity factor

Highlight

Market movements in the last trading session of the week were less positive. The market liquidity remained tight, some large cap stocks’ strong correction affected the market greatly, ROS, GAS, PLX contributed more than 2 down-points to the market index. Most large capitalization stocks or VN30 stocks are in the downtrend. The market breadth was relatively balanced as the number of gainers was almost equal to the number of losers. Particularly, 216 stocks gained and 220 stocks declined on both exchanges. Cash flow inclined to return to some sectors such as Construction Materials, Real Estate, Minerals, Securities, Fertilizers companies. On the other hand, selling pressure still existed for large sectors such as: Banking, Steel, Oil & Gas. The matching orders’ value was still modest at VND3089.26 billion while negotiated transactions had the worth of VND89.88 billion, of which focused on NVL, VNM and FPT. Closing the last trading session of the week, the VNI lost the 740 support level, closing at 738.81 points, down 4.6 points compared to last Friday's session or -0.6%. On HNX, HNX-Index closed green the main reason was the increase of VGC stock price, which closed at 94.36 points, up 0.67 points or 0.7% compared to the last trading session of the previous week.

Market outlook

Market liquidity has not been really positive when trading value was still in a weakening state. Cash flows also re-participated in some stocks in the recovery trend after the pressure of correction in the week passed, but the liquidity was very modest. On the other hand, the selling pressure for large cap stocks which support the market is increasing. Officially losing 740 points support level that formed in the past two weeks, however, the VN-index is still receiving support from the short-term moving average line MA (15). The market is in a riskier area than it was before the decline of liquidity as well as cash flow is still tending to escape the large caps. For trading activities in the next few sessions, investors should limit participation in stocks with market factors when the market cash flow has not really improved, the overall market risk can put pressure on the market and pushes the VN-index returned to the lower support at 730 points.