Stock commentary for the week of May 9-13: The downtrend is likely to continue

Analysts said that the decline in liquidity showed that the demand was weak, the short-term and medium-term trend of the market returned to a decline state.

Cautious cash flow

MB Securities Joint Stock Company (MBS) said that the drop in the market at the end of the week (May 6) was not unexpected by investors, as investors had just watched developments on tensions between Russia and Russia. and Ukraine have just continued the debate about the US Federal Reserve (FED) raising interest rates.

Notably in the last session of the week, in addition to the low liquidity, the decrease in the market in the second half of the afternoon session from the group of speculative stocks that were sold strongly was the main factor causing the market to fall deeply.

This makes the index VN-Index unable to hold the support at 1,330 points and the risk of retesting last week’s short-term bottom at 1,260 points.

SSI Securities Joint Stock Company stated that, with the current decreasing inertia, it is likely that the VN-Index will continue to retest the next support zone at the area of ​​1,320 – 1,300 points. “In case the index forms and completes the double bottom pattern in the coming sessions, investors can start increasing the proportion of stocks again”, recommended SSI.

Mirae Asset Securities Joint Stock Company (Vietnam), stock market Trading back after the holiday had to face interest rate hikes by the US Federal Reserve (FED), world stocks also had great volatility when this event took place.

Only trading 3 sessions in a week, VN-Index had 2 decreasing sessions and 1 increasing session and closed the week at 1,329.26, the lowest level of the week, down 37.54 points. This decrease came from the decline of real estate and securities stocks.

Stocks that fell sharply were: VND down 12.9%, SSI down 14%. Real estate codes such as: DIG down 16.8%, BCM down 6.3%, DXG down 11.1%. On the other side, VHM increased by 5.7% during the week, which supported the VN-Index a lot.

Foreign investors were quite balanced with only a net selling of more than 50 billion dong during the week. On the net buying side, NLG was the most bought stock with 330 billion dong, followed by VHM with 80 billion dong. Meanwhile, on the net selling side, VCB, VNM and KDH were the top 3 net sellers with a value of 77 billion dong, 69 billion dong and 67 billion dong, respectively.

VN-Index’s recovery span only lasted 4 sessions and stopped at 1,370 after recovering nearly 110 points. The short-term and medium-term trend is back to the downtrend. The current index’s support levels are psychological support at 1,300 and deeper is the old bottom at 1.260 – 1.280. VN-Index currently has a P/E (an index that assesses the relationship between a stock’s market price and earnings per share) of 14.5 times.

Rong Viet Securities Joint Stock Company (VDSC) said that in recent times, the market has had opposite ups and downs, due to the low liquidity in the market. Low liquidity also shows that cash flow is cautious and afraid of potential risks. The lack of supporting cash flow as well as stocks can stabilize the market.

With the current imbalance, it is likely that VN-Index will need time to retest the area of ​​1,315 points in the next session.

Currently, the market movement is unstable and potentially risky, so investors need to slow down and still limit buying until the market has a good enough support signal, and at the same time consider keeping the portfolio at safe level, VDSC recognizes.

Saigon – Hanoi Securities Joint Stock Company (SHS) said that the market had the fifth consecutive week of decline with liquidity decreasing compared to the previous week because it only traded for 3 days, but if calculated on average each session still recorded a decrease in liquidity.

At the end of the trading week, VN-Index decreased 37.54 points to 1,329.26 points, HNX-Index decreased 22.37 points to 343.46 points.

Trading value on HOSE decreased by 47.8% from the previous week to VND 46,816 billion, corresponding to a decrease of 47.5% in volume to 1,623 million shares. The trading value on the HNX decreased by 52.9% compared to the previous week with VND 4,855 billion, equivalent to a volume decrease of 53.7% to 210 million shares.

The market dropped in 2/3 sessions and ended the week near the lowest level. Materials stocks had the biggest drop in the past week with 5.1% of market capitalization with steel stocks like HPG down 3.5%, HSG down 8.1%, NKG down 7.6% …; chemical industry such as: DGC down 4.1%, DPM down 5.5%, DCM down 7.4%…

Followed by the oil and gas and information technology sectors with the same decrease of 4.3% in market capitalization. Typical stocks such as: PVS down 1.6%, OIL down 2.2%, CMG down 2.5%, PVC down 4.5%, PLX down 4.6%, PVB down 4.9%, PVD down 5.9%. In the information technology industry, FPT decreased by 4.6%, CMG decreased by 2.5%.

The pillar banking industry also decreased by 3.7% of capitalization, creating correcting pressure on the market, such as: VCB down 1.9%, CTG down 2.7%, SHB down 4, 9%, ACB down 5.2%, TCB down 5.7%, MBB down 6%, VPB down 6.9%.

Consumer services shares fell 3.1% of market capitalization. Specifically, retail stocks like MWG dropped 1.7%, FRT fell 9.3%, DGW fell 10.4%… and airline stocks like VJC dropped 1.5%, HVN fell 3.4. %.

The remaining sectors all saw a relatively strong decline, including industry down 3.2% in capitalization, consumer services down 3.1%, finance down 2.8%, pharmaceuticals and healthcare down 2.1% , consumer goods decreased by 1.6%.

In the opposite direction, only community utility increased in the past week with 2.4% of market capitalization, thanks to the positivity of GAS up 3.6%, POW up 3.7%.

SHS said, the market fell for the fifth consecutive week with a fairly strong drop, the last time the market had five consecutive weeks of decline was from July 2018.

The liquidity of the whole market on average per session in the past week continued to decline, showing that the demand is quite weak, so just a slight increase in supply is enough to make the market “red on fire”.

After five consecutive weeks of decline, the market’s valuation has returned to an attractive level with the P/E of the VN-Index about 14.5 times and the P/E of the VN30 about 14 times, both lower than the 5-year average. recently. Therefore, this can be considered as an opportunity for long-term investors following the school of value investing.

However, from the point of view of technical analysis, the situation became more negative with the VN-Index losing the threshold of 1,350 points last week to enter a correcting wave with the target around 1,200 points.

SHS forecasts that in the next trading week from May 9 to 13, VN-Index may recover if the strong support level around 1,300 points is maintained.

Wall Street’s main indexes go down

Vietnam’s stock market dropped sharply in the context that major stock markets in the world also went backwards. For example, all three main indexes on Wall Street fell in the session on May 6 in particular and the whole week in general, when investors were looking at April employment data amid concerns. about the risk of stagflation (economic stagnation and high inflation occurring at the same time) of the economy is increasing.

Closing this session, the Dow Jones Industrial Average fell 98.60 points to 32,899.37. Meanwhile, the Nasdaq technology index lost 173.03 points to 12,144.66 points, while the S&P 500 index lost 23.53 points to 4,123.34 points.

For the whole week, the Dow Jones and S&P 500 fell 0.2%, while the Nasdaq fell 1.5%. This was the fifth consecutive weekly loss for both the Nasdaq and S&P 500 indexes, and also the longest losing streak for the S&P 500 index alone since June 2011, according to Dow Jones Market Data. Meanwhile, the Dow Jones also recorded a sixth consecutive week of loss.

On May 4, the Federal Open Market Committee (FOMC), the panel of Fed officials in charge of monetary policy, raised interest rates by 0.5% to a target range of 0.75% to 1. %. The US central bank has not raised interest rates by more than 0.25% in an FOMC meeting since May 2000.

After leaving interest rates near zero for all of 2021, Fed Chairman Jerome Powell and other bankers have pledged to quickly bring borrowing costs back to levels that won’t stimulate the economy. Top Fed officials all confirmed an additional 0.5% rate hike in the weeks leading up to the FOMC meeting in May after approving a 0.25% increase in March.

According to Mr. Powell, a 0.5% increase will continue to be discussed in the coming meetings, but the FOMC will not consider a 0.75% increase in the near future. Experts said the comments above boosted the stock market’s momentum as Mr. Powell expressed confidence that the Fed can help the economy “soft landing” by curbing inflation but not bringing the economy back to life. economy into recession.

However, in the session of May 5, US stocks suffered heavy losses due to a wide-ranging sell-off amid concerns about the change in monetary policy and increased economic risks due to the economic crisis. inflationary. Notably, the Dow Jones Industrial Average recorded its worst drop since June 2020 in this session.

Angelo Kourkafas, investment strategist at financial services firm Edward Jones (USA), thinks that the Fed’s rate hike announcement is a signal of one of the strongest monetary tightening cycles in many years. decade. According to this expert, when the Fed tightens monetary policy at a fast pace, there are some people who are concerned that economic growth will decelerate.

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