An investor observes the market's movement at a securities company. VNA/VNS Photo

HÀ NỘI — The Vietnamese stock market continued to undergo a bearish week as many realty stocks faced selling force with large volumes. The only positive point was the strong return of foreign investors with five consecutive sessions of net buying.

Analysts warned that the biggest risk now is the forced liquidation of some stocks of the VN30 basket.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index ended last week at 954.53 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) traded at 189.81 points.

For the week, both benchmark indices lost 4.27 per cent and 7.2 per cent, respectively. Of which, the VN-Index fell for the second week in a row. 

The VN-Index breached below the bottom of 958 points and hit the lowest level since the beginning of the year at 947.2 points last Thursday. The market only recovered slightly in the last trading session of the week thanks to the strong purchasing force from foreign investors after the news that US inflation cooled down.

The market’s liquidity increased slightly with the total trading value on all three exchanges reaching over VNĐ11.9 trillion per session (US$480 million), a gain of 1.5 per cent over the previous week. 

In contrast to the significant selling force by domestic retail investors, foreign investors returned to the market, with a net buying value on HoSE of more than VNĐ4.1 trillion. Similarly, they net bought VNĐ352 billion on the northern bourse. 

The market was also cushioned by news that Fubon ETF, a fund of Taiwan (China), poured capital into the domestic market for three days, from November 7 to November 9. 

Mirae Asset Vietnam Securities Company said that while the global market posted a bullish week, with the S&P 500 index rising sharply over 6 per cent, the domestic market experienced a bumpy road. The opposite trend of the Vietnamese stock market to the world was due to the risk of liquidity as some pillar real estate stocks were weighed by selling pressure, the securities firm said. 

With five consecutive sessions hitting the floor prices last week, Novaland (NVL) dipped 25 per cent for the week, causing a loss of 7.3 points on the VN-Index. 

The break below the support zone of 960 - 980 points resulted in higher downside risk for VN-Index. According to Mirae Asset Securities Vietnam, the levels were considered an important defence in the short term. 

The area around 900 is a technical and psychological zone, but the biggest problem of the market right now is the risk of forced selling in some stocks in the VN30 basket. The short-term technical signal is at a negative level.

Similarly, VNDIRECT Securities Corporation said that the country’s stock market still experienced a less positive trading week as many real estate stocks continued to face selling force with large volumes.

The real estate group was under great pressure of forced liquidation with many stocks depreciating over 50 per cent, and even 70-80 per cent from the peak. Difficulties in accessing capital through credit channels and corporate bonds of the real estate businesses were the main reasons for the sharp declines. 

Amid the negative market movements, the cash flow tended to shift to defensive stocks such as energy, electricity, and consumer goods to seek shelter. These stocks included PV Gas (GAS) and Masan Group (MSN), both increased by 2.6  per cent, while PV Power (POW) surged 8.2 per cent. 

VNDIRECT said that last month’s CPI data in the US increased lower than expected, which is positive information for the global financial market. Investment cash flow tends to shift to risky assets as the US government bond yields and the dollar index were lower. 

This was also reflected in the strong net buying of foreign investors on the Vietnamese stock market in the last trading week and partly offset the selling and margin calls of domestic investors.

Selling pressure from domestic investors would remain strong this week, especially before and after the derivative maturity session last Thursday. The VN-Index would retest the nearest support zone at 940 - 950 points and foreign capital inflows would be an important support for the market this week, said VNDirect.