Corrections offer buying opportunity

Brokers match securities trading orders at Maybank Kim Eng Co. The domestic stock market saw strong corrections last week. - VNA/VNS Photo

However, analysts suggest that this is an opportunity for investors to buy shares while awaiting third-quarter business results.

The benchmark VN-Index lost a cumulative 3.05 per cent during the week, closing Friday's session at 613.29 points.

The slump of blue chips were the main drag as many of these shares lost value, especially on Friday, because of the portfolio restructuring of exchange-trade funds (ETF).

Stocks removed or scaled down from ETF portfolios sold strongly, such as Development Investment Construction Co (DIG), Vietcombank (VCB) and Phu My Fertiliser (DPM), as well as Bao Viet Holdings (BVH) and VinGroup (VIC).

The VN30, which tracks the top 30 shares by market value and liquidity, declined by 2.28 per cent to end the week at 654.54 points.

Foreign investors also concluded the week as net sellers on the southern bourses and unloaded shares worth VND549.5 billion (US$26 million). This is the fifth net selling week for this sector.

Active trading on hot stocks like oil and gas-related companies, seafood producers and securities companies helped cushion the market and boost liquidity.

Market volume on the HCM City's exchanges climbed by 16 per cent compared with that of the previous week, averaging 196 million shares worth more than VND3.88 trillion (nearly $184 million) per day.

Analysts at SHB Securities Company said that though most of the stocks in the oil and gas sectors had increased significantly in recent times and were facing profit-taking pressure, prospects for this group remained bright

"After four declining sessions, prices of many stocks have fallen to attractive ranges that will likely spur demand. In the short term, the market will continue to be supported at the 605- to 610-point mark," they wrote in a report.

Analysts at FPT Securities Company predicted that the market would be differentiated in the future, and stocks with prospects of positive third-quarter business results would likely increase.

"Recent corrections will be an opportunity for investors to buy shares and await the results of third-quarter corporate earnings. Investors may pay attention to oil and gas and securities groups," the analysts said.

On the Ha Noi Stock Exchange, the HNX-Index fell by 0.67 per cent to finish the week at 88.89 points. Liquidity remained high, with nearly 112 million shares worth VND1.63 trillion ($77.3 million) traded per session.

Because of ETFs' portfolio restructuring, foreign investors were also net sellers here, unloading VND310 billion ($14.7 million) worth of shares.