What should investors do when small and medium stocks are on the floor?

4 min read

In the short term, securities companies recommend that investors wait for a re-evaluation of the market status and avoid stocks that have grown hot despite fundamental factors. At the same time, investors can take advantage of the correction to accumulate basic stocks that benefit from economic stimulus packages and have a positive outlook in the fourth quarter of 2021.

The Vietnamese market had a shaking session at the beginning of the week (November 22) when strong selling prevailed and showed signs of increasing in most industry groups. However, the majority of large-cap stocks gained strongly, helping to keep the main index from falling too deeply.

Banking stocks continued to increase after last Friday’s rally. Besides the two stocks that hit the ceiling price, HDB (7.0%) and TPB (6.9%), the remaining 25/28 stocks also recorded positive trades such as MBB (3.2%), STB (3 .2%), ACB (2.1%).

However, selling pressure across the overall market, especially on oil and gas codes and real estate, caused the VN-Index to close at 1,447.3 points, down 5.1 points (or 0.4%). At the same time, the HNX-Index also plummeted by 9.4 points (2.1%), to 444.6 points.

The sharp sell-off towards the end of the session caused many small and mid-cap stocks to close at the floor price. As noted, the whole floor had 195 stocks on the floor, of which HOSE contributed up to 110 stocks that fell to the floor, HNX with 55 stocks and UPCOM with 30 stocks.

The positive point is that the liquidity decreased on both HOSE and HNX. The total matched volume on HOSE reached 34.3 trillion dong (down 16.9% compared to the previous session and HNX recorded the total matched value of 4.8 trillion dong (down 27.9%).

Below are the recommendations of securities companies for investors after the volatile session of Vietnam’s stock market.

VDSC: Waiting for a re-evaluation of market status, avoiding stocks that have grown hot despite fundamentals

Rong Viet Securities. (Photo: VDSC)

According to Rong Viet Securities (VDSC), although the VN-Index is still in a weak state, it is supported by a number of large-cap stocks. It is possible that the VN-Index’s exploration process has not ended yet and there will be another session to test supply and demand before the 1,465 point barrier.

Therefore, VDSC recommends that investors should wait for a re-evaluation of the market status. However, stocks that have grown hot despite the fundamentals should be avoided.

For stocks that have not been hot yet but have great selling pressure, they should also consider reducing the proportion when there is a recovery, in order to recover cash and provide for the risk of the portfolio.

Yuanta: Gradually reduce the proportion of stocks and restructure the short-term portfolio

Yuanta Securities said that the market is likely to have a recovery and the VN-Index may be bracing around the 1,453 point threshold. At the same time, the market shows signs of entering a period of accumulation, so cash flow is likely to continue to diverg, meaning that cash flow will likely shift from small and medium-sized stocks to large-cap stocks, especially bank stocks.

However, Yuanta rates short-term risks as high. Therefore, Yuanta recommends that short-term investors can continue to gradually reduce the proportion of stocks and restructure their short-term portfolio. At the same time, short-term investors should not buy at this stage.

VCBS: Short-term surfing strategy following cash flow is still more appropriate in the current period

Somewhat more optimistic, Vietcombank Securities (VCBS) believes that the drop in session 22/11 is not too big and comes with lower liquidity than the previous session, showing that short-term uptrend may return in a few sessions. Upcoming.

According to VCBS, a short-term surfing strategy based on the movement of cash flow is still more relevant in the current period. Therefore, VCBS recommends that investors take advantage of the adjustment to accumulate underlying stocks that benefit from the Government’s economic stimulus packages as well as stocks with the prospect of recording positive business results in the fourth quarter of 2021.

MBKE: Proposing a ratio of 30% money – 70% shares, limiting chasing

Keeping the previous position, Maybank Kim Eng Securities (MBKE) said that the existence of shakes and corrections as in recent sessions is a cautious development when this shows that the pressure from the seller is still significant.

Even so, the larger trend of the index is still bullish and the current correction is less likely to produce a trend reversal.

Therefore, it is recommended that investors can still maintain a higher proportion of shares than money in the current context with the proposed weight of 30% – 70% of shares but should limit chasing activities.

Source: vietnambiz.vn – Translated by fintel.vn