Hanoi (VNA) – Shares are forecast to extend a rally this week. However,experts expect a slower pace of growth, as profit-taking selling pressureincreases as the benchmark VN-Index continuously touches new nine-year highs.

TheVN-Index has recorded five consecutive gaining weeks on the HCM Stock Exchange,expanding 1.31 percent last week and closing on May 26 at 743.41 points.

Thesouthern market index has increased 3.6 percent this month and nearly 12 percentsince the beginning of this year.

On the Hanoi Stock Exchange, the HNX-Index gained1.64 percent for the week, ending on May 26 at 93.69 points. The northernmarket index has climbed 17 percent this year.

Moneyheavily flowed in the two markets, with a total of 303.6 million sharesaveraging over 5.8 trillion VND (255.5 million USD) traded in the two marketsin a single session. These figures represented increases of 74.6 percent involume and 100 percent in value compared to the previous week’s levels.

Large-capstocks, particularly banks, led the market rise following the information thatthe Government has submitted a new resolution on bad debts to the

National Assembly. If approved, the resolution will ease bottlenecks and speedup the process of settling bad debts in credit institutions.

Price of BIDV shares (BID) leapt 13.4 percent lastweek, while Military Bank (MBB) and Eximbank (EIB) shares increased 9.6 percentand 5.4 percent, respectively.

Though admittingthe new resolution is a positive factor for bank stocks, Nguyen Ngoc Lan, headof the brokerage at Agribank Securities JSC, forecasts that bank stocks willlikely stay in neutral position this week.

“Itshould be noted that bad debt restructuring is a time-consuming and difficultperiod, involving many economic subjects. Therefore, it takes a long time forthe new policy to translate into business results for banks,” Lan told thewebsite tinnhanhchungkhoan.vn.

She predicted that prices of bank shares wouldmove around the current level with alternative up/down sessions.

Lan said cash inflows remain strong but the growthspeed will likely slow down this week, as positive information has beenreflected in the share prices.

“The VN-Index may maintain its upward trend in thefirst week of June before facing a correction period in the following week,”Lan said and noted money could flow in large-cap stocks, which have notincreased much in the past period.

According to Nguyen Viet Duc, a market strategist atMB Securities Co, foreign buyers will continue to support the market in thecoming time.

Foreigninvestors were responsible for total net buy value of 607 billion VND on thetwo exchanges last week, a rise of 110 percent over the previous week’s figure.

Duc said foreign investors have constantly collected local shares, making betson strong economic performance of Vietnam. Both two ratings agencies, Moody’sCorporation and Fitch Group, upgraded their views on Vietnam’s prospect topositive.

Meanwhile,in mid-June, Vietnam’s stock market will likely be considered to enter theMSCI’s watchlist to be upgraded to an emerging market status.

“It isvery important to have foreign investors’ confidence in the local market,because Vietnam’s P/E (Price- Earnings) ratio is no longer cheap and is stillable to grow thanks to strong GDP growth compared to other regional countries,”Duc said.

He suggested that investors pay attention to theshares which could be added to portfolios of exchange-traded funds in theirJune’s reviews, including petrol retailer Petrolimex (PLX), Saigon Thuong TinReal Estate (SCR), Kinh Bac City Development (KBC) and Hoa Binh Constructionand Real Estate (HBC).

Severalsecurities companies have predicted that the VN-Index will move around 747-750points.-VNA