VN-Index stops 5 consecutive weeks of decline with a "follow-through" session and transaction value skyrockets
A few days ago, many individual investors were still feeling depressed as domestic stock trading was increasingly gloomy, liquidity was at a record low and stock prices were continuously falling. However, after the explosive session last weekend, investors were overwhelmed with emotions, hoping that the decline had ended and the market would return to an upward wave in line with the economic recovery.
“Untie” personal cash flow
The highlight of the stock market last week was the weekend session that stopped the VN-Index from falling for 5 consecutive weeks. Order matching liquidity on HSX reached over 917 million units, more than double the previous session and 50% higher than the average level of the last 20 days.
Many investors are more optimistic about the current stock market. Because a “follow-the-moment” session – the market increases in both points and liquidity and spreads across industries, leading stocks appear to attract cash flow… – helps them expect the VN-Index to end its losing streak and go up.
Mr. Nguyen The Minh, Director of Analysis - Yuanta Securities Vietnam, commented that after the sudden crash in early August, most major stock markets in the world recovered and soon regained their old peaks. Meanwhile, Vietnamese investors are still cautious.
“The nature of the downward adjustment in recent weeks is due to investors being caught up in the negative sentiment from the sell-off in the international market. The important thing is that the domestic macro economy is still very good.
After the explosive session last weekend, the market is unlikely to go up immediately but will accumulate around the current level, then begin to confirm the uptrend when more money flows in," Mr. Minh said.
Mr. Truong Hien Phuong, Senior Director of KIS Vietnam Securities Company, said that the large cash flow in the trading session last weekend showed that institutional investors and foreign investors have returned.
With a liquidity of more than 1 billion shares and a transaction value of more than 25,000 billion VND, it cannot be personal cash flow.
Foreign investors stop net selling
One of the bright spots in the stock market last week was that foreign investors returned to net buying more than VND1,000 billion on the HoSE. This is a positive signal, showing the renewed interest of foreign investors in the Vietnamese stock market, after a series of consecutive net selling since the beginning of the year.
According to Mr. Nguyen The Minh, in the context of the USD/VND exchange rate falling sharply and forecast to continue to cool down after the news that the FED may cut interest rates in September, foreign investors are net buying again.
Last week, money was withdrawn from technology stocks in some Asian markets and shifted to other markets with more attractive prices, including Vietnam.
Therefore, Mr. Minh believes that foreign cash flow from now until the end of the year will be a pillar for the market. The second quarter of 2024 is usually the time when large investors evaluate and choose stocks to buy and hold for the end of the year.
A very positive factor for the stock market is that the management agency is urgently seeking comments on the draft circular regarding the removal of the requirement for foreign investors to deposit funds (pre-funding) before placing orders - the biggest bottleneck in the process of upgrading the Vietnamese stock market.
Mr. Dinh Minh Tri, Head of Analysis Department - Mirae Asset Securities Company, commented that it is likely that the circular related to removing pre-funding bottlenecks for foreign investors will be issued in September.
The time when FTSE has a review period to consider upgrading the Vietnamese stock market. It is likely that Vietnamese stocks will be considered for upgrading in 2025.
Mr. Dinh Minh Tri analyzed: "The increase in points depends on the market's response, but it will trigger speculative cash flow to participate. Securities companies are rushing to increase capital to meet new standards before the Vietnamese stock market is officially upgraded."
Source: CafeF
