Many investors expected the market to soon return to the 1,300-point mark, but the "surprise attacks" at the end of the session made the market trend even more unpredictable.
The Vietnamese stock market has just experienced a turbulent trading session when profit-taking pressure suddenly appeared towards the end of the session. After a period of "stumbling" around the reference price range in the morning session, red quickly dominated the market, causing the VN-Index to plummet immediately afterwards. Although the market saw bottom-fishing demand help to somewhat reduce the decline, it still could not withstand the selling pressure that once again increased towards the end of the session.
At the end of the session on July 23, VN-Index decreased nearly 23 points to 1,231.8 points. From the short-term peak on July 9, VN-Index has lost more than 60 points (-5.3%). HoSE's capitalization value also "evaporated" about VND 253,000 billion (~ USD 10 billion) to more than VND 5 million billion after only 2 weeks of trading.
Many investors expect the market to soon return to the 1,300 point mark, but with the many "surprise attacks" at the end of the session, market trends become more unpredictable.
Explaining the reason for the sharp decline in the market, Mr. Bui Van Huy - Director of HCM Branch of DSC Securities said that the main index of the Vietnamese stock market fluctuated negatively after margin lending data was announced by securities companies at a record high. According to statistics, outstanding loans at securities companies at the end of the second quarter of 2024 continued to break records, estimated at about VND 225,000 billion, far exceeding the early period of 2022 when VN-Index was above 1,500 points.
This means that when the VN-Index fluctuates in a negative direction (this session has broken through the 1,250 point support level), investor sentiment is affected, even FOMO is swept away by the crowd effect.
In addition, Mr. Huy said that the banking group of stocks was sold heavily due to the information that bad debt is on the rise. Specifically, the bad debt ratio on the balance sheet has increased to nearly 5%. If including potential debt that can become bad debt, bad debt sold to VAMC, etc., the bad debt ratio is about 6.9%. The pillar group being sold heavily is one of many reasons that triggers profit-taking cash flow, negatively affecting the main market.
Besides, factors related to risks of policy changes and the production and business environment also make investors hesitant to "put money down" to catch the bottom.
In the context of the market with many unpredictable fluctuations, the DSC expert recommends that investors reduce the margin ratio in their portfolio to manage risks. At the same time, investors should also review the basic stocks they are holding, avoiding stocks with poor fundamentals that fall sharply when the market fluctuates.
Source: CafeF
