The stock market witnessed a sharp decline in the last week of June, marked by strong net selling from foreign investors, who have been net sellers for the past five quarters.

 

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed last week at 1,245.32 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) ended at 237.59 points.

 

Both benchmark indices recorded weekly losses, with the former down 36.7 points or 2.86 per cent and the latter dropping 6.77 points or 2.77 per cent.

 

Liquidity on HoSE saw a significant drop, with the market's trading value reaching VNĐ17.6 trillion per session (US$690 million), reflecting a 10.6 per cent decrease from the previous week.

 

Foreign investors showed no signs of slowing down, continuing to net sell nearly VNĐ4.5 trillion in the last week of June, with FPT shares and FUEVFVND fund certificates accounting for over 70 per cent of the sell-off.

 

According to statistics, foreign investors have been net sellers for the past five quarters, particularly in the first half of 2024, likely due to the pressure of capital withdrawal as the exchange rate remains high. Since the beginning of the year, the estimated net selling value has reached nearly VNĐ45 trillion ($1.8 billion). The foreign ownership ratio in the stock market is currently at 17.5 per cent, down about 0.75 per cent from the end of 2023.

 

Although market volatility may persist in upcoming sessions, as long as the support zone of 1,250 - 1,270 points is maintained, the short-term trend remains stable, with 1,300 points being the nearest target. Analysts at Saigon-Hanoi Securities (SHS) recommend that short-term investors continue to hold their existing positions and maintain upward momentum. Additionally, adjustments around the strong support zone present opportunities to optimise stock accumulation, especially in stocks with strong momentum and significant growth potential.

 

In the medium term, the VN-Index, after experiencing selling pressure at the upper trend line around the 1,300-point region, is now under pressure to retest the area around 1,250 points. Given the negative performance at the end of the second quarter of 2024, the VN-Index is expected to recover and test the 1,255-point level, corresponding to the peak in September 2023. If it fails to break above this level, the VN-Index may enter a less positive accumulation phase within the range of 1,190 points - 1,200 points to 1,245 points - 1,255 points.

 

As the market transitions into the third quarter and awaits the release of second-quarter business results and GDP growth data in July 2024, it will be a sensitive period for investors. This is especially true as the general market trend for the VN-Index appears to be weakening below the psychological resistance level around 1,250 points.

 

In addition to factors such as global geopolitical tensions, inflationary pressures, exchange rates, and persistent foreign net selling despite ongoing economic growth and stable low-interest rates, short-term investors should maintain positions below the average level. Mid- to long-term investors should hold their current portfolios and consider increasing new positions, awaiting second-quarter business results and cautiously evaluating the full-year prospects of leading companies. — VNS

 

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