Customers conduct transactions at the headquarters of Bảo Việt Securities in Hà Nội. — Photo courtesy of Bảo Việt Securities

 

The VN-Index endured a series of negative sessions over the past week, reflecting increasingly pessimistic investor sentiment.

 

Trading volumes remaining below the 20-week average further highlight the limited participation of cash flows in the market. Additionally, persistent net-selling by foreign investors continues to weigh on the index.

 

A cloud of gloom hung over Vietnam's stock market throughout the week. The VN-Index extended its losses as weak recovery attempts, coupled with lacklustre liquidity, exacerbated concerns about a sustained downtrend.

 

The final session of the week saw heavy selling pressure, erasing efforts to hold the 1,240-point support level and pushing the VN-Index down to 1,230.48 points.

 

By the end of the week, the VN-Index recorded a decline of 24.11 points, or 1.92 per cent, while the HNX-Index dropped by 6.17 points, or 2.73 per cent, closing at 219.49 points.

 

The market breadth skewed towards declines, with broad-based selling pressure across most sectors. Trading volume on the Hồ Chí Minh Stock Exchange (HoSE) increased by 24 per cent compared to the previous week, driven by notable but unfavourable activity in financials, industrial real estate, and technology-telecom sectors.

 

Liquidity remained subdued, indicating weak bottom-fishing interest. The average trading value for matched orders reached VNĐ9.875 trillion, down 2 per cent from the prior week, marking the lowest weekly liquidity since May 2023. Notably, all three key investor groups – individual, domestic institutions and foreign institutions – demonstrated low levels of participation.

 

Foreign investors continued to net sell, with a total net outflow of over VNĐ1.33 trillion (US$52.43 million) across both exchanges last week. This included VNĐ1.290 trillion in net sales on HoSE and VNĐ44 billion on HNX.

 

Analysts from Saigon Hanoi Securities (SHS) noted that the VN-Index's short-term outlook has turned negative after failing to hold above the 200-day moving average around the 1,260-point level. The index is now under pressure to test the 1,200-1,210 point range, a critical psychological and valuation-based support zone.

 

This support area corresponds to the 2018 peak, the lower boundary of the consolidation channel from early 2024, and the long-term growth trendline connecting the lows since November 2022, when the market bottomed during the corporate bond crisis.

 

In the medium term, the market is expected to consolidate within a wide range of 1,200 to 1,300 points, with a weaker bias towards the lower half of this band.

 

Despite short-term pessimism, SHS analysts highlighted that the current total market capitalisation of approximately $277 billion, equivalent to 60 per cent of 2024 GDP, represents a reasonable valuation.

 

Many stocks are trading at relatively attractive price levels compared to their intrinsic value and medium- to long-term growth prospects.

 

For long-term investors, the current market conditions may offer opportunities to accumulate high-quality stocks at favourable prices. However, caution and selective stock-picking remain key in navigating the current market volatility. — VNS

 

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