The liquidity of the stock market continuously narrowed in May and this situation lasted until the first week of June, reflecting the market's cautious sentiment.
The proof is that right in yesterday's trading session (June 9), although VN-Index has recovered, liquidity is a major minus point when the trading value on HOSE only reached less than 13,800 billion VND, of which the matched order value was less than 11,300 billion VND. This is the lowest level in more than a year, lower than the first session of June and fell to the most gloomy zone since the historic increase session after the "customs storm" of April 10, 2025.
Signs of a decrease in cash flow are not unexpected developments, but this trend has occurred in the past few months. The average trading value in the past June sessions was only approximately 18,000 billion VND, significantly lower than the level of 24,000 billion VND maintained in May and April.
Explaining the decrease in liquidity in large asset markets such as stocks and real estate, SGI Capital analysts believe that it is necessary to look back at 2020-2025 with two periods of monetary easing and very low interest rates. Cheap money is supplied in surplus to stimulate growth in difficult economic conditions.
The balance of money and goods has caused the prices of assets such as real estate and securities to skyrocket to high and expensive levels.However, that attractive price stimulated supply to increase sharply through IPOs and record divestments of foreign investors in the stock market, and the boom in real estate supply at an unprecedented speed and scale.Currently, the supply-demand balance is changing as asset supply increases faster than the absorption capacity of cash flow and credit.
With the amount of outstanding credit, bonds and margin loans for asset investment has increased sharply to a high level, liquidity decreased, interest rate increases are inevitable consequences and will also be the cause of reversing the supply-demand balance, activating the asset price reduction cycle.
Since the beginning of the year, major asset channels from stocks, real estate, gold to digital currency have faced difficulties as prices and liquidity have both declined.We continue to maintain a cautious view that the cheap money cycle has ended and cash will become scarce and gradually rise to power and reverse the psychology of fear of holding cash that was pushed to a peak last year," SGI Capital's report emphasized.
Although the valuation level has become more attractive and economic growth prospects are still a psychological support for investors, according to SGI Capital analysts, market liquidity has fallen to its lowest level in two years along with increased margin balances showing that the ability to absorb new supply of domestic money is weakening.
According to this investment fund, the market has begun to see more individual opportunities with valuations gradually decreasing to attractive areas, but in the trend of rising interest rates and increasingly tightened liquidity, truly large opportunities across the market have not yet emerged as the process of reducing leverage due to excessive borrowing has not taken place.
Looking at the market prospects in the coming time, VinaCapital calculates that the profit growth momentum of VN-Index is likely to slow down as the economic impact of the Middle East war gradually spreads, while higher interest rates are forecast to put pressure on the profit margin of banks in the remaining months of the year.
However, VinaCapital emphasized that the valuation of most of the Vietnamese stock market is at a level equivalent to the crisis period, contrary to the actual economic conditions that are generally still stable.
In addition, Vietnam is implementing a series of widespread reforms to improve the operational efficiency of state-owned enterprises, meeting the criteria related to being included in FTSE Russell's emerging market index, as well as removing obstacles to restart stalled real estate projects...
