The Vietnamese stock market has slowed down, struggling within a narrow range throughout the trading sessions of the past week, after a positive recovery in the previous 2 weeks. In the trading week before the September 2 holiday , the stock market did not have many fluctuations in both price and liquidity, the VN-Index maintained a tug-of-war situation before the resistance level of 1,300 points, closing the weekend at 1,283.87 points, liquidity decreased by 11% compared to the previous week. However, in terms of capitalization composition, large-cap stocks are attracting the attention of cash flow, especially in industries with strong developments such as banking and technology.
This development occurred in the context of investors preparing for a long National Day holiday, a time that always brings a state and psychology of profit-taking for investors.
In addition, according to experts, after a positive recovery, the general index is getting closer to the old short-term peak around 1,285 - 1,300 points. Therefore, slowing down last week is considered necessary, a careful preparation before moving forward to conquer the strong resistance zone.
According to market statistics over the past 10 years, the slowdown in liquidity before a long holiday is a natural defensive state of mind. Trading volume in the week before the holiday decreased by an average of 25%. However, the VN-Index then often increased in September and had strong fluctuations over a 3-month period, with a probability of 45% exceeding the peak, 36% forming a peak, and 19% remaining sideways.
The stock market is also receiving a lot of positive information. Domestically, the cooling of the exchange rate has supported the gradual expansion of monetary policy, the State Bank stopped issuing treasury bills and pumped net liquidity into the market (scale of 33,220 billion VND). Credit growth in August was stronger after slowing down in July, reaching 6.25% compared to the same period last year.
FTSE has also just reported on the positive upgrade for the Vietnamese stock market after the move to loosen prefunding regulations. Overseas, the US economic growth in the second quarter of 2024 reached 3%, higher than the previous estimate of 2.8%, expanding the optimistic perspective for investors.
Based on the above factors, analysts from DSC Securities Company believe that the market has a high probability of successfully testing the resistance level of 1,300 points in the fourth time approaching this point since the beginning of 2024. Investors holding stocks should be patient and wait for cash flow to return after the National Day holiday.
Experts from HSC Securities Company believe that, in terms of opportunities, the resistance level of 1,300 points has caused the index to adjust many times, but the recovery efforts are increasingly evident and more drastic, as the system of bottoms continues to form higher than the previous bottom. The possibility that the Fed is about to lower interest rates and the expectation that the domestic market will receive similar information and events will support trading sentiment and the 1,300 point level is expected to be successfully conquered soon.
Foreign net selling pressure is still very large
Contrary to the positive developments of the general market, foreign investors' transactions have not shown any signs of improvement as strong net selling pressure has been maintained throughout. In the first 8 months of 2024, foreign investors net sold VND 64,426 billion, equivalent to more than 2.5 million USD, nearly 18 times higher than the same period last year.
