Market liquidity revives
Positive signals show that market sentiment has strongly surpassed the resistance level of 1,300 points thanks to trading volume increasing strongly above the 20-week average. The total trading value on the HOSE floor last week reached VND 109,800 billion, up more than 15.9% over the previous week, becoming the 7th consecutive week of increased liquidity.
In particular, foreign investors have reduced their net sales. If last week, foreign investors net sold more than VND 2,000 billion, last week they only sold nearly VND 800 billion. Banks and securities are the two most prominent groups of stocks.
With liquidity remaining above VND20,000 billion/session for the whole week, it is not too unpredictable for the group of stocks to continue to operate strongly.
The improvement in liquidity of the stock market comes from positive information for the market. Last week, the State Bank announced the suspension of issuing Treasury bills after a long period of using this tool to regulate liquidity, a move that demonstrates a strong commitment to supporting liquidity for the system to lower market interest rates under the direction of the Government. At the same time, the State Bank also deploys additional solutions to support longer-term liquidity for the banking system.
These steps have helped the interbank interest rate level decrease quite sharply, overnight interest rates have reached around 4%... promoting the increase of the stock market, especially banking and securities stocks.
The market is showing clear positive signs
In a newly released report by SSI Research, experts have pointed out 4 factors that continue to push the Vietnamese stock market up.
First, 15-year historical data shows that the movement trend of the stock market in March tended to be positive with 12 increases.
Second, the market will challenge the 1,300-point mark on the VN-Index from the last week of February with the most recent 4-quarter P/E and P/E estimated at 14 times and 10.3 times per year; significantly lower than previous challenges in the period 2020 - 2024.
Third, the Government's monetary policy management orientation continues to lean towards supporting the economy. And fourth, the risk of tariffs on Vietnam is there, but lower than other countries.
From a technical perspective, SSI experts believe that the market will develop in a positive scenario, the VN-Index will slightly surpass the 1,300-point range in February and establish a new peak since mid-May 2022. The volume of matched transactions increased sharply during the month. However, the 6-week consecutive increase has put the volume indicators in the overbought zone, posing a potential risk for short corrections.
However, the analysis team expects the short-term uptrend of the VN-Index to continue in the coming time, with the target reaching the resistance zone of 1,320 - 1,330 points. Meanwhile, the risk of a short adjustment is supported around the 1,288 - 1,290 point range. This is an important balance area, playing a role in determining the reversal of the index's trend.
The long-term story of the market will focus on the Government's implementation reform process starting from the end of 2024. Regarding capital flows, continue to expect better improvement in foreign capital flows in 2025 thanks to FTSE Russell's prospect of upgrading to emerging market. In addition, there are stepping stone policies such as implementing the KRX trading system, applying the amended Securities Law and the amended Decree 155/2020.
In fact, the market has increased by more than 100 points since mid-January 2025, causing many investors to have the mentality of "going to the top". Waiting for the market to adjust while the market is growing strongly is a popular strategy, but it is easy to miss opportunities.
Of course, there will not be any index or stock that increases forever, there will be times to adjust. In addition, the market rarely follows the desired scenario, and sometimes "buying at a high price but still having the opportunity to sell at a higher price" is a reasonable choice.
