The Vietnamese stock market ended the trading week with a "green skin, red heart" with many sessions of increase and decrease in large areas. In the two weekend sessions when the two stocks VIC and VHM contributed more than 14 points to the VN-Index, the index had an increase of only 3 points compared to the whole week. The positive point is that the main index has recovered to the 1,660-point zone.
Regarding the trading value of foreign investors, this group of investors continues to face strong net selling pressure of thousands of billions of VND. Accumulated after 5 sessions, foreign investors net sold VND 7,715 billion.
The worrying thing is the sharp decline in liquidity when investors are currently quite cautious. VN-Index has mainly been moving sideways in the price channel of 1,600 - 1,700 for more than the past month along with reduced liquidity, while the upward trend of many groups of stocks (banking, securities...) is temporarily slowing down.
According to investors, the reason for the above problems is the increased profit-taking trend after 4 months of strong price increases. In addition, the net selling pressure of foreign investors affects the price movements of many large-cap stocks in the short term.
Investors limit disbursement due to the mentality of waiting for information, especially about the prospect of upgrading the stock market. FTSE Russell is expected to announce the results of the stock market classification in the early morning of October 8 (Vietnam time).
Entering the new trading week, the trend of VN-Index is predicted by experts to be quite unpredictable when the market is in a state of tug-of-war, liquidity decreases and cash flow has not yet spread clearly. This situation will not last long, it is likely that the banking group after more than 10 accumulation sessions with low liquidity will soon give a clear trend signal, thereby deciding the next direction of the VN-Index.
Although the market is mainly flat in the short term, many experts believe that this is a normal technical development, especially when the VN-Index has not seen a significant correction after a period of explosive growth. The current period will be the time to absorb less supply and contribute to the formation of a new buying point for cash flow.
In the coming week, it is forecasted that if there are no new factors causing increased demand, it is not excluded that the VN-Index may have to retreat to around 1,600 points to attract investors on the sidelines to participate in the market. However, VN-Index is unlikely to decrease too much.
Regarding the story of net selling by foreign investors, many viewpoints are that it will cool down in the scenario of Vietnam being officially upgraded to a secondary emerging market, according to the FTSE Russell classification framework. This development is contributed by new cash flow from investment funds in emerging markets.
However, even in the scenario of foreign investors continuing to sell net, the pressure on the market will also be balanced by domestic investors, accounting for over 70% of the trading structure, along with the prospect of new money entering the stock market due to the impact of the low interest rate environment.
