The big problem that exists in the stock market today is liquidity.
The market entered 2025 with a quiet month in January, down about 4%.
The market continuously has trading sessions with sharp declines in liquidity, and there are even trading sessions where liquidity seems to "disappear".
Analysts say that January is a very important time in the stock market cycle. The two weeks before Tet often have a big impact on market trends.
This development makes investors apprehensive as two important driving forces for the stock market, cash flow and internal business growth, are both showing signs of significant weakness.
Besides, there is great pressure from foreign investors who are still selling strongly even though in 2025, the story of upgrading the stock market is considered a highlight to attract foreign capital.
However, from the experts’ perspective, optimism is still present. If the current decline slows down, all expectations will focus on investors being able to buy again and liquidity improving. Because by then, the worst stories will have been priced into the market.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that the stock market does not necessarily reflect the macro-economic picture, but more importantly, liquidity. When money flows stay out of the market, excessive expectations about a breakthrough can be risky.
"In the context of unfavorable cash flow, the price movement of each stock will depend largely on the intrinsic strength of the enterprise and the financial capacity of shareholders. Diversification can occur very harshly in the weak cash flow environment of 2025. This is a point that investors need to pay attention to in order to manage large and unexpected fluctuations in the market," Dr. Phuong stated his opinion.
Meanwhile, although relatively optimistic about Vietnam's economic prospects, experts from VNDIRECT Research are somewhat more cautious about the short-term prospects of the stock market. Accordingly, the stock market seems to be moving sideways, accumulating and waiting for important supporting factors in the context of investors' concerns about the US-China trade relationship in the coming time.
VNDIRECT Research believes that the market's growth drivers are still present, including the upgrade from frontier to emerging markets and the upgrade of the national credit rating to investment grade.
Depending on US trade policy and FTSE's decision to upgrade Vietnam's stock market, VN-Index could end 2025 with a P/E of 12x - 15x, thereby the market could increase by more than 30% to 1,670 points, or conversely increase by only a modest 6% to 1,340 points.
The forecast is based on 66 companies under review with net profit expected to grow 19% this year.
Investors should closely monitor domestic and foreign signals and prioritize risk management until Mr. Trump's policies become clearer, VNDIRECT Research's report stated.
