Important Indicators
The Vietnamese stock market is in the first month of 2025 with less optimistic developments. The VN-Index has been continuously decreasing, at times "breaking" the 1,200 point mark. Market liquidity has also fluctuated, even reaching the lowest level in nearly 2 years.
According to Mr. Nguyen Viet Duc - Digital Business Director of VPBank Securities JSC (VPBankS), January is a very important time, this year January is quite bad, with a decrease from the beginning of the year of about 4%. "According to my statistics, in the 26-year history of Vietnamese securities, January and February are often highly indicative. When January declines, the market will usually have a difficult year. If the market can recover in February, there is still a chance for optimism throughout the year. On the contrary, if both months continue to be negative, investors need to prepare mentally for a difficult cycle," said Mr. Duc.
Another important factor is the Tet effect. Liquidity is often low before Tet. This could be an opportunity for investors to identify the bottom and start a stock accumulation strategy.
Along with domestic factors, the Vietnamese stock market is also affected by international developments, especially the event of Mr. Donald Trump's expected inauguration as US President on January 20, 2025. Mr. Nguyen Viet Duc predicts that Mr. Donald Trump's new policies may create a more positive reaction to the market.
In addition, the strengthening of the US dollar is also a factor to pay attention to. The US dollar usually peaks in the first three months of the year and then gradually weakens. Currently, the whole world is concerned about the rising value of the US dollar. Factors such as high US yields and the possibility of the Fed temporarily stopping interest rate cuts; trade policies bringing money back to the US... have greatly reflected in investor sentiment.
Investment opportunities from market cycles
Regarding the market cycle, VPBankS experts recommend investors to focus on potential industry groups in the first quarter of 2025. These include infrastructure, oil and gas and retail groups that often record positive growth in the early stages of the year. These are industry groups that benefit from public investment policies, oil price fluctuations and high consumer demand during Tet.
Although the market is currently sluggish, opportunities always exist for disciplined investors. The expert recommends a strategy of holding 20-40% stocks in the portfolio, and only increasing the proportion when there are clearer macro signals. Bottom fishing should be done with a low proportion, maximum 50%, and the rest should be reserved for buying after the bottom to minimize risk.
In addition, investors should focus on stocks with attractive valuations, such as oil and gas, steel, industrial real estate and banking sectors. These sectors are forecast to record profit growth of 15-44% this year, creating momentum for the market in the medium and long term.
Sharing the same view on the market cycle, Mr. Nguyen Huu Phong (36 years old, Hanoi), an investor knowledgeable in technical analysis, shared: "The market cycle is not only a recurring phenomenon but also an opportunity if we know how to take advantage of it. Determining the equilibrium point through technical models such as harmonic (a technical analysis method based on harmonic price models), shark (a "shark" price model that shows potential reversal points) or butterfly (a "butterfly" model that helps identify market peaks or bottoms) is an important factor to avoid chasing or catching the bottom at the wrong time".
