Sad record of liquidity
The Vietnamese stock market last week, with weak recoveries and increasingly weak liquidity, caused concerns about a downward trend that has no end in sight.
Even last week, there was a market trading session that recorded a sad record of liquidity when on the HOSE floor there was only liquidity of more than 7,500 billion VND (session on January 9).
The VN-Index continued to slide as investors became increasingly concerned about current market developments.
The massive selling pressure at the end of the week proved that, taking away all efforts to maintain the support level of 1,240 points, pushing VN-Index down to 1,230.48 points.
In terms of impact, pillar stocks weighed heavily as all 10 stocks with the most negative impact were in the VN30 group, each taking away at least half a point from the VN-Index.
Leading the way were two banking stocks BID and TCB, pushing the index down nearly 2.5 points. On the other hand, no notable names appeared that could slow down the decline.
Red spread across all industry groups. The telecommunications group plunged nearly 4%, ranking at the bottom of the table amid strong corrections in most large stocks in the industry.
The highlight is that YEG stock was sold off heavily with four floor-price sessions and the "pine tree" pattern has almost fully formed.
Cash flow improves with upgrade scenario
2025 is the year that experts and investors expect to be a positive year for the stock market. Many positive scenarios have been put forward, predicting that the VN-Index will increase from 1,400 points to 1,420 points.
However, at this point, investors are starting to have to follow the rule of identifying possible risks with a positive scenario.
If those risk factors become reality, we need to readjust the scenario, expectations, and have appropriate stop loss methods.
ACBS Securities Company recently commented that 2025 is a pivotal year for the Vietnamese stock market with the event of being upgraded to an emerging market by FTSE after 7 years since being on the watch list.
This event is expected to bring foreign capital to the VN-Index from ETFs and active funds, as well as the ability to raise valuations to a higher level, thereby supporting the growth of large-cap stocks.
The 2025 after-tax profit of listed companies is likely to increase by 15-16% over the same period. In the baseline scenario, the reasonable valuation of the VN-Index will continue to stick to the 3-year median P/E, corresponding to the trading range of 1,240 - 1,420 points on the basis of liquidity increasing by 15% compared to the average in 2024.
Opportunities for VN-Index in 2025 include: Upgrading the market, successfully boosting public investment, continuing to benefit from the trade war under Trump 2.0. On the contrary, risks come from exchange rates and operating interest rates increasing again and declining exports due to the trade war.
The market liquidity story is expected to be upgraded.
According to ACBS's estimate, VN-Index will account for about 0.3 - 0.4% of the weight in the FTSE emerging market index basket.
ACBS calculates that there will be 222 stocks eligible for the FTSE index. However, the weighting of each stock will depend on the investable capitalization of each stock.
Thus, the top 20 stocks account for 0.218% of the total 0.366% of the Vietnamese market capitalization, equivalent to 60%.
The stock market will see about $300 million to $400 million from the Vanguard FTSE Emerging Markets ETF passive index fund. According to FTSE Russell's estimate, total capital from active and passive funds will reach about $5 billion to $6 billion.
Normally, the Vietnamese and world stock markets often increase sharply and then decrease sharply, or vice versa, decrease sharply and then rebound sharply.
Thus, if looking at 2025 with supporting factors as analyzed above, the possibility of a strong increase will be greater than the possibility of a strong decrease.
