Still no solution on liquidity
The market is gradually trading more positively after two weeks of deep decline from the 1,280 point mark. However, the inauguration of US President-elect Donald Trump and new policies could create unpredictable impacts.
In addition, liquidity is still a bottleneck in the market. The buying money flow is quite cautious, while the selling force is gradually decreasing, which is the reason why the liquidity of the market is currently at a low level. This period also clearly reflects the trading psychology of investors before the Tet holiday.
This was clearly shown in yesterday's trading session (January 21), cash flow was still very weak and selling pressure was quite large in large-cap stocks such as banking stocks, real estate stocks... causing VN-Index to fall and lose the resistance level of 1,250 points, but liquidity only reached about 11.4 trillion VND on the HOSE floor.
In fact, market liquidity has been on a downward trend over the past quarter. The reasons come from many factors such as unattractive valuations in many groups and industries due to rapid price increases before; combined with exchange rate pressure or foreign investors continuously selling.
Medium and long term investment strategy
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, commented that an investment strategy focusing on macro factors may be more suitable for medium- and long-term investment goals. In the short term, according to experts' observations, the stock market tends to slow down before Tet, causing the prices of some good fundamental stocks to be adjusted, but creating opportunities to accumulate stocks for the portfolio. Because according to statistics, positive market developments often appear in the first months of the year.
Currently, positive macroeconomic data and prospects, efforts to upgrade the stock market, and investor sentiment after Tet are expected to be the driving force for the market to improve from the end of January and the first quarter of 2025. The stock market is adjusting to an attractive P/E range, which is one of the factors affecting long-term investment decisions. In the context of continued economic recovery, industry groups are expected to continue to focus on banking, technology, and public investment.
According to forecasts from many securities companies, the VN-Index in 2025 may fluctuate between 1,400 and 1,500 points, thanks to positive prospects from many supporting factors. Profits of listed companies are expected to increase by 16 to 19%, concentrated in sectors such as banking, real estate, technology and stocks benefiting from public investment.
“To stimulate cash flow, the exchange rate must be stable, foreign investors must stop net selling, and the new US policy must have more positive impacts than negative ones… The internal driving force to increase liquidity in the stock market is to expand the number of both short-term and long-term investors.
With the new HOSE index set taking effect from March 2025, whether or not it will have a positive impact on the stock market will take time to be tested by the market, but overall, many stocks will be of better quality, attracting more capital flows, and improving the position of the stock market," said Dr. Nguyen Duy Phuong.
