After being pressured to take profits and break the impressive increase in the trading session at the end of last week, the stock market opened the first trading session of the new week on August 18 quite positively thanks to the dominance of green on the electronic board.
However, the cautious sentiment after a series of strong increases and a reversal session to adjust down last weekend, while selling pressure is still constant at the price range of 1,640 points, has caused the VN-Index to gradually decrease in height and at times reverse to decrease in points. The decrease is not too big thanks to the demand force still being absorbed quite positively, especially the cash flow "finding" industry groups that have not " found waves", helping the market quickly reverse and recover to increase.
At the time of closing, the VN Index increased by 6.37 points, equivalent to 0.39%, to 1,636.37 points. However, liquidity on August 18 decreased significantly compared to the session at the end of last week. Specifically, the entire HoSE exchange has more than 1.6 billion shares matched, equivalent to a trading value of more than VND 45,000 billion.
In the session on August 18, although foreign investors still maintained the pressure to sell, the net selling value decreased by about VND1,000 billion compared to the previous session. Specifically, foreign investors net sold VND 1,947 billion, focusing on SHB, VPB, FPT, VIC, MBB, CTG, MWG, VIC, GEX, HCM.
Recently, the differentiation between investor groups has become increasingly clear. Foreign investors net sold nearly 800 million USD in the first half of August, mainly due to concerns about exchange rates and wanting to take short-term profits due to the risk of weakening the VND. In contrast, personal capital flows have returned strongly, while domestic organizations have maintained proactive transactions. Abundant liquidity and the excitement from domestic capital flows are becoming the key driving force to keep the growth pace.
According to experts, the current developments are reminiscent of the exciting period of 2021, when the increase was driven by favorable macro factors, positive business results and expectations of market upgrading. However, with the current P/E valuation approaching the 10-year average (about 15 times) and margin balance (margin) at a record high, profit-taking pressure is increasing, especially in stocks that have increased rapidly.
A short-term technical correction is necessary for the market to find a balance, reduce FOMO sentiment and attract new cash flow into stocks with good fundamentals but not yet broken out. This will not change the medium- and long-term uptrend.
Analysts from the Market Strategy Research section of HSC Securities Company commented that unlike 2021, the current increase is mainly based on the internal strength of enterprises. The second quarter business results are the best in the last 6 quarters, with the medium and small enterprises sector growing remarkably. Consolidated profit on all three exchanges increased by nearly 30% compared to the same period last year, reflecting the strong recovery of the economy. With the GDP growth target of 8.2 - 8.5% and the possibility of the market being upgraded by FTSE, the VN-Index can exceed current forecasts.
If comparing the market capitalization with the 2025 profit plans of enterprises, the P/E coefficient of the VN-Index is currently around 14 times. This level is not cheap, but during the period of strong market growth, this number can often increase to 18 - 19 times. Therefore, after adjusting about 10% (or equivalent), we think that the index still has room to increase further. History shows that in strong growth cycles, the expected P/E of the market often reaches 18 - 20 times, depending on cheap cash flow.
