The stock market has had some up sessions, but the downside is that liquidity has dropped sharply compared to previous sessions. Moreover, the uptrend could not be maintained at its peak at the close, showing that the momentum for the uptrend is not too strong.
However, this is still a positive signal that helps investors who opened a buy position at the previous support level of 1,260 points feel more optimistic. Analysts believe that VN-Index needs to have more testing sessions, or have a closing session above the 1,260 point mark with reliable enough liquidity to confirm the return of the uptrend.
Since the beginning of April 2024, VN-Index has been unable to maintain the upward trend and has moved sideways, failing to test the resistance zone of 1,300 points 6 times. In the context of the current exchange rate pressure, foreign investors have continuously sold Vietnamese stocks and this trend has not shown any signs of slowing down.
Foreign investors have been net sellers for 19 out of the last 20 months, and have net sold more than VND85 trillion since the beginning of the year. Market liquidity has been on a sharp decline as domestic individual investors have sought to leave the market and switch to other traditional investment channels such as gold, real estate, or savings.
Regarding the market outlook for 2025, Ms. Nguyen Thi My Lien - Head of Analysis Department of Phu Hung Securities Company (PHS) said that Vietnam's economic situation is still positive with GDP forecast to grow over 7%, exchange rate pressure will decrease when interest rates at central banks around the world gradually cool down, thereby attracting domestic and foreign capital flows into the stock market. The growth momentum of the economy will also be reflected in the business results of enterprises on the stock exchange, thereby boosting stock prices.
2025 is expected to be a turning point for the Vietnamese stock market. The State Securities Commission has recently shown its determination to solve the upgrade problem through amending the Securities Law. The pre-funding bottleneck for foreign investors has also been removed and the door to upgrading has opened wider.
"To achieve the goal of upgrading the market by 2025 and strongly attracting international capital flows, in addition to the general economic growth, Vietnam needs to continue to improve transparency, liquidity and legal infrastructure. This will be an important foundation for the Vietnamese stock market to strongly attract international capital flows, affirming its position on the global financial map," said Ms. Lien.
In terms of valuation, PHS experts believe that Vietnam's current stock market has a projected P/E of less than 10 times in 2025, which is 2 standard deviations lower than the average of the last 10 years. This projected P/E is also the lowest when compared to stock markets in the Southeast Asian region. Therefore, this is the right time for investors to consider re-entering the Vietnamese stock market.
However, there are also challenges that investors need to pay attention to, such as escalating geopolitical tensions or the unpredictable policies of President Donald Trump when he is re-elected, which will affect not only trade but also other monetary and fiscal policies of Vietnam.
