Market uptrend reinforced as VN-Index, transaction value hit new peaks: broker

Although the VN-Index closed Tuesday down significantly from the peak of 1,584 recorded at one point in the session, there were "many positive bright spots that reinforced the market's uptrend", according to Truong Hien Phuong, a senior director at KIS Vietnam Securities.

The Tuesday session featured many highlights. The VN-Index, which represents the Ho Chi Minh Stock Exchange, reached an all-time high of 1,584 points at around 2 p.m., and then dropped sharply to 1,519.65 (down 8 points from the reference point).

Then, it took only a few minutes for the index to quickly rebound to 1,542 points (up 14 points from the reference point). VN-Index closed the session at 1,547.15, up 18.96 points.

Transactions on the HoSE reached a record level of nearly 2.8 billion units, equivalent to VND74,929 billion ($2.85 billion). Selling pressure still overwhelmed the major exchange with 118 stocks increasing and 221 decreasing.

The index maintained its upward momentum largely thanks to VN30, which comprises 30 largest-cap stocks. VN30 increased by 37.21 points with 19 stocks rising and nine dropping. Most notably, MBB of MBBank maintained its maximum increase, rising to VND29,700 ($1.13) per share.

Some other stocks such as VIC, TPB, TCB, HPG, and STB had reached the ceiling price at one point and were the main factors that pushed VN-Index to the new peak. However, strong selling pressure drove these stocks to close the session with a narrower increase.

VIB at one point dropped at maximum to VND18,000 per share, but by the end of the session, the decline narrowed to -0.3%.

In general, stocks in the VN30 group mainly adjusted within the range of 0.3-1.3%. The only two stocks that decreased by more than 3% were BCM (-3%) and SSB (-3.2%).

However, the Midcap and Smallcap groups were not as positive. Both the indices which represent mid-cap and small-cap stocks "made efforts" to recover, but ended the session down 0.96% and 0.21%, respectively.

Truong Hien Phuong, a senior director of KIS Vietnam Securities JSC, told The Investor that the selling pressure on Tuesday was not simply from foreign investors and proprietary trading.

"The reason is these two groups of investors have a safe-haven style and prefer to invest in bluechip stocks. The widespread selling pressure across the entire market shows that Vietnamese individual investors sold heavily to lock in profits. Given the T+2.5, many stocks have a profit yield of 5-10%."

T+2.5 refers to a settlement cycle where securities are delivered and payment is made two and a half business days after the trade date.

Another bright highlight of the Tuesday session was that very few stocks closed at the floor price.

"The market fell sharply from the peak with record liquidity, but many stocks still increased well by 1-2%. This meant the buying power was still very strong, and the uptrend of VN-Index is still consolidated in the medium and long term," Phuong analyzed.

Market status upgrade a big boost to investor sentiment

Phuong assessed that the market is still in an uptrend thanks to the support of the market status upgrade prospects in the upcoming September review.

Phuong commented: “Investors expect that with the upgrade, Vietnamese securities can attract investment funds with a scale dozens of times larger than the current funds. Meanwhile, negative information from the outside such as tariffs and geopolitical tensions have been priced in. Therefore, individual investors are certainly very optimistic about the market prospects.”

On the other hand, Phuong acknowledged that the fear of missing out (FOMO) mentality is present in the market (most clearly shown in the Tuesday session). Many investors with a cautious mentality have missed the increases of VN-Index, so the adjustment sessions and fluctuations of the index are opportunities for them to enter the market, he argued.

“With the positive stories such as market status upgrade and optimistic sentiment, I believe that VN-Index is still in an upward trend,” he noted.

Phuong said that in addition to the VN30 group, investors can pay attention to stocks related to public investment, iron and steel given the positive impacts from the Government's promotion of public investment and those related to civil real estate given the Government's efforts to help property projects ride out of difficulties.

Industrial real estate is also attractive after Vietnam and the U.S. have finalized a 20% tariff rate. Another is the securities group with expectations from market status upgrade, he added.