Vietnam stock market faces strong selling pressure at the close

Vietnam’s benchmark VN-Index encountered strong selloffs at the close (ATC) from November 20-24.

In the first trading session of the week, strong demand helped the VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), move closer to the 1,110-point territory, with green covering almost all stock groups.

However, with caution and short-term profit-taking pressure, the market was somewhat out of breath in the next two sessions before suffering unexpected strong selling pressure on Thursday.

In the Thursday session, the VN-Index mainly moved around the area of 1,112-1,120 points from the morning to the first half of the afternoon. However, at the ATC, massive selloffs forced the VN-Index down more than 25 points compared to the reference level to close at 1,088.5 points, marking its deepest decline since October 26.

The drama followed in the week-ending session when the market entered the ATC with sudden strong demand, helping the VN-Index recover and close at 1,095.6 points, up more than 7 points from the previous day.

Ending the week, the VN-Index stood at 1,095.61, down 5.58 points, or 0.51%, from the previous week. MSN of Masan Group, TCB of Techcombank, and VNM of Vinamilk had the most negative impact on the market. In particular, MSN alone took away more than 0.5 points from the VN-Index.

On the contrary, SAB of brewer Sabeco, BID of BIDV bank, and HPG of steel giant were the most positive influencers, with SAB adding more than 0.8 points to the index.

The average trading value on all the three exchanges in Vietnam during the week was VND21.16 trillion ($871.7 million), down 0.2% compared to the previous week but up 14.6% compared to the five-week average.

Foreign investors continued to be net sellers to the tune of VND902.24 billion ($37.2 million) on the HoSE. They mainly net sold VPB of VPBank.

Banking stocks showed the worst performance with most of them decreasing with low liquidity such as STB of Sacombank (-3.58%), TCB (-3.53%), ACB of Asia Commercial Bank (-2.86%), and SHB of Saigon-Hanoi Bank (-2.23%).

Securities tickers increased compared to the previous week, with high trading values. Among the gainers were BSI of BIDV Securities, up 8.83%; VDS of Viet Dragon Securities (5.96%), CTS of VietinBank (5.81%), VND of VNDirect Securities (5.19%), and MBS MBBank Securities (4.37%).

Real estate stocks saw slight profit-taking pressure after a week of good gains.

Leading broker Saigon-Hanoi Securities (SHS) said it believed the market is still in a recovery stage and will need a lot of time to find a balance area for its accumulation process. If the VN-Index regains the 1,100-point mark, short-term investors can put down money but with caution.

“In the medium and long term, investors can increase their proportion of stocks. They should choose leading tickers with good fundamentals and stable growth potential that are moving in the current accumulation state," it advised.

Another broker Vietcombank Securities (VCBS) said that in a positive scenario, the VN-Index will move sideways around the 1,080-1,130-point area, so it recommended investors remain cautious, only buying stocks that show signs of rebounding at their support zone with a proportion of 20-30%.