Vietnamese individual investors open 106,417 new securities accounts in June

Vietnamese individual investors opened 106,417 new accounts in June, a decrease of more than 25,000 from May, according to the Vietnam Securities Depository (VSD).

By the end of June 2024, the total number of Vietnamese investor accounts reached approximately 8 million, the highest level ever in the nearly 24-year history of the Vietnamese stock market. Of them, individual investors hit 7.98 million, equivalent to 8% of the population.

The number of securities accounts decreased in June because the market encountered many difficulties at the resistance area of around 1,300 points, in both June and the first trading week in July.

Closing the session on July 5, the VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), stood at 1,283 .04 points, up 0.23% from the beginning of June, and 13.55% from the year outset.

June also saw foreign investors continuing to be net sellers to the tune of nearly VND16.6 trillion ($653.1 million). In the first five sessions of July, they net sold over VND2.16 trillion. Since the beginning of the year, foreign investors have net sold a total of nearly VND55 trillion (about $2 billion).

Many experts said that foreign investors' net selling comes from concerns that the U.S. Federal Reserve (Fed) will maintain high interest rates, even leaving open the possibility of the rates again.

In theory, the Fed’s high interest rates have made the valuation of Vietnam's stock market and other frontier markets less attractive. In addition, the good gain of some stock markets in developed countries is also the reason why foreign investors have strongly withdrawn money from emerging countries.

Broker Yuanta Vietnam Securities believes that inflation is still in a downward cycle, and the USD is cooling down. However, USD interest rates are still at high levels, while the central banks in Europe and Canada have begun to reduce interest rates. This raises expectations about the possibility of interest rate reductions in the last six months of the year to support the recovery of the economy.

It says that the VN-Index may increase, and if the VN30 index, which tracks the performance of the 30 largest-cap stocks, exceeds 1,310 points, the uptrend will be clearer and cash flow may return to the group of blue chips. Yuanta Vietnam recommends that investors choose stocks in their portfolio carefully and prioritize holding a high proportion of shares in the long term.

Another broker MBS Securities believes that the upward momentum of the benchmark VN-Index has not reached its limit. The valuation of large-cap stocks seems to be attractive thanks to their profit growth potential in the 2024-2025 financial year compared to other groups, it said.

"We predict the VN-Index will reach 1,350-1,380 points by the end of the year, after 20% profit growth in fiscal 2024 and a P/E (price to earnings) target of 12 to 12.5 times," it says.