Vietnam Insight

Highlights:

ADP data shows that job creation in the U.S. economy is slowing markedly. The number of announced layoff plans in the U.S. reached its highest level for the month of January since the global financial crisis.

Circular No. 08: Creates additional facilitation and helps “attract” foreign capital into the stock market. Circular No. 08 also amends and supplements regulations on non-prefunding (NPF) trading for institutional foreign investors.

Overnight interbank interest rates, after surging to 17%, quickly cooled down to around 10% in the February 4 session.

Assessment: The market faced strong downward pressure, led by the Vin group and quickly spreading across other sectors. The interbank interest rate’s first spike into double digits since the 2008 crisis is one of the main factors weakening market sentiment. We believe this is largely a seasonal factor due to: the Lunar New Year approaching, which increases cash demand; imbalances between lending and deposits; the impact of the new tax framework for household businesses (effective from 2026); and the gold and silver metal fever that has seen people lining up to buy at many stores. However, an upward trend in interest rates over the long term is difficult to avoid.

Technical view: The VN-Index closed the week at 1,755.49 points (-73.55 points; -4.02%), with slightly improved liquidity. The market has officially returned to the 1,700–1,800 trading range. On the daily chart, the uptrend has been violated as the index fell below the MA20 and MA50. This is largely due to the negative impact from the Vingroup stocks.

Investment ideas: Short-term investors should prioritize holding existing positions and be ready to sell according to plan. Temporarily refrain from new purchases and strictly limit margin usage as liquidity tends to decline ahead of the Lunar New Year. For medium-term investors, the power sector continues to show good momentum, while the real estate sector is trading at relatively low price levels.