Vietnam Insight

Highlights:

VND interbank interest rates continued to cool sharply on February 12, especially the overnight rate, which fell below 4% per annum.

On the morning of February 11 in Ho Chi Minh City, Prime Minister Pham Minh Chinh attended the launch ceremony of the Vietnam International Financial Center in HCMC (VIFC-HCMC), delivering a consistent action-oriented message: “Clear policy – Clear mechanisms – Available resources – Determination to never give up – Success will come.”

Credit institutions receiving compulsory transfers of banks under special supervision are entitled to a 50% reduction in required reserve ratios.

Assessment: The market rebounded from the 1,800 support level, supported by multiple positive developments in the banking sector. Specifically, the announcement of a reduction in required reserve ratios impacted stocks such as HDB, MBB, VCB, and VPB. Notably, MBB showed strong performance and recorded the highest net foreign buying over the past week. In addition, easing liquidity pressures further improved market sentiment ahead of the Lunar New Year holiday.

Technical view: The VN-Index closed the week at 1,824.09 (+68.6 points, +3.91%) with low liquidity due to the pre-holiday period. The market has successfully confirmed a test of the 1,800 support level, resuming its uptrend after three consecutive weeks of decline. Foreign investors posted strong net buying during the week. We believe the market is likely to continue its upward trend in the week following the Lunar New Year, with liquidity expected to improve.

Investment ideas: Short-term investors may consider initiating new positions in stocks that have rebounded from support levels and show strong momentum, particularly in the banking sector. The securities sector is also expected to perform positively amid upcoming developments related to potential market reclassification (upgrade).