Vietnam Insight

▶ The market entered the new week with a cautious trading session as tug-of-war pressure persisted throughout the day between buyers and sellers. The VN-Index opened around the reference level and remained mostly above this mark during the morning session; however, increased selling pressure in the afternoon caused many stocks to reverse, resulting in the index closing with a slight decline. Nevertheless, liquidity remained below the 20-session average, indicating that selling pressure was not overly strong amid a lack of disbursement cash flow. Foreign investors expanded their net selling range in the first session of the week, with a net value of nearly 1,400 billion VND. Bright spots emerged in several Real Estate stocks with solid gains, such as NLG (+6%), NVL (+7%), or VHM (+2%)...

▶ At the close of the trading session, the VN-Index decreased by 3.03 points (-0.18%) to close at 1,693.21 points; the HNX-Index fell by 0.1 points (-0.04%) to reach 245.74 points. Total market liquidity reached 25.6 trillion VND, lower than the 20-session average, corresponding to approximately 1 billion shares traded. Foreign investors widened their net selling margin with a net sell value of 1,377 billion VND, notably recorded in BSR, VIC, and PVD. On the other hand, typical net-sold stocks included MCH, PLX, and MSN.

▶ Technical perspective: In the context of uncertainties surrounding the conflict in Iran and the risk of disruption at the Strait of Hormuz, the VN-Index traded with low volatility and relatively quiet liquidity. Although more attractive valuation levels in previous sessions attracted some bottom-fishing force from sideline cash flow, the lack of cooling signals from geopolitical tensions limited the market's recovery momentum. The VN-Index is currently trading around the MA200 line, with an RSI at 36, indicating that selling pressure still prevails in the short term. In this context, we expect the market to fluctuate around the MA200 zone, with potential for a rebound if geopolitical tensions show signs of cooling in the coming weeks.

Base Case: The VN-Index is expected to fluctuate within the 1,650–1,750 point range in the short term as investors await clearer signals regarding the de-escalation of geopolitical tensions. If tensions ease, pressure on global oil prices may cool down, thereby opening the possibility for the Fed to resume its interest rate cut cycle sooner. This could help improve risk sentiment in the market and support the equity market.

Negative Case: Prolonged disruption at the Strait of Hormuz could further tighten global oil supply, keeping oil prices high for an extended period. This scenario increases the risk of stagflation (high inflation coupled with low economic growth). Historically, such an environment is generally unfavorable for equity markets and could cause the VN-Index to face a deeper correction.

Strategy: Investors should refrain from deploying full purchasing power until there is more clarity on geopolitical developments in Iran. During this phase, priority can be given to sectors benefiting from domestic factors such as public investment, banking, and construction materials; meanwhile, downward swings caused by cross-margin call pressure may create opportunities to buy at attractive prices. Additionally, investors may consider commodity stocks as commodity prices enter an uptrend (e.g., fertilizers). However, this group tends to be highly volatile, requiring strict risk management if the market context shifts.