Vietnam Insight

▶ The VN-Index extended its correction with a decline at the start of the trading week, although the drop was relatively mild. Liquidity continued to evaporate, falling below 20 trillion VND, equivalent to only 2/3 of the average value of the last 20 sessions. Market movements were relatively uniform, with 238 stocks declining and 76 stocks rising. LPB stock stood out today with a surge to its ceiling price; this is also a bank stock that has seen significant net buying from foreign investors recently. The low liquidity reflects the general market sentiment as investors hold their breath awaiting the expected upgrade results to be announced on the morning of April 8th, and the geopolitical variables of the world, which are crucial factors determining the market's future trend.

▶ At the close of trading, the VN-Index fell -9.05 points (-0.54%), closing at 1,674.99 points. The HNX-Index fell by -3.65 points (-1.47%), reaching 245.03 points. Market liquidity continued to decline to 19 trillion VND, corresponding to only about 757 million shares traded. Foreign investors net sold a low value of -116 billion VND, with strong net selling in the banking sector. Typical stocks experiencing net selling included TCB, MBB, and HDB... Typical stocks experiencing net buying included VIC, GEX, VNM…

▶ Technical perspective: The VN-Index continued to experience a subdued trading session ahead of potential market upgrade-related news and expectations of a ceasefire agreement between the US and Iran. The trading range narrowed, and liquidity declined significantly; however, the index still closed above its MA200 with only a marginal loss. Both buyers and sellers remained cautious, awaiting clearer developments from the Middle East situation. After a series of strong net selling sessions, foreign investors reduced their selling intensity in today’s session.

Base case scenario: Although the outcome of the conflict in the Middle East remains uncertain, recent signals suggest that both sides have taken steps to de-escalate tensions and move toward negotiations. Amid this period of heightened volatility, the VN-Index continues to trade sideways within the 1,580–1,800 range.

Worst case scenario: A prolonged disruption of the strait of Hormuz could further constrain global oil supply, driving oil prices higher for longer. This scenario would increase the risk of stagflation—persistently high inflation alongside weak economic growth. Historically, such an environment has been unfavorable for equity markets, potentially leading to a deeper correction in the VN-Index. VN-Index decisively lost the key support level at around 1,580 with limited following recovery would further confirms the downtrend. 

Strategy: Investors may consider gradual accumulation during market pullbacks. However, given that geopolitical risks remain uncertain, we recommend maintaining a moderate equity exposure to effectively manage portfolio risk. At this stage, capital flows are showing a preference for sectors supported by domestic drivers, such as public investment, banking, and construction materials. For the real estate sector, following a period of deep correction, recent sessions have indicated a return of capital inflows. Meanwhile, the securities sector continues to be supported by the market upgrade narrative, sustaining its relative attractiveness to investors.