Vietnam Insight

▶ In the first trading session of the week, the VN-Index recorded a 22-point increase, nearing its previous peak before geopolitical tensions impacted the index. However, the upward momentum lacked uniformity and was mainly concentrated in the VinGroup's stocks. The market was clearly polarized, with the trio of VIC-VHM-VRE reaching their upper limit, while most other sectors were in the red. The oil and gas sector continued to correct sharply, with many stocks recording significant declines. In addition, a few individual stocks also saw good price increases, such as STB, NVL, and MWG. Market liquidity narrowed before the long holiday, with the total trading value across all three exchanges only around 20 trillion VND.

▶ At the close of trading, the VN-Index increased by 22.55 points (+1.22%), closing at 1,875.84 points; The HNX-Index fell 2.51 points (-1%), reaching 249.44 points. Total trading volume across all three exchanges was approximately 20.6 trillion VND, corresponding to over 725 million shares traded. Foreign investors continued their strong net selling with a value of 533 billion VND, with FPT (-286 billion VND) and VHM (-166 billion VND) being the stocks experiencing the most significant net selling. Conversely, VRE and NVL were the stocks with the most net buying.

▶ Technical perspective: The VN-Index recovered, regaining some of the previous session's losses, despite remaining low liquidity. Notably, the current upward momentum is mainly driven by Vingroup's blue-chip stocks, meaning the index's performance doesn't fully reflect the overall market strength. Selling pressure remains in the oil and gas sector, while most other sectors are only fluctuating slightly or trading sideways. In the short term, the index is expected to continue its upward trend towards the historical peak of 1,920–1,950 points before facing correction pressure. The nearest support level is at the psychological mark of 1,800 points, while a stronger support zone is identified around 1,680 points.

In the base-case scenario: The ceasefire agreement has improved investor sentiment, but the two sides have yet to reach a complete agreement to end the war. During this volatile period, the VN-Index continues to head towards its previous peak of 1,950 points.

In a worst-case scenario: Prolonged disruptions in 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 environments are often unfavorable for the stock market and could lead to a deeper correction in the VN-Index. If the market continues to decisively lose the 1,580 support level, accompanied by weak recovery sessions, the downtrend could be further strengthened.

Strategy: Investors should limit chasing rallies and selectively choose stocks showing improvement in business operations. At the current stage, capital flows tend to favor sectors linked to domestic momentum such as public investment, banking, and construction materials. For the real estate sector, after a period of deep discounts, signs of capital inflow have appeared in recent sessions. Meanwhile, the securities sector continues to be supported by the market upgrade story, thereby maintaining a certain attractiveness to investors.