Vietnam Insight

EN:

▶ The index opened the week with a gap down of 2.14 points, continuing the correction from the previous session. Profit-taking pressure on Vingroup stocks continued to weigh on the index today; however, strong demand from oil and gas and rubber stocks curbed the market's decline. The index also experienced net selling pressure from foreign investors for more than 10 consecutive sessions, but domestic investor demand overcame the net selling pressure from foreign investors.

▶ At the close of trading, the VN-Index rose 5.60 points (+0.30%), reaching 1,901.10 points; the HNX-Index rose 5.22 points (+2.10%), reaching 253.28 points. Market liquidity fluctuated, sharply decreasing compared to previous sessions and below the 20-day average, at VND 22.3 trillion, corresponding to 798.9 million shares traded. Foreign investors continued to net sell VND 825 billion today, with the largest net selling values in FPT, VHM, and MSB. Conversely, VIC, VRE, and GEX were the stocks that saw net buying.

▶ Technical Perspective: The VN-Index closed the trading session at 1,901.10 points (+5.60 points, +0.30%), with higher volume than the average of the last 20 sessions. There were 161 gainers and 137 losers. Stocks positively impacting the index included STB, GAS, and BSR; while VIC, GEE, and VCB negatively contributed. Foreign investors net sold 825 billion VND, mainly focusing on FPT, VHM, and MSB. (Attempting to regain the 1900 mark despite the lack of support from Vingroup and insufficient liquidity)

Technical: The VN-Index regained the important support level of 1,900 points despite the continued correction of Vingroup stocks. The index's recovery session showed divergence across different sectors. However, the index's recovery was not supported by strong liquidity; the index experienced a sharp decline in trading volume compared to previous sessions. In the short term, the index is trading sideways around the important support level of 1,900 points, potentially heading towards the 1,950 point region as net selling by foreign investors eases. The market is likely to experience periods of volatility to restructure and shift capital flows to new leading stock groups such as banking and securities.

In the base scenario: The ceasefire agreement has improved investor sentiment, but the two sides have not yet reached an agreement to completely end the conflict. During this volatile period, the VN-Index continues to aim for the previous peak of 1,950 points.

In the downside scenario: The prolonged disruption 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 improvements in business performance. Currently, capital flows tend to favor sectors with domestic momentum such as public investment, banking, and construction materials. For the real estate sector, after a period of deep discounts, signs of capital returning have appeared in recent sessions. Meanwhile, the securities sector continues to be supported by the market upgrade story, thus maintaining a certain attractiveness to investors.