Vietnam Insight

Key highlights:

According to the Ministry of Finance, short-term liquidity in the banking system has improved. As of August 22, VND-denominated deposits increased 8.77% year-to-date, exceeding the 8.38% growth in credit outstanding.

In Japan, the 10-year government bond yield reached 3%, the highest level since 1996. Germany's benchmark 10-year bond yield rose to its highest level since 2011, while the US 10-year Treasury yield climbed to around 4.8%, the highest level since early November 2023.

Fed Governor Christopher Waller recently said that he is leaning toward keeping interest rates unchanged at the September meeting, provided that upcoming inflation data do not show any major surprises.

Assessment: The market continued its upward trend, but the gains were primarily driven by Vingroup stocks. The rally may have been supported by news that VIC issued bonds to South Korean investors. However, market breadth on the VN-Index has not improved following the holiday break, partly due to concerns that global bond yields remain at very high levels and uncertainty surrounding the possibility of further interest rate hikes by the Fed. Nevertheless, we believe the domestic market remains broadly stable, and expectations of foreign capital inflows following the market upgrade could provide a catalyst for further improvement in the coming period.

Technical View: The VN-Index ended the week at 1,853.08 points (+20.9 points, +1.14%), with weekly trading volume remaining low as the market was open for only 2 sessions following the National Day holiday on September 2. Most stocks held their ground and traded within a narrow range on low liquidity. In terms of the index, the market is trending toward the 1,900-point level, although the gains were primarily driven by the VIN group.

Investment Idea: Investors should remain patient and wait for market fluctuations to accumulate positions. The preferred strategy is to select stocks that have not risen significantly relative to the broader market but have solid business fundamentals, benefit from potential upgrade-related capital flows, and offer attractive valuations. In addition, investors should avoid chasing rallies and using excessive margin on stocks that have already experienced sharp gains.