The stock market on June 26-30 saw strong selling pressure late last week after the General Statistics Office (GSO) released statistics about the macroeconomic situation in the second quarter which showed no positive improvements.

Vietnam’s GDP continued to see a low growth rate of 4.14 percent compared with the same period last year because of the lack of orders for production and export. The growth rate was higher than the 0.34 percent growth rate in the second quarter in 2020 in the 2011-2023 period.

The industry and construction sector grew only by 2.5 percent, while the service sector grew by 6.11 percent.

Amid difficulties, the unsatisfactory business results of listed companies were foreseeable.

The stock market experienced a correction week after the four previous consecutive weeks of increase before. The recovery momentum on June 23 could not last a long time as the profit taking momentum appeared right on the first trading session of the new week (June 26).

The selling pressure increased when investors received information that the economic performance was not good. Some investors tried to make a profit and expected to buy back shares at a lower price when information about less positive business results appeared.

Closing last week, the VN Index decreased by 9.2 points to 1,120.2 points, down 0.81 percent compared with the week before. The HNX Index fell by 1.8 percent to 227.3 points and UpCom Index moved up slightly by 0.4 percent to 86 points.

The market was under downward pressure from shares with high capitalization value such as BID of BIDV (- 2.1 percent), VHM of Vinhomes (- 1.8 percent), GAS of PV GAS (- 2.3 percent) and VIC of Vingroup (- 1.9 percent).

The liquidity slightly decreased with the average transaction value of three bourses down 2.1 percent to VND19.052 trillion.

Foreign investors continued to sell more than buy. However, the net sale was insignificant, just VND39 billion, down 81 percent compared with the previous week. The investors bought manufacturing, retail, banking and securities shares, such as Hoa Phat (HPG), FPT Retail (FRT), VietinBank (CTG) and SHS.

In the first six months of the year, foreign investors’ purchases were still higher than sales by VND2.2 trillion.

Analysts say that the Vietnamese market continues to attract foreign capital. Foreign cash flow is expected to return when businesses’ period of profit decrease is over. Dragon Capital has expressed its optimism and belief that 2023 is the year for accumulating good shares.

Public investment, tourism, real estate to give a push

Despite sharp index falls, analysts believe that the market signs are not bad.

Dinh Quang Hinh from VnDirect Securities stressed that the indicator decrease on June 23-30 has not affected the upward trend of the market. The bottom-fishing demand may appear soon and help the VN Index recover when touching the MA20 (moving average), or 1.115-1,120 points.

The analysis director of a securities company said the last trading session of the last week (Friday) with VN Index decrease was a correction after the significant increases. However, in the last six months of the year, there will be many bumps and the momentum for an increase is not strong.

Analysts believe that if deposit interest rates continue to decrease, cash won’t outflow from the stock market, but will circulate between groups of shares. The stock indexes may not see breakthroughs, but some groups of shares will still attract cash flow and witness outstanding growth rates compared with the market in general.

In fact, the operating interest rates have decreased sharply and the deposit interest rates have also been lowered, but capital is still not cheap enough. The actual lending interest rate is still hovering around 7-8 percent. Meanwhile, profits expected from the stock market are estimated at just 8 percent.

This means that compared with depositing, making investment in stocks is not attractive.

Though enterprises and the national economy are expected to overcome the worst period and are recovering, the recovery is going slowly. The value of industry in the last six months increased by only 0.44 percent.

The good news is that public investment has accelerated with large projects kicking off. Large real estate firms have reactivated projects. Commercial banks have pushed up lending to real estate development projects. MB Securities predicts that the VN Index will aim for the 1,155-1,200-point area in the second half 2023.

Manh Ha