The HCM City Stock Exchange (HOSE) released a report on stock trading in May which showed notable results.

Closing the last trading session of May, the VN Index reached 1,292.68 points, a decrease of 5.42 percent compared with April, and 13.72 percent compared with late 2021. 

The VNAllshare was 1,312.15 points, a decrease of 6.64 percent compared with April and 15.96 percent compared with late 2021. Meanwhile, the VN-30 was 1,332.59 points, down by 5.98 percent and 13.23 percent, compared to April and late 2021 respectively.

Regarding liquidity, the trading value in May was VND14.951 trillion per trading session, and the trading volume was 540.22 million shares, which represented a decrease of 32.4 percent in value and 20.98 percent in trading volume compared with April.

The total value and volume of shares in the month were VND299.02 trillion and 10.8 billion shares, decreasing by 32.4 percent in value and 20.98 percent in volume compared with the month before.

As such, the trading value in May dropped by VND143 trillion, or $6.2 billion in comparison with April.

Along with the decline of the major index, most of the industry indexes also decreased. The VNMAT (material) index fell by 16.53 percent, VNFIN (finance) 9.68 percent and VNHEAL (healthcare) 6.42 percent. Meanwhile, the indexes of some industries saw growth, including VNENE (energy) up by 1.06 percent, VNIT (information technology) 3.22 percent and VNUTI (utility service) 4.41 percent.

In May 2022, the total trading volume of CW (covered warrants) in May reached 542.08 million CW and the trading value was VND347.61 billion. The average CW trading volume was 27.1 million CW and the average trading value was 17.38 billion, decreasing by 12.9 percent in trading volume and 46.5 percent in value compared with April.

The total trading value of foreign investors was VND53.764 trillion, which accounted for 8.99 percent of the value of the whole market. They purchased more than sold in May with net purchase of VND889.79 million.

Regarding HOSE market size, as of the end of May, there were 522 listed securities, including 404 shares, two closed-end fund certificates, nine ETF certificates, 102 CW and five bonds.

The total volume of listed shares was 129.28 billion. The listed capitalization value was 5.12 quadrillion, a decrease of 5.46 percent compared with the previous month, equal to 61 percent of 2021’s GDP.

In May, HOSE had 32 new CWs listed and put into transaction.

The stock exchange successfully organized a competitive offering session in lots of stocks of Chau Duc Construction and Urban Development held by the State Capital Investment Corporation (SCIC). The total volume sold was 1,152,000 shares, worth VND32,762,000,000.

By the end of May, 44 businesses listed on HOSE had had the capitalization value of over $1 billion and 3 businesses had had the capitalization of over $10 billion, namely Vietcombank, Vinhomes JSC (VHM) and Vingroup (VIC).

According to experts, the liquidity decreases recently because the cash flow is heading for other investment channels. Businesses’ idle money has been withdrawn and come back to production and business as the economy is recovering.

The deposits at commercial banks have begun increasing as the interest rates have increased. Meanwhile, the hot money flow into the market is becoming cautious following a series of policies and actions by state management agencies to make the finance and real estate markets more stable and transparent. 

The market liquidity has seen improvements in recent trading sessions with the liquidity of VND18-19 trillion instead of VND15 trillion as seen in previous weeks. 

Analysts said that the liquidity may increase to VND20-22 trillion, but don’t think that the figure would regain the VND30 trillion threshold as seen in the boom period in late 2021 and early 2022.

With the current liquidity, analysts believe that the market has not bottomed out yet. Vietnamese stock valuation is currently quite low, about 11-12x and it is considered attractive.

According to VinaCapital, the stock market is potential in both short and long terms.

FPT said in the first half of May, the VN Index saw the sharpest decrease in Southeast Asia with the rate or return decreasing by 21.8 percent (other markets saw the decrease of less than 8 percent). The P/E valuation fell to below the 10-year evaluation (15.0x).

According to Dragon Capital, Vietnam’s economy is stable with growth potentials and low market valuation. In general, the big correction spells in the last 10 years are followed by strong recoveries and the reach to new highs.

However, individual and institutional investors still keep cautious. Vietnam Enterprise Investments Limited (VEIL) managed by Dragon Capital reported the high proportion of cash, at 5.77 percent on May 5, just lower than the 6.38 percent seen in May 2020, when the Covid-19 pandemic broke out.

M. Ha