According to Saigon Securities Incorporated (SSI), the stock market is facing risks because of the exchange rate and interest rate increases.

The VN-index fell by 9.2 percent in October, the stock market by 31.3 percent so far this year. This shows a downtrend of profit as a result of high inflation and interest rates. The recent selling wave and force-sell pressure have caused the prices of many shares, especially real estate, to fall by 50-90 percent.

The market may have fallen into an "oversold" state. In general, excessive pessimism could be an indicator that the market will see recovery later, SSI forecasted. The current events, such as the upward trend of the exchange rate, interest rate and risks in the corporate bond market will not help the stock market recover sustainably.

In November, according to SSI, the VN-Index may be around 1,000 points. The recovery of the VN-Index would be high with a targeted index of 1,040 points. In an opposite scenario, the VN Index may be around 968-960 points.

Cash flow to Vietnam is positive. Some large ETFs have recorded a reversal of poor cash flow after many months of net withdrawal and have received big capital, such as VNDiamond (+ VND835 billion), VFM VN30 (+ VND566 billion), VanEck (+ VND516 billion). Meanwhile, Fubon has maintained continuous disbursement since the beginning of 2022 and reported a net inflow of VND1.314 trillion in October.

The net purchase of foreign investors in October, if not including EIB’s unexpected put-through transaction, has a total value of VND2 trillion. Foreign investors have disbursed money for essential goods retail shares, and industrial real estate and banking shares.

Manh Ha