The stock market experienced a gloomy week on December 18-22 with low liquidity of VND14 trillion per trading session. The multi-billion dollar cash flow no longer existed. There was no good news supporting the market, while foreign investors continued to sell more than buy shares.

The VN-Index last week increased slightly, hovering around the psychological threshold of 1,100 points. The highlight of last week was the price increase of steel shares after the news that Europe had increased HRC steel, while iron ore prices were on the decrease. 

The recovery of some steel shares, including Nam Kim (NKG), Hoa Sen (HSG) and Hoa Phat (HPG), helped the stock index increase slightly amid the prevailing gloom.

Retail shares also help prevented sharp falls. Investors put high hopes on the increase in goods trading in the year-end sale season.

The Gioi Di Dong (MWG) share prices increased significantly again thanks to foreign investors’ net purchase. MWG prices increased at three out of five trading sessions last week. Foreign investors bought 15 million MWG in the last five sessions.

However, the sharp decreases of real estate shares forced the market down. This was partly attributed to the news that the National Assembly doesn’t intend to approve the amended Land Law at the upcoming extraordinary session in January 2024.

In general, investors are cautious and the foreign investors’ net sales in the last 18 consecutive sessions continue.

The VN-Index increased slightly by 0.06 percent last week to 1,013.06 points, while the HN-Index was up 0.55 percent to 228.27 points and UpCom Index 1.28 percent to 86.14 points.

The liquidity of the three bourses decreased by 17 percent last week compared with the week before to VND14.752 trillion per session. The foreign investors’ net sales totalled VND2.679 trillion.

Sharks’ comeback

Analysts have noted the comeback of some investment funds.

Dragon Capital with NAV (net asset value) of $1.7 billion has increased the purchase of HPG, putting HPG back at the No1 position in the investment of the Vietnam Enterprise Investment Ltd (VEIL), a fund managed by Dragon Capital.

VEIL is holding 140 million HPG, worth $156 million, or 9.14 percent of charter capital. 

Recently, amid the foreign investors’ net sales, Fubon ETF quietly bought shares in trading sessions, having disbursed VND300 billion for some blue chips, including VNDirect shares (VND), SHB Bank, HPG and KDH.

Fubon is the latest ETF in Vietnam.

According to Dinh Quang Hinh from VnDirect Securities, the foreign investors’ net sale has made domestic investors shrink back. However, in the immediate time, when many developed markets will close their doors during holidays, the selling pressure by foreign investors in Vietnam may cool down.

However, domestic investors will still remain cautious and the stock indexes may not bounce back in the last week of 2023.

Though foreign investors sold more than they bought in 2023, experts believe that this is not worrying and the investors will return to Vietnam soon once Vietnam’s economy  performs well.

Vietnam’s economic growth rate is still among the highest in Asia and further improvement is reported for upcoming years. Vietnam can attract foreign investment from many multinationals.

Investors are looking forward to hearing information about KRX, the stock trading system using Korean technology. The system is expected to be put into operation this week or early next year.

Securities companies do not think the market will make a breakthrough in the short term. VCB Securities believes that the VN-Index will continue to accumulate points and the recovery will continue in the time to come.

But in the long term, analysts think a new investment wage will begin and last a long time.

According to FinPeace, the VN-Index is in the accumulation phase preparing for a new wave. The liquidity still has not increased clearly and there are few investors, but it is now the time to buy good stocks as cash flow may return after the fourth business quarter.

MSB Securities commented that the valuation has become more attractive which is an opportunity for long-term accumulation. It predicted that profits of listed companies would increase by 16.8 percent in 2024. 

Exports, production and consumption have been improving in the last months of 2023, while interest rates and exchange rate are cooling down. Banking, building material and consumer retail sectors are expected to recover in 2024.

Manh Ha