Credit growth reached 11.82% in the first eight months of the year, with total outstanding loans increasing by nearly $70 billion. Low interest rates have supported the economy and pushed asset prices higher. The VN-Index is hovering near its historic peak, making market volatility a natural occurrence.

On Monday, September 8, selling pressure continued to weigh on the market. After a mild dip in the morning, the VN-Index plunged in the afternoon, closing down 42.44 points (-2.55%) at 1,624.53. The HNX-Index dropped 3.24%, while the UPCoM-Index fell 1.52%.

Despite the decline, market liquidity remained high. More than VND 58 trillion (approximately $2.3 billion) worth of stocks were traded across the three exchanges, including VND 53 trillion ($2.1 billion) on the Ho Chi Minh Stock Exchange (HoSE) alone.

After a strong rally in the first eight months of the year, the market is facing profit-taking pressure. The VN-Index had surged more than 51% during this period.

Still, several blue-chip stocks maintained their appeal to investors, showing only slight declines or closing unchanged. These include stocks in banking, retail, industrial real estate, construction materials, and the "Vin" trio.

Notably, HPG of Hoa Phat Group (chaired by billionaire Tran Dinh Long) even gained VND 100 to reach VND 28,900 ($1.14) per share, with nearly 141.8 million shares traded. Foreign investors net bought approximately 11 million HPG shares.

The Vin group stocks - Vingroup (VIC), Vinhomes (VHM), and Vincom Retail (VRE) - saw limited trading volume but managed to hold their reference prices.

Another notable development is the return of foreign investors, who net bought nearly VND 1 trillion (around $39.9 million) worth of Vietnamese stocks, just ahead of the potential market upgrade by FTSE Russell from frontier to emerging market status in September.

Besides HPG, foreign capital also flowed strongly into securities and banking stocks, with notable tickers including SSI Securities (SSI), VietinBank (CTG), Saigon - Hanoi Commercial Joint Stock Bank (SHB), and VPBank (VPB).

On the flip side, foreign investors net sold several stocks, including VIX, Novaland (NVL), Vietcombank (VCB), and Phat Dat Real Estate (PDR).

A brokerage director commented that the VN-Index correction is natural after such a steep rise. According to this expert, the market may continue adjusting for another one to two weeks to build a new base, as “it cannot keep rising endlessly.”

Selling pressure intensified after the VN-Index broke below its 20-day moving average, a key technical support level that had previously buoyed the index during corrections in July and August. Historically, buying demand surged whenever the index approached this threshold.

The sharp declines over two consecutive sessions have shaken investor sentiment. However, many brokerage firms had already anticipated this correction. Several analysts earlier predicted a 7-15% pullback following such a dramatic rally. In August alone, the VN-Index rose nearly 12%, topping global markets.

In a recently released monthly strategy report, Mirae Asset forecast that high volatility would become the market’s new norm. Most of the positive news had already been priced into the rally, including the expected September review by FTSE Russell and the anticipated rate cut by the U.S. Federal Reserve (Fed) at its upcoming meeting.

These factors, while significant, are no longer surprises to the market.

Investors are increasingly inclined to lock in profits to safeguard gains accumulated in recent months.

Nevertheless, in the long term, the VN-Index still has room to rise and could potentially reach new historical highs between 1,800 and 2,000 points, provided the bullish momentum holds and exchange rate pressures remain within the central bank’s acceptable range.

The baseline scenario expects the VN-Index to establish short-term support at around 1,650 points and resume its upward trend toward 1,800 points.

Meanwhile, analysts at CSI Securities argue that, given the VN-Index is trading at record levels, a pullback is likely after more than four months of consistent gains. The index may retreat to the support zone near 1,565 points in the coming weeks.

On the macroeconomic front, Vietnam’s economy and large enterprises are still expected to perform positively thanks to continued loose monetary policy and a surge in public investment.

Credit has also grown more robustly compared to recent years. As of August 29, total credit outstanding across the economy stood at VND 17.46 quadrillion (about $698 billion), up 11.82% from the end of 2024, equivalent to an increase of VND 1.85 quadrillion (approximately $69.8 billion). This continues to be a driving force behind asset markets, including stocks.

Manh Ha