VN-Index may continue to retreat

The VN-Index slid from 1,153 to 1,136 points this morning

>> Hopes are high for many sectors, spurring VN-Index

Yesterday, the VN-Index dipped for the most of the morning session to a low of 1,126 points before recovering to close up 15.9 points (1.4%) higher at its intraday high of 1,153.9. The HNX-Index rose 2.7% to 235.8 points.

After four consecutive sessions of severe falls, the market began with a tiny gap up of 1.8 points. It subsequently dropped 11.6 points in what appeared to be a typical trend from recent days, but with selling pressure gradually easing.

Investors opened the afternoon session with the publication of excellent macro data, which showed that 9M2023 FDI increased 7.7% year on year to USD20.2 billion. This persuaded them that Vietnam's long-term economic narrative would continue. Investors were also pleased to learn that the SBV sold VND20,000 billion in T-bills, bringing the total withdrawal amount to VND70,000 billion, because this is believed to be the last issue of the term.

However, the rally gathered traction as word circulated about a meeting conducted Tuesday between the SSC and market participants discussing prefunding processes, which are believed to enhance Vietnam's chances of being upgraded to emerging market status. Brokerage stocks became the most significant sector, as they would profit the most from an EM upgrade.

SSI (6.8%), VND (5.8%), HCM (5.0%), VCI (5.5%), and FTS (6.9%) were among the stocks that surged more than 5%. The buying power expanded from there to other areas as well. Both domestic and international investors took part in the rise, with foreign investors bringing their three-day net purchasing total to VND1,660 billion (USD68 million).

Today's main beneficiary was VCB (0.9%), which added 1.1 points to the index on its own. MSN (4.1%), VPB (2.7%), GVR (4.8%), and CTG (2.3%) followed. SAB, on the other hand, was today's biggest laggard, losing 1.6% but only subtracting 0.4 points from the index.

>> VN-Index likely to continue fluctuating

Yesterday, all sectors increased, headed by Industrials (2.6%), Materials (2.2%), and Financials (1.5%). VCB (0.9%), MSN (4.1%), VPB (2.7%), GVR (4.8%), and CTG (2.3%) were the top index movers. SAB (-1.6%), PLX (-1.5%), BHN (-1.6%), PDN (-3.4%), and TMP (-3.6%) were the top index laggards. The top three significant put-through transactions were SSB with 16.3 million shares (VND427.4 billion), VJC with 2.3 million shares (VND221.8 billion), and HDB with 12.3 million shares (VND214.1 billion).

Foreigners net purchased on HOSE for VND332.7 billion, and net bought on HNX for VND20.3 billion. They mostly purchased MSN (VND137.7 billion), GEX (VND119.8 billion), and VRE (VND69.3 billion), and primarily sold MSN (VND141.9 billion), HPG (VND87.0 billion), and VCI (VND74.4 billion).

Ms. Nguyen Hoa, analyst at BVSC, predicted that the VN-Index will soon regain equilibrium and begin a technical rebound from the 1,135-1,150 point support zone. However, the market's short-term trend is deteriorating, and the VN-Index may continue to fall to deeper support levels in the near future.

"When the VnIndex falls below the 1,150-point support zone, investors should limit   their sell-off activities at low prices." Reducing stock exposure or portfolio restructuring should be done in accordance with the market's technical recovery rhythms," said Ms. Nguyen Hoa, adding that investors with a high cash exposure and a high risk appetite should consider opening T trading positions when the VnIndex falls to the 1135-1150 point support zone. However, investors should focus on firms with a favorable Q3 forecast and regulate the disbursement proportion to meet their risk appetite.