Investors went through a turbulent week as the VN-Index reported the biggest weekly fall since May. Analysts said that in the current environment, financial markets are very likely to continue revaluing.
On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index ended the last session of September at 1,132 points, up 0.54 per cent. However, it had lost 12 per cent last month and more than 24 per cent in 2022.
The HNX-Index on the Ha Noi Stock Exchange (HNX) closed last week at 250.25 points, an increase of 0.34 per cent.
For the week, both benchmarks posted big falls, of which the VN-Index dropped 5.9 per cent and the HNX-Index plummeted 5.4 per cent.
Trading value on HOSE rose 12.8 per cent over the previous week to nearly VND68.3 trillion (US$2.86 billion), equal to a trading volume of more than 2.8 billion shares, up 18.1 per cent. Meanwhile, the trading value on HNX declined by 1.2 per cent to VND6.5 trillion, equivalent to a rise of 4.6 per cent in the trading volume to 332 million shares.
Last week, the VN-Index broke below the psychological level of 1,200 points, causing pessimistic sentiment among investors. There was even a time the VN-Index plunged below 1,100 points to touch 1,099.44 points.
All industry groups inched down, with oil and gas stocks posting the biggest loss of 11.1 per cent in market capitalisation. The loss in oil stocks was attributed to strong corrections in oil prices in the international market as the risk of an economic recession raised concerns about weaker demand.
The stock market dipped as the economy recovered strongly. According to the General Statistics Office of Vietnam, the country’s gross domestic product (GDP) was estimated to increase 13.67 per cent on-year in the third quarter, due to the COVID-19 outbreaks in the same period of last year.
Foreign investors net sold nearly VND1 trillion last week, mostly in realty ticker symbols.
Vietcombank Securities Company (VCBS) said that indicators are still not positive and there is no sign of bottom formation. There is still a possibility that the last session’s rebound was just a technical recovery and the bearish trend may remain.
"We recommend investors continue to wait for the market to show a signal of balance, and do not rush for bottom-fishing to manage risks in the short term," VCBS said.
Last month, the market was under pressure from the rate hikes of the US Federal Reserve and the State Bank of Vietnam to outflow pressures of ETFs due to higher bond yields in many countries. This caused many stocks with good fundamentals to suffer under strong selling force.
From a long-term perspective, the market is still undervalued compared to the average of the last five years. But in the short- and medium-term, the market has yet to escape the downtrend. Therefore, investors with reasonable proportions and good short-term risk management can create a portfolio of stocks in industries with growth potential in the future to monitor and have disbursement plans when the market is stable again, SHS recommended.
KIS Vietnam Securities Company said that in the short-term, the VN-Index is likely to hit a new low due to bearish sentiment, meaning that the downtrend is confirmed. So the securities firm suggested investors should reduce the stock proportion in their portfolio and wait for the next signals. — VNS