HÀ NỘI — In a tumultuous year for the Vietnamese stock market, retail investors played a significant role, contributing to the market's liquidity recovery. 

However, despite their active participation, a large portion of these investors found themselves chasing stocks at their peak rather than succeeding in the market.

According to data from FiinTrade, retail investors accounted for over 80 per cent of the total market transaction value, serving as a vital force behind the liquidity rebound in 2024, with their transactions increasing by 22.7 per cent compared to the previous year.

These investors collectively net bought more than VNĐ77.7 trillion (US$3.1 billion) on the Hồ Chí Minh Stock Exchange (HoSE), with over VNĐ66 trillion through matching orders, offsetting the strong net selling pressure from foreign investors.

Analysing their sector preferences, retail investors were net buyers in 13 out of 19 sub-sectors, focusing on high liquidity fields such as banking, real estate and information technology (IT). 

Conversely, they net sold in sectors like retail, personal goods and maritime transport.

Despite their active trading behaviour, the majority of retail investors struggled to outperform the market in 2024. 

FiinTrade statistics reveal that these investors tended to intensify their trading activities and net buying positions during market upswings or at peak levels. In contrast, they reduced their trading and shifted towards net selling positions during market corrections.

Last year, retail investors significantly increased their trading and net buying activities starting in March, when the VN-Index surged by over 20 per cent from its late October 2023 low to its previous high.

The peak of net buying occurred in May-June, with hopes of the market surpassing 1,300 points. 

In the latter half of 2024, the benchmark index traded sideways within the range of 1,200 to 1,300 points, leading retail investors to scale back their net buying and reduce their transaction values.

During the peak net buying period, the top stocks that retail investors heavily bought into included Vinfamily (Vinhomes, Vincom Retail and Vingroup), banks (Vietinbank, Vietcombank and BIDV), IT (FPT Corporation and CMG Corporation), steel (Hòa Phát Group), securities (VNDirect Securities Corporation and SSI Securities Corporation) and chemicals (Đức Giang Chemicals Group). 

Apart from FPT and Vietinbank, most of the stocks that retail investors heavily net bought into either traded sideways (Vietcombank and BIDV) or experienced sharp declines (CMG, Hòa Phát, VNDirect, SSI and Đức Giang Chemicals) in the subsequent period.

In contrast to retail investors, foreign investors set a record of net selling VNĐ90 trillion on the Vietnamese stock market in 2024.

Regarding liquidity, the average transaction value across the entire market in 2024 exceeded VNĐ21 trillion, marking a 20 per cent increase from the previous year.

The first six months of 2024 saw the highest liquidity levels, with some trading sessions reaching up to VNĐ25 trillion. However, liquidity began to decline from July onwards.

Trần Hoàng Sơn, Market Strategy Director at VPBankS, attributed the robust liquidity to investor expectations of market upgrades, strong economic growth and favourable import-export activities in the first half of the year. 

Nevertheless, liquidity began to decrease in the second half of 2024, mainly affected by exchange rates and the withdrawal of foreign investors.

The most significant net selling period took place after June, coinciding with a sharp rise in exchange rates. During this period, retail investor liquidity exhibited cautious signs. 

The most significant decline occurred in mid to late November, when the market hit a bottom. To date, liquidity has rebounded to average levels.

Sơn forecasts that in the next three to six months, liquidity may fluctuate and trade sideways with uncertainty. 

Following the second quarter, liquidity is expected to begin rising, reaching relatively high levels. 

In contrast to liquidity trends in 2024, which saw an increase in the beginning of the year followed by a decrease towards the end, 2025 might witness a reverse, with low liquidity in the early months but a significant surge by year-end.

The clear catalyst for this shift lies in market upgrade expectations.

In other countries, foreign investors typically begin buying approximately three months before market upgrades. Leading up to September 2025, when FTSE Russell will make its upgrade decision, liquidity in Việt Nam is expected to markedly increase, continuing into early 2026.

However, the current period is seeing global stock market uncertainties, which may limit immediate liquidity growth.

On January 20, Donald Trump is set to assume the US presidency, potentially threatening increased import tariffs, leaving global investors on edge. 

Short-term US dollar appreciation could also restrict capital inflows into the market. As a result, the current market phase may involve consolidation and accumulation, amid global uncertainties. — VNS