HÀ NỘI — After two consecutive weeks of decline, Việt Nam's stock market rebounded, driven by strong performance in banking stocks and improved liquidity.

On the Hồ Chí Minh Stock Exchange (HoSE) last week, the VN-Index recorded three gaining sessions and two losing sessions.

By the end of the week, the VN-Index settled at 1,275.14 points, marking a gain of 17.82 points, or 1.42 per cent. Meanwhile, the HNX-Index also rose by 2.06 points, or 0.9 per cent, closing at 229.13 points.

The upward momentum was largely supported by banking stocks, with several tickers reaching historic highs (CTG, STB). Additionally, market liquidity significantly improved, rising 21 per cent compared to the previous week, with trading activity primarily concentrated in the banking sector.

Total trading value across both exchanges surged by 12.6 per cent, reaching VNĐ77.69 trillion (US$3 billion).

Foreign investors unexpectedly returned to net buying, recording a net purchase value of VNĐ308.63 billion after a net selling streak exceeding VNĐ1.4 trillion in the previous week.

However, some analysts predict that foreign investors might resume net selling in the first quarter of 2025, primarily due to global geopolitical uncertainties, which are driving capital towards safer markets.

Experts anticipate 2025 to be a volatile year for global and Vietnamese stock markets. If Việt Nam achieves an upgrade in market status as early as March 2025, significant capital inflows could drive the VN-Index to surpass 1,370 points, potentially reaching 1,500 points. Conversely, if geopolitical factors, such as tax policies under a potential Donald Trump administration, negatively affect global markets, the VN-Index might retreat to the lower boundary of its long-term parallel channel, around 1,150 points.

Phan Tấn Nhật, Head of Research at Saigon-Hanoi Securities (SHS), noted that the VN-Index is currently maintaining levels above its 200-day moving average and near the 2023 peak levels. Market breadth indicates a recovery and accumulation phase, but with significant divergence between sectors.

In the short term, the VN-Index is expected to find support around 1,265 points, with the next resistance level at 1,280 points, and a stronger resistance near 1,300 points. In the medium term, the index is projected to remain within an accumulation range of 1,200–1,300 points, with a balanced zone around 1,250 points.

"The market is expected to break out of this accumulation phase in 2025, supported by robust corporate earnings in Q4 2024 and a promising outlook for 2025," Nhật said.

According to Vietcap analysts, if the non pre-funding trading mechanism operates without significant flaws, the FTSE upgrade scenario is likely by September 2025, with an optimistic outlook suggesting it could happen as early as March 2025.

Once upgraded, the market is expected to attract $500–700 million from Exchange-Traded Funds (ETFs) into large-cap stocks included in the FTSE Emerging Markets Index.

The benefits of an upgrade will not be limited to ETF flows but will also include P-note investments (structured investment products facilitated by international banks), which are typically large-scale and short-term capital inflows. Additionally, value-investing funds are expected to target large-cap stocks with high liquidity, further solidifying the market's growth potential.

The potential market upgrade is seen as a transformative milestone, promising enhanced market liquidity, increased foreign capital inflows, and greater market transparency, setting a strong foundation for Việt Nam's stock market to reach new heights in 2025. — VNS