Stock market poised for a post-Tet surge?

The stock market in the week before the Lunar New Year 2024 saw a sudden surge in trading. Only on the HoSE exchange, the liquidity reached 86.459 trillion VND, an increase of 17.7% compared to the previous week. Similarly, liquidity on the HNX exchange also increased sharply by 21.8%. However, the indices and stock prices did not make a breakthrough but were continuously sold off whenever they rose.

Selling off before the Lunar New Year

In an exchange with a reporter of Nguoi Lao Dong newspaper, Mr. Truong Hien Phuong, a senior executive of KIS Vietnam Securities Company, analyzed that in recent years, the VN-Index often had a sharp decline before the Lunar New Year, such as in 2023 due to the negative impact of the bond market; in 2020, it was due to the COVID-19 pandemic…

In 2024, the VN-Index increased in the weeks before the Lunar New Year but the trading was quite weak, with money flow continuously shifting from one group of stocks to another instead of spreading across the whole market, which made many individual investors feel dizzy – just when they bought, the stock prices fell, and when they sold, the prices went up. The expert from KIS Vietnam explained that this could be because both domestic and foreign institutional investors saw the positive prospects of the economy and listed companies, especially the banking sector, so they maintained a moderate money flow to support the market while individual investors “took an early Lunar New Year holiday” as they did not see positive signals. “The money flow from institutional investors poured in strongly but was not strong enough to pull up the whole market, they chose to lift each stock group with potential to help the VN-Index maintain its upward trend and establish a new price level” – Mr. Truong Hien Phuong said.

Mr. Nguyen Nhat Khanh, Head of Investment Advisory Department at Mirae Asset Securities Company, analyzed the positive prospects of recently passed laws such as the Credit Institutions Law, the Land Law (amended) … which will be reflected in the revenue and profit of real estate and banking businesses but it will take time. “More importantly, how will investors and the market quantify the positive information from new policies? This is the time for companies to announce their business results, the profit picture has not met expectations, so even though the VN-Index is going up, it is difficult to create a real upward trend” – Mr. Khanh expressed his point of view.

Awaiting signals after the Lunar New Year

Although many individual investors choose to sell to have money for the Lunar New Year and minimize the risk during the long holiday (from February 8 to February 14), there are still many people quietly collecting stocks with good prospects to wait for an upward trend after the Lunar New Year. Among them, stocks in the industrial zone real estate, green energy, securities, and oil and gas sectors are considered to have great potential.

At many securities companies, brokers also advise customers to invest in stocks in the industrial zone real estate, oil and gas sectors… as the economy has received significant macroeconomic information such as the Consumer Price Index (CPI) only increased by 3.37% compared to the same period; the Industrial Production Index (IIP) and import-export have both improved positively. Especially, foreign direct investment (FDI) continues to flow strongly into Vietnam, as newly registered capital increased by 40.2%, and realized capital increased by 9.6% compared to the same period.

Mr. Huynh Nam (residing in Ho Chi Minh City) – an investor who has participated in the market for many years – said that he still buys more securities in the sessions when the VN-Index corrects downward with the expectation that the market will have a positive trend after the Lunar New Year. “I choose stocks of securities companies that reported large profits in 2023, and I also expect them to distribute high dividends at the upcoming shareholder meetings” – Mr. Nam said.

Mr. Dinh Quang Hinh, Head of Macroeconomic Analysis and Market Strategy Department at VNDIRECT Securities Company, believed that in the short-term trading sessions before the Lunar New Year, investors can take advantage of the downward sessions to accumulate stocks when there is positive domestic macroeconomic information; inflation and VNĐ interest rates maintained a downward trend. “The exchange rate has recently cooled down, helping to relieve psychological pressure on a part of investors. Money flow – especially from individual investors – will return to the market strongly after the Lunar New Year, pushing up the stock indices. Investors can take advantage of the pre-Tet adjustment sessions to buy stocks, prioritize sectors with supportive fundamental information such as banking, securities, and retail” – Mr. Hinh said.