Vietnam’s stock market is facing a challenging period, with consistent and significant declines. The VN-Index closed the first session of August with a loss of nearly 25 points, settling at 1,226 points – the lowest level in the past three months. Looking further back, the index has shed approximately 76 points (~6%) since its peak in June. 
According to Mr. Tran Truong Manh Hieu, Head of KIS Securities Analysis, the market had previously been driven by expectations, and the Q2 financial results have already been priced in. It is understandable that investors would take profits once the information is released.
Additionally, investors are cautious and tend to stay on the sidelines, observing market developments and awaiting crucial information such as exchange rate movements, inflation data, and the Fed’s decisions. This has led to a period of relative calm in the market.
The KIS expert identified a confirmed double-top pattern on the VN-Index, with a price target range of 1,180-1,200 points. After reaching this target, the market may form a significant bottom in the same range and resume its upward trajectory. Therefore, this correction should be viewed as a technical adjustment rather than the start of a new downward trend.
Liquidity often reflects investor sentiment, and low liquidity indicates that investors are cautious about the market recovery. While selling pressure may increase, experts believe that money is still circulating in the market, waiting for the right time to re-enter.
“The likelihood of funds shifting from the stock market to other investment channels is very low,” said Mr. Hieu. “Gold, after a period of high increases, has stabilized, real estate has not yet recovered, and deposit interest rates remain low, making these channels less attractive for large sums of money from the stock market.”
While acknowledging the downward trend in July 2024, the market remains in an uptrend since the end of 2024. This trend is supported by positive business results from enterprises amid an economic recovery.
“The approximately 6% decline has not yet made the market attractive, and many stocks are still trading around fair valuation levels. Meanwhile, liquidity remains low, indicating that money is not yet ready to enter, and the risk of further market correction persists,” advised the KIS expert.
While cautious about the short-term market outlook, the KIS specialist believes that the current correction will end soon, and the market will return to its long-term upward trend as the economy remains robust.
Regarding short-term investment strategy, Mr. Hieu recommends that investors maintain a safe stock proportion and wait for clear bottom-forming signals. When a reasonable entry point arises, investors can open mid- to long-term investment positions.
