Waiting for the 1,200-point region
According to experts from VPBankS, the current phase is a step back to move forward. The VN-Index has seen bottoms in November 2023 and November 2024, and smaller bottoms in April and August 2024, indicating a rising trend but in a sideway up direction.
Amid numerous challenges stemming from global news and capital flow turbulence, numerous stocks remain anchored at their highest prices for the year. As such, the market needs to adjust to more attractive levels to entice mid- to long-term investors. Mr. Son anticipates that the 1,200-point region could be where investors time their purchases for the upcoming upswing.
In 2024, the banking group has already climbed by roughly 20%, significantly outperforming the VN-Index’s 10% increase and serving as a pillar to prop up the index. If the banking sector index drops by another 5-7%, we can expect fresh capital to enter the market.
Mr. Son explains that while banking industry earnings reports have been published, with some banks posting impressive profit growth, their stock prices have remained high even after the reporting season. Therefore, a slight adjustment in the banking sector index will attract new capital into the market.
Towards the end of 2024 and the beginning of 2025, with the cycle of decreasing interest rates and potential turbulence stemming from Donald Trump’s tax policies, any corrections present an opportunity to buy.
Foreign capital is not likely to return soon
Foreign investors have been consistently net selling, notably in the stocks of MSN and VHM. According to Mr. Son, the case of MSN is due to capital divestment by a South Korean fund, which is a short-term impact specific to MSN. From a broader market perspective, international capital flows show signs of decreasing in Asia and Southeast Asia in the two weeks before and after Trump’s election victory.
Regarding the pressure on net outflows through ETFs showing signs of abating in October, Mr. Son considers this a positive signal.
However, Mr. Son believes that foreign investors will resume net buying in the future rather than at present, as the USD remains high and capital continues to flow into US equities or digital currencies. Investors need to wait for the Trump effect to fade and for USD and US bond yields to cool down before capital flows into emerging and frontier markets become positive again.
Investors should prepare for the scenario of Donald Trump assuming the presidency in January 2025 and the potential impact on tariffs starting in early 2025. This news may be reflected early on, in November-December 2024. Thus, in the fourth quarter of 2024, there will be a bottom region due to the impact of net selling by foreign investors, allowing investors to return to buying stocks for short-term opportunities and welcoming the rebound.
Why has turnover declined despite the number of accounts surpassing 9 million?
In October 2024, the number of accounts in the market surpassed 9 million for the first time, but during this process, turnover decreased. Commenting on this issue, Mr. Son attributed the decline in turnover to the absence of cheap money.
The decrease in turnover is influenced by capital flow shifts, specifically the withdrawal of capital from Vietnam and Asia. Domestic individual investors acted as a support, preventing the market from plunging further as foreign investors net sold up to $3 billion.
From July-August 2024 until now, turnover has also diminished due to a lack of investment opportunities and the need to service loan and bond debt.
Source: VTV Money
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Nonetheless, when low turnover combines with the index reaching a robust support region, it signifies the establishment of a new floor price and the onset of recovery. The most pessimistic phases of the market, when it is declining, present the greatest opportunities. Looking back at November 2022 and October-November 2023, these periods marked the lowest points in terms of both turnover and index value.
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