The Stock Market Soars to New Heights

The VN-Index has officially surpassed 1,600 points, the highest level in the 25-year history of Vietnam’s stock market, during a seven-day consecutive gaining streak. On August 12, the representative index of Ho Chi Minh City’s stock exchange rose over 11 points to reach 1,608 points. Since the beginning of August, the index has gained a total of 113 points, equivalent to nearly an 8% increase in value.

A Rush to Open New Accounts as Vietnam’s Stock Market Reaches New Heights

Liquidity continues to be the main driver of this upward trend, with Ho Chi Minh City’s exchange recording the trading of up to 1.64 billion shares, valued at over VND 45,320 billion. Large-cap stocks accounted for nearly half of this volume, with a value of more than VND 20,600 billion.

Previously, the VN-Index had also recorded an increase of 126.5 points (9.19%), reaching 1,502.5 points, officially surpassing the historical peak achieved in 2021. The average trading value increased by 76% compared to the same period last year, reaching VND 32,827 billion, and by 80% compared to the average of the first five months of the year.

The strong performance of the stock market has attracted a large number of people, along with significant capital inflows. Data from Vietnam Securities Depository (VSDC) shows that in July, the market welcomed 226,153 new securities accounts, the highest number ever. As a result, the total number of accounts reached 10.447 million by the end of July, equivalent to 10.4% of the population and close to the government’s target of 11 million accounts by 2030.

The atmosphere of “everyone” entering the stock market, as seen in the 2020-2022 period, has returned, even among those who had never considered investing in stocks before. Mr. Tran Quang, a teacher in An Khanh Ward, Ho Chi Minh City, who was used to only saving money in the bank, decided to open an account with VND 200 million to buy stocks and made a profit of 15% in just one week.

Encouraged by this success, he withdrew VND 500 million from his savings account to invest further. “In just one month, my account has made a profit of over 20%. If I had kept this money in the bank, it would have taken three years to achieve the same result,” said Mr. Quang, adding that he has taken profits but is still considering whether to reinvest.

The story of Duyen, a barista in Xuan Hoa Ward, Ho Chi Minh City, is even more interesting. Duyen was introduced to stock investing by her friends, who showed her how to open a securities account on an e-wallet and buy a stock for less than VND 20,000, which yielded a profit of 26% in just two weeks. Encouraged by this easy money, Duyen continued to invest VND 2 million from her salary and has made a profit of over 10%. “For me, this profit is significant. It’s also an opportunity for me to learn about investing, saving, and trading securities,” Duyen shared.

It’s not just newcomers who are attracted to the market; even investors who had previously left the market are returning. Mr. Phan Thien, a resident of Binh Trung Ward, Ho Chi Minh City, who had declared that he would “never return to the stock market” after losing more than VND 300 million, recently reactivated his account due to the market’s strong appeal and the encouragement of his friends. As a result, Mr. Thien quickly made a profit of over 15% in just one month, something he couldn’t have imagined before.

The Market Can’t Keep Rising Forever

According to Mr. Vo Minh Thanh, Investment Consulting Director of VPS Securities Company, the stock market is benefiting from both macro factors and investor psychology. Specifically, the government is determined to upgrade the market, and the necessary conditions have almost been completed.

The monetary policy is also in a cycle of loosening, with credit across the system increasing by about 10% compared to the end of 2024, equivalent to VND 1.56 quadrillion injected into the economy. On the other hand, low savings interest rates have prompted funds to seek more profitable channels.

“Other channels such as real estate, gold, and foreign currency are less attractive. Real estate involves high costs and low liquidity; gold has passed its big wave; and foreign currencies have little fluctuation. The idle money in the banking system amounts to more than VND 18 quadrillion, according to the State Bank, and this remains a huge potential source of capital for the stock market,” said Mr. Thanh.

In fact, the liquidity in the stock market in recent days has been described by securities companies as “unusual” and “very strong,” surpassing even their analytical models. Mr. Huynh Anh Tuan, General Director of Vikkibank Securities Company, believes that this is a period when various sources of capital are flowing into the market simultaneously.

It’s not just professional investors’ money; it also includes funds from retirees, long-term savings, investment loans, and even securities companies, investment funds, and insurance companies. “They are waiting for a strong market like the current one to deploy capital, causing margin debt to increase rapidly,” he said.

Even foreign investment has returned to strong net buying in Vietnam’s stock market. According to SSI Securities Corporation, in July, foreign investors net bought VND 8.5 trillion, reversing the net selling trend of VND 1.9 trillion in June, narrowing the net selling value since the beginning of the year to VND 37.5 trillion.

According to Mr. Tuan, the market has not peaked yet, as many sectors still have room to grow. Bank stocks have grown by more than 15% but have not returned to their old peaks; real estate stocks have only stood out in a few blue chips, while oil and gas and other groups have not broken out. “More importantly, the market is rising amid doubts, and investors remain cautious despite the fear of missing out. This upward trend amid skepticism helps to cool down the market and reduce the risk of a deep correction,” he analyzed.

However, he also emphasized that the stock market cannot rise indefinitely. Investors should take profits reasonably and restructure their portfolios towards more positive sectors. “Accepting lower profits also means lower risks, and when many people are still holding cash and waiting to enter the market, the market is less likely to fall sharply,” he said.

According to SSI Securities Corporation, the current upward trend of the stock market is mainly due to a stable macroeconomic foundation, with Vietnam’s 2025 GDP growth target set at 8.3%-8.5%, one of the highest in the world. Public investment continues to be promoted, and foreign investment attraction, production, and consumption are all increasing despite global tariff pressures.

“Fiscal policy continues to play a leading role, while monetary policy supports with the goal of increasing credit and reducing lending interest rates. Notably, in October, FTSE’s upgrade of Vietnam to an ‘Emerging Market’ is expected to create a breakthrough for the capital market,” the company’s experts said.