Will the Stock Market Shift Gears Next Week?

The VN-Index demonstrated a robust recovery last week, climbing 2.27% to reach 1,635 points. This positive momentum was bolstered by FTSE Russell’s announcement regarding Vietnam’s increased weighting in the FTSE Emerging Markets Index, alongside the addition of new leading stocks to the index.

Several banking, real estate, and securities stocks, which had previously experienced deep discounts during the recent downturn, are now showing signs of recovery. Investors are actively seeking opportunities in stocks with short-term growth potential, such as MCH, PVD, NVL, and DGC.

Meanwhile, foreign investors net sold VND 2,297 billion on HoSE, primarily in STB, VCI, and HDB. Conversely, VNM saw significant net buying, along with HPG and FPT. Liquidity continued to decline compared to the previous week, reflecting a cautious market sentiment. The index is expected to experience short-term volatility as it approaches the technical resistance zone of 1,640–1,645 points, with immediate support at 1,620 points.

According to Dinh Viet Bach, an analyst at Pinetree Securities, a key market driver is the National Assembly’s ambitious target of achieving a 10% or higher GDP growth rate by 2026, signaling a strong commitment to comprehensive reforms. The market has also responded positively to favorable signals from FTSE Russell and Vanguard following the recent upgrade.

During a meeting with the State Securities Commission in Melbourne, representatives from Vanguard, a global fund managing nearly USD 13 trillion, announced plans to open trading and indirect capital accounts in Vietnam, marking a significant step toward increased investment post-upgrade. Additionally, FTSE’s projection of 28 companies meeting upgrade criteria and the reduction in foreign net selling pressure are providing crucial support.

Pinetree’s experts view the current low liquidity as a positive sign, indicating that supply pressure has eased. Meanwhile, bottom-fishing investors, particularly in banking and securities sectors, have realized short-term gains, with no stocks breaking previous lows.

Vietcombank Securities (VCBS) analysts noted that the VN-Index’s 36-point recovery last week was driven by large-cap stocks and individual stocks with unique growth stories attracting significant investment.

VCBS advises investors to hold onto stocks maintaining strong upward trends while exploring short-term opportunities in sectors attracting speculative capital, such as real estate, chemicals, and construction.

Meanwhile, BETA Securities experts describe the market as being at a crossroads, emphasizing the need for caution without complete withdrawal. Despite cautious sentiment, positive signals are emerging as certain stock groups attract bottom-fishing demand.

This phase demands flexibility, careful observation, and avoidance of aggressive trading. Investors are advised to probe investments in deeply discounted zones rather than chasing falling prices. Anticipating a trend reversal upon confirmed recovery signals is recommended, while maintaining cash reserves for emerging opportunities.