Positive short-term signals emerge in Việt Nam’s stock market

An investor monitors stock market movements. — VNA/VNS Photo

HÀ NỘI - The VN-Index recovery last week brought short-term positivity, supported by favourable macroeconomic factors. However, market liquidity remains low, and risks persist.

Việt Nam’s stock market experienced a week of positive recovery as the VN-Index surpassed the 1,250-point threshold.

By the close of the week, both the VN-Index and the HNX-Index recorded gains, rising by 1.82 per cent to 1,250.6 points and 1.5 per cent to 224.64 points, respectively.

The average daily trading value across the market last week was just over VNĐ10.13 trillion (US$406.3 million), marking a nearly 17 per cent decrease. This is the lowest weekly liquidity level since May 2023.

Over the past eight weeks, the average daily trading value on the Hồ Chí Minh Stock Exchange (HoSE) has not exceeded VNĐ15 trillion, according to Fiintrade analysts.

Prolonged low liquidity in the stock market, coupled with rising valuations in other asset classes like real estate, foreign currencies, and cryptocurrencies, has raised concerns that capital is being diverted away from equities.

Phan Tấn Nhật, Head of Analysis at Saigon-Hanoi Securities (SHS), described the VN-Index’s trajectory as largely positive. The index has surpassed the downward trendline and is targeting the 1,255–1,260-point range (corresponding to the 200-day moving average and the 2023 peak). However, this range is also a strong resistance zone, with the nearest support level identified at around 1,240 points.

“While the VN30 index is showing signs of short-term declines, the VN-Index has maintained a broad accumulation channel throughout the year, fluctuating between 1,200 and 1,300 points,” Nhật observed.

He added that the VN-Index’s potential to return to the 1,300-point level is supported by attractive valuations relative to Việt Nam’s economic scale and projected GDP growth of 6.5–7 per cent for 2025.

Similarly, Đinh Quang Hinh, Head of Macroeconomics and Market Strategy at VNDIRECT Securities, highlighted the positive momentum as domestic indices sustained their recovery, with the VN-Index reclaiming the 1,250-point mark.

According to Hinh, the market’s rebound has been supported by both domestic and international economic trends. A cooling of exchange rate pressures, reflected in the US Dollar Index (DXY) dropping to around 106, came after the Japanese yen strengthened amid expectations of interest rate hikes by the Bank of Japan following inflation exceeding 2 per cent.

Domestically, interbank interest rates fell below 5 per cent following supportive measures by the State Bank of Vietnam. Additionally, credit growth surpassing 11 per cent as of November 22 bolstered expectations for annual credit growth of 14–15 per cent, lending support to banking stocks in the final month of the year.

Positive developments included the National Assembly’s decision to reinstate a 5 per cent VAT rate for fertilisers and renewed net buying activity from foreign investors, which fuelled broad-based recovery across multiple sectors.