The recovery of Vietnam’s stock market is considered a positive trend. In August 2022, the Vietnam stock market increased sharply compared to the previous month and was one of the best in Southeast Asia.
In the first half of August 2022, the market's gain came from key stocks such as VCB, NVL, and HPG. The recovery of the largest-cap codes in the market helped VN-Index gain quickly. In less than 3 weeks, the index recorded an increase of nearly 70 points. Although the market recorded a rebound in August in all capitalization groups, compared to the beginning of the year, the recovery is still weak. The large-cap group has a decline compared to the beginning of the year.
Vietnam's stock market is returning to a recovering trend after the technical correction. In the short term, it is recommended that investors re-evaluate the portfolio, review the structure, and reduce the weighting of stocks with weak growth expectations to restructure the portfolio into quality stocks with better growth.
In the long-term, the risks in the stock market in the coming time will mainly come from international uncertainties, such as the Fed raising interest rates to fight inflation, China's real estate bubble, and geopolitical issues.
Currently, the biggest worry is that the US Fed keeps the roadmap to raise interest rates with strong intensity in the context that inflation in the US is still high. Since the beginning of 2022, Fed has raised interest rates four times, including two increases at 0.75%, predicting that they are likely to continue to raise interest rates with great intensity in September. In that case, the market will face a great risk of money withdrawal and capital flow that has gone through a cheap period.
The effects that come from the risks of US inflation and the Fed raising interest rates can lead to the possibility of a decrease in export turnover, thereby putting pressure on the VND and weakening domestic demand due to high inflation. Forecasting macroeconomic developments in the years 2023-2024 may be more difficult.
In the first half of 2023, the CPI will likely rise above 4%, while economic growth will start slowing down. The pressure to increase prices for many groups of goods and services, which belong to the group of state-managed prices, such as electricity, water, education, health care, etc., is unavoidable. Therefore, the Government's top priority at the moment is to control inflation and then push for growth when inflation risks gradually decrease.
In general, Vietnam's stock market trend in the last months of this year is closely related to developments in the world, followed by domestic regulatory agencies. Therefore, when the inflation trend in the world cools down, and domestic commodity prices confirm a clear downward trend, the cash flow in the market will return to a stable and clear growth trend. In the current context, many companies still insist that commodity prices are unlikely to fall immediately.
The steel industry saw the most impressive increase in liquidity, up 79% from the previous month, since it was one of the industries with the deepest decline since the beginning of 2022, thus attracting bottom-fishing cash flow from investors in August.
Other sectors with strong increases in liquidity include construction materials up 42% MoM, transportation up 41%, and securities up 36%.
In contrast, the gas supply group, which increased by 8% and chemicals by 4% month-on-month, had the least improvement in liquidity in August.
Previously, according to FiinGroup's statistics in August, the securities companies' proprietary trading group continued to be relatively strong net buyers in the matching session thanks to reducing selling and focusing on net buying shares of finance, utilities, and food & beverage.
The top 10 stocks with the highest volume of proprietary trading in August included HPG with a value of 231 billion VND, followed by MSN with 164.3 billion VND, VPB with 154.6 billion VND, DXG with 130.9 billion VND, NVL with 104.1 billion VND, VCI 86 billion VND, 68 billion VND, GAS 64.5 billion VND, POW 52.6 billion VND, and STB 49.5 billion VND.
Compiled by VietnamCredit