Stock market has been ‘out of position’?

4 min read

The market liquidity suddenly went down, the VN-Index still recorded increasing sessions but the “bounce” was getting worse. This seems to be a reflection of investors’ expectations that are not as much as in the previous period.

In the first half of April, not only did Vn-Index excellently surpass the 1,200 point level, but the market liquidity also maintained a trading threshold (only matching orders) of 19,000-20,000 billion VND per day, especially the trading value sessions also amounted to 25,000-28,000 billion dong.

However, since the period after April 20 until now, the Vietnamese stock market has continuously witnessed intense vibrations like a “roller coaster”, causing not only individual investors but also experts. “dizzy”.

Liquidity evaporated

However, the index’s going up and down will be normal if the market liquidity remains high, but the movement is on the opposite trend, causing investors’ sentiment to fluctuate, or even fear.

Typically, the trading session on April 27th when the transaction value on HoSE only reached VND 7,500 billion in the morning session – this is an unexpected change, because in the past 2 months no liquidity session has recorded less than VND 10,000 billion, especially in the context that F0 cash flow is proving so strong that it clogs the system.

Investors’ reluctance to buy in recent sessions has made many people believe that the Vietnamese stock market has “exhausted”.

At the end of the trading session, vn-index increased points again but the value of HoSE order execution decreased by more than 22% compared to the previous session to VND 13,065 billion, the total value of execution of both exchanges (HoSE, HNX) decreased by 23% to VND 14,750 billion, recording the worst trading level within 5 weeks.

To explain the “evaporation” of the cash flow, there is an opinion that investors are more afraid to buy, the cash flow to take profits does not return as much as before, but is decreasing day by day. The amount of money in the market does not change after a few days, but the demand can change every night.

This is clearly shown through the market’s recovery after a day of nearly 33 points (April 26) decrease, the VN-Index only increased by nearly 4 points in the session of April 27. This movement is quite similar to what happened earlier in the session 22-23 April but different in “bounce” of the market.

Specifically, on April 22, VN-Index recorded a “red fire” session when it dropped more than 40 points but the next session (April 23) quickly recovered more than 20 points.

Notably, the number of advancers in the session of April 27 was not much when on HoSE there were only 0.78 gainers on the HoSE, while the April 23 session ratio was 1: 2.36.

In addition to the purchasing power issue, the decline in the cash flow also reflected a weak sentiment and decreased expectation. If the investor thinks that the market will go up further, more money will be poured in. Conversely, if expectations are run out, the primary goal will be to hold money in the short term.

Mr. Le Duc Khanh– Chief Analyst of VPS Securities company said that “the wave of big increases that have lasted since April 2020 can make investors concerned about the possibility of the next point increase of the market. Besides, the “Sell in May” effect is closer and investors are more apprehensive.”.

Long term is still bright

Before what is happening now, especially in the context of the first quarter business results season and the AGM is going to the final stage, many people say that the stock market has “run out” and put The question of how will the stock market move in the coming period? Low-lying information is coming near?

In fact, according to Mr. Huynh Minh Tuan – Managing Director of Mirae Asset Vietnam, investors are tending to treat the market as a gamble and a “fruiting” deal, so the fluctuating psychological state is always the main but removes the logic as well as the basic foundation of finance and investment, forming surfing trading behavior.

Weakness in official information is making the market oriented by unauthentic rumors affecting the transaction structure as well as the trend of the cash flow. In addition, the market size is still small and lack of quality goods as well as the lack of a large number of professional investors is also one of many factors affecting the general development.

“However, to talk about Vietnam’s stock market, a bright outlook remains key in the long-term,” said Mr. Tuan.

In the recent report of Pyn Elite Fund, Mr. Petri Deryng – Investment Director gave an optimistic forecast that the VN-Index will soon reach 1,500 points in the near future.

“The general forecasts for growth for the Vietnamese stock market in 2021 are justified given strong earnings growth, while taking into account the positive outlook for the next few years. Since the beginning of the year, foreign investors have continuously net sold Vietnamese stocks. We assume that this investment flow will surely reverse this year, ”Mr. Petri Deryng emphasized.

In general, it is possible that the market needs a break but will quickly pass when the reform of institutions and the business environment has been a great motivation for the economy is still the most positive signal for investors in a long-term trend.

As securities expert Nguyen Hong Diep said: “In 2021, we have talked a lot about the story of cheap money flow, economic recovery. Obviously these things have made us burning confidence. So why just because the temporary moves of the market are doubting the previous things? “.

Source: – Translated by