Stocks under pressure as individual investors withdraw money

The market had a rather negative last week of June when the VN-Index had deep declines and less active liquidity. According to trading statistics on the HOSE last week, the VN-Index had 2 increasing sessions and 3 decreasing sessions.

At the end of the trading week, VN-Index decreased by 36.7 points (-2.86%) to 1,245.32 points. Liquidity on the HOSE floor this week decreased compared to the previous week when the matched volume decreased by 8.8%, the total value decreased by 5.6%, equivalent to VND 110,203 billion.

Notably, on June 28, VN-Index had its last trading session of the second quarter of 2024 with a negative performance. The strong selling pressure at the end of the session caused VN-Index to fail to maintain the important psychological support price zone around 1,250 points. This caused the short-term trend of the market to shift to a less positive state.

Foreign investors have shown no signs of cooling down as they continued to net sell nearly VND4,500 billion in the last week of June. In the trading week from June 24-28, foreign investors net sold 118.78 million units, with a total net selling value of over VND4.4 trillion. In total, foreign investors net sold 436.69 million units in June, with a total net selling value of nearly VND16.8 trillion, just behind the record month set in May when they net sold more than VND19 trillion.

Foreign investors typically account for about 10% of the trading value in the Vietnamese stock market, so the record net selling by foreign investors will certainly have some impact on the market. The foreign ownership ratio in the stock market is currently at 17.5%, down about 0.75% compared to the end of 2023.

However, in recent times, thanks to the abundant capital flow of domestic individual investors, all the foreign selling has been absorbed. Therefore, many opinions believe that if the low interest rate environment continues to be maintained, it will be an important factor to help individual investors continue to pour money into the stock market in the coming time, absorbing the net selling of foreign investors if capital withdrawal activities continue.

Dr. Nguyen Duy Phuong, Investment Director of DG Capital, expects that the pressure to withdraw foreign capital will decrease in the second half of 2024 and 2025 when the exchange rate cools down according to the Fed's interest rate cut roadmap. More positively, foreign capital will soon return if there are more obvious steps for Vietnam's process of upgrading to an emerging market.

Commenting on the stock market in the second half of 2024, TPS Research experts have just released an analysis report, in which they stated that there will be many factors supporting cash flow in the coming time. The amount of margin loans in the second half of 2024 is expected to increase significantly as a series of securities companies have approved plans to increase capital strongly in 2024, showing that the margin lending space in the coming time is still very large and supports the growth of the stock market.

TPS Research experts believe that the second half of 2024 will be the premise for the market's upward trend from the brighter upgrade story when MSCI's assessment report in June 2024 showed that Vietnam has improved the transferability criteria, the KRX system is being urgently completed, expected to be deployed from September 2024, strengthening the possibility of upgrading. In particular, important laws such as the Land Law, Real Estate Business, etc. taking effect from the third quarter of 2024 will create momentum for the stock market to increase points.

Source: https://laodong.vn/kinh-doanh/chung-khoan-chiu-nhieu-ap-luc-khi-dong-tien-nha-dau-tu-ca-nhan-rut-lui-1359594.ldo