VN-Index fell 34 points last week. Speaking to Tuoi Tre Online, experts analyzed the main concerns that caused stocks to experience the sharpest decline in the past 20 weeks.
Many large-cap stocks were sold off fiercely by foreign investors - Photo: QUANG DINH
Will stocks return to the 1,200 point zone?
* Mr. Do Bao Ngoc - Deputy General Director of Kien Thiet Securities:
- Last week, the index fell sharply to 1,218 points. There is a possibility that a correction will cause the index to fall back to 1,200 points.
Most of the reasons for the market decline have not improved. Supporting information is also lacking. Meanwhile, foreign investors have been net sellers very aggressively. Since the beginning of the year, they have net sold about 3-4 billion USD, a record number so far.
Domestic cash flow is being competed by many investment channels with higher returns than the VN-Index, while foreign investors are shifting to the US or other more attractive markets.
Mr. Do Bao Ngoc
In addition, investors are worried about the sudden increase in exchange rate pressure. After Mr. Trump was re-elected, the US inflation index was also higher than expected, causing many people to worry that the Fed would be more cautious in its interest rate reduction roadmap. In fact, the USD index has increased sharply, putting great pressure on the VND-USD exchange rate.
This week, we need to continue to observe the developments of the USD index (DXY). If a downward trend appears, the exchange rate will be less tense, and the stock market will also be less pressured.
In addition, when the score reaches 1,200, it may stimulate cash flow to catch the bottom in the short term. But is it a long-term bottom? It needs bigger supports, not just a matter of current valuation.
Investors will pour more money in when there is confidence in better economic growth, clearer recovery of corporate profits, foreign investors return to net buying...
Exchange rate will cool down
* Mr. Tran Truong Manh Hieu - Head of Strategy Analysis Department, KIS Vietnam Securities:
- Indeed, investor sentiment has become pessimistic in the past week after Mr. Trump was elected US president. With the expected trade policies, imported goods into the US may be subject to a 10% tax.
This has raised concerns about a possible decline in Vietnam’s exports. As Vietnam’s economy is heavily dependent on exports, economic growth is at risk of slowing down, negatively affecting investor sentiment and creating selling pressure throughout the recent trading sessions.
The downtrend has re-formed in the short term, especially when the VN-Index is in the process of establishing a new bottom lower than the September 2024 bottom.
Mr. Tran Truong Manh Hieu
There are currently many factors affecting the exchange rate, of which the real interest rate difference between Vietnam and the US is a notable factor. Capital flows tend to shift to the US to take advantage of higher interest rates, creating pressure on the VND/USD exchange rate since the beginning of the year.
However, this pressure may not be as great as investors fear.
First, the Fed and major central banks around the world are cutting interest rates, shifting to a loose monetary policy.
Second, at the end of the year, businesses' demand for USD is no longer high, as large orders for the year-end holidays have been completed. At the same time, foreign currency flows from these orders will return, contributing to reducing exchange rate pressure.
Third, remittances are expected to increase in the latter part of the year, especially as Tet 2025 approaches early. These factors will help reduce pressure on the exchange rate.
Foreign net selling momentum focused on bluechip stocks
* Mr. Dinh Quang Hinh - Head of Macro and Market Strategy Department - VNDirect Securities Analysis Department:
Mr. Dinh Quang Hinh
- The increase in DXY and US government bond yields has put pressure on the VND exchange rate and significantly narrowed the State Bank's monetary policy space.
The central exchange rate has been continuously adjusted upward in the past week and the interbank exchange rate has nearly returned to its mid-year peak, combined with the interbank interest rate increasing again to over 5%, which has negatively impacted investor sentiment as well as the performance of banking, securities, and steel stocks, which are highly sensitive to fluctuations in exchange rates and interest rates.
Foreign net selling momentum focused on bluechip stocks also increased pressure on stock indexes.
In the context of a lack of strong enough supporting information and no signs of a sustained cooling of interbank interest rates and exchange rates, I think investors should prioritize portfolio risk management at this time.
Source: https://tuoitre.vn/chung-khoan-giam-manh-nhat-20-tuan-phan-tich-noi-so-lan-tren-thi-truong-20241118090636559.htm
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