What's happening in the stock market?

Lost nearly 20 billion USD in 1 month

At the end of October, the VN-Index closed at 1,028.19 points, down 125.96 points, equivalent to a loss of 10.91% compared to the end of September. With the decrease in October alone, the capitalization of the HOSE floor evaporated nearly 480,000 billion VND, equivalent to a decrease of 19.5 billion USD. This is the strongest month of decline of the VN-Index in the past 13 months, since October 2022. Consecutive declines have caused all the recovery achievements of stocks since the beginning of the year to disappear when

The VN-Index has fallen back to the level at the beginning of the year. Compared to the peak the market reached on September 11, 2022, this index has decreased by more than 17%. Similarly, the HNX-Index on the Hanoi Stock Exchange also "evaporated" all the points earned before, returning to the beginning of 2023. Notably, not only did the stock indices plummet, but the market liquidity also dropped sharply.

In October, the average daily trading value on the stock market reached VND15,472 billion, down 36.7% compared to the average level in September when the trading volume of the two most active groups of investors, individuals and foreign investors, decreased in both buying and selling directions. Both groups sold continuously; in which, foreign investors alone continued to net sell more than VND2,300 billion in October. However, the net selling value of foreign investors decreased by nearly 42% compared to September 2023.

Rumors contribute to stock price plunge

In this market downturn, the large-cap stocks in the VN30 basket on the HOSE contributed the most, while the small- and medium-cap stocks were also strongly affected. Securities companies shared the view that investor sentiment was low, so the risks were still quite high. This prevented cash flow from returning to the stock market in the short term.

Securities expert Nguyen Hong Diep analyzed that the sharp decline in the stock market in just the last 2 weeks of October reflected the story of many difficulties in the macro economy. That is, the continuous increase in the VND/USD exchange rate forced the State Bank to use the tool of withdrawing money. This caused anxiety for investors in the stock market when it was predicted that interest rates would not decrease as expected. In addition, the story of military conflicts in the Middle East also triggered general anxiety around the world and the trend of investors being defensive, choosing safer assets than stocks.

It is difficult to hope to eliminate rumors in the stock market, because all information has two sides. Many groups of investors will exaggerate certain aspects according to their own interests. Individual investors when participating in the market must understand and accept as well as learn to be calm.

Securities expert Nguyen Hong Diep

Sharing the same view, Mr. Nguyen Nhat Khanh, Head of Consulting Department of Mirae Asset Vietnam Securities Company, said that the market had previously had a strong increase mainly due to expectations of government policies such as reducing interest rates, removing bottlenecks for the real estate market or increasing exports again... However, up to now, many businesses have not been able to recover as expected. Regarding business results, some companies have grown but the main industry groups are still weak. It can be mentioned that the banking industry's profits are running out of steam while bad debts are increasing, and the net profit margin (NIM) is decreasing. Seafood and steel companies have recovered but are still fragile, and real estate has not shown clear signs of recovery and still needs more time.

Mr. Khanh emphasized: After a period of high growth due to expectations, the results so far have not been as expected, so the stock market has adjusted, which is normal. Combined with negative information from the world market, domestic and foreign macroeconomics, many stocks have been continuously sold off.

Rumors contribute to sinking stocks

In addition, it is impossible not to mention the situation of rumors that also contributed to the decline of stocks. In October, along with the VN-Index's downward sessions, there were some rumors about listed companies such as the story of "Vingroup having to sell shares" or the foreign shareholder from Korea of ​​Masan "divesting all capital"... Unfounded but the rumors still made individual investors worried, rushing to sell even though the business results of the third quarter of 2023 of the above-mentioned units were higher than before.

According to Mr. Nguyen Hong Diep, there will always be rumors on the stock market. When the market declines and investor sentiment is low, just a small piece of information can be rumored and widely speculated about many negative issues about business operations. "It is difficult to expect to eliminate rumors on the stock market, because any information has two sides. Many groups of investors will exaggerate certain aspects according to their own interests. When participating in the market, individual investors must understand and accept as well as learn to be calm. Sometimes, do not pay too much attention to rumors because you should not choose stocks based only on certain information or stories. Because when one rumor ends, another rumor will appear, which is also normal," said Mr. Nguyen Hong Diep.

According to this expert, although it is not yet possible to determine the bottom of the stock market, at the current score, VN-Index is near the bottom so there will be more opportunities. At the same time, in terms of macroeconomics, stocks are still the most attractive investment channel, with the highest profit potential for many people while traditional investment channels are still quite gloomy.

Mr. Nguyen Nhat Khanh himself also said that the rumor had an impact on the psychology of individual investors in a few sessions, but this was not the main reason for the stock decline in October. Therefore, even the businesses that were rumored did not need to have corrective information, but the market would adjust itself. Currently, it is not possible to be optimistic about the trend of stocks from now until the end of the year, but Mr. Khanh said it is also difficult to predict. Because the profits of the banking sector in the fourth quarter of 2023 have not yet improved; real estate is also facing many difficulties and related industries such as iron and steel, cement are also unlikely to have positive results. Moreover, although when banks continuously reduce interest rates, many forecast that the cash flow of individuals deposited in banks can be withdrawn and partly transferred to the stock channel, but in reality that does not happen.

According to the latest updated data from the State Bank, as of August, the balance of deposits of residents in the credit institution system reached over 6.43 million billion VND, a sharp increase of 9.68% compared to the end of 2022. Deposits of economic organizations also exceeded 6 million billion VND, no longer negative as in previous months but have grown positively again (+1% compared to the end of last year). Thus, in August, people with idle money deposited nearly 44,000 billion VND into the banking system, despite the fact that at this time the mobilization interest rate level has decreased rapidly. Therefore, Mr. Khanh believes that the market from now until the end of the year will mainly move sideways but there will be short-term recoveries.

According to technical analysis, the 1,050 - 1,100 point area of ​​VN-Index is considered the technical bottom. With the market's P/E (price/earnings) of about 13 times and P/B (price/book value of shares) of about 1.7 times (lower than the average level in the last 5 years), the market has adjusted to a relatively attractive level.

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