Since the beginning of the year, VN-Index has encountered difficulties 7 times when approaching the peak of 1,300 again - Photo: QUANG DINH
VN-Index closed the 41st session of the year at 1,288.39 points, up nearly 18 points (1.4%) compared to the end of last week, but liquidity decreased sharply.
The stock market missed the upgrade train again last week, but the index did not react strongly, but instead continued to increase. However, even the "miraculous" increase in GDP did not push the VN-Index back to its old peak of 1,300.
Why is VN-Index "stuck in place"?
In early 2022, Vietnam's stock market made an important milestone when the VN-Index reached a historic peak of 1,528.57 points. To date, this is still the highest level the index has ever reached and has not reached a second time.
Last year and for more than 9 months this year, the index has struggled to conquer the 1,300 peak again. Up and down, VN-Index hovered around the 1,200 area, making many investors frustrated.
While Vietnamese stocks are "stuck in place", looking at other markets, both in the US and Asia, they are continuously surpassing their peaks.
Speaking with Tuoi Tre Online , Mr. Huynh Hoang Phuong - FDIT's asset management consultant, pointed out that the score not being able to break through or increasing very slowly is also a characteristic of a frontier market like Vietnam.
Mr. Phuong observed that even some emerging markets' scores did not increase as strongly as developed markets.
For VN-Index, the index stopped at this level partly due to the cyclical nature of most listed stocks that are still "heavy" such as the real estate group. The proportion of this industry has decreased but together with banking, these groups still make up the majority of VN-Index.
Source: HNX, HoSE, VCI
Mr. Phuong explained that many stocks in many other sectors in the Vietnamese stock market have gone through many cycles with the phenomenon of "changing stars", in other words, there are stocks that increase very strongly then "fade" and other "big guys" take their place. The index not increasing is also the result when many big guys decline.
For example, Hoang Anh Gia Lai shares in the previous cycle, or recently FLC and Novaland groups... "This further shows that the quality of listed enterprises is uneven and is a very worrying thing," said Mr. Phuong.
Ms. Hoang Viet Phuong - Director of SSI Investment Analysis and Consulting Center, agreed: The market does not have many quality sources of supply and attractive new financial products.
Meanwhile, the low proportion of professional investors is a limitation that makes it difficult for the market to make a sustainable breakthrough as expected.
"Since 2007, the stock market has made progress in terms of infrastructure, legal regulations, scale and liquidity.
However, the VN-Index has not yet broken out due to strong fluctuations in the market when individual investors account for the dominant proportion and are easily affected psychologically," Ms. Phuong said.
VN-Index remains the same, but the market has also changed a lot.
Although still hovering around the current 1,200 point area, experts point out that compared to the 2007-2009 period and later periods, the market has changed a lot.
Ms. Hoang Viet Phuong said that with the same score, the number of securities investor accounts has increased 20 times.
In addition, market capitalization increased more than 10 times compared to the 2007 period. The infrastructure system and legal framework for the stock market in the current period have developed and improved much more than in the previous period.
Mr. Huynh Hoang Phuong explained that although the index was adjusted to 1,200 points when more stocks were listed, the total market capitalization was much larger at the same point.
In fact, good Vietnamese stocks have grown very well recently, only the index has been held back by some "big guys" that seem to be out of date.
Proposing solutions, Ms. Hoang Viet Phuong proposed continuing to improve the legal framework and infrastructure for the market, speeding up the operation of the KRX system, supporting IPO activities and conditions for participation in transactions of investment funds...
Another direction also promoted by experts and stock market regulators is to increase the proportion of institutional investors.
Source: https://tuoitre.vn/giai-ma-chuyen-vn-index-lai-quan-quanh-vung-1-200-diem-sau-20-nam-20241013165954952.htm
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