Stock liquidity is at its lowest in nearly 2 years, where is the money going?

The average trading value of the stock market last week reached just over 10,000 billion VND, the lowest level since May 2023.

Stock market continues to trade sluggishly - Photo: QUANG DINH

Stock liquidity is sluggish.

VN-Index closed the 48th trading week of this year at 1,250.5 points, up 22 points from the previous week. Although the index increased, the average trading value per session reached VND10,131 billion, down nearly 17%.

This is also the lowest weekly liquidity since May 2023. In the past 8 weeks, the average trading value on HoSE has never exceeded VND 15,000 billion, according to observations from Fiintrade experts.

Low stock liquidity has persisted while many other assets have continuously surpassed their peak prices, leading many to believe that cash flow in the stock market is being drawn to real estate, foreign currency, cryptocurrencies, etc.

Speaking with Tuoi Tre Online, Mr. Bui Van Huy - director of DSC Securities' Ho Chi Minh City branch - said that the possibility of such a cash flow shift is also "reasonable".

In addition, according to Mr. Huy, the large amount of money needed to be allocated to handle maturing bonds and bad debts according to Circular 02 also affects stock liquidity.

"Looking at channels like real estate (some localities have land fever) or cryptocurrencies, it is clear that stocks are difficult at this stage. Especially when foreign investors are selling strongly," said Mr. Huy.

According to Mr. Huy, when liquidity is withdrawn, asset prices will decrease. For long-term investors, this period of securities can be a good opportunity to hunt for stocks with attractive valuations.

"There is always bad news at the bottom, but we shouldn't be too pessimistic," said Mr. Huy.

Investors should be cautious with illegal investment channels.

Meanwhile, Mr. Tran Truong Manh Hieu - Head of Strategy Analysis Department of KIS Vietnam Securities - said that liquidity is low but the cash flow moving to other markets on a large scale has not really appeared.

Firstly , to invest in the real estate market, the initial capital required is larger than that of the stock market. Therefore, the number of investors who can switch to this market is not too many, Mr. Hieu commented.

Second, foreign exchange transactions for investment purposes have not been permitted by the Government. This makes the transition to this market face many barriers and significant risks, according to Mr. Hieu.

Third , with digital assets, Mr. Hieu also said that they are not yet protected by the Government in Vietnam, so transferring capital here will face many risks, investors need to be cautious.

Commenting on the stock market trend, Mr. Dinh Quang Hinh - head of macro and market strategy department - VNDirect securities analysis block - said that the indices last week had recovered positively.

Accordingly, the market's recovery was supported by positive domestic and international macroeconomic information. Specifically, exchange rate pressure somewhat cooled down last week when the USD index (DXY) adjusted to around 106 after the yen increased sharply, due to expectations that the Bank of Japan would raise interest rates in the upcoming meetings.

Along with that, according to Mr. Hinh, the interbank interest rate level also decreased below 5% after the support measures of the State Bank. Information about credit growth reaching 11.12% as of November 22 also reinforced the prospect of credit growth this year reaching 14-15%. Thereby supporting the prospects of the banking group of stocks in the last quarter of the year.

There is also other positive information, including the National Assembly returning fertilizer to be subject to a 5% value-added tax and foreign investors returning to net buying, which has promoted a broad recovery trend in many industry groups, Mr. Hinh said.

Source: https://tuoitre.vn/thanh-khoan-chung-khoan-thap-nhat-gan-2-nam-tien-chay-di-dau-20241130094122536.htm