FILE PHOTO: An investor sits in front of screens showing stock board information at a securities company in Hanoi, Vietnam July 6, 2018. Picture taken July 6, 2018. REUTERS/Kham/File Photo
HANOI: After two consecutive weeks of decline, Vietnam’s stock market has rebounded, driven by strong performance in banking stocks and improved liquidity.
On the Ho Chi Minh Stock Exchange last week, the VN-Index recorded three gaining sessions and two losing sessions.
By the end of the week, the VN-Index had settled at 1,275.14 points, marking a gain of 17.82 points, or 1.42%.
Meanwhile, the HNX-Index also rose by 2.06 points, or 0.9%, closing at 229.13 points.
The upward momentum was largely supported by banking stocks, with several tickers reaching historic highs.
Additionally, market liquidity significantly improved, rising 21% compared to the previous week, with trading activity primarily concentrated in the banking sector.
Total trading value across both exchanges surged by 12.6%, reaching 77.69 trillion dong.
Foreign investors unexpectedly returned to net buying, recording a net purchase value of 308.63 billion dong after a net selling streak exceeding 1.4 trillion dong in the previous week.
However, some analysts predict that foreign investors might resume net selling in the first quarter of 2025, primarily due to global geopolitical uncertainties, which are driving capital towards safer markets.
Experts anticipate 2025 to be a volatile year for global and Vietnamese stock markets.
If Vietnam achieves an upgrade in market status as early as March 2025, significant capital inflows could drive the VN-Index to surpass 1,370 points, potentially reaching 1,500 points.
Conversely, if geopolitical factors, such as tax policies under a potential Donald Trump administration, negatively affect global markets, the VN-Index might retreat to the lower boundary of its long-term parallel channel, around 1,150 points.
Saigon-Hanoi Securities research head Phan Tan Nhat noted that the VN-Index is currently maintaining levels above its 200-day moving average and near the 2023 peak levels.
Market breadth indicates a recovery and accumulation phase, but with significant divergence between sectors.
In the short term, the VN-Index is expected to find support around 1,265 points, with the next resistance level at 1,280 points, and a stronger resistance near 1300 points.
In the medium term, the index is projected to remain within an accumulation range of 1200 to 1300 points, with a balanced zone around 1250 points.
“The market is expected to break out of this accumulation phase in 2025, supported by robust corporate earnings in the fourth quarter of 2024 and a promising outlook for 2025,” Nhat said.
According to Vietcap analysts, if the non pre-funding trading mechanism operates without significant flaws, the Financial Times Stock Exchange (FTSE) upgrade scenario is likely by September 2025, with an optimistic outlook suggesting it could happen as early as March 2025.
Once upgraded, the market is expected to attract US$500mil to US$700mil from exchange-traded funds (ETFs) into large-cap stocks included in the FTSE Emerging Markets Index.
The benefits of an upgrade will not be limited to ETF flows but will also include P-note investments (structured investment products facilitated by international banks), which are typically large-scale and short-term capital inflows. — Viet Nam News/ANN
