Cash flow disbursed into stocks sets record

This is a trading week with record liquidity, averaging more than 30,000 billion VND/session. This shows the fast and strong turnover of cash flow in a market with many short-term profit opportunities.

Last week, cash flow into the stock market hit a peak. Illustration photo: Van Giap/BNEWS/TTXVN

The stock market experienced a positive trading week (March 18-22) when the VN-Index successfully conquered a new peak in 2024. Analysts said that investors' concerns were relieved when bad news was absorbed and the US Federal Reserve (Fed) revealed more specific policy directions in the coming period. Therefore, stock investors continuously disbursed when the market was considered to have many short-term profit opportunities.

*Record high liquidity

According to Saigon - Hanoi Securities Joint Stock Company (SHS), last week (March 18 - 22), liquidity on HOSE reached VND151,877.51 billion, a sharp increase of 20.4% compared to the previous week. This was a trading week with record liquidity, averaging more than VND30,000 billion/session. This shows the fast and strong turnover of cash flow in the market with many short-term profit opportunities.

Experts from SHS said that the stock market last week received many important information such as: The Fed kept interest rates at 5.25% -5.5%, expected to cut interest rates 3 times this year; The Bank of England decided to keep interest rates at 5.25%; The Bank of Japan raised interest rates for the first time since 2007, ending the only negative interest rate policy in the world ; The Swiss National Bank decided to cut interest rates. This is the first major central bank in the world to cut interest rates after 9 years.

Notably, last week, the State Securities Commission consulted its members on the regulation that foreign institutional investors can trade without depositing 100% of their money.

If approved and implemented in the near future, this regulation will remove one of the two bottlenecks in the process of upgrading the market according to the regulations of the FTSE rating organization: the requirement for pre-transaction margin (prefunding) and the limit on foreign ownership ratio (room). Along with the recent trial run of the KRX system by HOSE, it can be seen that the management agencies are very active in solving problems to upgrade the market in 2025 as the Government 's target.

The market had a positive trading week in response to the above information, despite experiencing a very volatile first session of the week when it dropped nearly 50 points in the session from 1,270 points to 1,220 points, then recovered to 1,240 points with a record liquidity of nearly 48,000 billion VND.

In the remaining trading sessions, VN-Index recovered strongly, rising above the 2023 peak (equivalent to 1,245 -1,255 points) and above the highest price peak 2 weeks ago around 1,275 points.

At the end of the trading week from March 18 to 22, VN-Index increased by 1.43% to 1,281.8 points and began to approach the price range around 1,295 points, corresponding to the highest price in August 2022. HNX-Index ended the week at 241.58 points, up 0.89% compared to the previous week.

In contrast to domestic investors, foreign investors had the largest net selling week since the beginning of 2024. On all three exchanges, foreign investors net sold VND 3,109 billion. The focus of net selling during the week of March 18-22 was the index fund group FUEVFVND (VND 1,539 billion), VNM (VND 660 billion), VHM (VND 486 billion)...

Last week, banking stocks were the driving force behind the market's recovery after a sharp decline, surpassing the peak in 2023, heading towards the peak in August and September 2022, notably TCB up 8.45%, VIB up 7.56%, MBB up 5.25%, BID up 3.83%...

Meanwhile, financial services and securities codes were divided with a mixture of green and red. On the downside, VFS decreased by 6.64%, IVS decreased by 6.47%, FTS decreased by 3.75%, VIX decreased by 3.12%... On the contrary, there were still codes that attracted short-term cash flow, liquidity increased sharply with CSI increasing by 4.91%, SHS increasing by 4.71%, VND increasing by 3.18%...

Real estate stocks were also the main driving force last week when many stocks increased sharply, surpassing the nearest peak price, liquidity increased dramatically, notably HPX increased by 37.18%, DIG increased by 12.11%, PDR increased by 12.1%, TCH increased by 12.03%, DXG increased. Industrial park and rubber real estate stocks increased and decreased alternately. In addition to D2D increasing by 17.5%, KBC increasing by 6.25%, PHR increasing by 4.4%..., most of the remaining stocks were under strong adjustment pressure such as DTD decreased by 5.48%, TIP decreased by 4.63%, GVR decreased by 3.90%, SZC decreased by 3.78%...

According to VNDIRECT Securities Joint Stock Company (VNDIRECT), the Fed kept its March policy meeting unchanged (in line with market expectations) and said that "policy interest rates may have reached their highest level for this cycle".

The Fed also raised its 2024 GDP growth forecast to 2.1% from its previous forecast of 1.4% in December. More importantly, the dot plot (a chart that shows each Fed official’s forecast for short-term interest rates) shows the Fed is leaning toward a scenario of three rate cuts in 2024.

“This is in line with market expectations, thus somewhat removing investors’ “fear”,” explained experts from VNDIRECT.

According to VNDIRECT, with these developments, the VN-Index may maintain its upward momentum next week and head towards the psychological resistance zone around 1,300 points (+/-10 points).

Experts from Mirae Asset Securities Joint Stock Company (Vietnam) said that VN-Index has reversed and increased rapidly in the last 3 sessions of the week, accompanied by improved liquidity. Notably, the matched volume in the last 2 sessions of the week both exceeded 1.1 billion units, among the sessions with the highest liquidity ever, showing that the buying power at high prices is active.

Technically, 1,285 - 1,310 points will be an area under strong profit-taking pressure, with great momentum from trading volume, in the short term, a tug-of-war situation may appear, Mirae Asset Securities commented.

In fact, the Vietnamese stock market reached a new peak in 2024 in the context of very positive developments in the world stock market.

* “Blue wave” on the US stock market

The S&P 500 index in the US stock market was almost flat in the trading session on March 22, but the index recorded its biggest weekly gain (in percentage terms) in 2024, after the US Federal Reserve (Fed) maintained its forecast of three interest rate cuts this year.

At this session, the Dow Jones industrial index fell 305.47 points, or 0.77%, to 39,475.90 points; the S&P 500 index fell slightly by 7.35 points, or 0.14%, to 5,234.18 points; and the Nasdaq technology index added 26.98 points, or 0.16%, to 16,428.82 points.

For the week, the S&P 500 rose 2.3%, its biggest percentage gain since mid-December 2023. The Dow Jones Industrial Average rose 2% last week, its biggest weekly gain since mid-December 2023, while the Nasdaq Composite rose 2.9%, its biggest weekly gain since mid-January 2024.

"Blue wave" on the US stock market. Illustration photo: THX/TTXVN

According to Dow Jones Market data, the financial market has witnessed a record-high “green wave”, in which many stocks have reached all-time highs, with technology stocks recording the strongest upward trend.

After a two-day policy meeting of the Federal Open Market Committee, the Fed decided to keep the interest rate unchanged at a range of 5.25% - 5.50%, and said it expected to cut interest rates by 0.75 percentage points by the end of 2024, amid inflation gradually falling towards the 2% target. The Fed also revised its economic growth forecast up to 2.1% in 2024, from just 1.4% in December 2023.

Traders now see a 71% chance of the Fed starting to cut rates in June, up from 56% earlier this week, according to CME's FedWatch tool.

Mr. Michael Sheldon, Director of RDM Financial Group, commented that after the stock market's recovery since October last year, the market may enter a correction or sideways phase in the near future.

According to BNEWS (Vietnam News Agency)

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