'Decoding' why Vietnam's stock market has fallen sharply, what is the next scenario?

With a decrease of 64 points, equivalent to more than 4.1%, the index representing the Vietnamese stock market had the strongest correction in the Asian region. Many investors are interested in what the next development of the market will be?

Stock market drops sharply, investors look for reasons - Photo: QUANG DINH

VN-Index dropped sharply by 64 points at the close of the session on July 29, equivalent to 4.11%, closing at 1,493.41 points. Notably, the order matching liquidity in the session was recorded at a record high, but there was a significant difference between statistical platforms.

According to data from FiinTrade, the order matching value on the HoSE floor reached about VND75,800 billion, while some other securities companies only recorded nearly VND72,000 billion.

VN-Index has the biggest drop in the region

Comments on the reasons for the stock price drop

Commenting with Tuoi Tre Online , Mr. Nguyen The Minh - director of individual customer analysis at Yuanta Vietnam Securities - said there are many factors affecting the market.

One of the important factors affecting the short-term trend of the market, according to experts, is the sharp increase in the USD/VND exchange rate - which has now set a new peak.

Specifically, the State Bank announced the central exchange rate on July 29 at 25,206 VND/USD, an increase of 24 VND compared to the previous day. Many commercial banks simultaneously adjusted the USD selling price, bringing the exchange rate to its highest level ever.

The sharp increase in exchange rates has created significant pressure on foreign capital flows, increasing exchange rate risks in investment decisions. At the same time, this has also affected the psychology of domestic investors, especially in the context of the market trading around the peak, many accounts are making good profits and tend to proactively preserve their achievements by taking profits early.

In addition, interbank interest rates have increased sharply again, showing that liquidity in the financial system is no longer as abundant as before. "This directly affects the margin lending capacity of securities companies - which use both their own capital and bank loans to support customers," Mr. Minh commented.

When capital is limited, purchasing power in the market also shrinks, especially in stocks with "stretched margins" such as real estate or securities - stocks that have increased sharply recently.

According to Mr. Minh, the market has now reached the 10-year average P/E valuation. In the period from 2023 to now, every time the P/E approaches the threshold of 15 times, the market has experienced strong corrections and the current situation is tending to repeat itself.

Mr. Truong Hien Phuong - Director of KIS Vietnam Securities - also believes that this is a necessary and inevitable development in a growth cycle. In every trend, adjustment is a normal factor: if in a downtrend there are increasing sessions called "bull traps", then in an uptrend there will also appear technical adjustments.

In addition, according to Mr. Phuong, after the market broke out strongly and surpassed the 1,500 point mark, investors who were "stuck with goods" from previous periods, now when the market recovers, also took the opportunity to sell to recover capital.

What is the forecast for the next sessions?

When asked whether this is a normal technical correction or a downtrend signal, Mr. Nguyen The Minh commented: The decline will likely continue in the next few sessions.

The short-term support zone of 1,450 - 1,460 points could help the market experience a technical recovery. "If the pressure continues, the VN-Index could correct further to the strong support zone around 1,380 points," Minh predicted.

However, the adjustment period is expected to be quick, and the market may recover soon afterwards. "Normally, declines after periods of overheating often end quickly and the market will soon return to growth trajectory," Mr. Minh analyzed.

Ms. Nguyen Phuong Nga - analyst of Vietcombank Securities (VCBS) - said that fluctuations and adjustments are necessary for the market to regulate supply and demand, at the same time re-evaluate growth momentum and find a new balance point.

With the current developments, VCBS recommends that investors proactively realize profits in stocks that have increased rapidly when a recovery appears.

No rush to catch the bottom?

Faced with the negative developments of the market, Mr. Minh recommends that investors reduce their investment proportion to a safe level, about 40-50%. At the same time, it is necessary to closely monitor and proactively handle leveraged portfolios to limit risks.

"We should not rush to buy at the bottom at this time, because the market has not yet formed a clear accumulation zone or bottom," said Mr. Minh.

BINH KHANH

Source: https://tuoitre.vn/giai-ma-vi-sao-chung-khoan-viet-nam-giam-manh-kich-ban-tiep-theo-la-gi-20250729183140185.htm