Market liquidity dropped sharply in today's session - Photo: QUANG DINH
In today's session (June 27), VN-Index closed down 2.15 points with liquidity of just over VND15,173 billion, the lowest level since early May.
Foreign investors had another net selling session of nearly 1,200 billion VND on all three exchanges. Thus, this group has had a total of 16 consecutive net withdrawal sessions on the Vietnamese stock market.
Why do investors pay attention to the free USD price?
Speaking to Tuoi Tre Online , Mr. Nguyen Thanh Trung - investment consulting director of Thanh Cong Securities - commented that exchange rate is not a new issue but is still of interest to both domestic and foreign investors.
Today, the State Bank announced the central exchange rate of 24,264 VND, continuing to increase by 6 VND. The USD price at commercial banks adjusted upward.
The increase was also recorded very strongly in the free market when the selling price of each USD for the first time in history exceeded 26,000 VND.
"In the context of a market lacking information, and having just had a session where it fell 28 points, investors cannot avoid being cautious and liquidity decreasing," Mr. Trung commented.
According to Mr. Trung, there are many export enterprises that earn USD but do not sell it, but keep it in the context of the exchange rate still being "tense". Meanwhile, the demand for foreign currency for imports is high.
Ms. Tran Khanh Hien - Director of Analysis at MB Securities (MBS) - said that the exchange rate story started to heat up from the beginning of 2024 and has shown no signs of cooling down as it continues to rise to new milestones.
Since the beginning of the year, the Vietnamese Dong has lost about 5% of its value against the USD. The unfavorable exchange rate performance is partly due to the USD Index (DXY) which has been rising steadily in the first months of the year. Recently, it has increased again and approached the 106 mark.
The US Federal Reserve (Fed) delayed cutting interest rates, causing international investors to continue to believe in the strength of the USD.
Will the exchange rate gradually ease towards the end of the year?
Unlike last year, according to Ms. Hien, this year's exchange rate pressure largely comes from domestic factors. In particular, interest rates have dropped to record lows, widening the gap with USD interest rates, which has promoted carry-trade activities, pushing up domestic demand for USD.
Second, domestic enterprises are stepping up the import of machinery, equipment, and raw materials to prepare for a new production cycle...
Ms. Hien said the weakening of the Vietnamese dong will affect foreign investors' capital flows, especially foreign indirect investment (FII) in the stock market.
However, with many supporting factors, pressure on exchange rates will soon cool down in the second half of 2024.
The international market predicts that the Fed will cut interest rates once in 2024, possibly in September this year. As a result, the DXY index will decrease slightly in the second half of 2024 and reduce pressure on domestic exchange rates.
Domestically, many measures to stabilize exchange rates have been introduced, such as net withdrawal of Vietnamese Dong from the interbank market to reduce interest rate differences in this market, selling foreign currency on a spot basis to credit institutions to balance foreign currency status, organizing gold sales through banks, etc.
In addition, a stable macro environment with a trade surplus, disbursed FDI capital still growing compared to the same period, and an increase in international tourists ... will be the basis to support the exchange rate in the last months of the year.
Besides exchange rates, what other factors put pressure on the stock market?
Mr. Nguyen Thanh Trung said that the recent decline in prices of Nvidia and other large-cap technology stocks also had an impact on domestic stocks in this industry.
Meanwhile, foreign investors have been net sellers for 16 consecutive sessions, creating psychological pressure on the market. Not to mention that after a sharp decline (June 24, down 28 points), both sellers and buyers are hesitant, making it difficult to avoid a decline in liquidity.
Source: https://tuoitre.vn/ly-do-nha-dau-tu-chung-khoan-theo-sat-gia-usd-tu-do-20240627171919382.htm
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