Weakening stock liquidity: Need to return to fundamentals, instead of betting on cash flow

According to experts, this is the stage where investors are forced to return to the fundamentals of the stock market, instead of betting on cash flow expectations.

Stock liquidity declines - Photo: QUANG DINH

Stock liquidity gradually 'disappears'

* Mr. Nguyen Anh Khoa, Director of Analysis and Research, Agribank Securities (Agriseco):

- VN-Index broke through the support level of 1,620 points after a sharp decline at the end of the week. Investor sentiment was largely defensive as both active supply and demand were low and trading liquidity was less active.

The current correction mainly comes from the decline in stocks that have attracted strong cash flows in recent times. The fact that some stocks that were mostly flat before have suddenly increased somewhat reflects the shifting trend of cash flows.

Therefore, this can be considered a healthy adjustment, refreshing the portfolio structure and market when the old leading group temporarily runs out of new growth stories to tell.

We believe that the immediate technical support point will be at 1,585 points, which may be tested in the first session of the week. Meanwhile, the strong support zone of VN-Index is around 1,490-1,510 points.

Currently, disbursement is not encouraged, priority is given when the index is balanced at the support zone with the stock ratio maintained at 40-60% of the portfolio.

Regarding industry groups, investors can refer to some mid-cap stocks in industries such as chemicals, energy, seafood and industrial zones in the scenario of the index testing and recovering at the threshold of 1,585 points.

For the scenario where the index falls rapidly and heads towards the distant support level in the 1,490-1,510 zone, investors can wait for opportunities in the securities, banking, and real estate groups after the adjustment process and bottoming before the market.

A healthy adjustment

* Mr. Bui Van Huy - Director of FIDT investment research:

- The market is entering a natural correction phase, but this correction reflects more than simple profit-taking.

After a long uptrend and surpassing 1,700 points, the market has shown signs of weakening cash flow.

Liquidity has continuously declined, currently at its lowest level in the past 4 months, showing that short-term cash flow has significantly withdrawn, while long-term cash flow is still observing and has not really re-entered the market.

The slowdown in liquidity is not just a technical manifestation, but a sign that short-term expectations have moved too fast compared to the economy 's absorption capacity and actual business results.

As valuations approach highs, investors tend to become more sensitive to volatility, ready to reduce positions in response to uncertain signals.

The fact that most stocks have fallen 15-25% from their peak is not necessarily a sign of a crisis of confidence, but rather a repositioning of expectations after a period of euphoria.

I see the current situation as a healthy, but deep, correction aimed at cleaning up speculative positions and bringing the market back to a more balanced level.

This is the stage where investors are forced to return to fundamentals, instead of betting on cash flow expectations.

The important point is that the current fear is more defensive than panicky. As short-term money flows out, the rest of the market, especially institutional investors and domestic funds, have the opportunity to restructure their portfolios in a more selective and sustainable way.

Factors to Watch

* Ms. Nguyen Thi Bao Tran - analyst at Mirae Asset Securities (Vietnam) :

- VN-Index has been under pressure to correct for the fourth consecutive week with declining liquidity. Average trading value decreased by 6% compared to the previous week, down to VND23,600 billion/day.

Regarding the market outlook, VN-Index is expected to fluctuate around 1,600 in the short term, according to our base case. Meanwhile, with valuation, it has become more attractive after the market P/E has decreased from 17 times to 15.5 times.

Key factors to watch: Q3 earnings up 22.3% YoY, with the last four quarters up 15.6% YoY.

Economic growth in the first 10 months of the year, the Government 's ambitious economic growth plan for the 2026-2030 period (+10%/year).

Solutions to upgrade Vietnam's market to MSCI's emerging market status by 2030; and the IPO wave from 2025 onwards...

Back to topic

BINH KHANH

Source: https://tuoitre.vn/thanh-khoan-chung-khoan-suy-yeu-can-quay-tro-lai-yeu-to-co-ban-thay-vi-dat-cuoc-vao-dong-tien-20251110101932038.htm