The market experienced a negative trading week under strong net selling pressure from foreign investors, causing the overall index to continuously lose points. Although the VN-Index opened the week with a good increase, the relentless selling by foreign investors deprived the market of crucial support.
Over the past five trading sessions, foreign investors have net sold 3,347 billion VND across the entire market. This marks the sixth consecutive week that foreign investors have been net sellers in the Vietnamese stock market.
Since the beginning of the year, the net selling value of foreign investors has exceeded 20,000 billion VND across the entire market, including a net selling of 22,600 billion VND on the HoSE exchange.
At the end of the week of December 11-15, the VN-Index decreased by 7.83 points, equivalent to 1.97% compared to the previous week, to 1,102.3 points.
The return of cautious investor sentiment resulted in low liquidity, with the average daily trading value for the week reaching VND 15,502.4 billion, a decrease of 32% compared to the previous week.
After a strong recovery week, most large-cap stocks faced strong downward pressure from foreign selling, for example, MSN fell 4.83%, BCM fell 4.62%, VPB fell 4.59%, MWG fell 4.34%, SAB fell 4.27%, STB fell 3.90%, etc.
Offering advice to investors in the final trading weeks of the year, Mr. Nguyen Anh Khoa - Head of Analysis Department at Agriseco Securities and Mr. Duong Hoang Linh - Director of Analysis at SBS Securities both advised against using margin.
Reporter (NĐT): Last week, the market continued to witness strong net selling by foreign investors; however, the inflow of capital from domestic individual investors was a bright spot, helping to "block" the market's decline . What is your assessment of this development by foreign investors , and will this move affect investor sentiment?
Mr. Nguyen Anh Khoa: In the late 2022 - early 2023 period, this group intensified its disbursement as the market underwent a deep correction from the 1,200-point level down to the 880-point level. The continuous net selling in the past two quarters is believed to stem from typical short-term profit-taking on previously opened positions.
In addition, domestic risks such as pressure to repay bonds, or external factors such as major financial institutions agreeing to lower global economic growth forecasts, and increased geopolitical tensions, have caused foreign capital to withdraw from risky asset classes and seek safer investment channels such as US government bonds and gold.
I believe that the continuous net selling by foreign investors could have a negative impact on the sentiment of individual investors in particular and the stock market in general.
Mr. Duong Hoang Linh : Clearly, the selling pressure from foreign investors in recent times has significantly impacted investor sentiment, which has also considerably affected the strength of capital flows into the market. The concentrated net selling in large-cap stocks within the VN30 group is also partly responsible for the impact on the VN-Index.
In my opinion, this net selling trend is likely to continue in the near future as interest rates in the US remain high and interest rates in Vietnam are very low.
VN-Index performance during the week of December 11-15 (Source: FireAnt).
Investor : In your forecast, what will the market be like in the last two trading weeks of the year?
Mr. Nguyen Anh Khoa: After each sharp decline, the market usually experiences periods of recovery, reflecting investor sentiment and bottom-fishing capital flows. However, I believe that with the downward trend remaining dominant in the medium term, it is necessary to limit aggressive disbursement or the use of margin, and to keep the proportion of stocks in the portfolio at a safe level, corresponding to the level of risk tolerance.
The current priority should be to restructure portfolios towards medium- and long-term positions in stocks with strong fundamentals, sound financial situations, low debt ratios, and positive business prospects.
Mr. Duong Hoang Linh : The market is always affected by many different factors at each period. Therefore, in my opinion, investors should observe developments to determine short-term trends. Only when the trend channel improves and money flows back in is it a reliable indicator.
Investor : In your opinion , how should investors act at this time?
Mr. Nguyen Anh Khoa: In the current uncertain market environment, I believe it's necessary to limit aggressive disbursement or the use of margin. Instead, we should maintain a safe proportion of stocks in our portfolio, corresponding to our risk tolerance.
In addition, priority should be given to restructuring portfolios towards medium- and long-term positions in stocks with strong fundamentals, sound financial situations, low debt ratios, and positive business prospects.
Mr. Duong Hoang Linh : The market is currently fluctuating within the range of approximately 1,080 - 1,130 points. Therefore, the most suitable strategy for short-term investors at present is to consider buying when the index approaches the lower boundary at 1,080 points and consider taking profits when the index approaches the upper boundary at 1,130 points.
Furthermore, the investment allocation should not exceed 50% in stocks, especially given the ongoing risks in the market. Therefore, margin trading should be absolutely avoided, and risk management should be prioritized over maximizing profits .
Source
Comment (0)