Prioritize risk management

The market experienced a negative trading week under strong net selling pressure from foreign investors, causing the general index to continuously lose points. Although the VN-Index opened the week with a good increase, the relentless selling momentum of foreign investors caused the market to lose important support.

Over the past 5 sessions, foreign investors have net sold VND3,347 billion in the entire market. This is the 6th consecutive week that foreign investors have net sold in the Vietnamese stock market.

Since the beginning of the year, the net selling value of foreign investors has exceeded VND20,000 billion in the whole market, of which net selling was VND22,600 billion on the HoSE floor.

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 investor caution has caused liquidity to remain low, with the average total trading value per session during the week reaching VND15,502.4 billion, down 32% compared to the previous week.

After a good recovery week, most stocks in the large-cap group were under strong correction pressure again under selling pressure from foreign investors, such as MSN down 4.83%, BCM down 4.62%, VPB down 4.59%, MWG down 4.34%, SAB down 4.27%, STB down 3.90%...

Giving advice to investors in the last trading weeks of the year, Mr. Nguyen Anh Khoa - Head of Analysis Department of Agriseco Securities Company and Mr. Duong Hoang Linh - Director of Analysis of SBS Securities Company both said that margin should absolutely not be used.

Nguoi Dua Tin (NDT): Last week, the market continued to witness strong net selling by foreign investors, however, the cash flow of domestic individual investors was a bright spot, contributing to "blocking" the market's decline . What is your assessment of this development by foreign investors , will this move affect investor sentiment?

Mr. Nguyen Anh Khoa: In the period of late 2022 - early 2023, this group has increased disbursement when the market experienced a deep correction from the 1,200 point area to the 880 point area. The continuous net selling in the past 2 quarters is believed to come from the usual short-term profit-taking activities of 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, increasing geopolitical tensions, etc. 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 continued net selling by foreign investors may have negative impacts on the psychology of individual investors in particular and the stock market in general.

Mr. Duong Hoang Linh : Obviously, the selling pressure of foreign investors in recent times has had a great impact on investor sentiment, which also significantly affects the strength of cash flow participating in the market. The net selling concentrated in large-cap stocks in the VN30 is also partly the reason affecting the VN-Index.

In my opinion, this net selling trend is likely to continue in the near future when interest rates in the US are still high and interest rates in Vietnam are very low.

VN-Index performance week 11 - 15/12 (Source: FireAnt).

Investor : According to your forecast, what will the market performance be like in the last 2 trading weeks of the year?

Mr. Nguyen Anh Khoa: After each sharp decline, the market often has recovery phases, which also reflects investor sentiment and bottom-fishing cash flow in the market. However, I think that with the medium-term downtrend still playing a key role, it is necessary to limit the increase in disbursement, or use margin, and control the proportion of stocks in the portfolio at a safe level, corresponding to the level of risk acceptance.

Restructuring the portfolio to medium and long-term positions for stocks with good fundamentals, healthy financial situation, low debt ratio, and positive business prospects should be prioritized in the current period.

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 the cash flow returns is it a reliable factor.

Investor : In your opinion , how should investors act at this time?

Mr. Nguyen Anh Khoa: In the current uncertain market context, I think it is necessary to limit the disbursement or use of margin. Instead, we should keep the proportion of stocks in the portfolio at a safe level, corresponding to the level of risk acceptance.

In addition, it is necessary to prioritize restructuring the portfolio to medium and long-term positions for stocks with good fundamentals, healthy financial situation, low debt ratio and positive business prospects.

Mr. Duong Hoang Linh : The market is fluctuating within the range of about 1,080 - 1,130 points, so the most suitable strategy for short-term investors is to wait to buy when the index is near the lower border at 1,080 points and consider taking profits when the index is near the upper border at 1,130 points.

Along with that, the investment ratio should not exceed 50% of stocks, especially because the trend still has many potential risks, so absolutely do not use margin, prioritize risk management over trying to find profits .

Source: https://www.nguoiduatin.vn/lang-kinh-chung-khoan-18-12-uu-tien-quan-tri-rui-ro-a641143.html