HÀ NỘI — The Vietnamese stock market continued a historic upward trajectory last week, with the VN-Index closing at 1,531.13 points, its highest closing level ever, an increase of 33.85 points compared to the previous week. 

This marks the sixth consecutive week of gains, reflecting a sustained bullish trading sentiment. Significant capital flowed into mid-cap stocks, while liquidity on the Ho Chi Minh Stock Exchange (HoSE) surged, surpassing the average of the past 20 weeks.

The market began the week with a correction of over 12 points, but strong buying interest quickly helped the VN-Index recover more than 24 points, negating the short-term adjustment. 

Subsequent trading sessions saw fluctuations, but the upward momentum was maintained, allowing the market to finish the week at a record high.

In terms of sector performance, 19 out of 21 sectors recorded gains last week, with notable increases in aviation, up 9.63 per cent, securities up 8.91 per cent and fertilisers, up 5.58 per cent. 

Conversely, the real estate sector declined by 1.97 per cent and consumer food fell by 0.6 per cent.

Foreign investors sold off, with a net value exceeding VNĐ1.6 trillion (US$61.3 million) for the week. Vietjet Aviation (VJC) experienced the strongest net sell-off at VNĐ1.7 trillion, followed by Hoa Phat Group (HPG) at VNĐ890 billion and FPT Corporation (FPT) at VNĐ501 billion. 

On the buying side, HDBank (HDB) saw net purchases of VNĐ683 billion, with VPBank (VPB) at VNĐ660 billion and SSI Securities Corporation (SSI) at VNĐ526 billion.

According to the Vietnam Construction Securities JSC (CSI), since hitting a low on April 9, the VN-Index has increased by over 43 per cent in three months, without significant corrections. 

Historical data indicates that after strong increases of 43-45 per cent, the market typically undergoes a technical correction of 7-15 per cent before establishing a renewed upward trend.

With the current rapid increase, the VN-Index is in all-time high territory. The market is also entering an 'information vacuum' phase following the release of the second quarter business results, raising the likelihood of a technical correction.

Vietnamese stocks could continue to surge, head of the Pyn Elite Fund Petri Deryng said in a letter to investors. 

He wrote that he believes the current upward trend is supported by expectations of a recovery in exports, increased investment capital and positive signals from the US Federal Reserve regarding interest rate cuts in the next 6-12 months, which would benefit the bond market and the Vietnamese đồng.

Domestically, growth-supporting policies such as boosting public investment, reducing value-added tax (VAT), easing credit, reforming the legal framework for real estate and and an anticipated market upgrade in September are further bolstering the upward momentum.

Despite ongoing net sales by foreign investors since the beginning of the year, Deryng pointed out that attractive valuation levels, positive sentiment and a solid foundation will help the market maintain its upward trend. He said that the VN-Index could reach 1,800 points by Christmas this year. 

However, he also warned about the potential for short-term corrections due to profit-taking by domestic investors.

In reality, the strong upward trend of Vietnamese stocks occurs amid mixed developments in global markets. While Wall Street continues to set new records, Asian markets remain cautious ahead of several important economic events on the horizon.

From a more cautious perspective, investment director at DG Capital Dr Nguyễn Duy Phương noted that the VN-Index is nearing a short-term resistance level, which heightens the risk of a technical correction. 

In this context, the bullish sentiment among domestic investors could face significant volatility, particularly if foreign capital shows signs of slowing down.

The current net buying trend from foreign investors combines short-term investment strategies with medium-term expectations, but it has yet to establish a sufficiently strong momentum to trigger a new market wave. 

This situation necessitates that investors closely monitor signals related to potential market upgrades, increased net buying activities from exchange-traded funds and the diversification of capital flows into other sectors in the near future. — BIZHUB/VNS