The VN-Index reached 1,426 points mid-morning on 9/7. Investor enthusiasm, both domestic and foreign, propelled the index, representative of the Vietnamese stock market, to its fourth consecutive gain. Compared to the historical peak set in early 1/2022, the index is still about 100 points, or 7%, lower.
In an interview with VnExpress, Tyler Nguyen Manh Dung, Senior Director of Market Strategy Research at HSC Securities, stated that the VN-Index reaching its historical peak this year is entirely feasible.
Dung initially projected the VN-Index to reach approximately 1,431 points by the end of this year and 1,521 points in the first half of next year. These forecasts were made amidst uncertainty surrounding US tariffs. Now, with the tariff situation becoming clearer and trending more positively than anticipated, Dung expects a psychological boost for the market, extending the current positive sentiment.
"Thanks to the positive news on tariffs, the index has continuously broken through technical resistance levels after a prolonged rally from the 1,300-point accumulation zone. The psychological thresholds we are monitoring are 1,400 and 1,450 points before targeting the 1,500-point mark," Dung said.
He noted several similarities between the current market conditions and the period preceding the VN-Index surpassing 1,400 points in 2021 and setting its historical peak in early 2022.
First, the global value chain faced significant challenges, previously Covid-19, and now tariffs from the Trump administration. Second, Vietnam maintained relative stability, demonstrated by its control of the pandemic four years ago and current trade negotiations. The third factor is the easing monetary policy aimed at stimulating economic growth.
"The current economic outlook is even more positive, with GDP growth surpassing the pandemic period, increased domestic investment, and strong institutional reforms," Dung analyzed.
Beyond macroeconomic factors catalyzing the VN-Index's rise, Do Minh Trang, Director of the Analysis Center at ACB Securities, is optimistic about the index reclaiming its previous peak and reaching new highs in the short term (the next 3-6 months) due to strong cash flow.
Last year, the average trading value per session reached 21,100 billion VND. Following a sharp correction in early April due to tariff news, liquidity began to improve, reaching an average of 24,000 billion VND per session. The last two trading sessions have seen stable liquidity at over 28,000 billion VND, with several large-cap stocks recording trillion-VND transactions.
Foreign investors are also signaling a strong return after net selling of 40,700 billion VND in the first half of the year. They have been net buyers for six consecutive sessions, with a total net purchase value of over 8,000 billion VND.
"Foreign investors previously tended to buy heavily when the market dipped and sell when it rebounded. Their trading patterns now seem to be changing, as they continue to invest while the VN-Index climbs. This capital inflow is significantly supporting the index's upward momentum," Trang observed.
 |
Investors monitor the electronic board at a securities company in Ho Chi Minh City. Photo: Quynh Tran |
Investors monitor the electronic board at a securities company in Ho Chi Minh City. Photo: Quynh Tran
Regarding domestic investors, Tran Hoang Son, Director of Market Strategy at VPBank Securities (VPBankS), believes confidence is also returning quickly. In addition to liquidity, Son cited the continuously increasing number of new securities accounts. In the first half of this year, the market welcomed nearly 1 million new accounts, bringing the total to 10.2 million.
According to Son, the stock market's valuation is attractive for a new growth cycle, with a P/E ratio of 13.9 times, lower than the median P/E of the last 10 years (16.6 times).
He added that the market has several other catalysts to help the VN-Index return to its previous peak. First, the probability of Vietnam's stock market being upgraded from frontier to emerging market status in the September review is up to 70%, according to VPBankS. This upgrade could attract an estimated 3-7 billion USD in active and passive capital flows.
Second, there is the potential for several initial public offerings (IPOs) and transfers from the Hanoi Stock Exchange (HNX) to the Ho Chi Minh Stock Exchange (HoSE) between now and 2027. The total value of these transactions is estimated at 47.5 billion USD, which could further attract foreign investment.
Finally, the profit growth of listed companies this year is projected to reach 16.5%. The main growth driver remains the financial sector, while the non-financial sector (real estate, energy, retail, etc.) could grow by more than 10.4% against a backdrop of a rising base.
"We previously forecast the VN-Index to fluctuate between 1,420 and 1,450 points, which it is now approaching. We expect the market to potentially reach 1,500-1,550 points in the next six months," Son said.
Despite their optimism about the prospect of a new peak this year, experts emphasize that the market will likely experience several technical corrections.
The head of market strategy at VPBankS noted that some technical indicators are entering overbought territory, suggesting the market is heating up. He predicts that when the VN-Index approaches 1,430 and 1,450 points, the market will correct before gaining momentum to reach new price levels.
Similarly, the HSC expert believes the recent rally is a positive sign but carries the risk of profit-taking pressure. Dung recommends investors carefully observe the technical support levels of 1,380, 1,350, and 1,340 points.
"These could be strong bottom-fishing buy points during corrections. However, the market outlook remains positive due to the strong return of foreign investors, which could shorten corrections and allow the VN-Index to quickly regain momentum. Market corrections driven by profit-taking at this stage can contribute to long-term stability," Dung said.
Phuong Dong
