Vietnam Stock Market had a prosperous new year bolstered by a high surge in liquidity as regular investors continued to create new accounts.
Aviation and energy companies led the VN-Index to a 1.5-percent gain on Monday morning, kicking off the new lunar year.
As the market reopened following the nine-day Tet holiday, it rose 22 points to 1,503 points at 11.20 a.m., a near four-week high.
It is a 4.1-percent rebound from the trough of 1,439 points achieved on January 18 as investors booked gains before the Tet holidays.
Since there was no bad news during the holidays, most brokerages predict the index to gain this week.
The VN-Index is expected to remain around the 1,500 range this week, according to analysts at ASEAN Securities and BIDV Securities.
Since 2016, it has closed in the green on opening day in five of the previous six years, with the exception of 2020, when Covid-19 first struck Vietnam.
24 of the 30 biggest capped companies in the VN30 basket gained on Monday, headed by VJC of discount carrier Vietjet, which surged 6.6 percent as investors anticipate the aviation industry to rebound after the government announced plans to stimulate foreign tourism by the end of March.
The stock of Vietnam Airlines (HVN) rose 7% to its highest level in over three months.
The volume of the Airports Corporation of Vietnam (ACV) increased by 7.4%, reaching 321 percent of the average of the previous ten sessions.
Energy stocks climbed as well, with PLX of gasoline distributor Petrolimex up 6% and GAS of state-owned Petrovietnam Gas up 6.2 percent.
Petrovietnam Power Corporation’s POW increased by 6.5%.
Other gainers included VRE, a real estate retail business, and MSN, a conglomerate, all of which are projected to profit from increased spending demand.
At the time of publication, the HNX-Index on the Hanoi Stock Exchange, which tracks mid- and small-cap firms, was up 1.2 percent, while the UPCoM-Index on the Unlisted Public Companies Market was up 1%.
Vietnam stock market expected to rebound after Tet
During the period 2016-2021, the Vietnam stock market increased five times in six years, only declining in 2020.
After a week off for the Lunar New Year celebration, the market resumes trading. Based on historical data, the market is expected to rebound after the Tet holiday.
The Vietnam stock market had a prosperous year, according to Nguyễn Đình Thắng, an analyst at Saigon-Ha Noi Securities JSC (SHS), bolstered by a high surge in liquidity as regular investors continued to create new accounts.
“Overall, investors experienced a relatively favourable trading year and benefited from solid momentum,” Thắng said.
“The positive trend is expected to continue in the Year of the Tiger as the country’s economy recovers from the low base of the previous year.”
Technically, the market is normally fairly favorable following Tet, according to historical data, Thắng added.
According to SHS figures, the Vietnam stock market after Tet has risen five times in six years from 2016 to 2021, with the exception of 2020, when it decreased owing to the impact of COVID-19.
On this premise, SHS’s research team predicts that the market benchmark VN-Index will continue to recover in the first trading week of the Tiger New Year, aiming for 1,500 points as psychological barrier.
“Investors who have engaged in bottom fishing can continue to hold their current portfolio to take advantage of the uptrend,” Thắng said.
“In the negative scenario, if bad news happens during the week holiday and selling pressure increases after Tết, the VN-Index could correct back to the support zone of 1,400-1,450 points.
“This will also be an opportunity for investors to accumulate more stock proportions in the portfolio.”
Similarly, Đinh Quang Hinh, Head of Macroeconomics and Market Strategy Department at VNDIRECT Securities Corporation (VND), stated the stock indices have showed signs of recovery after hitting support levels Han the 1,435-1,440 point area.
“We expect that at the start of the Year of the Tiger, the market will continue to recover,” Hinh said.
“And this is the right time for investors to increase the proportion of common stocks, which have positive business prospects in 2022 and have seen a rally trend over the past several months like banks, construction materials and retail stocks, in their portfolios.”
According to market opinion, the Vietnam stock market began the Year of the Tiger on a strong note, owing to anticipation of a swift economic rebound.
The Vietnam Stock Market had somewhat rebounded before the extended break
The VN-Index closed at 1,478.96 points on the Ho Chi Minh Stock Exchange (HoSE) in the penultimate trading session before Tet on January 28.
After declining for two weeks in a row, the index recovered modestly this week, rising 0.4%. For the second week in a row, market liquidity was lower than the typical level.
Meanwhile, the HNX-Index on the Hà Ni Stock Exchange (HNX) closed at 416.73 points yesterday session, up 1.33 percent but down 0.3 percent for the week.
“It is reasonable because of investors’ holiday spirit, which is the same as in previous years,” Thắng said.
Bank stocks led the upswing in the market for the whole week, with many companies seeing significant gains, such as BIDV (BID) up 1.3 percent, Vietinbank (CTG) up 3.8 percent, Techcombank (TCB) up 6%, VPBbank (VPB) up 6.9%, or MBBank (MBB) up 6%.
Securities stocks, on the other hand, saw a clear division in the past week, with SSI Securities Corporation (SSI) up 1.1 percent and VND up 4.9 percent, while Ho Chi Minh City Securities Corporation (HCM) was down 2.5 percent, Viet Capital Securities JSC (VCI) was down 3.3 percent, and MB Securities JSC (MBS) was down 1.5 percent.
Steel stocks like Hoà phát Group (HPG) and Hoa Sen Group (HSG) as well as oil and gas stocks like PetroVietnam Drilling & Well Services Corporation (PVD) and PetroVietnam Technical Services Corporation (PVTS) weighed on the market (PVS).
Foreign investors net bought on both main exchanges with a value of VN1.9 trillion (US$82.4 million), equivalent to a volume of 60 million shares on HoSE, and VN60 billion on HNX, equivalent to a trading volume of 2 million shares, in contrast to domestic investors’ profit-taking activities for the Tet holiday.