Vietnam's stock market is weakening: Should investors cut losses or hold stocks?

The first week of October ended with a quiet performance on the stock market when VN-Index decreased slightly by 0.9%, falling back to around 1,645 points; HNX-Index decreased to 276 points and UPCoM-Index to 109 points.

Green outer red inner stocks, foreign investors net sell

Although the decrease is not large, what worries investors is the sharp decline in liquidity, down to only around 25,000 billion VND per session - nearly half of the level in August when VN-Index approached the peak of 1,700 points.

In particular, foreign investors have been net sellers for 11 consecutive weeks, with a net withdrawal of more than VND7,200 billion last week on the HoSE floor. SHS Securities Company commented that market sentiment is less optimistic due to a lack of strong supporting information, while short-term loss pressure is increasing.

Weak cash flow has caused the market to lose momentum, while selling pressure has spread across many sectors such as fertilizers, chemicals, construction, seaports, insurance, oil and gas, steel and real estate.

On financial forums, many investors shared the situation of “green on the outside, red on the inside” – the index remained above the psychological mark of 1,600 points but the portfolio suffered heavy losses. Many people continuously cut losses and then bought back, causing their accounts to be seriously eroded.

Mr. Le Hoang, an investor in Ho Chi Minh City, said his portfolio is down more than 10%, especially securities and real estate stocks down up to 15%. “Many people using margin have lost up to 15-20% but still do not dare to cut, because they are hoping for the market to recover. Information about market upgrade or positive business results in the third quarter is not enough to push prices up,” Mr. Hoang said.

Chứng khoán Việt Nam đang suy yếu: Nhà đầu tư cắt lỗ hay giữ cổ phiếu? - Ảnh 3. — Foreign investors have been net sellers tirelessly in recent times.

Patiently waiting for the results of the stock market upgrade

Mr. Nguyen Tan Phong, an analyst at Pinetree Securities Company, said that the VN-Index has been in a state of accumulation for more than a month, reflecting investors' caution before FTSE Russell announces the results of its review to upgrade Vietnam's market on October 8.

“The market is still in a state of ‘green on the outside, red on the inside’, with only a few large-cap stocks such as VIC, VRE or LPB keeping the index in rhythm. If this group were excluded, the VN-Index would have actually fallen back to the 1,620-1,630 point range,” Mr. Phong commented.

Although the market is showing signs of weakness, many securities companies believe that this is a necessary accumulation period after a strong increase since the beginning of the year. The index's fluctuation range will gradually narrow in the coming days as investors "hold their breath" waiting for the upgrade results.

According to Thanh Cong Securities Company (TCSC), the possibility of Vietnam being upgraded to a market is very high, up to 90%. However, the actual impact after the upgrade will not be immediately evident, but mainly depends on psychological factors. "The important thing is that foreign investors must return to stable net buying, then the cash flow will really return and the market will have a basis to move towards the 1,700 point zone" - TCSC's report clearly stated.

In the short term, experts recommend that investors maintain a moderate stock ratio, avoid using high leverage and wait patiently for clearer signals after October 8. The market is in a period of testing confidence, and steadfast investors with good risk control strategies will be the ones to stand firm when the recovery trend returns.