Stock market set to boom after week-long Tet holiday

A strong performance of the stock market after Tet with a rise of 40.85 points against the previous trading session, or 3.66%, and the recovery of the global stock market are reasons to believe in a bright outlook for the domestic market in its first transaction week [February17-19].

Investors at a stock exchange center in Hanoi. Photo: Nhu Y.

“History showed the market often rise in the first two weeks after Tet with stocks from bank-finance sector taking the lead,” broker expert Nguyen Duy Dinh from MB Securities firm told Vietnam News Agency.

“The Covid-19 pandemic has limited investment options for investors, making the stock market an attractive one at the moment,” he noted.

“Investors are more well-prepared in terms of financial capabilities, knowledge and understanding of risks in the market,” Dinh suggested.

While investors tend to withdraw money from the stock market before Tet, they would return to the market after the break for reinvest, stated Dinh.

Investor Director of Maybank KimEng Vietnam Phan Dung Khanh said the pandemic situation is not a decisive factor affecting the market, referring to several Covid-19 outbreaks last year, but the market still ended at 1,103.87 at the last trading session of the year, representing an increase of 14.9% against early 2020 and 67% compared to its lowest point last March.

“At a time when foreign investors remain net seller and professional securities investors keep a low profile, their new domestic peers [aka F0 investor] were the backbone for the market,” Khanh said.

In January, the stock market recorded an all-time high of 86,269 new securities accounts, up 36.4% month-on-month. However, the market liquidity has been on the decline since the start of February, a hint that the investment capital from F0 investors into the market is decreasing.

“This could be a sign of concern,” Khanh said, but saying the fact that the government imposed social distancing order at Hai Duong province for 15 days, and Hanoi’s authorities closed all street food restaurants and café from February 16, could stimulate more online transactions.

“Investment capital, as a result, could return to the market,” Khanh added.

 Sharing a same view, broker experts from SSI Securities Corporation (SSI) expected the Vn-Index could rise to its next resistance zone of 1,175-1,200, however, there should be higher transaction volume for the market to reach this target.

A report from Yuanta Vietnam Securities firm predicted the Vn-Index to increase in the first few trading sessions after Tet, and then stabilize for the rest of February.

As of late January, total number of shares listed on the stock market amounted to 101 billion with the market capitalization of over VND3,900 trillion (US$169.3 billion), up 3.32% month-on-month and equivalent to 62.69% of the GDP in 2020.