Investors are advised to hold and maintain a proportion of stock exposure through the Lunar New Year festival with 80% probability that the market will continue to rally after the festive period, a report from Bao Viet Securities Company (BVSC) said.
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According to BVSC's statistics, since 2010, the market has usually rallied in about ten sessions before the Lunar New Year holiday – the market rallied for nine out of ten observed years with an average increase of about 4.57%. However, market liquidity often shows signs of decline during this period.
BVSC said in three out of ten observed years, trading volume increased in ten sessions before the Lunar New Year and only four out of ten observed years, trading value increased. The average decrease of trading volume was 16.43% year-on-year and of trading value was -17.25%.
This was due to the fact that investors restructured loans before and avoided holding loans during the festive holiday. However, according to BVSC statistics, the markets also usually increase in ten sessions after Tet holiday but with a strong increase in trading volume and value. In eight out of ten years under study, the benchmark Vn-Index increased with an average increase of 4.31%. Trading volume increased over eight out of ten years with an average increase in those eight years at 45.03% and trading value increased in nine over ten years with an average increase of 40.31%.
Therefore, investors should take advantage of the market’s prior Lunar New Year sessions to buy, sell and hold stocks, concluded BVSC.
A study from FiinGroup expected liquidity of Vietnam’s stock market to improve in 2020, thanks to the capital inflow from foreign investors and attractive market valuation.
FiinGroup stated the current market valuation is at the same level as when the VN-Index hovered around 700 in mid-2017 before a strong rebound, which is “the most positive factor for the market potential in 2020. However, the key points lie on the quality of corporate’s profit growth in the coming quarters to lure cash flow return.”
