Loss of $ 6.2 billion, a rare sharp drop in a month’s stock market

Ho Chi Minh City Stock Exchange (HOSE) has just announced the report of stock trading in May with many notable points.

Accordingly, at the end of the last trading session of May 2022, VN-Index reached 1,292.68 points, down 5.42% compared to April, corresponding to a decrease of 13.72% compared to the end of 2021; VNAllshare reached 1,312.15 points, down 6.64% compared to April, corresponding to a decrease of 15.96% compared to the end of 2021; VN-30 reached 1,332.59 points, down 5.98% from the previous month, corresponding to a decrease of 13.23% compared to the end of 2021.

The stock market liquidity in May recorded an average trading value and volume of over 14,951 billion dong and 540.22 million shares, respectively, down 32.40% in value and 20.98% respectively. in volume compared to April.

Total value and trading volume of shares in the month reached about 299.02 trillion dong and 10.8 billion shares, respectively, down 32.4% in value and 20.98% in volume respectively. last month.

Thus, compared to the previous month, the transaction value decreased by 143 trillion VND (equivalent to about 6.2 billion USD).

Along with the decline of the main index, most of the industry indexes also corrected down, in which the industry groups that decreased the most included: materials industry (VNMAT) down 16.53%, financial industry (VNFIN) down. 9.68% and the healthcare industry (VNHEAL) decreased by 6.42% from the previous month. During the month, industry indexes recorded growth, including: energy sector (VNENE) up 1.06%, information technology industry (VNIT) up 3.22% and utilities industry (VNUTI). increased by 4.41% over the previous month.

In May 2022, the total volume of covered warrants (CW) trading reached about 542.08 million CW with a trading value of over 347.61 billion VND. The average trading volume of CW reached more than 27.1 million CW with the average trading value of 17.38 billion VND, corresponding to a decrease of 12.9% in volume and 46.5% in value compared to the same month. April 2022.

The total transaction value of foreign investors in the month reached over VND 53,764 billion, accounting for 8.99% of the total trading value of both buying and selling directions of the whole market. Foreign investors made a net purchase in the month with a value of over VND 889.79 million.

Regarding the market size on HOSE, by the end of May 31, 2022, there were 522 listed securities codes, including: 404 stocks, 2 closed-end fund certificates, 9 ETF certificates, and 102 stocks. secured rights and 5 bond codes. The total volume of listed shares reached over 129.28 billion shares. The listed market capitalization reached more than 5.12 million billion dong, down 5.46% from the previous month, reaching about 61% of GDP in 2021 (GDP at current prices).

In May, HOSE had 32 new CW codes listed and officially put into trading.

During the month, HOSE also successfully held a competitive offering session for shares of the State Capital Investment Corporation (SCIC) invested in Chau Chau Urban Development and Construction Joint Stock Company. Germany, with a total sale volume of 1,152,000 shares, equivalent to a total selling value of VND 32,762,000,000.

By the end of May 2022, on HOSE, there are 44 enterprises with market capitalization of more than 1 billion USD, of which, 3 enterprises have market capitalization over 10 billion USD, including: Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB). ), Vinhomes Joint Stock Company (VHM) and Vingroup Corporation (VIC).

Big money flow has not yet entered, continue to search for the bottom

According to experts, the recent decrease in liquidity is partly due to the cash flow into the derivatives market, but mainly due to the money flowing to other channels. The idle cash flow of businesses due to the Covid pandemic has been withdrawn and can return to production and business when economy rehibilitate.

The amount of savings at banks also increased when interest rates inched up. Besides, the hot cash flow into the market showed signs of caution after a series of policies and actions from the management agency very strongly with the aim of stabilizing and making the financial and real estate market more transparent.

Recently, market liquidity has improved, to VND18-19 trillion, instead of VND15 trillion as in previous weeks. Liquidity may reach 20-22 trillion dong, but it is likely that it will be difficult to return to the threshold of 30 trillion dong like the boom period in late 2021 and early 2022.

With the current declining liquidity, many experts and investors believe that the market is unlikely to create a bottom. Technically, the VN-Index can be viewed as bottoming at 1,200 points, after falling to 1,160 points in May.

However, the valuation of Vietnamese shares is currently quite low, about 11-12 times and is considered attractive.

According to VinaCapital, stock market potential both in the short and long term.

FPT also said that in the first half of May, the VN-Index dropped the most in the Southeast Asian market with the profit margin down 21.8%, the remaining markets fell below 8%. P/E valuation is below 10-year average valuation (15.0x).

According to Dragon Capital, Vietnam’s macro-economy is still stable, has growth potential and is stable market price short. History shows that after major corrections in the last 10 years, the market recovered strongly and conquered new peaks.

However, institutions and individual investors are still quite cautious. Recently, the Vietnam Enterprise Investments Limited (VEIL) fund managed by Dragon Capital recorded a rather high proportion of cash, at 5.77% (on May 5), just behind the level of 6.38% in May/May. 2020 when the COVID-19 epidemic began to break out.