The market is once again experiencing a contrast in its developments, with a decline in the morning followed by an upward movement toward the end of the day thanks to certain large-cap stocks.

The influence of market makers The recent performance of the VN-Index has raised questions about the intentions of market makers. On July 7, the 10 most influential stocks accounted for a significant portion of the index's rise. Vietcombank (VCB) played a major role, contributing over 5.2 points as its stock picked up nearly 4.3% back to its highest price in history (a rate already adjusted) at VND105,000 per share. As a result, the capitalization of Vietcombank stood at over VND496.91 trillion at the end of the week, larger than the combined value of the two following enterprises, namely Vinhomes (some VND235.13 trillion) and BIDV (nearly VND224.1 trillion). The market dynamics on July 7 surprised many investors, with a late-session comeback driven by key stocks, particularly VCB. However, this divergence between the index's growth and the performance of individual stocks has become a recurring trend. The market experiences a decline in the morning, followed by an upward movement towards the end of the day led by selected large-cap stocks. This pattern allows market makers to strategically steer the market in their desired direction while conserving resources. Statistics show that the 10 most influential stocks accounted for a significant portion of the index's recent gains, contributing 72% of the overall increase. Four banks, including BIDV, VCB, SSB, and SHB, along with other stocks from various sectors, including HPG, GAS, GVR, MWG, PLX, and MSN, have played a crucial role in driving the index. The dominance of banking stocks can be attributed to interest rate cuts, capital hikes, dividend payouts, and potential share sales to foreign investors. Vietcombank has set July 26 as the deadline to sign up for the right to receive dividends from its remaining profit of 2019 and 2020 at a rate of up to 18.1%. SHB is in negotiations over the sale of a 20% stake to foreign investors, with its valuation possibly at US$2-2.2 billion. A number of investors from South Korea and Japan have got in touch with SHB for such a deal. Likewise, a private placement of nearly 95 million shares at SSB (equivalent to 4.63% of its outstanding shares and more than 3.7% of the post-issuance ones) to the Norwegian Investment Fund (Norfund) of Norway has recently got approved. However, the concentration of market influence in a few key stocks raises concerns among investors. The dual nature of the stock market, with significant reliance on specific stocks, may indicate a phase of distribution and potential correction. Investors remain cautious, particularly given the sensitivity of the current market environment. Analysts remain optimistic about the market trend in the upcoming period, despite the prevailing concerns and mixed signals. Viet Dragon Securities Corporation (VDSC) anticipates that liquidity will continue to improve in the second half of the year. Deposits made in banks during the peak interest rate period in late 2022, with terms ranging from six months to one year, will gradually reach maturity. As a result, investors will seek alternative channels with potentially higher profitability, such as the stock market. VDSC's statistics indicate that the transaction rate of individual investors has consistently increased compared to the first quarter of this year. These factors contribute to the positive outlook for the market's future performance. The Vietnam Securities Depository (VSD) reported a significant increase in the total number of securities accounts in Vietnam. By the end of June, the number had reached nearly 7.3 million, marking a surge of 145,864 accounts compared to the beginning of the month. This represents a growth rate of nearly 40%, the highest in recent months. In line with this positive development, SSI Research has optimistic expectations for the index. They anticipate that the index will achieve the target range of 1,150-1,156 points and further advance to a higher level at 1,170-1,180 points during the growth cycle in July. Several factors are expected to provide support, including a more relaxed monetary policy, increased disbursement for public investment in the second half of the year, the implementation of a 2% value-added tax reduction from July 1, and the easing of visa rules to boost the tourism industry. In July, the completion of the secondary market for privately placed bonds is anticipated. This development aims to enhance information transparency, rebuild confidence in the corporate bond market, and indirectly reduce risks for the stock market. Additionally, the KRX system, which includes new operations like T+0 transactions, short selling, and options contracts, is currently in the connecting and testing phase. It is expected to officially launch later this year. The State Bank of Vietnam (SBV) has recently adjusted the credit growth target for credit institutions in 2023, increasing it by a common rate of about 14%. This adjustment allows many banks to have their credit growth limits extended compared to the allocations made in the first quarter. This step aligns with the goal of relaxing monetary policy, as urged by the Prime Minister, to foster a more flexible, accommodating, and expansionary monetary environment. However, there are several risks that could pose significant challenges to the market. One prominent risk is the potential for the U.S. Federal Reserve (Fed) to raise interest rates further this year in an effort to control inflation. This could potentially lead to a recession in the world's largest economy, with spillover effects on the global economy, including major trading partners like Vietnam. The weakening consumer demand in major economies has already resulted in a decrease in orders, forcing many companies to reduce their production and business activities since the fourth quarter of the previous year. Risks have emerged from the corporate bond market, as a significant volume of bonds is set to mature in the second half of the year, particularly in the third quarter. Many companies are facing cash flow difficulties, making it challenging for them to meet their bond obligations on time. This situation poses a risk of bad debt for the banking industry, which could impede the recovery of the stock market. Moreover, analysts express concerns about the limited effectiveness of monetary policy in driving growth. Some worry about the rapid easing of monetary policy, which could lead to a reversal of international capital flows and put pressure on the exchange rate.