Vietnam’s stock market appears poised for a short-term recovery, with technical indicators suggesting a potential breakthrough after the Tet holiday, provided no unexpected shocks or negative developments emerge. This has raised expectations of a positive cash flow return once trading resumes.

Banks lead the market After a 50-point drop (nearly 4%) in the first half of January—at times dipping to 1,220 points—the VN-Index showed signs of a rebound. On January 20, the market gained 30 points (2.5%), marking a shift in momentum. However, trading liquidity remains subdued, as funds withdrawn before the Tet break have yet to flow back into the market. Notably, the stock market has gained ground despite continued foreign investor sell-offs. On January 16, foreigners net sold over VND3.1 trillion, with VIC on their radar. More than 50.6 million VIC shares, valued at VND2.04 trillion, were offloaded—most likely as part of SK Group’s previously announced plan to divest over 50.8 million shares. Adding to the uncertainty, exchange rate fluctuations remain a concern, further complicating foreign investment strategies. Similarly, proprietary traders have mirrored foreign investors’ stance, net selling nearly VND39 billion in the two weeks before Tet. Historically, proprietary traders and foreign investors have moved in opposite directions, making their simultaneous selling spree before Lunar New Year a notable development. Despite this, the market has steadily recovered, signaling resilience and potential optimism for the post-Tet trading period. Bank stocks have played a pivotal role in the VN-Index recovery, supported by strong profitability and financial performance. Among the 22-point increase in the week before Tet, five bank stocks were among the top 10 contributors, with Techcombank (TCB) adding 1.73 points, Vietcombank (VCB) 1.5 points, LPBank (LPB) 1.2 points, HDBank (HDB) 0.8 point, and BIDV (BID) 0.66 point. The remaining five major contributors were HPG, GVR, FPT, PLX, and BVH, helping with 1.5, 0.7, 0.6, 0.6 and 0.5 point, respectively. In other words, the top 10 stocks alone contributed nearly 10 points. BIDV reported VND30 trillion in pre-tax profit, a 12% increase over 2023—the highest financial gain in the bank’s history. Techcombank also saw record profits, posting VND27.5 trillion in pre-tax earnings, a 20.3% surge. Its total operating income (TOI) hit VND47 trillion, up 17.3% year-on-year. The bank’s current and savings account (CASA) ratio rose to 40.9%, while its capital adequacy ratio (CAR) under Basel II improved to 15.3%, and return on assets (ROA) reached 2.4%. LPBank expects profit to reach an all-time high of over VND12.16 trillion, reflecting a staggering 73% increase from 2023. Meanwhile, Vietcombank has announced a charter capital increase, planning to issue nearly 2.77 billion shares to pay a dividend of 49.5%, with a total estimated value of VND27.66 trillion. Additionally, it intends to offer a 6.5% stake to institutional investors via private placement, a move expected to raise US$1.3 billion. This transaction is set to be completed in the first half of 2025, provided market conditions remain favorable. Waiting for a breakthrough after Tet? Technical indicators suggest that the VN-Index is on the verge of a short-term recovery, raising expectations of a stronger market breakthrough after the Tet holiday, provided no major disruptions or negative news emerge. Historically, February showed an average VN-Index growth rate of 2.2% from 2001 to 2024, making it the third-best month of the year, trailing only January (3.6%) and August (2.6%). The upcoming peak season for financial reports, along with the announcement of business strategies for 2025, is expected to be a key driver for market activity in the first and early second quarters of the year. This will be followed by the shareholders’ meeting season, where dividend policies and capital increase plans will be unveiled, further shaping investor sentiment. Currently, many investors anticipate a strong market performance in 2025, with expectations of significant gains early in the year. However, as always, the stock market remains unpredictable, and investors should remain cautious amid potential surprises.