Vietnam Stock Market Analysis for July 23rd: Why Investors Should Absolutely Avoid Leverage
The Vietnamese stock market continued its negative trajectory on July 23rd, with the VN Index plunging by more than 62 points and falling below the crucial 1,700-point level. This marked the fourth consecutive day of decline, indicating that selling pressure continues to dominate the market. Market analysts suggest that the market remains in a downtrend with significant risks. Investors are advised to prioritize risk management, limit new investments, and absolutely avoid using leverage until clear signals of a bottom formation appear.
Market Performance on July 23rd
The VN Index opened the trading session in a downward trend and continued to decline throughout the day. By session close, the VN Index settled at 1,688.05 points, down 62.32 points (3.56%). This represented the largest single-day decline in several weeks and caused the index to break below the important 1,700-point psychological level.
Market liquidity remained low, reflecting cautious sentiment among investors. The total trading value across the market reached approximately 11,000 billion VND, with foreign investors selling a net of over 300 billion VND on the Ho Chi Minh Stock Exchange (HOSE).
Most stock groups declined, with banking, securities, and real estate sectors experiencing the deepest losses. Notably, many blue-chip and market pillar stocks such as VCB, CTG, HPG, MWG, and VHM fell sharply by 3-5%, creating significant downward pressure on the index.
Expert Analysis
According to analysts from SSI Securities, the market is currently in a strong correction phase after failing to break through the 1,750-point resistance level. They suggest that selling pressure remains substantial and could persist for some time.
Mr. Nguyen Van Dung, an analyst at VPS Securities, commented: "The market is clearly in a downtrend with the VN Index breaking through important support levels. Low liquidity indicates that investors are cautious and waiting for confirmation of a bottom. The concerning factor is that foreign capital continues to sell net, showing no intention of returning to the market in the short term."
Ms. Tran Thi Minh Anh, Director of Analysis at MB Securities, stated that the market is being influenced by negative macroeconomic factors such as high inflation in the US and Europe, geopolitical tensions, and concerns about global economic growth. She noted: "The VN Index could continue to fall to the 1,600-1,650 point range in the coming sessions before seeking a bottom."
Investment Recommendations
Given the negative market developments, most securities firms have issued cautious recommendations. Here are the specific recommendations:
- Prioritize risk management: Investors should reduce their stock portfolio allocation and maintain a significant cash position to wait for opportunities when the market shows signs of recovery.
- Limit new investments: Avoid rushing to buy when the market hasn't shown clear signals of bottom formation.
- Absolutely avoid using leverage: In a highly volatile market, leverage can lead to substantial losses.
- If new investments are needed, choose stocks with strong fundamentals, high liquidity, and from defensive sectors such as consumer goods and pharmaceuticals.
Mr. Le Hoang Anh, an analyst at BSC Securities, emphasized: "Investors should patiently wait for confirmation of a bottom, such as the VN Index recovering and maintaining above the 1,700-point level, combined with improved market liquidity. Until then, maintaining cash or reducing portfolio allocation is the safest option."
Market Outlook
Experts forecast that the market may continue to adjust in the short term before finding a bottom. However, the long-term outlook remains positive due to fundamental factors such as Vietnam's sustained economic growth, controlled inflation, and continued foreign direct investment inflows.
Mr. Pham Quang Hung, Director of Retail Clients at VNDirect Securities, commented: "We expect the market to continue declining for 1-2 weeks to form a bottom before potentially recovering. The next important support level for the VN Index is around 1,650 points. If this level is broken, the market could fall deeper to the 1,550-1,600 point range."
| Market Summary for July 23rd | |
|---|---|
| VN Index | 1,688.05 points (-62.32 points, -3.56%) |
| Total Market Liquidity | ~11,000 billion VND |
| Foreign Capital Flow | Net selling of ~300 billion VND on HOSE |
| Advancing/Declining/Unchanged Stocks | 77/317/40 |
| Investment Recommendations | ||
|---|---|---|
| Strategy | Priority Level | Rationale |
| Maintain cash position | High | Waiting for market recovery signals |
| Reduce stock allocation | High | Risk management amid high volatility |
| Avoid leverage | Critical | High market volatility increases risk of significant losses |
| Select defensive stocks | Moderate | Sectors less affected by macroeconomic conditions |
Conclusion
The Vietnamese stock market is currently facing a challenging period with consecutive declines and low liquidity. All experts agree that the downtrend may continue in the short term. In this context, investors need to be particularly cautious, prioritize risk management, and absolutely avoid using leverage.
However, the long-term market outlook remains positive due to solid fundamental factors. This could present an opportunity for investors to accumulate quality stocks at reasonable prices when the market forms a clear bottom.