研究中心

The money market experienced one more worrying week with USDVND increasing for the second consecutive week amid persistently negative USD-VND rate differentials and a strong DXY. SBV continued issuing bills to provide a channel for excessive liquidity when interbank rates dropped sharply. For the next week, SBV's VND20.00tn bills, issued one month ago, will start to mature. The actions taken by the central bank may reveal its short-term tendency to combat the exchange rate swing. If SBV decides to issue a more significant amount of new bills, it could indicate the commitment to stabilize USDVND, even if this decision leads to increased funding costs in the money market.

The stock market encounters difficulties when the VNIndex approaches the strong resistance zone of 1,150-1,160 points, indicating selling pressure is still present and quite significant. The downside risk is intact due to this index maintaining to end below the 50-period moving average. Therefore, investors should stand aside and wait for the next signal. The next time, if the VNIndex surpasses the above resistance zone, investors can open again exploratory long positions and focus on leading stocks.

Although the reversal for the downtrend is still not confirmed, new long positions for swing trading are not recommended due to the upcoming volatile period. The bullish move would come back only when 1,160 pts zone is broken.

Subsequent bullish candles have faded the bearish momentum and increase the risk for holding short positions. Thus, traders should close short positions due to the current volatile period and wait for more accurate signals.

The stock market closes around the reference points with improved liquidity, indicating investors’ sentiment is still quite cautious. Moreover, the downside risk is still present as the VNIndex maintains to end below the 50-period moving average. Therefore, investors should stand aside and carefully observe the next movements of the market.

In this quarterly review, the VN DIAMOND Index is expected to remove DHC and add HDB. The results will be announced on 16 Oct 2023, the new weight will be effective on 06 Nov 2023.

The covered warrant market has slowed down in trading volume from both domestic and foreign investors. Besides, the underlying market is currently in a correction phase phase, which is likely to have an impact both domestic and foreign trading activity in the upcoming period.

The effect of SBV’s liquidity withdrawal, through bill offerings, on the money market this week becomes more significant this week. Interest rates for short-lived tenors, ranging from overnight to 1-month, rose generally by around 80bps compared to last week. Similarly, 10-year and 15-year G-bond yields increased by 19bps and 16bps, respectively. However, the USDVND rebounded strongly due to a broad appreciation of the greenback following the intensified U.S. government bond sell-off.

We expect that the inflow across Vietnam could decrease in upcoming quarters due to the diminish of demand on foreign ETFs, but the net flow would be flat cause the outflow on ETFs could be covered by the inflow from others.

Despite the second consecutive growth session, the downside risk is still intact as the VNIndex maintains to end below the 50-period moving average. Therefore, investors should reduce a portion of stocks in their portfolio to the safety threshold and wait for the next signal.