Investors Face Losses Despite VN-Index’s Strong Climb to Record Levels
The Vietnamese stock market has recently experienced a remarkable nine consecutive sessions of gains, with the VN-Index nearing its previous peak from mid-October. However, many investors find themselves facing losses in their accounts. This trend reflects a phenomenon referred to as “green shells, red hearts,” where significant gains are primarily concentrated in a handful of individual stocks while others continue to decline.
Market Dynamics and Key Contributors
A prime example of this trend is Vingroup (stock code: VIC), whose shares have surged dramatically in the last two trading sessions. Despite these gains, the VN-Index has only risen less than 1%, impacted by declining values in other sectors such as banking, securities, and real estate. Year-to-date, the VN-Index has increased by 487 points, with VIC alone contributing 239 points. When factoring in the four listed stocks within the Vingroup ecosystem—VIC, VHM, VPL, and VRE—the combined contribution rises to 343 points.
Wider Market Trends
Generally, market increases have not been equally distributed. Notable large-cap stocks like VCB, FPT, and DGC have resisted the market’s upward momentum, with many blue-chip stocks having retreated significantly from their peak values. Major stocks that are popular among investors, such as HPG, TCB, VPB, SSI, and NVL, have seen declines ranging from 15% to 25% from their recent highs.
Vingroup’s Dominance
Vingroup has reached unprecedented heights in terms of market capitalization, nearing 1.2 trillion VND, which represents over 15% of the total value on the HoSE. When considering the four stocks associated with billionaire Pham Nhat Vuong, this figure approaches 25%. Such dominance implies that the performance of these stocks heavily influences the VN-Index, leading to a scenario where the index may not accurately depict the overall market’s health.
This situation raises concerns as the VN-Index continues to rise while the majority of investors are experiencing daily losses. Newer investors who entered the market chasing the recent price surge might be incurring significant losses despite the index nearing the 1,800 point threshold.
Future Market Outlook
As high-performing stocks face profit-taking pressure, this creates a challenge for the market’s sustainability. However, many large stocks have returned to attractive valuation levels, potentially stabilizing the VN-Index around 1,500 or even 1,200 points. For a more sustainable ascent, broader sector agreement is crucial beyond a few individual stocks.
Investor Sentiment and Potential Growth
To overcome the current “green shells, red hearts” scenario, the engagement of major stock sectors such as banking, securities, and real estate is required. Looking at the medium to long-term prospects, Dragon Capital believes that the Vietnamese market holds significant foundational elements to sustain growth into 2025-2026. Projections indicate a 21.3% increase in profits for 80 tracked enterprises in 2025, maintaining a solid 16.2% growth rate in 2026. Market valuations also appear attractive, with forecasted P/E ratios around 12.5–13 for 2025 and 11 for 2026, lower than various regional markets.
The anticipated upgrade from a frontier market to an emerging market will likely facilitate substantial opportunities for revaluation, as large-scale international capital influx can enhance growth prospects. Supporting this view, Petri Deryng, head of PYN Elite Fund, envisions macroeconomic policies fostering a conducive environment for growth in Vietnam’s economy and listed companies. This fund has even raised its VN-Index target to 3,200 points by 2028, assuming an average profit growth rate of approximately 18–20% in the forthcoming years.
