Daily Market Watch 05/08/2025: Intraday Rollercoaster Movement Driven by Local Flows

MARKET HIGHLIGHTS

o       The market opened with a strong momentum from yesterday. Most retail investors believed that the consolidation phase last week has completed and the Index shall be heading to a new round of rally. Thus, they quickly get back to the market and build up positions with a bullish sentiment. Vingroup stocks continued to deliver solid performance. Several large-cap stocks including HPG and some banks such as TCB and MBB surged to limit up and pushed the VN-Index up remarkably during the day. The VN-Index was getting stronger towards middle of the afternoon to hit an intraday high of +3.72% at 2pm. Most investors were highly bullish as we observed. The gain was well spread in the broader market.

o       However, there were sudden pressures to stock prices from 2pm onwards. The market experienced a sharp pullback which erased the day's earlier gains. Selling pressures were rather strong and hit both large-cap stocks and high beta names significantly. Stock prices dropped quickly, many turned around and saw up to 7%-10% price retreat intraday. There were some rumors regarding tight funding for margin lending of brokers. According to which, several brokerage firms have reached their full capacity for margin lending, while others are facing constrain in funding as their margin lending balances have enlarged quickly in the last few weeks. This, as usual, caused a real panic among retail investors and many just decided to run away. Many small/mid-cap stocks hit their limit down prices as a result.

o       Despite this, strong bottom-fishing demand at low price levels helped stock prices and the Index recover by the close, with few stocks remaining at their floor prices. The buying consumed selling overhang and pushed prices up at close. The Index even gained 1.24% to end the day at 1,547pts. Large-cap names continued to provide support while a number of small/mid-cap stocks still lost 3%-7% at close. From our view, such volatility is typical during strong upward cycles, especially in a retail-dominated market where individual investors account for over 90% of total trading value.

o       Large-cap stocks outperformed, supported by favorable macro signals that attracted more stable, long-term capital flows. The VN30 index gained 2.3% (+37.2 points), led by Vingroup stocks, amid growing investor belief that credit will increasingly flow into real estate this cycle. Bank stocks also rose on expectations of robust credit growth. HPG climbed after announcing a VND 430/kg increase in selling prices. In contrast, mid- and small-cap stocks underperformed, as their prior gains were primarily driven by speculative retail flows, which faced strong sell-offs today.

o       The intense buying, followed by a sharp sell-off and then late-session absorption, pushed market liquidity to a record high of over USD 3 bn, surpassing the previous peak set on July 29. Foreign investors net sold USD 97 mn, with VIC seeing the heaviest outflows at USD 111 mn. Excluding VIC, foreign investors net bought USD 14 mn, focusing on HPG (+USD 41.5 mn), BID (+USD 5.4 mn), and MSN (+USD 5.4 mn).