Vietnam Stock Market Update: June 18 - VinGroup Leads as Market Liquidity Dries Up
The Vietnamese stock market experienced a day of significant volatility on June 18, characterized by a notable paradox: while the VN-Index closed with impressive gains, the broader market painted a concerning picture with most stocks declining and market liquidity plummeting to alarming levels. This "green skin, red heart" phenomenon has raised questions about the sustainability of the current market rally and the health of Vietnam's equity market.
Market Overview
In a session that highlighted the deep polarization within Vietnam's stock market, the VN-Index managed to close at 1,267.78 points, an increase of 15.41 points from the previous session. However, this seemingly positive performance masks underlying weaknesses in market breadth and participation. The advance-decline ratio heavily favored decliners, with the majority of listed stocks ending the day in negative territory.
The VN30 Index, tracking the 30 largest and most liquid companies on the Ho Chi Minh Stock Exchange (HOSE), reflected this dichotomy, with only 15 of its components finishing the day higher, 14 declining, and one remaining unchanged. This narrow advance suggests that market gains were concentrated in a select few large-cap stocks rather than representing broad-based market strength.
Market Indices Performance
The divergence between the main indices and broader market performance was striking on June 18. While the headline VN-Index posted gains, the market's internal structure revealed concerning signs of weakness. The HNX-Index, which tracks stocks on the Hanoi Stock Exchange, also showed a similar pattern of divergence, with large-cap stocks outperforming their smaller counterparts.
Market analysts noted that this type of performance typically occurs during periods of uncertainty, when investors flock to perceived safe havens or stocks with strong narratives, while avoiding the broader market. The concentration of gains in specific sectors or stocks can create an illusion of market health that doesn't reflect the true sentiment among market participants.
Market Liquidity Deteriorates Sharply
One of the most alarming aspects of the June 18 trading session was the dramatic decline in market liquidity. Total trading volume across all three exchanges (HOSE, HNX, and UPCOM) plummeted to just over 1.2 billion shares, equivalent to a total trading value of approximately 28,000 billion Vietnamese Dong (VND).
Compared to previous trading sessions, this represented a significant drop in market activity, with liquidity falling by double-digit percentages across all exchanges. The decline suggests that investors were either withdrawing capital from the market or adopting a wait-and-see approach pending clearer market signals.
Market Liquidity Summary - June 18 Session
| Exchange | Trading Value (billion VND) | Volume (million shares) | Change vs. Previous Session |
|---|---|---|---|
| HOSE | 22,500 | 950 | -15% |
| HNX | 5,500 | 250 | -18% |
| UPCOM | 800 | 120 | -12% |
VinGroup Emerges as Market Leader
The standout feature of the June 18 session was the exceptional performance of stocks within the VinGroup conglomerate. Three key VinGroup subsidiaries—VIC, VHM, and VRE—all hit their daily price limits, playing a crucial role in lifting the VN-Index despite broader market weakness.
The performance of these VinGroup stocks was particularly impressive:
- VIC (VinGroup) surged 6.9% to close at 93,000 VND per share
- VHM (Vinhomes) increased 6.3% to reach 74,800 VND per share
- VRE (Vinpearl) jumped 7% to close at 45,700 VND per share
Collectively, these three stocks accounted for nearly 20% of the total trading value across the entire market, underscoring their outsized influence on market direction. The concentrated buying in VinGroup stocks suggests that institutional investors or large funds may have been positioning in these names, possibly driven by positive company-specific news or strategic considerations.
VinGroup Stocks Performance - June 18
| Stock Code | Closing Price (VND) | Change (%) | Volume (million shares) | Trading Value (billion VND) |
|---|---|---|---|---|
| VIC | 93,000 | +6.9% | 15.2 | 1,414 |
| VHM | 74,800 | +6.3% | 18.5 | 1,384 |
| VRE | 45,700 | +7.0% | 12.8 | 585 |
Analyst Perspectives on Market Polarization
Market analysts have expressed mixed reactions to the June 18 session, with many highlighting the concerning signs of market polarization. According to Mr. Nguyen Van Binh, an analyst at a major Hanoi-based securities firm: "The market's heavy reliance on a single group of stocks like VinGroup is not a healthy sign. This indicates a lack of consensus in the market and suggests that liquidity is becoming increasingly polarized."
Mr. Binh further emphasized: "The low trading volume indicates that investors are exercising caution and awaiting clearer macroeconomic signals before committing additional capital to the market. This wait-and-see approach is understandable given the current global economic uncertainties and domestic policy changes."
Other analysts pointed out that while VinGroup's strong performance may reflect positive developments within the conglomerate, such as potential business expansion plans or favorable sectoral trends, the broader market's weakness suggests that investor confidence remains fragile. They noted that sustainable market recoveries typically require broad-based participation across multiple sectors and market caps.
Investor Sentiment: Divided and Cautious
Quick surveys conducted by various securities firms revealed a divided investor sentiment during the June 18 session. Short-term traders appeared to be actively selling positions in stocks outside the VinGroup universe to lock in profits, while longer-term investors maintained a cautious approach, avoiding significant new commitments.
Many retail investors interviewed expressed concerns about the market's direction, citing volatility in global markets, uncertainty about domestic monetary policy, and mixed corporate earnings reports as factors influencing their decision-making. Several indicated they were closely monitoring key economic indicators and policy announcements before making new investment decisions.
Institutional investors, on the other hand, seemed to be selectively accumulating quality stocks with strong fundamentals, with VinGroup appearing to be a particular focus. This divergence in strategy between retail and institutional investors has contributed to the market's polarization and limited broader participation.
Market Outlook: Narrow Ranges and Continued Polarization
Looking ahead, most analysts predict that the Vietnamese stock market is likely to continue trading within narrow ranges with strong polarization between winners and losers. The VinGroup conglomerate, with its strong market presence and diverse business interests, may continue to act as a market leader, particularly if the company continues to deliver positive news flow.
However, for a sustainable market recovery, broader participation across multiple sectors and improved market liquidity will be necessary. Analysts recommend that investors focus on companies with solid financial foundations, clear business models, and positive medium-term growth prospects rather than chasing momentum stocks.
Key factors that could influence market direction in the coming weeks include:
- Domestic monetary policy decisions
- Global economic developments and their impact on emerging markets
- Corporate earnings reports for the second quarter
- Government policies supporting economic recovery
- Foreign investor sentiment and capital flows
As the Vietnamese economy continues its post-pandemic recovery, the stock market's performance will likely be closely tied to the pace and breadth of economic growth. Investors should maintain a diversified portfolio aligned with their risk tolerance and investment horizon while staying informed about both domestic and global economic developments.
Source: Compiled from various securities firms and reports from the Hanoi and Ho Chi Minh City Stock Exchanges