Vietnam's stock market surpasses 13 million accounts as VN-Index hits record high

Vietnam's stock market has witnessed a surge in investor participation, with the total number of trading accounts nearing 13.16 million by the end of May. This growth, primarily fueled by domestic individual investors who opened over 255,700 new accounts, signifies a robust interest in the market. The overall figure represents approximately 13% of Vietnam's population, though the actual number of unique investors may be lower due to individuals holding multiple accounts.

The market experienced considerable volatility during May, coinciding with the VN-Index reaching an all-time high of 1,927 points on May 18, driven by large-cap stocks, particularly from the Vingroup conglomerate. However, this peak was followed by profit-taking and a general cautiousness among investors, causing the index to retreat slightly. By the end of the month, the VN-Index closed at 1,863.49 points, marking a modest 0.51% increase from April.

Foreign investor activity also contributed to the market's expansion, with the total number of foreign accounts rising by 367 to 51,843. Individual foreign investors were the main drivers of this increase, opening 356 new accounts. Despite the overall growth in accounts, trading liquidity showed mixed signals. Average trading volume on the HoSE decreased slightly in May, while the average transaction value saw a marginal increase.

Looking ahead to June, market analysts at Tien Phong Securities (TPS) express optimism, anticipating an improvement in investor sentiment. Factors such as easing geopolitical tensions in the Middle East and a potential reduction in inflationary pressures are expected to boost confidence. The market is likely to shift its focus towards expectations for second-quarter earnings and the outlook for the latter half of the year. TPS notes that the current valuation levels remain attractive, with the VN-Index's P/E ratio below its 10-year average, suggesting potential for medium and long-term capital inflows.

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The market may gradually shift to a trading state based on expectations of second-quarter business results and the outlook for the second half of the year.