Vietnam Stock Exchange Recap
VN-Index closes at 1,266.8 points on the 31st of December 2024 - Bullish outlook for 2025
The VN-Index closed up +12% for calendar 2024. The trading narrative was one which saw foreign investors remain cautious heading into the new Republican administration in the USA, and a similar focus on risk reduction among Vietnamese domestic investors. Together, Vietnam's three (3) bourses tapered down and average daily trading value (ADTV) reduced, accordingly.
The decline in the market has resulted in increasingly attractive valuation metrics (exhibit: the VN-Index price-to-book (P/B) ratio heading into 2025 is now at decade-long lows (1.6x P/B), and the VN-Index price to earnings (P/E) ratio is below 14.5x P/E. Meanwhile, from a technical point of view, the resistance level of 1,240 on the HSX was breached - and, post the 10th of December, the Ho Chi Minh Stock Exchange traded below three (3) moving averages (exhibit: 20-day, 50-day, 100-day). This suggests a market correction is here. Thus, with P/B levels now at 10-year lows, considered accumulation in blue-chip securities is a theme being spoken about with an increasing voice among local and foreign asset managers for 2025.
Currency stability remains a positive for Foreign Indirect Investors (FII). Unlike many Asian countries whose currencies fell dramatically in 2024 (exhibit: Japan (down -10.43% v USD), South Korea (Won 'KRW', hit a 15 year low v USD)), the VND only fell by about-4.8% to VND25,430 on official markets by the end of December 2024. The State Bank of Vietnam (SBV) displayed exemplary oversight in 2024 and is expected to continue as and when required selling of foreign currencies and intervention in the open market (OMO).
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