HIGHLIGHTED NEWS
The State Bank of Vietnam (SBV) has announced a plan to sell foreign currency through a 180-day, cancelable forward contract, starting from August 25-26. However, the transaction will only be conducted with credit institutions with negative foreign currency status, at a selling price of VND26,550/USD. The maximum foreign currency sold for each bank in each transaction is equivalent to the level to bring the credit institution's foreign currency status to a balanced level. The provision of foreign currency forward contracts (with cancelable) by the SBV aims to establish a hard threshold for the interbank exchange rate around VND26,550, while eliminating market expectations that the SBV will continue to loosen the exchange rate ceiling, thereby helping to cool down the exchange rate in the short term. This move by the State Bank of Vietnam is also expected to boost USD demand in the banking system towards the end of 2025 and early 2026. This is the period when foreign currency supply will be increased from remittances and when the US Federal Reserve (FED) is likely to cut interest rates. In response to the above information, the interbank USD exchange rate has fallen sharply.
TRADING STRATEGY
The stock market fluctuated and closed the week at 1,645 points with liquidity increasing above the weekly average. Selling pressure was widespread across most groups and industries. In particular, the most affected groups were stocks in the finance, basic resources, oil and gas, and construction materials sectors. Today, the VN-index is likely to fluctuate around the 1,635-1,655 point area.
The stock market adjusted down after testing the resistance zone of 1,680-1,700 points. Selling pressure was quite large and mainly concentrated on stocks with high mass that had gone through a period of overheating before. Foreign investors continued to sell at high intensity in the context of the exchange rate showing signs of increasing and the State Bank of Vietnam leaving open the intention to sell USD to intervene. VN-Index is likely to have an intermediate downward adjustment phase in the long-term uptrend. The index's support zone is around 1,600-1,620 points. Investors should consider managing each stock individually, prioritizing the recovery to bring the portfolio to a safe ratio to wait for the next opportunities when the market stabilizes again.
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