From good signals, such as the impressive gain of the VN-Index, the cash flow continued to pour into the market as well as the number of investors opening accounts is still increasing, showing that the stock market is still an attractive investment channel in the current context.

Market movements will continue to have strong differentiation
among stock groups. Internet photo. 

Cash flow was into small and medium stocks

The stock market has had a week of positive developments, out of investors' expectations. At the end of the stock trading week on August 31 to September 4, the VN-Index closed at 901.54 points (up 22.56 points or 2.57%).

It can be seen that the increase of the market's 5-day gain in a row was blocked by the pressure from the world stock market, but the decline on September 4 was very slight compared to other regional markets, even as the whole trading time is an increasing attempt after falling almost 10 points at the open. These signs show that the market is relatively healthy despite having increased in the last 8 out of 10 sessions.

Besides, the short-term cash flow is constantly circulating among sectors, but the uptrends are quite short, because optimism is always accompanied by caution, selling this stock and then buying again. Another vote is common action seen last time.

Observing the market movements, it can be seen clearly that most of the stock sectors gained in August. Especially the large-cap stocks where the number of advancers overwhelmed the losers. In which, Vinaconex VCG increased the most with 36.8%; MWG of Mobile World and Petrolimex's PLX increased by 25.4% and 24.4%, respectively.

The remarkable point is the strong cash flow into small and medium-cap stocks. According to statistics of Tan Viet Securities Company, in the first eight months of the year, the small and medium capitalization groups increased by 7.7% and 16.8%, respectively, despite the VN-Index falling 8.9%. More specifically, on all three exchanges, there are 314 small-cap codes with returns of up to 65.08%. The common feature of small and medium-cap stocks is low liquidity and unstable business performance, but this still attracts investors.

Cash flow will pay more attention to sectors that have not increased remarkably.

According to data from the Securities Depository Center (VSD), domestic and foreign investors opened a total of nearly 28,600 securities trading accounts in August, up 4.4% from the increase in July. This is also the second consecutive month that the number of newly opened securities accounts has been below 30,000 since March (when investors massively bottomed after the market plunged due to the impact of Covid-19.) The total number of accounts as of August 31 is nearly 2.6 million.

Although the second wave of the pandemic is having complicated developments in Vietnam, it can be seen from data of investors participating in the stock market that this is still an attractive investment channel at this time. However, according to many experts, to make a profitable investment, it is necessary to have meticulous observations and good analytical skills based on the actual situation in our country as well as the business situation of the enterprises.

Mr. Duong Hoang Linh, Head of Research Department of Sacombank Securities Company (SBS), recommended that for short-term surfing investors, a reasonable portfolio structure according to the cash flow signal will bring good results. Those stocks that have reached the profit target, but the price increase is not associated with corresponding positive business results should take profits to realize profit to restructure to other more potential stocks.

“At the moment, it is advisable to prioritize an investment portfolio in leading blue-chips that are attracting cash flow or buy early on good fundamental stocks that are less affected by the epidemic but have not increased in price by much," Mr. Duong Hoang Linh said.

Bao Viet Securities Company also forecasts that market movements will continue to have a strong differentiation between stock groups. Large-cap stocks may alternately increase to support the market's uptrend.

Besides, investors should also note that the cash flow will pay more attention to the sectors that have not increased much in the past such as securities, retail, oil and gas. In addition, stocks in the industries are benefits because macro factors still receive special attention from investors when adjusting to reasonable price ranges.