Market Recap September 2023 - VNI retreats after four consecutive positive months

The VN-Index (VNI) retreated in September after four consecutive positive months. The VNI increased in the first several trading days of the month thanks to positive news surrounding US President Joe Biden’s trip to Vietnam. In fact, the VNI reached 1,245.5 on September 6 and 1,245.4 on September 12, marking its highest levels in nearly a year. However, the VNI then declined gradually due to profit-taking pressure and the release of US inflation data (3.7% in August vs 3.2% in July). This downturn continued with a 6.0% drop from September 21 to 29, which was driven by: (1) the State Bank of Vietnam (SBV) resuming T-bill issuance to withdraw excess liquidity after a six-month hiatus, which sent a misunderstanding signal that the SBV’s could reverse its current loose monetary policy stance; (2) the Deputy Prime Minister urging the State Securities Commission to accelerate the process of identifying and verifying securities accounts; and (3) rumors circulating about the resignation of a high-level official at the HCMC Stock Exchange. The VNI closed September at 1,154.2 (-5.7% MoM). In 9M 2023, the VNI increased by 14.6%, outperforming other regional markets such as Thailand’s SET (-11.8%), the Philippines’ PCOMP (-3.7%) and Indonesia’s JCI (+1.3%).

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