Data from the Vietnam Securities Depository and Clearing Corporation (VSD) revealed the number of securities accounts at the end of May reached nearly 7.94 million, of which 7.87 million were held by domestic retail investors. This marks the highest number of accounts on record and represents the sixth consecutive month of continuous growth.

An investor at a securities company in Hanoi. Photo: Pham Hung/The Hanoi Times

Compared to the previous month, the market saw an addition of 132,220 new accounts. On average, about 4,265 new retail and institutional accounts joined the market each day.

This record increase in investor accounts comes as the benchmark VN-Index is at its highest level in nearly three months, comparable to its peak in August 2022. In May, the VN-Index rose by 4.3% to around 1,280 points. Overall, the market has gained 11.7% since the beginning of the year, which is almost as much as the total growth for the whole of 2023.

The increase in market participants has helped maintain high liquidity on the HoSE (Ho Chi Minh Stock Exchange). Since March, the total value traded per session has mostly remained above VND20 trillion (US$787 million), sometimes exceeding VND40 trillion ($1.57 billion).

Domestic investors are seen as a counterbalance to the negative cash flow trend of foreign investors. Since the beginning of the year, foreign investors have been consistently net sellers, offloading thousands of billions of VND worth of shares in many sessions. However, domestic individuals have absorbed these sell-offs well, providing a support mechanism that prevents the market from turning too negative.

This year, many analysts view the stock market as an attractive investment channel, given the overall economic recovery and improving corporate earnings. The consensus is that stocks have significant potential to deliver good returns over an investment horizon of at least 2-3 years.

In the medium term, analysts from Saigon-Hanoi Securities (SHS)  expect the VN-Index to remain in a consolidation range between 1,180-1,200 points and 1,300 points, possibly rising to 1,320 points. The 1,200-point level represented the highest in 2018, while the 1,300-1,320-point range was the highest in June and August 2022. The equilibrium point within this medium-term consolidation channel is around 1,245-1,255 points, corresponding to the highs in 2023.