- Interest Rate Policy: When the SBV reduced the operating interest rate to 4.5% in March 2024, market liquidity increased by 32% in the following month, with average trading value reaching 22,456 billion VND/session
- Fiscal Stimulus Package: The 347,000 billion VND economic recovery program implemented since early 2023 has boosted liquidity steadily in subsequent quarters
- Foreign Room Expansion: The proposal to raise foreign ownership limits to 100% for certain sectors in May 2024 stimulated liquidity in banking stocks by 47% in just 2 weeks
- T+1.5 Regulation: The roadmap to shorten the settlement cycle from T+2 to T+1.5 in September 2024 is expected to increase market liquidity by 15-20%
Liquidity is one of the most important factors when evaluating stocks in the Vietnamese stock market. Properly understanding stock liquidity not only helps investors minimize risks but also optimizes trading strategies, especially in today's volatile market environment. This article will provide you with comprehensive knowledge about liquidity and how to apply it to real investment practices.
Concept and Importance of Stock Liquidity in the Vietnamese Market
In the Vietnamese stock market, stock liquidity is the ability to quickly convert a stock into cash without significantly affecting the market price. According to data from the Ho Chi Minh City Stock Exchange (HOSE), the average trading value per session reached about 15-20 trillion VND in 2024, however, this liquidity is not evenly distributed among stocks.
Investors need to understand that when a stock has good liquidity, you can sell it within seconds at a price close to the quoted price. For stocks like VNM, VCB, HPG or FPT, trading large volumes (over 100,000 shares) usually doesn’t cause price fluctuations of more than 0.5%. Conversely, with low-liquidity stocks such as penny stocks on the UPCoM exchange, selling just 10,000 shares can sometimes cause the price to drop by 2-3%, causing significant losses for investors.
| Liquidity Level | Average Trading Volume/Day | Bid-Ask Spread | Examples of Vietnamese Stocks |
|---|---|---|---|
| Very High | Over 1 million shares | Under 0.1% | VNM, VCB, HPG, VHM |
| High | 500,000 – 1 million shares | 0.1% – 0.3% | MWG, FPT, VRE, MSN |
| Medium | 100,000 – 500,000 shares | 0.3% – 0.7% | PNJ, VCI, REE, GMD |
| Low | 10,000 – 100,000 shares | 0.7% – 2% | HAG, HVN, SBT, TCH |
| Very Low | Under 10,000 shares | Over 2% | Most UPCoM stocks |
In the Vietnamese stock market, what is stock liquidity is also understood as a measure of the overall health of the market. According to analysis from experts at Pocket Option, Vietnamese stock market liquidity increased by 28% in Q2/2024 compared to the same period last year, marking a positive recovery after a period of volatility. Liquidity is not only a determining factor in asset conversion ability but also reflects investor confidence and predicts short-term market trends.
Factors Determining Stock Liquidity in Vietnam’s Market in 2024
The Vietnamese stock market has unique characteristics that affect stock liquidity. Understanding these factors helps investors more accurately assess opportunities and risks when trading.
Macroeconomic Policies and Specific Impacts on Liquidity
The macroeconomic policies of the Government and the State Bank of Vietnam have direct impacts on liquidity in the stock market. Here are specific examples:
Company Factors: Points to Analyze
Liquidity also depends on the characteristics of the company issuing the stock. Investors need to carefully analyze the following factors:
- Market Capitalization: VN30 companies with an average market capitalization of 135,000 billion VND typically have 8-10 times higher liquidity than small companies
- Free-float Ratio: Vinamilk (VNM) with 75% free-float has 3 times higher liquidity than Vietcombank (VCB) with similar market capitalization but only 25% free-float
- Presence in Indices: When POW was added to VN30 in February 2024, liquidity increased by 156% in the following month
- Dividend Policy: FPT with a consistent dividend history of 15-20%/year maintains stable liquidity even during market volatility periods
- Analyst Coverage: Stocks covered by more than 5 securities companies typically have 45% higher liquidity than industry peers with less analysis
| Stock Group | Average Trading Volume | Liquidity Volatility | Suitable Strategy |
|---|---|---|---|
| VN30 | 3-5 million shares/session | ±20% during market volatility | Suitable for short-term trading, medium-long term investment |
| MIDCAP (VNMid) | 500,000-2 million shares/session | ±35% during market volatility | Medium-term investment, use limit orders |
| SMALLCAP (VNSmall) | 50,000-500,000 shares/session | ±60% during market volatility | Long-term investment, split buy/sell orders |
Experts from Pocket Option emphasize that in the context of Vietnam’s market, stock liquidity often has a “polarization” characteristic – the top 20 stocks account for up to 65% of total market trading value (Q2/2024 data), while more than 300 stocks have very low liquidity with volumes under 100,000 shares/day.
How to Check Stock Liquidity on Popular Trading Platforms
To accurately assess how to check stock liquidity, investors need to analyze specific indicators using practical tools. Here is a detailed according to popular trading platforms in Vietnam:
Liquidity Measurement Indicators and How to View Them on Pocket Option
| Indicator | How to View on Pocket Option | Reference Thresholds (Vietnamese Market) |
|---|---|---|
| Trading Volume | Go to “Stock Information” > “Liquidity Indicators” > View Volume indicator | – Very good: >1 million shares/day- Good: 500,000-1 million shares/day- Average: 100,000-500,000 shares/day- Low: <100,000 shares/day |
| Trading Value | Go to “Market Data” > “Trading Statistics” > View “Trading Value” | – Very good: >100 billion VND/day- Good: 50-100 billion VND/day- Average: 10-50 billion VND/day- Low: <10 billion vnd> |
| Turnover Ratio | Use “Advanced Analysis” tool > “Liquidity Indicators” > “Turnover” | – High: >1%/day- Average: 0.3-1%/day- Low: <0.3%/day |
| Bid-Ask Spread | View directly in real-time price table, “Price Difference” column | – Very good: <0.2%- Good: 0.2-0.5%- Average: 0.5-1%- Poor: >1% |
| Market Depth | Use “10-level Order Book” feature on stock detail page | – Good: >100,000 shares at each price level- Average: 30,000-100,000 shares- Poor: <30,000 shares |
When using VNDIRECT platform:
- Log in to your VNDIRECT account
- Search for the stock code to check liquidity
- In the stock information table, note the indicators:- “Trading Volume” (daily trading volume)- “10-session Avg Volume” (average trading volume over 10 sessions)- “Trading Value” (daily trading value)
- View “Order Book” to assess market depth and bid-ask spread
- Check the liquidity chart in the “Technical Analysis Chart” section
When using SSI TRADING:
- Log in to SSI TRADING
- Select the stock to analyze
- Go to “Trading Information” to see current trading volume
- Check “Trading History” to see liquidity trends
- View “Market Breadth” to compare stock liquidity with industry average
When applying how to check stock liquidity in the Vietnamese market, note some specific characteristics:
- Intraday liquidity patterns: 9:30-10:30 (high), 11:00-13:30 (low), 14:00-14:30 (average), 14:30-15:00 (high)
- Weekly patterns: Monday and Friday typically have 15-20% lower liquidity than average
- Derivatives expiration day: Third Thursday of each month, liquidity typically increases 30-45%
- Effect before and after holidays: Liquidity typically decreases 20-25% before holidays and increases 15-20% after holidays
Detailed Comparative Analysis: Liquidity of Stocks and Bonds in Vietnam’s Market 2024
In Vietnam’s financial market, the liquidity of stocks and bonds has notable characteristics and differences. Below is a detailed analysis based on data updated to Q2/2024:
| Criteria | Stocks (HOSE/HNX) | Government Bonds | Corporate Bonds |
|---|---|---|---|
| Average daily trading value | 17,500 billion VND | 9,800 billion VND | 1,200 billion VND |
| Monthly turnover ratio | 15-20% | 8-10% | 2-3% |
| Time to execute large transactions | Few minutes to few hours | 1-2 days | 3-7 days |
| Transaction costs | 0.15-0.35% of value | 0.01-0.05% of value | 0.1-0.2% of value |
| Short-term price volatility | ±2-7% in a week | ±0.2-0.5% in a week | ±0.5-1% in a week |
Analysis based on specific examples:
- VNM (Vinamilk) stock: Market capitalization of 135,000 billion VND, average trading volume of 2.5 million shares/day, value around 187 billion VND/day. Average bid-ask spread of 0.1%. Can trade large volumes (100,000 shares) within minutes.
- 10-year Government Bond (VBMB10Y): Listed volume of 25,000 billion VND, average trading value of 450 billion VND/day. Bid-ask spread of 0.05%. Takes 1-2 days to complete large transactions (over 100 billion VND).
- VinGroup Corporate Bond (VINCB2124): Listed volume of 8,500 billion VND, average trading value of 25-35 billion VND/day. Bid-ask spread of 0.3-0.5%. Transactions over 50 billion VND can take 3-5 days to find matching orders.
When comparing the liquidity of stocks and bonds, Vietnamese investors should note the following unique points:
- Liquidity by economic cycle: During growth periods (like 2021-2022), stock liquidity excels; during interest rate hike periods (like Q3/2022-Q2/2023), government bond liquidity is typically more stable
- “Safe haven” phenomenon: When markets experience strong volatility, money flows shift from stocks to government bonds, creating a liquidity reversal
- Impact from the 2022-2023 bond crisis: Corporate bond liquidity decreased significantly (60-70%) and has not fully recovered
- Role of foreign investors: They account for 20-25% of liquidity in the stock market and 35-40% in the government bond market
Analysts at Pocket Option point out that in Vietnam’s 2024 market, the VN30 stock group has liquidity equivalent to short-term government bonds (1-3 years), while many small-cap stocks have liquidity even lower than BBB-rated corporate bonds.
Practical Investment Strategies Based on Stock Liquidity in Vietnam’s Stock Market
What is stock liquidity in the context of building practical investment strategies? It’s the factor that determines how you place orders, manage positions, and choose when to exit. Below are specific strategies for each stock group:
Detailed Strategies for High Liquidity Stocks (VN30 and Top Midcaps)
| Strategy | Holding Period | Specific Implementation Method | Real Example |
|---|---|---|---|
| Trend Trading | 5-20 days | 1. Identify trend using MA20, MA502. Wait for pullback to support zone (Fibonacci 38.2% or 50%)3. Enter when reversal confirmation appears (Hammer, Bullish Engulfing candlesticks)4. Set stop-loss 3-5% below nearest support5. Take partial profits at resistance levels | HPG in uptrend Q1/2024: Buy at 27,000 VND (pullback to MA50), set SL at 25,500 VND, exit 50% at 30,000 VND and 50% at 32,500 VND |
| Sector Rotation Investment | 1-3 months | 1. Identify leading sectors through MSCI Vietnam Sectors index2. Select 2-3 top stocks in the sector with best liquidity3. Allocate capital in 40-30-30% ratio4. Monitor weekly money flow, restructure when money flows shift sectors | Q2/2024: Banking sector leading, allocation: VCB (40%), TCB (30%), ACB (30%). Result: +18% after 2 months |
| T+ Trading | 1-3 days | 1. Find stocks with positive news but without strong price increases yet2. Enter during morning session when market stabilizes3. Use 70-80% of available buying power4. Set profit target of 3-5%5. Take profit before 14:30 on T+1 day or earlier if target is reached | FPT after announcing Q1/2024 results up 32%: Buy at 96,500 VND morning of announcement, sell at 99,800 VND the following afternoon (+3.4%) |
With high liquidity stocks, investors can use advanced trading techniques such as:
- Scaling (Partial Entry): Divide buy orders into 3-4 parts and execute over several days to get a better average price
- OCO Orders (One Cancels Other): Combine take-profit and stop-loss automatic orders on the Pocket Option platform
- T0 Strategy with Ultra-Liquid Stocks: Intraday trading with stocks like HPG, STB, SSI can yield 1-2%/day profits during active market periods
Practical Strategies for Medium and Low Liquidity Stocks
| Strategy | Holding Period | Step-by-Step Implementation | Real Example |
|---|---|---|---|
| Value Investing | 6-18 months | 1. Find stocks with P/E 30% lower than industry average2. Check revenue and profit growth for the last 3 years3. Accumulate gradually over 1-2 months (each batch 20-25% of total capital)4. Set profit target of 30-50% and wait patiently | DGC in 2023: P/E 5.5 (industry 9.8), accumulated in the 55,000-60,000 VND range, current price (Q2/2024) 89,000 VND (+45-60%) |
| Event-Driven Investment | 1-3 months | 1. Create a watchlist of stocks with important upcoming events (new listings, capital increase, M&A)2. Study analyst reports carefully about event impact3. Buy 2-4 weeks before the event with moderate volume4. Sell in parts when information is officially announced | BCM before information about moving to HOSE and joining VN30 (Q4/2023): Buy at 38,500 VND, sell at 48,000 VND after officially joining VN30 (+24.7%) |
| Dividend Accumulation | 2-5 years | 1. Select companies with consistent dividend history >7%/year2. Buy after dividend distribution when price adjusts3. Reinvest received dividends into the same stock4. Increase weighting when ROE and dividend yield improve | REE: Bought from 2021 at 48,000 VND, consistently received dividends of 10-12%/year, current price 95,000 VND, total profit after 3 years: +98% (price and dividends) |
What is stock liquidity when considered in the context of managing a long-term investment portfolio? It’s the determining factor for asset allocation ratio and portfolio rebalancing strategy. Pocket Option recommends the following allocation model for Vietnamese investors:
- 40-50% of portfolio: High liquidity stocks (VN30) – ensuring ability to withdraw capital quickly when needed
- 30-40% of portfolio: Medium liquidity stocks – seeking higher growth with moderate risk
- 10-20% of portfolio: Low liquidity stocks with high potential – accepting “freezing” when necessary
- 5-10% reserve: Cash or ultra-liquid assets to capitalize on unexpected opportunities
Risk Analysis and Practical Solutions When Trading Low Liquidity Stocks
Vietnam’s stock market has unique liquidity characteristics that create specific risks that investors need to understand to build effective prevention strategies:
| Risk | Specific Manifestation | Practical Solution | Example from Vietnamese Market |
|---|---|---|---|
| Slippage Risk | Buy/sell order of 50,000 shares causes price to increase/decrease by 2-3% immediately | 1. Split orders into smaller parts (5,000-10,000 shares/order)2. Use limit orders instead of market orders3. Avoid placing orders at the beginning and end of sessions4. Use trailing stop-loss orders | VHG stock: Sell order of 100,000 shares at the end of session on 02/23/2024 caused price to drop from 4,800 VND to 4,400 VND (-8.3%) in just 15 minutes |
| Liquidity Trap Risk | Unable to sell large volumes of stock for many consecutive sessions | 1. Apply the “1% portfolio rule”: Don’t invest more than 1% of total assets in low liquidity stocks2. Create an “escape hatch”: Place standing sell orders for a portion when experiencing abnormal liquidity3. Consider “averaged exit” strategy: Sell gradually over many weeks/months | Small real estate stock group (DIG, NVL, PDR) in Q1/2023: Many investors couldn’t exit large positions even accepting 20-30% losses |
| Manipulation Risk | Artificial liquidity to attract new investors, then pushing prices up and dumping | 1. Analyze money flow through Pocket Option’s “Money Flow” tool2. Monitor ratio of matched to negotiated transactions3. Be cautious with stocks experiencing sudden price increases with surging liquidity4. Check information on insider buying/selling | The phenomenon of “pumping” certain FLC group stocks in 2022: Liquidity suddenly increased 500-600% in 1-2 weeks, then collapsed when manipulating group withdrew |
| Market-wide Liquidity Drought Risk | Widespread liquidity depletion during crisis periods | 1. Build a “liquidity ladder” for portfolio: always have 30% that can be sold immediately2. Maintain 10-15% cash in portfolio3. Use derivatives (VN30F) to hedge market risk4. Monitor Pocket Option’s “Market Liquidity” index | November 2023 crisis: Market liquidity decreased 65% in 5 sessions, the strongest decline in 2 years |
In the Vietnamese market, the liquidity of stocks and bonds is often affected by extreme crowd psychology more than in developed markets. When negative events occur (like the securities scandal in 2022-2023), liquidity can decrease by 70-80% in just 1-2 weeks, creating a “spillover effect” across the entire market.
Experts at Pocket Option propose the following “liquidity defense” strategy:
- Liquidity Diversification: Ensure portfolio includes high, medium and low liquidity stocks in appropriate ratios
- Build a “Liquidity Ladder”: Structure portfolio so that 30% of capital can be withdrawn in 1 day, 50% in 3 days, and 80% in 10 days
- Leverage T0 Market: When needing to exit positions quickly, consider converting from low liquidity stocks to high liquidity stocks, then selling the high liquidity stocks
- “Counter-trend Exit” Strategy: Sell during sessions with price increases and good liquidity, avoid selling during strong declining sessions
- Automate Risk Management: Use smart order tools on Pocket Option to set capital protection thresholds
Conclusion: Applying Liquidity Knowledge to Practical Investment Strategy in 2024
Understanding stock liquidity is one of the determining factors for investor success in Vietnam’s stock market. Liquidity not only affects the ability to buy and sell stocks but also shapes the entire investment strategy.
Based on the detailed analysis above, investors should apply the following specific principles to trading practice in 2024:
- Multi-dimensional Liquidity Assessment: Not only examine trading volume but also analyze market depth, bid-ask spread, and liquidity fluctuations over time
- Build a “3-Layer” Portfolio: Allocate 40-50% to high liquidity stocks (VN30), 30-40% to medium liquidity, and maximum 20% to low liquidity stocks with high potential
- Smart Order Entry Strategy: For low liquidity stocks, split purchase orders into 4-5 batches and execute over 2-3 weeks to get optimal average price
- Multi-tier Exit Mechanism: Set up strategies to sell in parts at different price points, combined with trailing stop-loss orders
- Monitor Market Liquidity Indicators: Use Pocket Option’s analytical tools to forecast early changes in money flow and liquidity
Vietnamese investors in 2024 should particularly note that liquidity is no longer just a “technical” factor but has become one of the main drivers of the market. Q1/2024 data shows that stocks with liquidity improvements over 30% had an average price growth of 18.7%, 7.2% higher than the VN-Index.
Pocket Option continues to invest in advanced liquidity analysis tools, helping Vietnamese investors to:
- Forecast liquidity trends based on deep learning AI models
- Early detection of money flow changes between sector groups
- Optimize entry timing based on liquidity patterns
- Automatically analyze liquidity risk for the entire investment portfolio
- Set up smart exit strategies suitable for each stock
Remember: In Vietnam’s stock market, understanding liquidity not only helps you avoid dangerous “traps” but also opens the door to sustainable profitable investment opportunities in the long term. Transform liquidity from an abstract concept into your own competitive advantage on your investment journey.
FAQ
What is stock liquidity and why is it important for Vietnamese investors?
Stock liquidity is the ability to quickly convert a stock into cash without significantly affecting the market price. For Vietnamese investors, liquidity is particularly important because the Vietnamese stock market is still young with unevenly distributed liquidity. Specifically, the top 20 stocks account for up to 65% of total trading value, while more than 300 stocks have very low liquidity. Good liquidity helps investors exit positions quickly when needed, minimize bid-ask spreads, and is especially important during periods of strong market volatility such as 2022-2023.
How to accurately assess the liquidity of a stock in the Vietnamese market?
To accurately assess the liquidity of Vietnamese stocks, multiple indicators should be considered simultaneously: average trading volume (good when above 500,000 shares/day), trading value (good when above 50 billion VND/day), bid-ask spread (good when below 0.5%), turnover rate (high when above 0.3%/day), and market depth (good when there are over 100,000 shares at each price level). Additionally, attention should be paid to intraday liquidity patterns (high at 9:30-10:30 and 14:30-15:00) and weekly patterns (low on Monday and Friday), as well as special effects from derivative expiration days (30-45% increase) and before/after holidays.
Are there specific strategies for trading low-liquidity stocks while still controlling risk?
Yes, when trading low-liquidity stocks in the Vietnamese market, you should apply these strategies: (1) Follow the "1% portfolio rule" - don't invest more than 1% of total assets in a low-liquidity stock; (2) Split purchase orders into 4-5 phases and execute over 2-3 weeks to achieve an optimal average price; (3) Use limit orders instead of market orders; (4) Closely monitor corporate events that can significantly increase liquidity (AGMs, dividend distributions); (5) Build an "averaged exit" strategy - selling gradually over many weeks/months instead of all at once; and (6) Consider the "counter-trend exit" strategy - selling during sessions when prices rise and liquidity is good.
What tools does Pocket Option provide to analyze stock liquidity in the Vietnamese market?
Pocket Option provides several specialized tools to help Vietnamese investors analyze liquidity: (1) "Trading Statistics" tool displaying volume and trading value in real-time; (2) "10-level Order Book" to assess market depth; (3) "Money Flow" indicator analyzing cash flows in/out of stocks; (4) "In-depth Analysis" tool with Turnover index measuring rotation rate; (5) "Abnormal Liquidity Fluctuation" alert system; (6) AI model predicting liquidity trends; and (7) Automated tool analyzing liquidity risk for the entire investment portfolio. These tools help investors optimize entry/exit timing and early detection of investment opportunities.
How does liquidity compare between stocks and bonds in the Vietnamese market?
In the Vietnamese market in 2024, there is a clear difference in liquidity between stocks and bonds. Stocks have an average trading value of 17,500 billion VND/day, higher than government bonds (9,800 billion VND) and corporate bonds (1,200 billion VND). The monthly turnover rate of stocks (15-20%) is also higher than government bonds (8-10%) and corporate bonds (2-3%). However, stocks have stronger price fluctuations (±2-7%/week) compared to bonds (±0.2-0.5%/week). A notable feature is that the VN30 stock group has liquidity equivalent to short-term government bonds, while corporate bond liquidity has not fully recovered after the 2022-2023 crisis (decreased by 60-70%).