HÀ NỘI — The domestic stock market has seen an impressive performance of mid- and small-cap stocks, outperforming the market average.However, experts warn investors to assess valuation levels against the growth potential of these companies for informed decisions.Post-Lunar New Year, there has been a notable improvement in market liquidity, with funds spreading across various sectors, leading to an overall increase in stock prices. The VN-Index has risen for five consecutive weeks, surpassing the significant 1,300-point threshold, a level it struggled to breach throughout 2024.Average trading value since early February has reached approximately VNĐ17.5 trillion (US$684.5 million) per session, marking a 36 per cent increase compared to January. In the most recent week, liquidity exceeded VNĐ20 trillion per session. However, when compared to the same period last year, February's liquidity was down by 25 per cent, and year-to-date figures show a 28 per cent decrease.During this period, mid- and small-cap stocks, particularly in sectors like mining, building materials, construction, rubber and chemicals, have experienced significant price increases. The market surpassing the 1,300-point threshold, driven by mid- and small-cap stocks, is seen as a positive signal, especially amid global market volatility.In February, the top ten best-performing stocks were dominated by the mining sector (Yên Bái Industry Mineral JSC, Fecon Mining, Becamex) and financial services sector (Icapital Investment JSC, APG Securities, Ocean Group JSC).The recent surge in mineral stocks can largely be attributed to escalating trade tensions among major economies, said Lâm Gia Khang, Head of Market Strategy at VietinBank Securities. With China tightening export controls on key raw materials, particularly strategic metals and minerals, supply chain disruptions have driven investors toward these stocks. However, after a strong rally, investors should be cautious. Despite the price surge, profits after tax in this sector have remained low in recent years, making valuations less attractive and raising the risk of short-term corrections.Meanwhile, some non-life insurance stocks have been gaining momentum, partly due to a recovery in insurance demand after the crisis of confidence at the end of 2022. Việt Nam’s insurance market still has substantial growth potential. By the end of 2024, the insurance penetration rate (measured by premiums as a percentage of GDP) is expected to range from 2.3 per cent to 2.8 per cent, which is still lower than the ASEAN average of 3.35 per cent, Asia’s 5.37 per cent and the global average of 6.3 per cent. (ICE HO CHI MINH CITY)

Fonte notizia: Vietnam News