A sad year for the stock market.

Stock market experts predict that the downward trend will continue for the remainder of December, and the VN-Index will fall below 600 points by the end of the year.

The stock market in December, closing out 2015, was in turmoil with many concerns. At the beginning of December, the VN-Index experienced significant volatility, falling by 8-10 points in several consecutive sessions before recovering. At its peak on December 9th, the VN-Index dropped nearly 9 points to 565 points, a decrease of 73 points compared to July 14th when it reached 638 points thanks to positive news about easing foreign ownership limits.

Regarding foreign investors, they are massively selling off shares on the HOSE. In just the first 7 trading sessions of December, foreign investors sold over 8.3 million shares worth more than 2,006 billion VND. Thus, they have continuously sold a net amount of shares worth 824 billion VND. The net selling trend is intensifying, with some sessions seeing net selling by foreign investors reaching 300 billion VND.

The downward trend is expected to continue throughout 2015.

Previously, in November, foreign investors also sold net nearly 500 billion VND. This massive net selling by foreign investors caused the VN-Index to fluctuate sharply, with some sessions seeing drops of 9-10 points. On the HNX exchange, the net selling volume was insignificant, only at 25 billion VND.

Market liquidity has consistently remained low, with sluggish trading despite continued capital inflows. Average liquidity only reached around 1,500 billion VND per session.

The amount of margin trading in securities is estimated to be high. BIDV Securities Joint Stock Company (BSC) reported that margin trading at some major securities companies has reached VND 12,380 billion, 71% higher than during the sharp market downturn in March 2015. Accordingly, this excessively large amount of margin has put pressure on the market, causing it to decline continuously. The margin balance reflects the significant risk that remains high in December.

With no positive news to support the market, the upcoming meeting of the US Federal Reserve (FED) on December 15-16 to decide on raising the benchmark interest rate significantly impacted investor sentiment. According to forecasts from international and domestic experts, the FED will raise the US dollar interest rate by 0.25 to 0.5% this year. This psychological pressure from the FED's interest rate hike has pushed the stock market into a less than favorable situation in December.

According to statistics, December in previous years has always been unpredictable and tended to see a decline in the market. In 2011, the VN-Index fell by 7.9%; in 2013 by 0.8%; and in 2014 by 4.1%. Financial experts predict that December will conclude a rather "gloomy" year for the Vietnamese stock market.

Mr. Tran Hoang Son, Director of Strategy at MB Securities (MBS), said that December saw little supporting information for the market after the ETFs restructured their portfolios for the final time this year. In addition, the news of the FED meeting to decide whether or not to raise interest rates caused investor anxiety. With the scenario of the FED raising interest rates, foreign investors would withdraw capital from frontier and emerging markets.

"In fact, foreign investors have been heavily net sellers since the end of November and throughout the first days of December due to concerns about the Fed raising interest rates. For domestic investors, high margin levels have kept the market under constant downward pressure. The sharp downward trend will continue until the end of the year," Mr. Son commented.

Accordingly, this expert predicts that the VN-Index will close below 600 points at the end of 2015. However, Mr. Son also believes that the sharp market decline is an opportunity for investors to buy cheap stocks to ride the wave at the beginning of 2016. At that time, after the rather long Christmas and Tet holidays, foreign investors will return and the market will stabilize again.

BSC Securities Company also presented two rather bleak short-term scenarios for the VN-Index, suggesting that the market will continue to decline in the short term.

In the first scenario, the VN-Index could break through the nearest support level of 561 points and retreat to a deeper support level at 543 points in the negative scenario. In this case, a margin call would occur, triggering a massive sell-off.

In the second scenario, the VN-Index is expected to fall to the support level of 561 points. In that case, investors will consider reducing their stock holdings during rallies, as the downward trend is expected to continue until the end of the month. This will bring the market back to a state of sideways trading, fluctuating, and unlikely to break out strongly.

2015 was a turbulent year for the stock market, filled with a rollercoaster of emotions – joy and sorrow, hope and disappointment. At the beginning of 2015, many securities companies predicted that the VN-Index would close at 640-650 points. However, unpredictable fluctuations in crude oil prices, exchange rates, and the Fed's interest rate hikes prevented the stock market from growing as expected. Given these negative market developments, analysts believe the VN-Index will miss the 640-650 point mark this year.

According to VNE