Experts have presented two scenarios for the stock market this coming week. In the base scenario, the recent deep market correction may have already reflected most of the 'assumed risks' in the medium term.
The VN-Index ended November at 1,250 points, down 14 points from October, with average daily trading value hitting an 18-month low of 12,200 billion VND - Photo: QUANG DINH
Two scenarios for the stock market this coming week.
* Mr. Doan Minh Tuan - Head of Research and Investment at FIDT:
- The VN-Index recovered better than expected last week, quickly regaining the 1,250-point equilibrium level within two weeks.
The market continues its upward trend despite the "doubtful" low liquidity scenario, with most stock groups showing signs of having completed their bottoming phase and rising well along with the market.
A notable point this week was that foreign investors bought net for five consecutive sessions. This was the first week of net buying after more than a month of heavy selling. This is also a clear sign that the removal of exchange rate risks will encourage foreign investors to return to the market, helping to balance supply and demand.
We expect the restructuring process of indirect investment flows to be nearly complete this year (end of 2024), with foreign investors reducing net selling, creating opportunities to attract new investment flows.
In terms of market valuation, the VN-Index is currently trading around a P/E ratio of 13 - 13.2 (price-to-earnings ratio per share).
With an average EPS (earnings per share) growth rate of 15-17% per year, the forward P/E ratio for 2025 (estimated price-to-future earnings) is projected to be 11.3-11.5 times. This represents a low valuation range throughout the more than 10-year period from 2015 to 2024.
Mr. Doan Minh Tuan
We present two scenarios for this week. For the base scenario, FIDT believes that the recent deep market correction has reflected most of the "assumed risks" in the medium term.
At that time, any significant reversal of key global variables such as the USD index (a sharp drop below 105) or the yield on 10-year US Treasury bonds (a sharp drop below 4.2%) would create an opportunity for the VN-Index to successfully bottom out and reverse the medium-term correction trend.
In a negative scenario, if global finance continues to reflect the increasingly negative "Donald Trump" policy variables, with the USD index rising to historically high levels near 110, it will create significant pressure on the exchange rate, and strong selling pressure from foreign investors is expected. In this negative scenario, market risk is very high, and the bottom of the VN-Index will be very difficult to predict.
Overall, the necessary condition remains that risks related to the USD index and domestic exchange rate risks show signs of easing.
Avoid getting into an overbought condition.
* Mr. Nguyen Huy Phuong - Analyst at Rong Viet Securities:
- The market continues to extend its recovery, negating signs of a cooling-off seen in the last trading session of the previous week. This signal is helping the market stabilize before reaching the 1,250-1,265 point range, a historically contested area.
The market is expected to move further into this zone to test supply and demand. There is a possibility that supply will increase again, putting pressure on the market in this area.
Therefore, investors still need to observe supply and demand developments to assess the market's state. Currently, investors can exploit short-term opportunities in some stocks that are gradually improving from their support levels.
However, proper portfolio management is still necessary to avoid overbuying, and short-term profit-taking should be considered during any recovery.
Exchange rates will cool down towards the end of the year.
* Mr. Dinh Quang Hinh - Head of Macroeconomics and Market Strategy Department - Analysis Division, VNDirect Securities:
Mr. Dinh Quang Hinh
- As we enter December, the general market trend is expected to remain recovery as risk factors such as exchange rates and short-term liquidity constraints gradually ease.
The Fed is likely to further lower its benchmark interest rate at its December meeting, and the domestic supply of USD is expected to improve significantly towards the end of the year.
Typically, export businesses tend to resell foreign currency to commercial banks at the end of the year to finance domestic purchases, pay salaries and bonuses to employees, etc.
This, coupled with the continued positive trend in FDI disbursement and the influx of remittances at the end of the year, will help ease exchange rate pressure. The State Bank of Vietnam may shift its focus to other objectives such as supporting system liquidity and credit growth, aiming towards its ambitious credit growth target of 15% this year.
If credit growth meets its target and money flows into the economy , it will be a major boost for the stock market in December and early next year.
Source: https://tuoitre.vn/chung-khoan-o-vung-dinh-gia-thap-nhat-10-nam-hai-kich-ban-cho-tuan-moi-20241202080302076.htm
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