Stocks soar to near historic peak, expected to set new record this year

Profit-taking pressure increased while cash flow continued to pour in, causing the stock market to shake violently, but at the end of the session it still increased quite strongly and reached a historical peak. What is the market outlook in the coming time?

Stock market rises to near historic peak. Photo: HH

Approaching the historical peak

The Vietnamese stock market recorded a strong shaking session when the VN-Index approached its historical peak.

Opening the morning trading session on July 24, strong cash flow poured into the market, helping the VN-Index increase by more than 13 points at times and get very close to the historical peak of 1,528.57 points recorded in January 2022.

However, the pillar stocks in the VN30 basket weakened rapidly, causing the VN-Index to increase by a negligible 0.92 points at the end of the morning session. Liquidity on HoSE decreased by 22% compared to the previous morning session, showing increased caution. The duo Vingroup (VIC) and Vinhomes (VHM) put strong pressure on the market.

In the afternoon session of July 24, VN-Index fell nearly 10 points to 1,502 points. Selling pressure was not only in VIC and VHM but also spread to many other industries such as real estate, steel, chemicals, with many stocks falling sharply such as: HPG, HSG, DPM, NVL...

However, the stock market suddenly regained green in the final minutes, closing the session up nearly 9 points and for the first time since the beginning of 2021, it jumped above the 1,520 point threshold thanks to support from banking and real estate stocks. Notably, VIC shares also recovered. The VN-Index is only about 7 points away from the historical peak recorded in early 2021.

In the session on July 24, foreign investors traded strongly, buying shares with a total value of more than VND5,100 billion, while selling more than VND5,300 billion.

Market outlook

Assessing the recent positive developments in the stock market, Mr. Luu Chi Khang, Director of the Research Center, CSI Vietnam Securities Joint Stock Company, said that there are many factors supporting the market.

According to Mr. Khang, that is stable macro, high economic growth. The Government continues to set a target of striving for GDP growth of 8.3-8.5% in 2025. Money supply and credit growth are both high. Credit growth in the first 6 months of the year reached nearly 10%, the target of 16% this year is feasible, it can even reach 18-20%.

In addition, interest rates remain low, the Government maintains a loose policy to support economic growth. Fiscal policy is also expanded by boosting public investment, determined to disburse 100% of the investment plan in 2025.

In addition to the macro environment supporting the stock market, it is highly likely that by September this year, Vietnam's stock market will be upgraded from frontier to emerging according to FTSE criteria. This is an important effort by the Government to attract foreign investment and enhance the position of the Vietnamese stock market in the international arena.

At that time, Vietnamese stocks will attract foreign capital quite well. Proof of that is that foreign investors have returned to strong net buying in the last 3 weeks.

Mr. Khang believes that the above factors are quite strong and are the main driving force helping the market increase points in recent times, and there will even be room for strong increases. Expectations of surpassing the historical peak of 1,535 points are well-founded, as liquidity has recently been maintained at a high level. The VN-Index is even likely to reach a peak of 1,720 points from now until the end of 2025 and mid-2026.

Ms. Tran Thi Khanh Hien, Director of Research, MB Securities Company, commented that the market outlook remains positive thanks to the low interest rate environment. In addition, many businesses have also recorded profit growth and the prospect of market upgrade is still present. The market is currently witnessing a shift in cash flow from large-cap stocks to mid- and small-cap stocks.

According to Ms. Khanh Hien, in the first 6 months of the year, listed enterprises generally had good business results. The banking group still saw profit growth, although at a slower pace. The real estate group faced many difficulties last year, but this year has been better.

Exporting businesses increased sharply due to front-loading (boosting exports to the US) before Washington applied new taxes. Securities companies benefited from the vibrant stock market, only consumer companies were weak.

However, according to Mr. Khang, when VN-Index is approaching its peak (1,528-1,535 points), it is possible that there will be profit-taking selling pressure after the strong increase from 1,073 points in April.

Therefore, at this stage, according to CSI experts, you should not chase buying and limit the use of margin, instead prioritize selling to take profit in part of the portfolio, wait for the market to have an adjustment period to accumulate to the support zone before strongly disbursing (accumulating around 1,420 points).

Meanwhile, Ms. Tran Thi Khanh Hien warned that risks related to exchange rates could increase.

Regarding the future prospects, Mr. Khang said that the banking group will continue to benefit from high credit growth, along with the insurance group. Next is the public investment group with construction and building materials enterprises. The securities stock group is also positive. The last group that will often make a strong breakthrough at the end of the credit growth cycle is real estate.

In addition, real estate stocks are also expected to enter a growth cycle. However, the proposal to tax real estate is still a major obstacle, which may prevent this group of stocks from making a strong breakthrough in the short term.

Vietnamnet

Source: https://baohaiphongplus.vn/chung-khoan-vot-len-sat-dinh-lich-su-ky-vong-lap-ky-luc-moi-trong-nam-nay-417194.html