ANTD.VN - Despite experiencing a deep decline last weekend, experts believe that the market will soon recover as margin call pressure is not too great and potential market demand is still quite high.
The Vietnamese stock market ended the trading week with a widespread sell-off, closing at 1,177.99 points, down nearly 56 points in the session, the sharpest drop in over 14 months.
Along with the sharp drop in points, liquidity also skyrocketed and set a new record for the volume of shares traded in the session with 2 billion units traded on 3 floors. Meanwhile, the transaction value also approached the historical level of 45,000 billion VND on August 20, 2022.
The deep drop with large liquidity caused many investors to panic when thinking about the scenario of margin calls and selling off stocks like in mid- and late 2022, especially recently, the leverage ratio has increased sharply in the context of positive market developments.
However, some experts are optimistic that the margin call pressure this year will not be as intense as last year. Mr. Nguyen The Minh - Director of Analysis of the Individual Client Division of Yuanta Securities Company said that there are many reasons leading to this assessment.
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Experts believe that the stock market will soon recover after a deep correction last weekend. |
According to him, the sell-off that occurred continuously in mid-2022 can be divided into two phases. In phase 1, from April 2022 to August 2022, retail investors were the ones who were sold off stocks, due to continuous averaging but stock prices continued to fall.
In the later stage, large investors or internal shareholders used margin to "support" stock prices, but the market continued to decline and this continued to be part of the reason for the liquidation in the fourth quarter of 2022.
However, at present, securities companies have been more cautious in risk management. One of the factors that securities companies use to determine lending rates is based on the fundamental situation of the enterprise. Therefore, after the second quarter business results announced by enterprises, there may be moves to reduce lending rates in risky industries. The outstanding margin of real estate stocks used to account for 40% of total margin, but now it is not much, but is concentrated in securities banks and manufacturing enterprises.
Some concerns are that the margin debt on market capitalization has returned to its old peak, however, according to Mr. Minh, at this time, the equity of securities companies has expanded, the margin/equity ratio is still lower than the second quarter of 2022. Therefore, the margin room is still very large at the present time.
Regarding the sharp decline last weekend, the expert did not rule out the possibility that this was an early reaction from the warehouses (securities companies lending outside - PV) as one of the reasons for the surge in stock supply. However, according to Mr. Minh, loans outside securities companies with high leverage ratios will react very quickly, especially in cases of real estate stock loans because the fundamental factors of businesses in this industry have not yet recovered while stock prices have increased sharply. The value of loans through the warehouse is also much lower than the outstanding margin loans through securities companies.
For the above reasons, Mr. Minh believes that the market will have a recovery next week. The index may continue to fall early next week but will rise within the week. The two thresholds to watch are 1,160 points and in the worse scenario, it could be 1,125 points and then bounce back.
In addition to the not-so-great margin call pressure, Mr. Minh also believes that the good potential demand of the market will be the reason for the market to go up. Accordingly, from May to July, there were still market investors observing and waiting for certainty. At the same time, other investment channels such as deposits and bonds have not shown much appeal to attract cash flow to participate.
Mr. Minh believes that in the last months of the year, the Vietnamese stock market may enter a new wave of growth, possibly even helping the VN-Index reach 1,415 points. However, there will no longer be a situation of buying and winning, and the stock selection strategy will be more difficult than in previous months.
Yuanta Vietnam Securities' analysis department has proposed three scenarios for the VN-Index in 2023, based on the assumption that the 12-month bank deposit interest rate will be around 6.5% and that 2023 EPS growth on the HOSE will increase by 3% compared to 2022.
In which, the scenario with the highest probability (50%) is that the Vn-Index reaches 1,265 points, corresponding to a P/E of 15 times. The positive scenario with an expected probability of 40% is that the P/E increases to 18 times and the Vn-Index reaches 1,518 points. The negative scenario with a probability of 10% is that the P/E is 10x and the VN-Index reaches 885 points.
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