Which stock is leading the way?

VN-Index surges in the first week after the Lunar New Year: Which stocks lead the way?

Experts from VNDirect believe that good liquidity and broad market coverage, not just in the banking sector, are positive signs for the Vietnamese stock market in the Year of the Dragon 2024.

The Vietnamese stock market started the new year with two exciting trading sessions. The VN-Index continuously rose, surpassing the 1,200-point mark and maintaining its upward momentum above this important psychological threshold. In just two sessions, the market capitalization on the Ho Chi Minh City Stock Exchange alone increased by 45,143 billion VND, equivalent to 1.83 billion USD. The total market capitalization across all three exchanges increased by over 2.22 billion USD.

On the first trading day of the Lunar New Year (February 15th), the VN-Index rose 0.33% after late-session profit-taking, closing at 1,202.5 points with positive trading volume. The increase was led by the banking sector, notably stocks like TCB (+3.0%) and MBB (+2.8%). In addition, small-cap bank stocks also recorded strong gains, for example: MSB (+6.7%), NVB (+5.6%), andOCB (+5.0%).

The VN-Index continued its upward trend, gaining 0.6% in the following session, closing at 1,209.7 points. The gains from the banking sector spread to other VN30 stocks such as GVR (+6.8%), MSN (+2.0%), VIC (+3.3%), and VNM (+3.6%), helping the VN-Index maintain its upward momentum. Despite some profit-taking selling pressure in the afternoon, the VN-Index rebounded towards the end of the session.

Overall, in the two sessions this week, the VN-Index was boosted by blue-chip stocks such as VIC (+3.7%), GVR (+5.1%), VNM (+3.6%), and TCB (+3.2%). Conversely, some bank stocks like BID (-0.8%), VCB (-0.4%), andACB (-1.4%) corrected after their recent price increases, putting pressure on the overall index.

Last week, trading value on the three exchanges surged by 20.2% compared to the previous week, driven by positive post-Tet sentiment, reaching a value of VND 20,637 billion per session. Foreign investors continued to be net sellers, with net selling value reaching VND 768 billion across all three exchanges. Specifically, foreign investors net sold VND 726 billion on HoSE and VND 62 billion on HNX, while net buying a small amount of VND 20 billion on UPCOM.

According to Mr. Dinh Quang Hinh, Head of Macroeconomics and Market Strategy Department, VNDirect Analysis Division, with good liquidity and broad market breadth, this is a positive start for the Vietnamese stock market in the Year of the Dragon.

Analysts from VNDirect believe that investor capital has quickly returned to the stock market after the Tet holiday. This is also a factor helping the VN-Index break through the psychological threshold of 1,200 points.

Market breadth is also more positive as many sectors take turns gaining points and maintaining market momentum instead of focusing solely on the banking sector as in the period before the holiday. Domestic investor sentiment is currently quite buoyant thanks to positive macroeconomic information, especially the PMI, import-export, and FDI data for January, as well as the clear recovery in Q4 2023 business results of listed companies.

“This reinforces market sentiment toward a brighter outlook for the 2024 shareholder meetings and the Q1 2024 earnings reporting season. Given these factors, there are no signs that could reverse the current upward trend of the market,” Mr. Dinh Quang Hinh commented.

According to Mr. Hinh, the VN-Index could head towards the previous peak around 1,240 points (+/- 10 points). This is the strong resistance zone and is capable of challenging the market's upward trend.

Source