Banking lines still have a lot of room and can lead the VN-Index up

Mr. La Giang Trung, CEO Passion Investment.

A very good year for VN-Index to return near its old peak

Sharing at the Workshop "Identifying business and investment highlights in 2024" organized by VCCORP Joint Stock Company on the morning of March 26, Mr. La Giang Trung, CEO of Passion Investment said that VN-Index is currently in the valuation zone. quite low. P/E is below 3 times, while previously P/E was always above 15 times. Interest rates are at the lowest level in history, lower than the Covid-20 epidemic and interest rates continue to go down. Besides, the world's stock markets have all surpassed their peaks, but the VN-Index is still stagnant.

“The weather is very favorable for market growth. This year is a very good year for VN-Index to return to near its old peak, setting the stage for the beginning of next year to surpass its peak. During the upward process, the market will have adjustment rhythms," said CEO Passion Investment.

Assessing current policies, Mr. La Giang Trung said that the stock market is in a good period, although the macro economy faces many difficulties, in contrast to the past. 

Often when the macroeconomy is difficult, fiscal and monetary loosening policies are introduced. Current policies are strongly stimulating and are good conditions for stocks to develop. The stock market will not increase this year but will increase from 2023. 

In 2023, Vietnam's socio-economic situation continues its recovery trend, the macroeconomy is stable, and inflation is under control. Along with that, major balances such as budget revenues and expenditures, disbursement of public investment capital are guaranteed, and many important results in various fields have achieved the set goals. Since then, Vietnam has become an economic bright spot in the region and the world.

Looking at the picture of the first 2 months of 2024, Vietnam's economy has had some positive bright spots. Typically, FDI capital flowing into Vietnam reached about 2,8 billion USD, up 9,8% over the same period. In particular, realized FDI capital was the highest in the same period in the past 5 years.

Along with that, the purchasing managers index (PMI) for 2 consecutive months increased over 50% while continuously decreasing below 50% by the end of 2023. Specifically, PMI in January reached 1 points, in February reached 50,3 points. This number shows that the manufacturing industry has begun to improve significantly.

Among them, a notable point is the readiness to welcome new FDI capital flows from Vietnamese enterprises. 2024 is a time with rare opportunities for investors to participate in high-value supply chains, contributing to creating great momentum for economic growth.

Therefore, with carefully prepared strategies, Vietnamese businesses will take advantage of opportunities from new FDI capital flows to increase internal resources for their production, business and investment activities. From there, Vietnam's economy will easily integrate more deeply with the world.

“Banking is a major beneficiary”

Asked about the sectors leading market growth, Mr. La Giang Trung emphasized the role of banking stocks.

According to Mr. Trung, Banking is a major beneficiary, this group of stocks can also lead the market. The reason is that the valuation of this industry is at a low level and there is still much room for growth. Second, deposit interest rates have decreased and banks' net interest profit margin - NIM has increased. Third, banks' business results will be more positive when the economy recovers, supporting credit activities as well as improving loan quality.

In addition to increased NIM, the fact that interest rates are low and will continue to be maintained from now until the end of the year makes credit easier to inject into the economy. Increased credit helps banks' income increase. Bad debt is reduced because of better business activities and people's income. These are three major factors that have a positive impact, thanks to which the bank's business activities are positive. 

In addition to increased NIM, low interest rates make credit easier to inject into the economy, while bad debt decreases, helping the economy recover, business activities and people's income improve. These are three major factors that have a positive impact, thanks to which the bank's business activities are positive. 

In the banking group, banks such as Techcombank, MBBank, and BIDV have very good foundations but are priced low because their products are heavily allocated to the real estate sector. While the real estate sector is recovering. Badly rated loans can turn good. Bank stocks that are undervalued have a better chance of increasing in price. As for banks that have already set good prices, the speed of price recovery will be slower.

According to Mr. Trung, first, the valuation of this industry is at a low level and there is still much room for growth. Second, as deposit interest rates decrease, banks' net interest margin - NIM increases. Third, banks' business results will be more positive when the economy recovers, supporting credit activities as well as improving loan quality.

According to Mr. Trung's investment opinion, when choosing to invest, you should only choose 1-2 main industries. In addition to banking, the retail industry also has very attractive valuations.