“Pocketing” hundreds of thousands of billions of dong in a few days, this group of tycoons is still “criticized”

Making a big fuss at the beginning of the year, earning hundreds of thousands of billions of dong

In the first trading sessions of 2024, the VN-Index was quite positive with increasing points and more abundant liquidity. A major contributor to this bright development was the excitement of banking stocks.

Most notably, on January 10, when the entire market was in red, blue-chips in the banking sector all increased sharply, helping the VN-Index maintain its green color, creating a situation of “green on the outside, red on the inside”. In other words, banking stocks “distorted” the real picture of the market.

After a few trading sessions in early 2024, following a strong increase, the banking industry's market capitalization accelerated.

Specifically, despite a slight decrease in the session on January 11, compared to the last session of 2023, VCB of the Joint Stock Commercial Bank for Foreign Trade of Vietnam - Vietcombank still increased by VND 9,000/share, equivalent to 11.2%. Thanks to that, Vietcombank's market capitalization increased by VND 33,535 billion (about USD 1.36 billion). VCB is still the stock with the largest market capitalization on the Vietnamese stock exchange.

Hundreds of billions of dong in a few days, this group of tycoons is still being hidden. — Despite earning hundreds of thousands of billions of dong in the first few days of the new year 2024, this group of tycoons is still criticized. Illustrative photo

Similar to VCB, BID shares of the Vietnam Joint Stock Commercial Bank for Investment and Development - BIDV also stumbled in the stock market session on January 11. However, after the first 8 trading sessions of 2024, BID still increased by VND 3,100/share, equivalent to 7.1% to VND 46,500/share. BIDV's market capitalization increased by VND 17,671 billion (about USD 717 million).

The last piece of the Big 4 listed on the stock market, CTG of Vietnam Joint Stock Commercial Bank for Industry and Trade - VietinBank, also had a significant acceleration when it increased by 3,900 VND/share, equivalent to 14.4% to 31,000 VND/share. VietinBank's market capitalization increased by 20,943 billion VND (about 850 million USD).

The market capitalization of the Military Commercial Joint Stock Bank increased by VND10,428 billion after MBB shares increased by VND2,000/share, equivalent to 10.7% to VND20,650/share.

Just counting the four big players in the industry, the banking market capitalization has increased by nearly VND83,000/share.

The market capitalization of many remaining units also has thousands of billions of VND after only 8 trading sessions in the first 2024.

TCB increased by VND2,350/share, equivalent to 7.4% to VND34,150/share, helping Techcombank's capitalization increase by VND8,278 billion. SHB's stock price increased by VND1,300/share, equivalent to 12%, helping SHB's capitalization increase by VND4,705 billion,...

Thus, with dozens of bank codes listed on the banking market, in the recent short period of time, the market capitalization of this industry has increased by hundreds of billions of VND.

Bank stocks are still "disparaged"

Although the market capitalization increased by more than 100,000 billion VND after only a few trading sessions at the beginning of the new year 2024, the banking industry group is still "criticized" and not included in the "Buy" recommendation list of securities companies.

SSI Research believes that 2024 will continue to be a challenging year for the banking industry in terms of asset quality. However, the overall situation will improve compared to 2023, largely thanks to the cost of capital falling to a much lower level than in 2023 and the improvement in pre-provision profit (PPOP) giving banks room to create a better provision buffer.

In SSI Research's baseline scenario, GDP growth could recover to between 6.0% and 6.5%, average annual interest rates would remain around the lowest level in the past decade, and the State Bank would respond flexibly in the mechanism for recording and setting aside bad debt provisions. According to SSI Research's estimates, pre-tax profit growth in 2024 of banks under the study scope is expected to reach 15.4%, which is a better growth rate than the 4.6% in 2023.

SSI Research maintains a Neutral view on the Banking sector in 2024 as the process of consolidating the reserve buffer continues, preventing the industry's profits from accelerating strongly right away. However, SSI Research still favors stocks with good asset quality such as ACB and VCB, as these banks will complete bad debt settlement much sooner than other stocks in the same sector. BID is also a favorite stock of SSI Research as its upcoming private placement plan will actively support the bad debt settlement process as well as medium-term growth prospects. In addition, SSI Research also chooses STB because the story revolves around the restructuring progress.

SSI Research has added 3 stocks to its watch list, including TCB, CTG and MBB. For TCB and MBB, SSI Research will closely monitor new developments as well as the process of untangling the real estate market to assess whether these banks can achieve a better-than-expected recovery rate. For CTG, as the bank has increased its provisioning in the past 2 years, we believe that profit growth may have a new turning point, possibly at the end of 2024 or 2025.

“For other stocks, we recommend that investors can observe again at the end of the year because it may take at least 1-2 more years to complete the bad debt handling process,” SSI Research advised investors.

Meanwhile, VCBS Securities recommends that investors should closely follow the market if short-term selling pressure continues to increase sharply in mid- and small-cap stocks. Notably, the list of industries highly rated by VCBS does not include banks.

“This will be a good opportunity to disburse for stocks that are still in a medium-term uptrend in sectors such as securities and real estate. In case the market corrects down, the milestones to pay attention to are 1,150 and 1,130, corresponding to the Fibonacci retracement scale of 0.786 and 0.618,” VCBS said.

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