Take profit spread

The stock market has not really shown signs of a breakthrough before Tet, even though many forecasts say that Vietnam's economy will continue to recover and will have the best growth in 2024.

During the week of January 8-12, the stock market moved sideways while the gold price quickly increased again to the mark of 77 million VND/tael. The USD/VND exchange rate also quickly climbed to 24,630 VND/USD ( Vietcombank selling price), compared to the level below 24,500 VND/USD at the beginning of the month.

During the week, on the stock market, the banking stocks were still the mainstay and the mainstay. In contrast to the decline of most of the pillar stocks in other groups, including real estate, oil and gas... Many large bank stocks broke out following good business signals in the fourth quarter of 2023.

Specifically, CTG shares of Vietinbank increased by 8.2%, BID of BIDV increased by 3.4% and VCB of Vietcombank increased by 2.9%... after banks simultaneously reported strong profit increases, many organizations reaching billions of USD.

For the first time in history, the profits of the Big 4 group all reached the billion-dollar threshold, with total profits exceeding VND115,000 billion. Vietcombank estimates pre-tax profits in 2023 to reach more than VND44,400 billion (equivalent to nearly USD2 billion).

Another positive point is that foreign investors had their first net buying session in the new year.

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Stocks are expected to fluctuate before Tet. (Photo: HH)

Regarding the week's developments, the VN-Index started the new week with a slight increase, reaching 1,160 points thanks to the breakthrough of the banking group with positive results as above. In addition, the construction materials group, including steel industry codes, also increased quite strongly at the beginning of the week.

However, in the following session, the VN-Index decreased slightly and ended the streak of 7 consecutive increasing sessions.

However, the banking group was once again a pillar, helping the market escape a losing session after the State Bank announced very strong credit growth in December, thereby pulling the whole year's credit growth to above 13.7%, close to the target of 14%.

In the last session of the week, January 12, the market recorded a sharp decline in the morning before closing slightly lower in the afternoon, as investors worried about domestic and international instability. The escalating instability in the Red Sea region caused shipping costs to skyrocket, making import-export businesses extremely worried. Escalating costs could push up inflation.

In the end, during the week of January 8-12, the VN-Index remained almost flat, closing at 1,154.7 points. The HNX-Index did not have strong support from the banking group, so it fell 1.1% to 230.31 points. The Upcom-Index fell 1.1% to 86.9 points.

Except for the banking group, most other pillar stocks fell. GVR fell 6.4% during the week, Vinhomes (VHM) fell 4.2%, while GAS fell 2.7%.

Liquidity increased significantly during the week, up 25.5% compared to the previous week to VND18,664 billion/session. During the week, foreign investors net bought slightly VND22 billion on all three exchanges.

The tug-of-war trend continues, waiting for a breakthrough after Tet

Mr. Dinh Quang Hinh, Head of Market Strategy Department, VnDirect Securities Analysis Division, said that the tug-of-war trend in the stock market may continue into the next trading week when cash flow has not yet reached consensus and spread among industry groups.

According to VnDirect experts, the recent increase in stock indices is mainly driven by banking stocks, while other sectors have not shown signs of attracting cash flow.

With the banking sector likely to see profit-taking pressure in the coming trading sessions and the lack of a replacement leading group, the market's uptrend is unlikely to be sustained. At the same time, the market is also preparing to enter a supportive information trough before the Lunar New Year, while some emerging risk factors may affect the overall trend.

Mr. Hinh said that the recently announced higher-than-expected US inflation figures will dampen the excitement of international markets. Domestically, gold prices are still high, along with the unexpected return of exchange rate pressure in recent sessions, which is a risk factor that needs to be observed.

Meanwhile, Mr. Nguyen Duc Nhan, Director of the Business Center of KB Securities Vietnam Company, has a rather positive long-term view. Accordingly, there may be another shake-up when the VN-Index enters the 1,185+/-5 point zone in the short term.

According to Mr. Nhan, with a favorable start in the first sessions of the new year (a series of 7 consecutive days of increase), it is completely possible to expect a "smooth start and smooth ending" in 2024.

Mr. Nhan believes that it is unlikely that the market will increase sharply during the "sandwich" period between New Year's Day and Lunar New Year 2024. However, the market will have a strong increase when the Lunar New Year holiday ends.

Normally, the stock market often trades "very uncomfortably" before the Lunar New Year holiday, making it difficult for stock holders. The psychology of selling and not owning stocks before the holiday is understandable.

Several organizations also unanimously stated that the stock market is entering a recovery phase in the context of low interest rates, stable macro-economy and profit growth starting to bottom out.

Vietnam's economy this year is forecasted by many organizations such as HSBC, WB, IMF... to grow better than in 2023. Foreign direct investment (FDI) flows remain positive. Vietnam's GDP growth is rated as the second highest in Southeast Asia and among the highest globally in 2024.