Experts believe that while the stock market hasn't experienced a major surge yet, its transition from a bottom to a recovery phase presents an opportunity to accumulate stocks for the next three months to a year.
Despite positive news such as lowering the policy interest rate ceiling, a new decree on bonds to ease difficulties for real estate businesses, and a VAT reduction to stimulate consumer demand, the stock market has not shown signs of a boom recently. For the past two months, the VN-Index has fluctuated between 1,030 and 1,080 points, with a daily range of no more than 20 points. This range is significantly narrower than in the first three months of the year, when the index sometimes fell close to 1,000 points before rising to nearly 1,120 points.
The gloomy market sentiment is further reflected in the weakening of both new account openings and investor cash flow. Last month, only 22,740 new accounts joined the market – the lowest number in three years. The average trading value per session was around 11,000 billion VND, and in some sessions it fell below 7,000 billion VND, which is less than 20% of the peak market period.
"This shows that stock market investors are in a highly defensive state after a year of more losses than gains," said Le Vu Kim Tinh, Director of the Tan Binh branch of Phu Hung Securities Company (PHS).
According to Mr. Tinh, the current stock market is not bright but not entirely bleak either, because all the bad news about the financial health and growth prospects of businesses has been released after the annual general meetings, and good news is appearing more frequently. Loose monetary policy and support for businesses are seen as the biggest pillars for recovery. However, because policies need time to take effect, the market cannot surge immediately but must wait at least a few months.
Mr. Tinh believes that the strong fluctuations in the VN-Index over several months are a sign that the market has bottomed out. Investors should therefore not fear a sudden market crash like the scenario that occurred in the second half of last year; instead, they should accumulate stocks for a medium-term outlook of 3-6 months and a long-term outlook of over one year.
For investors with a high risk tolerance, he believes the current situation is likely to cause impatience because they can't buy due to the sluggish price increase, and they can't sell either because the profits haven't met expectations.
Investors monitor stock prices at a stock exchange in District 1, Ho Chi Minh City. Photo: Quynh Tran
Sharing the same view, Mr. Le Anh Tuan - Director of the Securities Division of Dragon Capital Investment Fund - also affirmed in a meeting with investors a week ago that the VN-Index is shifting from its bottom to a recovery phase. The shift in monetary policy from tightening to loosening, relatively attractive stock valuations, lower interest rates, and stable exchange rates will limit the possibility of the index falling 15-20% in the short term.
Mr. Tuan advised investors not to abandon the market during calm periods, but rather to view this as an attractive accumulation phase for the medium and long term. Downward price movements should be seen as opportunities to restructure and reduce the cost basis of portfolios, but cautioned against using excessive leverage.
"We shouldn't expect a 30% or 50% profit this year. Anyone who can achieve that is a genius. This is a period of accumulation for a growth phase next year. If the market falls and you're scared, just buy in without thinking," Mr. Tuan said.
Analyzing potential sectors, Mr. Tinh suggested that when the market is slowly rising in a zigzag pattern and cash flow is limited, agricultural , textile, and export-oriented stocks should be prioritized. These sectors typically accelerate very quickly when the market stabilizes and businesses release positive information about new orders.
Furthermore, Mr. Tinh also highly appreciates the medium- and long-term price appreciation prospects of sectors benefiting from the disbursement of public investment capital, such as infrastructure construction, building materials, and energy. Regarding blue-chip stocks like banking, securities, or real estate, the expert suggests that short-term trading strategies should only be employed when the market is truly booming and liquidity is explosive.
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