Stock market outlook for the week of July 8-12: There will be some volatility at the resistance level of 1,280 - 1,300 points.
In July 2024, a 5% fluctuation in the VN-Index could result in significant differences in returns for portfolios with varying stock weightings.
The market saw gains across five consecutive sessions last week. However, liquidity has yet to return. This rally was mainly driven by large-cap and fragmented stocks such asFPT , MWG, LPB, etc.
The VN-Index closed the week at 1,283.04 points, an increase of 37.72 points (+3.03%) compared to the previous week.
Liquidity on both exchanges decreased this week compared to the previous trading week, with trading volume down 26.8% on HoSE and down 29% on HNX. Foreign investors continued their net selling trend this week, with 2,308.962 billion VND on HoSE, concentrated in VRE (-728.4 billion VND), FPT (-463.1 billion VND), VHM (-422.2 billion VND), and HPG (-214 billion VND)... Conversely, they net bought in DSE (+206.4 billion VND), NLG (+194.4 billion VND), BID (+188.2 billion VND)...
 |
| Source: SSI. |
Mr. Ho Huu Tuan Hieu, an investment strategy expert at SSI Securities, said that the low liquidity environment is not new to the market since 2023. Market downturns have consistently seen a contraction in market breadth and liquidity, consequently limiting the number of growth stocks.
In 2024, the index is projected to increase by approximately 13%, matching the total for 2023. However, looking at the percentage of stocks outperforming the market in previous years, the number of stocks performing better than the market in 2024 is significantly more limited than in previous years. In 2017, only a few key stocks like VIC, MSN, and GAS... saw strong gains, driving the VN-Index up, while most other stocks lagged behind.
In years with very low liquidity, such as 2019, the number of outstanding stocks was also very small. In 2022, the market experienced a sharp decline in points (a 25%-30% drop in indices), creating difficulties in stock selection.
According to Mr. Hieu's observations, from the beginning of 2024 until now, although the market has risen, the picture is quite similar to the difficult years of the past, with a very high degree of differentiation between industry groups, a low number of stocks increasing in price, and no sequential price increases among stocks within an industry - similar to the industry wave of 2023, where although the index did not rise too sharply, choosing stocks was much easier.
This picture suggests that, despite rising scores and stock differentiation, the main story of the market is stock selection. However, at this time, the probability of selecting stocks is lower than in previous years, and therefore, short-term trading and position building will be more difficult.
The return of liquidity will bring more positive results, increasing the probability of making the right stock choices. In short, not only the index score, but also market breadth and liquidity are crucial links in making short-term decisions.
A positive point to look forward to in July 2024 is that the second-quarter earnings season may bring a more positive sentiment.
According to Ms. Nguyen Thi Phuong Lam, Head of Strategy at Rong Viet Securities, the second quarter earnings reporting season will bring vibrancy to the stock market, continuing the positive trend of economic growth and gradually improving credit growth rates from the end of the first quarter of 2024.
According to Rồng Việt's estimates, overall market revenue will begin to recover compared to the previous quarter, although the increase may be lower than the same period last year. Meanwhile, after-tax profit growth is estimated at 13% year-on-year, implying an improvement in the net profit margin of listed companies compared to the same period.
Conversely, exchange rate pressure and consequently interest rate issues will continue to weigh on the market. Statistics show that deposit interest rates have increased by 30-50 basis points compared to the end of March 2024, but are still lower than at the end of 2023. The prolonged exchange rate pressure due to the strength of the US dollar and high demand for foreign currency makes it possible for the State Bank of Vietnam to adjust the policy interest rate upwards in the third quarter of 2024.
At the same time, Rong Viet expects the economy's capital absorption capacity to gradually increase again, especially in the latter part of the year, leading to a continued rise in interest rates during this period.
Ms. Lam noted that a 5% fluctuation in the VN-Index could result in significant differences in returns for portfolios with varying stock weightings. Therefore, she advised investors to limit excessive leverage and always have buying power for opportunities during major corrections.
Returning to the investment strategy for next week, according to SSI experts, the VN-Index is gradually approaching the important resistance zone of 1,280 - 1,300 points in the short term. Liquidity has not really returned as investor sentiment remains quite cautious. It is likely that the market will experience some "volatility" at the above resistance zone next week, followed by further accumulation to form a new bullish structure.
Short-term investors are advised to take partial profits on positions that have yielded good returns and wait for opportunities to increase their holdings when the market pulls back or convincingly breaks through resistance levels. Sectors to watch include retail and consumer goods, food, exports, banking, and steel…
With a long-term perspective, investors can apply a strategy of accumulating shares gradually during corrections, focusing on fundamentally sound stocks with positive business prospects .
The current recommended stock allocation is 60% of NAV.
Source: https://baodautu.vn/goc-nhin-ttck-tuan-8-127-se-co-rung-lac-tai-vung-khang-cu-1280---1300-diem-d219477.html
Comment (0)