There are no signs yet that the VN-Index can easily surpass the 1,300-point mark, so investors need to adjust their mindset towards a more cautious approach, avoiding FOMO ("buying up stocks that have already experienced a rapid surge").
At the end of last week, the VN-Index still increased by 1.48% compared to the previous week, reaching 1,290.92 points. Market breadth leaned towards the selling side in the final trading session of the week, with 113 stocks rising, 189 stocks falling, and 65 stocks remaining unchanged on the HoSE. On the HNX, there were 60 stocks rising, 63 stocks remaining unchanged, and 60 stocks falling.
The VN-Index experienced a slight correction after reaching the 1,300-point mark. During an upward trend, the market inevitably experiences fluctuations and minor corrections, which serve as pauses to allow the index to regain momentum. This movement will help sustain the index's upward trend, increasing the probability of successfully breaking through the 1,300-point target.
Liquidity on both exchanges remained high, with a value exceeding VND 22,000 billion and a trading volume of nearly 1 billion shares in the last three trading sessions of the week. The trading volume increased by 22.53% on HoSE and 10.4% on HNX. Foreign investors were net buyers this week, with a value of VND 1,221.2 billion on HoSE, notably focusing on bank stocks such as TPB, HDB, and TCB. On the HNX, foreign investors were also net buyers of VND 71.07 billion, with significant purchases in stocks like SHS, PVS, and CEO.
The banking sector, driven by net buying from foreign investors, was the main positive force influencing the market, with many stocks experiencing strong price increases and surges in volume, such as TPB (+12.04%), MSB (+9.09%), STB (+8.91%), EIB (+7.55%), BVB (+5.26%),SHB (+5.26%), etc.
Foreign investors are also very active in the market, having made net purchases in 8 out of the last 10 trading sessions. The return of foreign capital to the Vietnamese market, combined with the net buying trend of domestic investors, will become a driving force helping the VN-Index continue its positive trend in the coming period.
This is happening against the backdrop of a stock market being supported by a lot of positive domestic and international news: the State Bank of Vietnam continuously buying forward contracts in the open market and "injecting money" into the system; the Fed (US) cutting interest rates and the Bank of Japan (BoJ) postponing its plan to raise interest rates, confirming a wave of monetary policy easing; the People's Bank of China (PBoC) launching a large economic stimulus package and warming up the real estate market….
The People's Bank of China (PBoC) recently announced policies to support the economy on the largest scale since the Covid-19 pandemic. These policies include (1) Loosening monetary policy; (2) Removing obstacles and supporting the housing market; and (3) Supporting the stock market. With China launching a large-scale economic stimulus package, Agriseco experts expect other countries in the region, including Vietnam, to continue maintaining and strengthening loose monetary policies to boost economic growth.
Furthermore, the boost from the stimulus package will increase the attractiveness of the stock market and is expected to be a factor in reversing the trend of foreign capital flows from net selling to net buying in Asian markets towards the end of the year.
In the short term, many securities companies recommend against chasing the VN-Index as it continues to rise to the 1,300-point level , as this is not an attractive price range. The market will conclude the third quarter of 2024 in the coming session and begin the fourth quarter of 2024, as well as the period of receiving business results. Investors should maintain a reasonable portfolio allocation, below the average level. New capital inflows can still be considered, increasing and expanding portfolios in stocks that have not recovered much and have price ranges similar to the VN-Index's previous 1,250-point level.
Buy positions should be carefully evaluated based on business results. Investment targets should focus on leading stocks with strong fundamentals, good Q2 earnings growth, and positive Q3 earnings prospects.
According to Mr. Dinh Quang Hinh, Head of Macroeconomics and Market Strategy at VNDIRECT Securities Joint Stock Company, the VN-Index continued its breakout week, even surpassing the 1,300-point mark at one point during the final trading session. However, increased selling pressure pushed the index back down to near 1,290 points. This is not surprising, as since the beginning of the year, the area above 1,300 points has always been a zone where the VN-Index faces strong profit-taking pressure and struggles to maintain its position.
Given that there are no signs yet that the VN-Index can easily surpass the 1,300-point mark, it is necessary for investors to adjust their mindset towards a more cautious approach, avoiding the FOMO mentality of "chasing after stocks that have experienced rapid price increases".
At the same time, portfolio risk management should be given high priority. Investors should proactively take partial profits on stocks that have risen by more than 15% in the last two weeks and reduce their stock holdings to a safe level (below 100%). New investments and the use of financial leverage should be limited, at least until the VN-Index clearly confirms its trend after retesting the 1,300-point resistance level.
"New disbursements should be made when the VN-Index successfully and reliably breaks through the 1,300-point resistance level or retreats to the support level at 1,260-1,270 points," according to Mr. Hinh.
Mr. Hinh shared his perspective on the Fed's recent interest rate cut, which will undoubtedly have a significant impact on the outlook for global financial markets in general and the Vietnamese stock market in particular in the coming period.
Specifically, on September 18th, the Fed officially began easing monetary policy, a move long awaited by the market, with a decision to cut the benchmark interest rate by 0.5 percentage points. This was a bold start by the Fed and also controversial, as most economists leaned towards a 0.25 percentage point cut just before the meeting. Some argued that the Fed's aggressive interest rate cut was due to the risk of recession in the US economy.
In Mr. Hinh's personal opinion, this perspective is not comprehensive. Given the context of "lower-than-expected inflation" and "concerns emerging in the job market, although still within control," the Fed's 0.5 percentage point interest rate cut is very logical.
Regarding the decisive action, Fed Chairman Jerome Powell shared, "There is a view that now is the time to support the job market, while it is still strong, not when layoffs have already begun." It seems that, while still asserting that the US economy remains healthy, the head of the Fed agrees with the concerns raised by experts that "monetary policy has a time lag before it takes effect, and with the information gathered from businesses and the slowdown in hiring, Fed officials feel it is necessary to preempt a more significant weakening of the job market."
Therefore, the 0.5 percentage point cut in the policy interest rate was more like a "preemptive intervention" by the Fed than a "firefighting action" when things were already too late. Along with the interest rate cut, the Fed also made some significant changes, such as lowering its forecast for the Personal Consumption Expenditures (PCE) index – the Fed's preferred measure of inflation – to 2.3% by the end of this year, from the previous forecast of 2.6%, and further reducing it to 2.1% by the end of 2025.
Regarding the unemployment rate, the Fed forecasts 4.4% by the end of this year, up from its previous forecast of 4.0%, and believes this level will remain until the end of 2025. For economic growth, the Fed forecasts 2.1% this year and 2% next year, unchanged from its June forecast. The positive reaction of the US stock market following the Fed's move also reinforces the scenario of a "soft landing" for the US economy.
Domestically, the Fed's interest rate reduction trend will have a positive impact on the economy and financial and monetary markets. The Fed's interest rate cut will support the US economy and boost consumer demand, thereby positively impacting Vietnam's export prospects to the US.
It is important to emphasize that the US is Vietnam's largest export market, accounting for nearly 30% of our total import value. The Fed's interest rate cut also weakened the DXY, helping to ease exchange rate and inflationary pressures, thereby creating conditions for the State Bank of Vietnam to be more flexible in managing monetary policy, shifting priorities to supporting system liquidity and maintaining a low interest rate environment to promote economic growth. Open market operations (OMO) and purchases of foreign exchange reserves to inject Vietnamese dong into the market aim to improve money supply growth, which has been very slow since the beginning of this year.
With the above expectations, Mr. Hinh maintains a positive view on the Vietnamese stock market in the medium term from now until the end of the year and the scenario of VN-Index surpassing 1,300 points this year is entirely feasible thanks to (1) a more relaxed monetary policy, (2) continued improvement in the business results of listed companies and (3) new progress in the story of upgrading the market rating.
Therefore, any market corrections in the coming period will be a good opportunity for long-term investors to accumulate more shares, prioritizing sectors with positive growth prospects at the end of the year such as banking, securities, import-export (textiles, seafood, wood products) and industrial real estate.
Source: https://baodautu.vn/goc-nhin-ttck-tuan-309-410-khong-mua-duoi-vung-1300-diem-d226163.html
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