The right time to accumulate good stocks

VN-Index recovered about 70 points after forming a short-term bottom at 1,200 points, however, many stock groups have not yet recovered adequately and still have suitable valuations for investment.

Stock Market Perspective Week 9-14/12: The Right Time to Accumulate Good Stocks

VN-Index recovered about 70 points after forming a short-term bottom at 1,200 points, however, many stock groups have not yet recovered adequately and still have suitable valuations for investment.

Last week, the December 5 session was the first breakout session with sudden liquidity after more than 10 trading sessions from the recovery effort and the first bottom. Green spread and cash flow participated strongly in many industry groups. Foreign investors reversed their net buying trend, in line with the positive development of the index in the short term.

Mr. Le Duc Huy, Head of Market Strategy Department, Agribank Securities Company (Agriseco), said that after the session on December 5, the index creating two upward bottoms and continuously breaking through important moving averages confirmed a short-term uptrend.

The Vietnamese stock market continued to record a week of gains with the VN-Index closing the week at 1,270 points. The market's recovery momentum was extended this week thanks to some supportive domestic macroeconomic information.

Specifically, the positive assessments from FTSE during this working trip to Vietnam have reinforced the market's expectations of the possibility of upgrading the Vietnamese stock market to FTSE's secondary emerging stock market next year.

Mr. Dinh Quang Hinh, Head of Macro and Market Strategy, VNDIRECT Securities Joint Stock Company, assessed that this information has triggered speculative cash flow back into the market, promoting the price increase of stocks expected to benefit from market upgrade such as securities and some large-cap stocks. In the last two sessions of the week, the market's increase was also fueled by the return visit to Vietnam of Nvidia CEO - Mr. Jensen Huang to realize previous commitments to open an R&D center and promote investment in Vietnam.

In addition, the General Statistics Office also announced that the November macroeconomic data was generally quite positive, showing a continued trend of broad-based recovery of the Vietnamese economy after Typhoon Yagi, spanning from industry, services to public investment, as well as showing that concerns about inflation have been "left behind" when the CPI in November increased by only 0.13% compared to the previous month and 2.77% compared to the same period.

Market liquidity is also a bright spot, witnessing the return of trading sessions of over VND 20,000 billion.

With positive signs of cash flow, Mr. Hinh believes that the VN-Index may continue to move upward and head towards the strong resistance zone of 1,280 - 1,300 points. The market will soon witness increased profit-taking activities when the VN-Index hits the above resistance zone, so investors should limit chasing high-priced purchases, patiently wait for upcoming fluctuations to restructure their investment portfolios, shifting their portfolios to stocks with positive growth prospects in the last quarter of the year such as banks, exports (seafood, textiles) and stocks that benefit from the market upgrade story.

According to Mr. Huy, VN-Index will still head towards the 1,300-point mark this December, but it is unlikely to surpass 1,300 points immediately. A shake-up before returning to the uptrend at the end of the week when the US Federal Open Market Committee ( FOMC) meeting with interest rate expectations is approaching is considered a more reasonable scenario for the market next week.

In the context of the market bottoming out in the short term and recovering, cash flow can return and spread to industry groups with high profit growth prospects in the fourth quarter such as retail, technology or industry groups with investment stories such as the securities group with the story of upgrading the market, the chemical and fertilizer groups with the story of applying 5% VAT on fertilizers and China stopping the export of DAP - MAP fertilizers. In addition, this is also the right time for investors to accumulate good stocks in the medium and long term with suitable valuation levels.

Mr. Huy said that VN-Index has recovered about 70 points after creating a short-term bottom at 1,200 points, however, many stock groups have not recovered at a commensurate level and still have suitable valuations for investment. The banking group has a relatively attractive valuation with P/E and P/B both being lower than the average of the past 5 years. Similarly, the basic resource groups (steel) or real estate groups also have valuations at a low level compared to the average of the past.

In addition to industry groups with low valuations, investors may be interested in industry groups with a lot of room for profit growth in the fourth quarter of 2024 and 2025 with suitable valuations such as retail, export, and industrial park groups.

Source: https://baodautu.vn/goc-nhin-ttck-tuan-9-1412-thoi-diem-phu-hop-tich-luy-cac-co-phieu-tot-d231972.html