Billions of dollars are waiting, real estate and stocks are surging, VN-Index surpasses 1,200 points

Successfully conquered the 1,200 point mark

The Vietnamese stock market (TTCK) had an impressive breakthrough session before the September 2nd holiday and successfully conquered the 1,200-point mark with an overwhelming number of increasing codes, and cash flow spreading to most industry groups.

At the end of the trading session on August 28, the VN-Index increased by 18.35 points (equivalent to an increase of 1.55%) to 1,201.72 points with almost all key stocks increasing, notably the banking and real estate groups.

Liquidity reached VND22,000 billion on the three exchanges. This is a fairly high level before the long holiday. Selling pressure is not strong, while demand is high. The selling side shows signs of short-term speculative money flow, while large money flows remain in the market, even a large amount of money up to more than VND61,000 billion is in accounts, ready to enter the market at any time.

In the trading session on August 28, 28 out of 30 pillar stocks in the VN30 group increased in price, the remaining 2 codes remained at the reference level.

Many stocks increased quite strongly and attracted the attention of foreign investors such as Vingroup (VIC) of billionaire Pham Nhat Vuong and Vinamilk (VNM) of Ms. Mai Kieu Lien. Vingroup shares increased by 1,200 VND to 64,700 VND/share, while Vinamilk increased by 3,000 VND to 77,900 VND/share. Many investors expect VinFast to be able to maintain its huge capitalization (hundreds of billions of USD) on the Nasdaq and this is the beginning of a new electric vehicle legend.

Vinhomes (VHM) and Vincom Retail (VRE) of billionaire Pham Nhat Vuong also increased their prices quite strongly by 600 VND and 1,050 VND respectively to 54,700 VND/share and 29,750 VND/share.

FPT Corporation shares increased by 3,400 VND/share, reaching a new historical peak: 94,000 VND/share (adjusted price). This also means that this enterprise has a capitalization of 119,400 billion VND (equivalent to more than 4.9 billion USD). This is a rare technology stock on the Vietnamese stock exchange that has just set a new historical peak. Compared to 10 years ago, FPT shares have increased 13 times. FPT is considered a business that benefits from the global digital transformation trend, despite the weakening world economy.

Oil and gas stocks PV GAS (GAS) and Petrolimex (PLX) also increased sharply. Steel giant Hoa Phat Group (HPG) of billionaire Tran Dinh Long increased by VND900 to VND26,850/share. Banking stocks all increased slightly.

Previously, the postponement of the implementation of some points according to Circular 06 of the State Bank (on credit quality control) was considered to have a positive impact on the stock market.

The stock market is expected to be vibrant by the end of 2023. (Photo: HH)

Retail stocks also increased quite impressively. Mobile World (MWG) of Mr. Nguyen Duc Tai increased by 1,200 VND to 51,700 VND/share. Masan (MSN) of billionaire Nguyen Dang Quang increased by 1,000 VND to 80,700 VND/share.

Consumer demand in Vietnam tends to increase again. MWG reported a recovery in July revenue, up 5% compared to the previous month, to VND9,900 billion. Thailand's Central Retail earned VND17,000 billion in Vietnam in the first half of 2023. The Thai retail giant owns the retail chains GO!, Nguyen Kim, Tops Market, Lanchi Mart...

Billions of dollars waiting to flow into stocks

According to VNDirect, at the top 30 securities companies, by the end of the second quarter of 2023, there will be about 61,000 billion VND of investors' money ready to buy stocks.

This figure may increase as bank deposit interest rates continue to fall and credit growth remains low, even declining in July.

Previously, the market showed signs of slowing down after a shocking 55-point drop on August 18. However, the market has recently shown signs of stabilizing. Cash flow has been quite steady, at around VND20,000 billion per session. Meanwhile, selling pressure has decreased significantly, as in today's session on August 28.

Cash flow into stocks remains quite stable in the context of bank interest rates continuously decreasing over the past several months. Interest rates under 6 months have dropped to 4%/year, while interest rates for one-year terms are only around 6%. Meanwhile, other investment channels remain quite unattractive. The real estate market remains quiet, and gold prices have not fluctuated much.

Mr. Michael Kokalari - Director of Macroeconomic Analysis and Market Research, VinaCapital - said that Vietnamese stocks are receiving a lot of supportive information. Accordingly, the expectation of export recovery will boost the profit growth of listed companies, increasing from 6% in 2023 to more than 20% in 2024.

According to many experts, this is a very suitable time to accumulate stocks to wait for the explosive growth that may take place at the end of 2023.

Mr. Dinh Quang Hinh, Head of Market Strategy Department, Analysis Division, VnDirect Securities, said that the postponement of the implementation of some points of Circular 06 has a positive impact on the performance of the pillar stocks of the banking, real estate, and securities markets, thereby helping to stop the decline of the stock market.

Real estate stocks benefit from the delay of Circular 06, helping real estate businesses access credit capital more easily.

Securities stocks also traded positively as the market welcomed new developments related to the implementation of a new trading system developed by the Korea Exchange (KRX). The KRX system is expected to be operational by the end of 2023.

According to VNDirect, when the KRX system comes into operation, it can help increase liquidity capacity by up to 4 billion USD/session. The new system will reduce settlement time from the current T+2.5, thereby promoting capital turnover. It also helps solve the problems needed to be upgraded to an emerging market.

VnDirect also assessed that cash flow has shifted from bank savings to other asset channels, including the stock market.

However, after a sharp decline on August 18, investor sentiment became more cautious. Investors are also listening to signals from the USD/VND exchange rate. The USD is still on an upward trend. At Vietcombank, on August 28, the USD selling price reached VND24,200/share, still much lower than the VND24,888/USD on October 25, 2022. However, if the USD continues to increase, domestic and foreign investors may reduce their stock holdings.

Although the stock market has a lot of supportive information in the short term, in the medium and long term, international macro factors can affect Vietnamese stocks. Accordingly, the US economy can still be in recession and if this happens, some organizations predict that it will fall in 2024. The Chinese economy is also facing the risk of recession. This country is offering many solutions to stabilize the real estate and stock markets. However, the possibility of a recession in China is not predicted to happen in the short term. Currently, money is still ready to flow into stocks if the USD/VND exchange rate is stable.

(Source: Vietnamnet)

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