VN-Index may increase up to 35 points

Interest rates tend to decrease

The State Bank of Vietnam (SBV) has reduced a series of operating interest rates by 0.3-0.5 percentage points on April 3. Of which, a 0.5 percentage point reduction is for the ceiling interest rate on demand deposits and deposits with terms of less than 1 month and terms from 1 to less than 6 months.

Closing the trading session on April 4, Vietnamese stocks were still hovering around the 1,080 point mark, an increase that was shown in the previous session on April 3 when the market jumped nearly 15 points following the news of the State Bank's interest rate cut.

Also in the two sessions of April 3 and 4, the cash flow poured into the market, causing the order matching liquidity on HoSE to skyrocket by 24% compared to the previous sessions, reaching VND13,583 billion. Although this figure is nothing compared to the previous boom period, it is still the second highest order matching liquidity since the beginning of the year.

VCBS Securities said that according to data released by the State Bank of Vietnam, credit growth as of March 28 was estimated at 2.06%.

Thus, the interest rate management decisions during this period continue to demonstrate a consistent orientation in reducing lending interest rates to support businesses and people in accessing capital, especially in the context of the economy going through many difficulties in the first quarter with low growth.

The short-term trend of the market will still have differentiation, increase and decrease, interweave and most likely zig zag up towards the old peak area around 1,090 - 1,100. With the current developments, investors should closely follow the market, take advantage of strong fluctuations to increase the proportion of industries that are attracting good demand such as real estate, securities, and retail.

Finance - Banking - Stock market perspective April 5: VN-Index may increase up to 35 points — Lending and deposit interest rates of joint stock commercial banks (Source: KBSV).

KB Vietnam Securities predicts that the mobilization interest rate will tend to decrease and may remain around 7%, corresponding to the average lending interest rate of around 10% (for the average 12-month term of the state-owned banking group) at the end of the year.

Regarding the market in recent sessions, VN-Index has been experiencing a fluctuating rhythm within a narrow range with alternating increases and decreases. Increased profit-taking pressure around the resistance level of nearly 1.07x has caused the positive growth momentum of the index to weaken somewhat.

Although the opportunity to extend the uptrend and move towards the next expected target area around 1,100 points is still dominant, VN-Index is likely to continue to fluctuate in the following sessions to establish a more stable price level with the near support level set around 1,065. Investors are recommended to increase the trading proportion when the index is around the near support level.

Can reach 1,100 points

Talking to Nguoi Dua Tin , Mr. Dao Tuan Trung , Director of Research Center, VietinBank Securities Company (CTS), realized that in the context of the world's macro economy still increasing interest rates and inflation, Vietnam's interest rates are lowered, this is a positive signal.

According to Mr. Trung, the reason the State Bank reduced interest rates is because commercial banks cannot lend credit and there is excess liquidity, so in the short term, the State Bank is forced to lower refinancing interest rates and savings interest rates under 6 months and short-term loans to some industries.

"The State Bank's move to lower operating interest rates is essentially just to support credit and temporary refinancing, while investors' cash flow will still be observed from the sidelines without entering any channels and not being pushed into circulation," said Mr. Trung.

According to the representative of VietinBank Securities, the market in the coming time is likely to increase by about 35 points according to the positive scenario above, reaching the range of 1.08x to 1,100, but will not be able to have a strong uptrend.

At the same time, industry groups will also be differentiated and there will not be too much increase, the stocks that have shown signs of distribution and will not increase anymore. Mr. Trung also commented that the main groups that benefit from this period are securities, real estate and manufacturing .

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