In recent trading sessions, the stock market has shown a positive recovery reaction and formed a candlestick with a short leg around the support level of nearly 1,240 points. At the same time, liquidity has improved, showing that bottom fishing activities are still taking place actively despite the increasing intensity of selling.
According to analysts, the market still has a lot of information supporting a scenario of increasing points again in the near future.
Regarding the domestic economic situation, production recovered significantly with the IIP and PMI indices in October both increasing sharply compared to September. Exports and FDI continued to achieve positive results.
Growth momentum is expected to remain positive in the remaining two months of 2024. Measures to promote public investment disbursement are continuously being implemented, aiming to complete the 2024 full-year plan.
However, the downside is the undesirable developments in the financial market. Interest rates mobilized by commercial banks have increased again in the first half of November. The exchange rate has also increased again in the last 3 weeks, reaching a record high of 25,500 VND/USD, equivalent to an increase of 4.4% compared to the beginning of the year.
The focus of the market in November was institutional reform when many laws were considered for amendment in the 8th Session of the 15th National Assembly, which is expected to remove institutional bottlenecks to support growth.
With the above developments, analysts from ABS Securities Company believe that although Vietnam’s economic outlook is quite positive, in the short term, the market will still face difficulties in cash flow as foreign capital continues to net sell amid the rebound of the USD and US government bond yields. Therefore, ABS forecasts two scenarios for the market in November.
Scenario 1, the market continues to decline with weak trading liquidity (VND 10,000 - 12,000 billion/session) to the lower boundary of support level 1 around 1,225 points. At that time, the buy signal needs to be seen on the H1 chart (1 hour) with a relatively strong candle with a short leg, ABS recommends that investors can open a short-term buy position.
Scenario 2, when the market falls through the 1,125 point price zone with large liquidity and no active buying signal, investors should wait to trade at support price zone 2 (1,207 - 1,190 points) and support 3 (1,190 - 1,164 points).
At the same time, ABS recommends that investors should pay attention to groups of stocks that benefit from macro trends such as: industrial park real estate, textiles, seafood, technology, food... They should choose leading stocks with good fundamentals and profit growth prospects, showing more strength than the general market or stocks that form a bottom model...
Another point to note is that most major securities companies have recorded an increase in margin lending. For example, at TCBS, the margin balance at the end of the third quarter of 2024 reached VND 25,483 billion, an increase of VND 790 billion compared to the end of the second quarter of 2024. Mirae Asset Securities had the second-strongest increase in margin balance in the market, from VND 16,746 billion at the end of the second quarter to VND 19,291 billion at the end of the third quarter.
Margin increased in the context of low market liquidity. The total liquidity of the three exchanges decreased in the third quarter of 2024, reaching an average of VND 18,561 billion/session, down 26.5% compared to the second quarter of 2024. The ratio of margin debt/average transaction value increased to 18 times, mainly due to the sharp decrease in liquidity in the third quarter, which was not in line with the development of margin lending debt.
It is worth noting that not only now but also in previous quarters, margin has continuously set records, while individual investor activity has been gloomy, as shown by the decrease in brokerage revenue. This shows that large investors are using margin at securities companies more and more and the amount of goods on the market is increasingly condensed, helping the market to potentially have a strong price increase.
