VN-Index had its second consecutive decline with trading volume falling below the 20-session average. Compared to the three previous sessions of gains with trading volume exceeding the 20-session average, the two recent declines did not have enough momentum to change the previously formed trend. Meanwhile, foreign investors stepped up selling by net selling nearly VND450 billion, with the focus of selling mainly on VRE shares.
Demand and selling pressure have not shown complete dominance over the other side, causing the market to continuously experience fluctuations within the range of 5-10 points. However, the bright spot is that smart money still has differentiation to individual stocks and industry groups, helping the VN-Index balance after the fluctuations.
According to analysts at Mirae Asset Securities Company, the VN-Index found support at 1,250 points and is expected to continue its upward momentum with support from industry groups such as financial services, retail, insurance and steel.
On the other hand, although the banking group is likely to continue to attract cash flow, trading performance is likely to be lower than the general level in the context of many leading stocks being traded at historical peaks. Although valuations remain attractive, this somewhat affects the general trading sentiment and cash flow is expected to shift to industry groups with higher potential for price increases.
In December, Mirae Asset continues to expect that cash flow will continue to spread and promote a broad-based increase to help VN-Index conquer the psychological resistance zone of 1,300 points. At the same time, Mirae Asset recommends necessary caution as profit-taking pressure may form in the 1,300-point zone and extend to 1,330 points.
Looking ahead to 2025, Mirae Asset has identified several drivers that could have a major impact on the market. In particular, for manufacturing, the positive outlook for the stability of the manufacturing industry in 2025 is supported by the benefits of supply chain diversification from the “China + 1” strategy and Vietnam will continue to attract FDI inflows in the coming time.
At the same time, domestic consumption and consumer spending will grow steadily, but at a modest level due to the impact of asset depreciation from the uneven recovery of the real estate and stock markets.
Regarding bad debt, with Circular 02/2023 of the State Bank of Vietnam expiring on December 31, 2024, commercial banks will likely pursue a three-pronged strategy: increasing credit risk provisions, promoting bond issuance to support credit growth, and promoting corporate debt restructuring activities in the context of the business environment showing no clear signs of recovery.
For the corporate bond market, the grace period for bonds with rescheduled payment terms under Decree 08/2023 of the Government will gradually expire, creating asset quality risks for banks and system liquidity challenges in the first half of 2025, especially when the real estate, construction and energy sectors are still facing difficulties in business operations as well as refinancing pressure.
