Market to attractive valuation zone
After a strong correction early last week, the Vietnamese stock market has recovered thanks to bottom-fishing demand and positive information from outside. Market prospects are assessed to be more optimistic as expectations for the first quarter business results of listed companies and new supporting factors are gradually emerging.
According to Mr. Dinh Quang Hinh - Head of Macro and Market Strategy, VNDIRECT Securities Joint Stock Company: "In the past week, the Vietnamese stock market has recovered spectacularly. The VN-INDEX index had a time fall to its lowest level of 1,137 points in the third session but quickly recovered in the session to 1,197 points. This impressive recovery has absorbed a significant amount of cheap bottom-fishing goods before, helping to reduce supply pressure in the following sessions".
Positive news such as the US-China move to cool down trade tensions and US President Donald Trump affirming that he has no intention of replacing Fed Chairman Jerome Powell has supported market sentiment. VN-INDEX then reversed and increased in three consecutive sessions at the end of the week, ending the week climbing to nearly 1,230 points, up about 10 points compared to the end of last week.
Assessing the prospects of two sessions before the holiday and week after 30.4-1.5 holiday, Mr. Hinh said that the VN-Index can re-test the area of 1,240-1,241 points and if passed, it will be towards 1,260-1,270 points. He repeated the positive assessment of the picture of the first quarter business results of the listed enterprises, saying that this would be an important force for the market in the short term.
Notably, the KRX system expected to officially operate from September 5 will open up expectations of developing new products and support the goal of upgrading the Vietnamese stock market. Positive signals from international trade and bilateral negotiations between the US and Vietnam are also factors supporting investor psychology.
With those expectations, Mr. Hinh recommends that investors can continue to hold stocks in a moderate proportion, prioritizing industry groups with positive first-quarter business results and bright prospects for the second quarter such as banking, retail, seafood, electricity and the group benefiting from public investment. However, investors need to pay attention to limiting the use of leverage in the context of large market fluctuations and tariff risks that have not been completely controlled.
4 promising industry groups, opportunities from low valuation zones
Regarding the opportunity to choose stocks in attractive valuation zones, Mr. Dao Hong Duong - Director of Industry and Stock Analysis, VPBank Securities Joint Stock Company (VPBankS) - also pointed out four outstanding industry groups: steel, electricity, oil and gas and banking.
Regarding the steel industry, Mr. Duong assessed that the prospect of output recovery will be driven by public investment and the improvement of the domestic real estate market. Another supporting factor is the preparation of Hoa Phat's Dung Quat 2 project to come into operation, which can create new growth momentum for businesses.
For electricity industry, although the growth rate is not too outstanding compared to the whole market, the increase compared to the same period is still positive. Stocks like Ree, POW, PC1 are forecasted to record profit before tax growth in the first quarter at 10-15%. Due to being a defensive stock, Mr. Duong said that investors need to consider more liquidity, capitalization and the ability to attract foreign cash flow.
For the oil and gas group, the first quarter results have not had many breakthroughs due to seasonal factors and flat oil prices. However, stocks in this industry have adjusted to a valuation zone lower than the general level and lower than the industry's history. According to VPBankS's forecast, the profit of the whole industry may increase by about 13% in 2025, opening up more attractive investment opportunities than many other industries.
Finally, the banking group - which was the focus of both experts. Mr. Duong said that if GDP growth in 2025 reaches the target of over 8%, credit will need to increase by at least 16%, thereby creating momentum for profit growth of banks this year.
