The first trading sessions of October of the stock market continued to be in a sideways state, the market state was flat, neither increasing nor decreasing clearly, the trend was not positive, making it difficult for investors to find profits.
It can be seen that the demand force in the stock market has shown signs of slowing down in recent sessions when VN-Index has not been able to break through the strong resistance level of 1,300 points, selling pressure has increased in many industry groups.
The question investors are asking now is whether the stock market is gradually losing its momentum?
According to the latest information, as predicted by experts, FTSE Russell has not upgraded the Vietnamese stock market.However, FTSE Russell believes that Vietnam needs to continue to maintain the current pace of reform if it wants to achieve the upgrade target by 2025.
Meanwhile, with the domestic economic situation, the October stock market reports of some securities companies are showing a bright picture.
According to the October strategy report of Rong Viet Securities Company (VDSC), the third quarter 2024 business results reporting season is expected to be bustling in the last two weeks of October, which is expected to be a positive support factor for the market.
In particular, the banking group continues to be the leading force leading the growth momentum, along with the recovery of the manufacturing and retail sectors, helping to increase the after-tax profit of the VN-Index by approximately 28% compared to the same period last year.This will be the catalyst to help the stock market break out to a new score when valuations are still at the average trading level, experts from VDSC Securities Company commented.
Also having an optimistic perspective, the analysis department of SSI Securities Company (SSI Research) assessed in its October strategy report that the Vietnamese stock market has a good foundation to welcome capital flows.Regarding the domestic macro, in the third quarter of 2024, Vietnam's GDP grew by 7.4%, showing the strong resilience of the economy in the recovery process.
In terms of profit prospects, the profits of listed companies on SSI Research's watchlist are forecast to increase by 15.5% in 2024 and continue to increase by 19.6% in 2025.Profit growth will continue to expand across many industry groups.In the short term, profit growth over the same period could reach 21.7% in the second half of 2024, accelerating significantly compared to 6.2% in the first half of the year.
In terms of valuation, SSI Research believes that Southeast Asian stock markets are expected to benefit from capital reallocation as the Fed begins its interest rate easing cycle, so attractive valuations could be a factor in attracting cash flows.Vietnam's market valuation is still lower than some Southeast Asian markets, one of the key points to compete to attract foreign capital flows back.
Forecasting the trend of the market indices, VDSC expects the VN-Index to fluctuate within the range of 1,265 - 1,320 in October.Looking further into the remaining months of the fourth quarter of 2024, the VN-Index may aim to conquer the 1,334 - 1,380 range when reflecting the third quarter profit growth, corresponding to an expected P/E of 14.5 - 15 times.The short-term risk of the market according to VDSC is that the Middle East tensions escalate strongly, causing the VN-Index to retest the P/E trading range of 13.5 times, corresponding to the VN-Index possibly returning to 1,230 before recovering again.
SSI Research also assessed that the proportion of cash flow allocation in the large-cap group reaching the highest level since the beginning of the year and the estimated 1-year P/E of the VN-Index reaching the highest level in 8 months may cause the market to need a cumulative trading rhythm again.However, stronger expected corporate earnings growth in late 2024 and 2025 will be the driving force for the market to continue its upward trend.
