The VN-Index continued to record a fairly positive trading period, reaching a short-term peak of 1,300 points at one point. There are many factors supporting the index's recovery. Many sessions of increasing points along with significantly improved liquidity.
Observing market developments shows that since the beginning of the year, the VN-Index has tried many times to surpass the 1,300-point threshold but failed. Although these efforts have not created a wave to surpass the peak, they have created a positive trend and are waiting for a phase of synchronization of codes to break through this important resistance level. If the general index surpasses the 1,300-point threshold, the synchronization of the increase of most codes will return.
In particular, the increase is prominent in the large-cap group (banking, securities). This is considered a positive effect from a series of information, abroad is the Fed lowering interest rates. Domestically, the Ministry of Finance allows foreign institutional investors to trade and buy stocks without requiring a deposit in advance from November 2, 2024. Experts assess that this is considered an important bottleneck in upgrading the market and the season of announcing business results in the third quarter of 2024 is approaching with the expectation of recording high growth in many industries and many businesses.
MB Securities Company (MBS) forecasts that the overall market profit growth in the third quarter of 2024 could reach 20.2% year-on-year (maintaining the growth momentum of more than 20% recorded in the previous quarter), based on a number of supporting factors such as low interest rate environment, sharp exchange rate decline, production and consumption on the recovery path. The profit of enterprises maintaining the growth momentum is a fundamental factor that positively supports the growth prospects of the general market.
In a recent report, FiinGroup stated that the growth prospects of after-tax profits of listed companies will continue to be positive in Q3/2024 thanks to the comparison base of the bottom level in the past 6 quarters established in Q3/2023. According to FiinGroup's observations, with consumer demand expected to recover more strongly and profit margins remaining expanded (thanks to good control of input costs), the growth prospects in Q3 and Q4/2024 are quite positive for most industries. The factor of strong profit recovery in Q3 is an opportunity to accumulate stocks with good growth.
Banks are also the group of stocks that attracted the strongest cash flow in the recent rally. Experts predict that credit growth in the third quarter of 2024 will continue to improve compared to the previous quarter (according to data from the State Bank, credit growth as of September 17, 2024 reached an increase of 7.38% compared to the beginning of the year, while the growth rate by the end of June reached 6%) thanks to the recovery of production and business activities. Net profit of listed banks in the third quarter of 2024 may increase by 18.5% over the same period and be an important pillar for profit growth in the whole market.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, commented that the domestic stock market still has a lot of growth potential. The Vietnamese economy is recording better-than-expected growth, coupled with the Government's active removal of legal obstacles for industries, boosting public investment, as well as efforts to promote the upgrading of the stock market - all of which are positive factors supporting the market in the long term. Net selling pressure from foreign investors has also decreased after the US Central Bank's move to lower interest rates. From there, there is every basis to expect that the market will consolidate and recover by the end of 2024.
