The US Federal Reserve (Fed) has officially announced its first interest rate hike in 3 years. The federal fund interest rate margin (standard interest rate) was adjusted up by 0.25 percentage points by the FOMC - the Fed's agency, responsible for deciding US monetary policy - from 3.5 - 3.75% to 3.75 - 4%.
According to the general assessment of experts, the impact on Vietnam in the short term will not be too large. With the exchange rate, the increase in USD interest rates may support the greenback, thereby creating more pressure on the USD/VND pair. However, VND is currently still supported by a number of factors.
In which, the exchange rate on the free market has tended to decrease recently; domestic gold prices and gold investment demand have cooled down; FDI capital flows continue to be maintained stably. Besides, there is the prospect of attracting more foreign indirect investment capital after the Vietnamese stock market is upgraded.
Regarding interest rates, Dr. Nguyen Duy Phuong, Senior Director of Financial Analysis Division of DG Capital, said that the Fed's interest rate increase may cause the VND - USD interest rate difference to narrow, thereby partly reducing the space for the State Bank to loosen monetary policy. However, the impact on the domestic interest rate level in the short term is forecast to be relatively limited, except for the case where the USD/VND exchange rate turns around and increases sharply again.
With the Vietnamese stock market, the Fed's interest rate hike factor has been partly reflected in the market developments from the beginning of September to now. The diễn biến of 2 recent strong selling sessions shows the caution of investors before the Fed meeting. However, in subsequent sessions, the decrease range has narrowed, showing that the level of caution has somewhat decreased.
Currently, VN-Index is operating in a neutral accumulation state when closing at 1,810 points, although selling pressure is increasing, the index is still maintained, showing that supporting demand is still present and there are no signs of reversing the negative trend.
Dr. Nguyen Duy Phuong assessed that in an optimistic scenario, VN-Index will not break the mark around 1,750 points. The market is expected to bottom out near this zone and then go up thanks to the story of upgrades and capital returning. A worse scenario may occur if external variables unfold unexpectedly. If oil prices increase from the 104 - 108 USD zone to about 120 USD/barrel, the market may return to test the 1,600 - 1,700 point zone.
Two trading sessions from September 17-18 will be the focus of the series of events, when the market successively welcomes the term of derivatives maturity and the time when capital flows related to upgrades and ETF restructuring activities have a clearer impact.
Therefore, the priority strategy is still to observe and limit transactions to avoid being swept away by technical fluctuations or structural cash flow and maintain a portion of the cash ratio.
Keeping resources will help be more proactive if the market experiences corrections after major events pass, and at the same time have more basis to assess the quality of cash flow and price levels before increasing the proportion more strongly.
In this context, short-term investors should maintain an average stock ratio, avoid chasing and focus on trading in the support zone of 1,810-1,820 points and the resistance zone of 1,830-1,840 points.At the same time, prioritize industry groups with leading stories such as state capital divestment, resolutions on economic development, market upgrade roadmaps or offshore oil and gas cycles.
At the same time, medium and long-term investors can take advantage of adjustments to the support zone to partially disburse into industry groups with solid fundamentals and high liquidity such as banking, securities, retail, public investment and oil and gas.
