The Vietnamese stock market experienced a recovery in the first half of the third quarter after falling sharply to the support zone. Many stocks are in attractive valuation areas, commodity prices have cooled down. Meanwhile, world stocks have performed positively in the face of expectations that the FED will slow down the rate of interest rate increase.
In the second half of the third quarter, Vietnamese stocks returned to an adjustment trend, similar to developments globally in the face of risks of inflation, recession, increased interest rates, geopolitical risks as well as domestic exchange rate risks. In the third quarter of 2022, the VN-Index increased by 0.86% compared to the beginning of the quarter, while liquidity decreased by 27% compared to the same period.
In the latest report, KBSV Securities adjusted the reasonable score of the VN-Index to 1,330 points at the end of 2022. This forecast is based on the assumption that the average EPS growth reserve of listed companies on the HOSE will reach 18.3% in 2022. KBSV also reduced the target P/E to 13 times to reflect risks from peripheral factors, combined with the increase in domestic interest rates.
Factors affecting the forecast include: A collapse in the domestic real estate bond market; inflation or exchange rate fluctuations return; global inflation continues to increase strongly; the FED and central banks around the world speed up the tightening of monetary policy; major economies enter recession; China's economic growth declines rapidly.
Looking to the fourth quarter of 2022, KBSV noted that investors should be cautious with short-term market developments when many risk factors are still present. Notably, the market is likely to see a deep correction and may soon penetrate the bottom of June.
However, KBSV expects the market to regain balance and recover when risks related to geopolitics, inflation, US economic recession or instability in the EU have been significantly reflected and partly cooled down. Some other supporting factors also come from within the country such as the economy's good resilience to increased pressure on the peripheral region as well as speeding up the disbursement of economic support packages and boosting public investment.
With a focus on macro-economic instability, which could put pressure on the business results prospects of many businesses, KBSV believes that the market will differentiate between industry groups.
This is the period when stock investors need to " dig for gold", focusing on businesses with their own stories to choose for their portfolios in the second half of 2022.
