The market has just had another week of recovery, with the VN-Index reaching the 1,250-point barrier. However, in the absence of a major industry group leading the way, the problem of breaking out of the downtrend remains difficult.
Although the index recovered strongly, liquidity remained low last week, showing that cash flow was still cautious and the recovery mainly came from the weakening selling pressure after shaking off the majority of investors at the bottom stage. With this situation, it is unlikely that there will be a large industry wave, cash flow is likely to continue to rotate into each stock with its own story.
However, foreign investors have been net buyers quite well in all 5 trading sessions, with a total net buying value of about 1,030 billion VND. It can be said that the VN-Index has been relieved of a huge burden as it is no longer affected by strong net selling from foreign investors as before, which is expected to help the market break out more in the new week.
Another supporting factor is that on November 28, 2024, the State Bank announced an increase in the credit growth limit for credit institutions in 2024, showing the banking industry's efforts to achieve the credit growth target of 15%.
Regarding the impact on the stock market, when credit is expanded and interest rates remain low, it will stimulate cheap money to find investment channels with higher yields such as stocks. This can create momentum for the market to increase points, especially interest rate-sensitive industries (real estate, construction, stocks).
Businesses, especially those in the real estate and manufacturing sectors, can access capital more easily, thereby improving business prospects and debt repayment ability during the year-end business season.
The State Bank's policy is on the right track in prioritizing credit for production and business and controlling risks, but to make the credit growth target more feasible, the market needs more substantial stimulus measures to restore economic confidence.
The short-term trend is not favorable, but looking at the long-term, with the macro foundation showing many positive signals, it means that the growth potential for the stock market in the long term is quite bright.
Commenting on the scenario for VN-Index in the remaining period of 2024, experts from DSC Securities Company said that before moving forward in a more sustainable way, the index needs to retest the 1,230 point area to create a second bottom. The market may be a bit excited at the beginning of the week, but is expected to adjust and create a second bottom by the end of this week. The change in cash flow from small-cap stocks such as technology, insurance and flowing back into large-cap stocks such as banking, securities, steel, and real estate will be a necessary factor, creating the basis for expectations of a strong uptrend in the future.
Experts from Kafi Securities Company also recommended that with low supply, the stock market could extend its recovery momentum and move up to the 1,265 - 1,270 point range. However, investors need to be cautious with the risk that the market will fluctuate more strongly because demand has not improved significantly.
"This week, investors can continue to expect the market to increase, but need to limit chasing and avoid overbuying when the market is in the resistance zone. To limit risks, investors should only participate during corrections," Kafi experts said.
