Strong market differentiation
The Vietnamese stock market is entering the final months of the year with positive expectations as the market upgrade process is positive and many support policies are maintained... thereby creating a positive psychological effect on the general market, helping the VN-Index regain the 1,290 point mark from the end of last week.
The market continues to be strongly differentiated, stock valuations in some industry groups remain low, and experts predict positive prospects in the coming time.
According to Ms. Nguyen Thi My Lien, Head of Analysis Division of Phu Hung Securities Corporation (PHS), the stock market has been very differentiated in recent months, between industry groups, even between stocks in the same industry. For example, banks, the group focusing on lending to businesses has recovered better than the group focusing on consumer and retail lending.
Accordingly, investors should pay attention to industry groups with attractive valuations, such as banking and securities. With an optimistic scenario, the financial group including banking and securities will be favorable. In particular, the securities industry also has the factor of upgrading. In particular, leading enterprises in the industry will be safer investment opportunities.
Regarding retail activities, Ms. Lien said that most key commodity groups have maintained a fairly good recovery since the beginning of the year. In particular, Vietnam still has an advantage in exports in the context that some regions in the world, which compete with Vietnam, are facing geopolitical tensions.
At the same time, this can also help attract investment capital into Vietnam. The number and scale of investment projects in Vietnam are both on the rise. Another observation is that FDI capital is starting to show signs of recovery, as investors have increased their confidence in the Vietnamese market.
According to experts, the risks of many real estate businesses are still large and the historical undervaluation of this group is mainly due to the impact of the large-cap group.
Expect a boost from monetary policy
According to Ms. Nguyen Thi My Lien, the exchange rate has cooled down significantly from its peak recently. The market is expecting the State Bank to increase foreign currency purchases.
Interest Rate has increased but is still only around 5-5.5%/year, not high compared to before. The expert expects the State Bank to maintain interest rates at a stable level, to support the economic recovery and overcome the consequences after the storm. In case the exchange rate drops sharply, the State Bank's move to buy foreign currency will be a boost for the stock market, when the money supply is very large.
Dr. Can Van Luc - economic expert commented that on September 18, the FED reduced interest rates by 50 basis points and signaled a further reduction of 200 points until 2026. It is expected that the trend of interest rate reduction will reduce pressure on emerging and frontier stock markets, including Vietnam.
Dr. Can Van Luc believes that this will have a positive impact on the stock market and investment capital flows, especially foreign indirect investment. In the first 8 months of the year, the Vietnamese stock market continued to recover despite many challenges. The VN-Index has not yet reached the peak of 1,300 points in 2024, however, the move to narrow net selling momentum and gradually shift to net buying by foreign investors shows the positive side of the market.
