After a strong increase since the beginning of the year, the VN-Index is entering a short-term adjustment phase with selling pressure appearing at the old peak. In the first trading session of April, the index sometimes declined below 1,310 points, causing investors to question the upcoming trend. However, the bottom-fishing demand that appeared at the end of the session helped the market reverse. At the end of the session on April 1, the VN-Index increased by 10.47 points, to 1,317.33 points.
According to experts, the current adjustment is technical and does not change the market's growth momentum in the medium term.
Mr. Dao Hong Duong - Director of Industry and Stock Analysis, VPBank Securities Joint Stock Company (VPBankS) - commented that the VN-Index may have formed a two-peak model with the first peak around 1,342 points and the second peak at 1,338 points, 12 sessions apart. However, to confirm the long-term discount model, more signals such as a strong sell-off with high volume are needed. If the market has a rhythm at the end of the session, creating a "pull-up" of the candle, then the negative scenario will most likely not happen.
In the worst case scenario, the nearest support zone of the VN-Index could be the Fibonacci level of 0.382, equivalent to around the threshold of 1,293 points, said Mr. Duong, adding that the market is likely to struggle around this support zone instead of falling sharply, especially in the context of macro factors remaining positive.
The market's growth momentum comes from expectations of upgrading, along with upcoming business results for the first quarter and a series of business plans approved at annual shareholders' conventions. In addition, internal factors such as public investment disbursement, positive trade balance and stable CPI are also creating a favorable macro foundation.
Economic data for the first quarter showed that many indicators continued to grow. The Index of Industrial Production (IIP) maintained a good increase, public investment disbursement in the first two months of the year reached the fastest rate in the past 5 years, the trade balance recorded a trade surplus of more than 1.5 billion USD. In particular, exports and imports have both increased, despite concerns from geopolitical factors and global trade tensions.
Regarding business results, VPBankS assessed that the banking industry will continue to play a leading role in the market, with the prospect of stable profit growth in 2025. Credit growth is expected to reach at least 16% if the GDP target of over 8% is maintained, helping the profit margin of this industry to maintain. However, the differentiation will be more obvious, depending on technology strategy, pure profit margin and the growth ability of supporting business segments.
The steel industry is also expected to have a strong recovery thanks to increased domestic consumption and supporting factors such as public investment and improved real estate market. Mr. Duong said that VPBankS forecasts Hoa Phat's profit to exceed the business plan thanks to three factors: increased consumption output, benefits from the trade war, and expectations of an average selling price improvement. However, he noted that the new gross profit margin is a key factor to monitor, in the context of fluctuating raw material costs such as ores and coal.
For the electricity industry, enterprises such as REE, POW or PC1 are forecast to have a profit growth rate in the first quarter of 10-15%. Although the valuation is no longer cheap, electricity stocks still play the role of a defensive investment channel, especially when attracted by foreign investors.
On the contrary, the oil and gas group has not recorded a profit breakthrough in the first quarter of the year due to weak demand and low oil prices. However, the current valuation is considered attractive compared to many other industry groups. According to Mr. Duong, with the forecast of a return of about 13% in the whole industry in 2025, this could be the right time for investors to start paying attention again.
Overall, the market may be going through the necessary correction to create a new price level. VN-Index needs to re-evaluate the peak area before establishing a more sustainable uptrend. Basic factors are still supporting a positive trend, expectations of market upgrading are becoming increasingly clear and pillar stocks continue to play a leading role.
