Market closed yesterday at 9.8, VN-Index increased by 15.32 points (1.27%), reaching 1,223.64 points. However, market liquidity decreased compared to the previous trading session, with a value exceeding 1.6 trillion VND.
The market is unpredictable, which is a concern for experts. In a new strategic report, ABS Securities Company notes that from late July, despite Vietnam's positive macroeconomic situation, unfavorable information from around the world has had a significant impact on the global stock market and Vietnam, and is expected to have a negative impact on the Vietnamese stock market in the near future.
Financial results for the second quarter of listed companies show a strong recovery trend continuing from the previous quarter. In terms of valuation, the P/E ratio of the VN-Index has decreased from 14.1x at the end of June to 13.8x at the end of July, lower than the average of 14.14x for this index over the past year. The expected P/E ratio for the whole of 2024 is lower due to the expected continued recovery of the market's overall results in the second half of the year. Large-cap stocks in VN30 have a P/E ratio of 12.58x, significantly lower than those of mid-cap and small-cap stocks in VNMID (16.73x) and VNSML (17.38x).
ABS Securities Company has expressed its opinion that the index will continue to decline sharply in the first week of August to around 1,185 points. With the current situation, ABS has presented two scenarios for the VN-Index in August.
Scenario 1, if the armed conflicts are resolved and do not escalate further, if the VN-Index maintains the 1,166 point level, it will form a structure of sideways accumulation.
Scenario 2, if the opposite occurs, the scenario of price adjustment downward in August is given priority. If the closing price of the week does not maintain the 1,166 point level, the market as a whole will continue to adjust downward to the support levels of 3 in the previous report at the price range of 1,140 - 1,080+/-. The adjustment phases may occur with a relatively fast and strong intensity. At that time, the 12-month P/E ratio of the market is expected to decrease to a relatively attractive level of 12.6x - 11.9x.
Therefore, in August, experts recommend that risk management in the medium term be given top priority. Trading in stocks during technical recovery phases should be carefully considered at the support levels of the VN-Index and specific stocks, when there is specific confirmation of the completion of the price model.
