Weak liquidity makes it difficult for stocks to break out

The stock market had a week of strong declines accompanied by weak liquidity.The positive point probably only came from the fact that the support level of 1,250 points was maintained and some agricultural and food stocks attracted investors.

At the end of the trading week, the VN-Index decreased by 22.25 points (-1.75%), down to 1,251.71 points.The HNX-Index decreased by 2.23 points (-0.95%), down to 232.42 points.

Liquidity on both exchanges this week was higher than the trading week after the National Day holiday (due to having 5 trading sessions compared to 3 sessions last week), but the average trading value per session on the whole market decreased by 21.29%.

Although trading was also less active when market liquidity decreased sharply, foreign investors still net sold nearly 1,200 billion VND.Notably, this group turned to strongly disburse FPT shares.

Recently, analysts from ABS Securities Company released a September 2024 strategy report with forecasts for two stock market scenarios in September.

Scenario 1, the market is supported by credit growth measures and positive macroeconomic factors, plus the Fed starting to lower rates on September 18 and market upgrade solutions being implemented.

It is forecasted that in September, the VN-Index will continue to fluctuate sideways, gradually narrowing the range from 1,250 -1,269 to 1,284 +/- points.After that, the VN-Index needs to conquer the price range of 1,305 - 1,316 points, confirming the upward trend to higher levels of 1,340 - 1,395 points in the coming months.

Scenario 2, which experts assess as having a high probability, the market will continue to move sideways for a longer time, within the range of the past 5 months from 1,165 - 1,185 points to 1,300 points due to the floods and storm Yagi that have not ended, and the damage caused by the storm to the economy has not yet been estimated.

The Dragon Viet Securities Analysis Center (VDSC) has a more optimistic assessment of the stock market when it believes that September will be the time to mark the Fed's reversal of monetary policy.

Meanwhile, the positive macroeconomic context and the removal of bottlenecks to meet the criteria for upgrading according to FTSE Russell, if there is progress, will be catalysts to help the Vietnamese stock market maintain its recovery momentum and return to an upward trend.

VDSC expects FTSE Russell to have positive comments on the efforts of the regulatory agency in this review and the opportunity to be approved for an upgrade by FTSE Russell in 2025 will be more feasible, when foreign investors and organizations have positive comments in the process of using Pre-funding solutions.

Regarding the score, VDSC expects VN-Index to trade in the range of 1,250 - 1,325 in September, bringing the 4% yield gap between the stock market and 10-year government bonds closer to the 5-year average value of 3.6%, corresponding to a P/E of 15.2x.This is a level that the market has touched many times since the beginning of the year when the general sentiment maintained positive momentum.