The stock market stepped into August with stronger fluctuations in the first week of the month, with new risk factors emerging, including concerns about the US economy slipping into recession as data on production and labor markets weakened; the Bank of Japan (BOJ) decided to raise the basic interest rate from 0.1% to 0.25%, negatively affecting the stock market in this country. Risk assets, including stock, were sold heavily in most stock markets around the world, including Vietnam.
Regarding the Vietnamese stock market, in its recent report, SSI Research evaluated some positive changes in the underlying foundation that may have been overlooked due to psychological factors. These include the decreasing risk of exchange rate depreciation as the US dollar weakened; the trend of recovering profits on a quarterly basis remaining good and the market valuation at 11.27 times the estimated P/E ratio for one year becoming more attractive as the price continues to adjust.
The second-quarter business results season is almost over, with the total profit on the HOSE exchange continuing to grow by 23.1% compared to the same period last year and increasing by 17.5% compared to the previous quarter. Compared to the same period last year, the largest contribution to the growth in profit came from industries such as retail, telecommunications, basic resources, tourism, and entertainment...
In addition, the industries that accelerated their growth rate during this period were retail, basic resources, banking, telecommunications, and information technology. On the other hand, the service finance, manufacturing, and industrial services sectors showed slower growth. Notably, the real estate group recorded a positive profit growth after a significant decline in the previous quarter.
The expansion of profit growth is a good factor supporting the stock market due to the flow of funds between groups of industries and the increasing number of leading stocks driving the market up, according to SSI Research. TS Nguyen Duy Phuong, Director of Investment at DG Capital, also stated that if the economy continues to grow positively in the latter part of the year, it will support the growth of listed companies, which is a long-term support factor for the stock market. However, the signal of recession in major economies will be a risk factor that needs to be closely monitored, as it will also be a risk factor for Vietnam's recovery process.
For the remainder of August, analysts at Mirae Asset Asset pointed out unfavorable factors and risks that investors need to monitor.
These include the weakening labor market in the US, which may prompt the FED to take action more quickly, along with large and continuous interest rate cuts.
In addition, the risk of asymmetric monetary policy may lead to the US falling into a state of stagnant inflation.
The group of analysts also expressed concern about the risk of escalating conflict between Israel and Iran, along with their allies in the Middle East region, or a trade war between the US and China, which may prolong the time for global trade to recover. Both countries are also Vietnam's key trading partners but are currently facing difficulties in promoting economic growth, which may directly affect Vietnam's export and import activities in the future.
Based on the above analysis, Mirae Asset's experts believe that the market's behavior in the first few days of August is reflecting investors' risk aversion, particularly individual investors in Vietnam. However, the risk of a decline is still present, as the pressure to decline on major stock markets will contribute to a negative impact on the market's behavior in Vietnam.
VN-index reverses to decline on August 8
The supply pressure increased on the stock market after two consecutive sessions of recovery, while the lack of leading stocks made investors cautious. At one point, the VN Index plummeted by over 10 points, falling back to around 1,200 points. However, in the final trading session, the buying pressure was pushed in, helping the VN Index close on August 8 at 1,208 points, down 7.56 points (0.62%).
The trading volume for this session reached 16.743 trillion VND. Foreign investors continued to maintain a "clearing" status, with a net selling value of 1.164 trillion VND.
The two notable stocks today were HAG of Hoang Anh Gia Lai Group, which unexpectedly plummeted, with over 8.7 million shares sold at the floor price at the close. HAG has been under selling pressure and experienced a significant price drop over the past two months.
Another stock that fell into a similar situation is TCH of CTCP Dịch vụ Tài chính Hoàng Huy, which unexpectedly plummeted to the floor price in the afternoon session on August 8, with a rapidly increasing trading volume. The reason is that rumors about TCH being investigated by the Securities Commission for trading in the 2021-2022 period were spread through online forums, with a common recommendation to stop buying and sell some shares to avoid the risk of price decline due to selling based on rumors.
