Stocks await year-end uptrend

Although liquidity improved, the market faced increased selling pressure at the old peak, causing the VN-Index to reverse and decrease slightly after a positive week in early July.

The lack of strong gains in the market may largely be due to the weakening trading performance of large-cap stocks in the Banking and Real Estate groups.

Although other sectors may see more positive prospects, their overall impact is still limited compared to the 51% market capitalization weight of Banking and Real Estate.

Accordingly, the banking industry, although recording accelerated credit growth in June (reaching 6%, while the first 5 months of the year only reached 2.4%), however, this development will hardly be reflected in second quarter profits.

On the other hand, the outlook for the real estate industry has not really improved while waiting for clearer information on the early application of three important laws: Land Law 2024, Housing Law 2023 and Real Estate Business Law 2023.

In terms of business results, after a modest growth of only 5.3% in the first quarter of 2024, MBS Securities Company predicts that total market profits will increase by 9.5% year-on-year in the second quarter of 2024, and increase by 33.1% and 21.9% in the third and fourth quarters of 2024, respectively.

For 2024, market earnings are expected to increase by 20% yoy from a low base in 2023. The main drivers of market earnings improvement will come from solid performance in banks (up 20% yoy), retail (up 204%), construction materials (up 56%) and electricity (up 25%).

In the second half of 2024, MBS Securities' analysis team sees many factors positively impacting the market. From a macro perspective, MBS expects the economy to accelerate in the last two quarters of the year, driven by a strong recovery in exports and improved investment (both private and public).

GDP in 2024 is expected to grow 6.7% year-on-year, lower than 2022's 7.9% (but higher than the Government's target of 6.5%).

However, MBS believes that there are still two factors that could negatively impact the market. Firstly, along with the increased demand for USD for export activities, exchange rate pressure is the leading risk, which will reduce foreign investors' interest in the Vietnamese market.

Second, MBS estimates that the CPI may increase in the second half of the year, pushing the average CPI in 2024 to 4.3%, close to the government's target. Any upside risk to inflation could prompt the State Bank to shift its priority to controlling inflation rather than stimulating the economy.

In the market, the recent strong rally has led some investors to question whether the market has peaked. However, MBS believes that it has not reached its limit. MBS believes that the valuation of large-cap stocks looks attractive in terms of profit growth potential in the 2024-2025 fiscal year compared to other groups. Therefore, the investment strategy in the second half of the year will be to focus on large-cap stocks.

Overall, MBS's analysis team predicts that the VN-Index will reach 1,350 - 1,380 points by the end of the year, after 20% profit growth in fiscal year 2024 and a P/E target of 12 to 12.5 times.

Source: https://laodong.vn/kinh-doanh/chung-khoan-cho-doi-nhip-song-tang-giai-doan-cuoi-nam-1365989.ldo