The exchange rate suddenly increased to the peak of 25,500 VND/USD after only 8 sessions, along with the State Bank's move to withdraw money, immediately reflecting the pressure on the stock market...
Stock market "shakes" as exchange rate increases sharply - Photo: QUANG DINH
Last week, VN-Index "collapsed" under strong selling pressure, the index lost 33 points, could not maintain accumulation but quickly decreased to the 1,240 - 1,250 range.
Decoding the reason why stocks fell the most in 3 months
* Mr. Doan Minh Tuan - Head of Research and Investment Department, FIDT:
- This is the strongest weekly decline of VN-Index in more than 3 months. There has been a phenomenon of panic selling with large volume since the index broke through the 1,280 - 1,300 zone.
The market fell sharply not only due to the risky macro context but also from technical factors related to the derivatives market and speculative cash flow in the 1,280 - 1,300 area massively cutting losses last weekend.
In particular, the strong downward pressure from the banking group and the Vin group (VIC, VHM, VRE) causes great psychological pressure.
Regarding exchange rates, the State Bank also took strong measures by absorbing more than 50,000 billion VND through treasury bills and selling USD.
Mr. Doan Minh Tuan
The sudden increase in exchange rate to the peak of 25,500 in just 8 sessions shows great pressure from the reversal of this important variable.
Besides, the picture of corporate profits in the third quarter gradually became clear but was relatively unfavorable, as most industries/enterprises showed limited growth.
Stocks also adjusted sharply when business results were not as expected. Cash flow to catch the bottom was timid in the market.
However, we believe that in the medium/long-term economic growth trend with high expectations, a quarter of lower-than-expected profits for listed private enterprises is also acceptable.
In addition, the pressure on the USD/VND exchange rate and the State Bank will reduce the withdrawal of money in the next 1-2 weeks when the USD supply is supported (the State Bank sells). Meanwhile, the Fed is expected to continue cutting interest rates by 0.5% at the meeting on November 7.
Score forecast, VN-Index has reached the very strong mid-term support zone of 1,250 with selling pressure also decreasing rapidly. In current conditions, there is a high probability that VN-Index will have a slight recovery and form a bottom in the 1,250 (+/- 10) area.
Exchange rate will cool down soon
* Mr. Nguyen The Minh - Director of individual client analysis, Yuanta Securities Vietnam:
- The exchange rate is still facing the "double yoke" of high US government bond yields and a strong USD.
As the bond yield differential between the US and Vietnam remains positive from 2023, holding USD is still more beneficial than VND.
After cooling down due to the Fed's interest rate cut, US government bond yields have now increased again due to stories specific to the US economy and related to the presidential election.
In addition, there is a seasonal factor related to the need for year-end USD payments to pay for raw materials and from public debt.
Mr. Nguyen The Minh
The rate of increase is quite fast, but the impact on the market will soon be balanced again and the pressure will ease in the last months of the year.
If the Fed lowers interest rates at its upcoming meetings, the exchange rate pressure will ease. And thus, the State Bank will be able to reduce the withdrawal of money soon.
In addition, foreign investors are still net sellers, but the force is not as large as in the first half of this year because the ownership ratio is now mainly from strategic investors.
Overall, the scenario of whether VN-Index will recover next week or break through support remains uncertain. However, it is also important to note the positive points in this decline: the stocks that have fallen are differentiated, instead of falling uniformly.
Bottom fishing money will soon join the game
* Mr. Dinh Quang Hinh - Head of Macro and Market Strategy Department, VNDirect Securities Analysis Department:
Mr. Dinh Quang Hinh
- The market experienced a week of sharp declines amid cautious investor sentiment in the face of rising exchange rate pressure, forcing the State Bank to take countermeasures such as resuming the issuance of treasury bills after more than 2 months of suspension.
This move has pushed up interbank interest rates and reduced the interest rate differential between VND and USD to support the exchange rate. The development is quite similar to the market adjustment and sideways period in June-July.
Overall, this exchange rate pressure is only temporary as the Fed will continue to maintain interest rate cuts in the coming time.
The market is expected to soon witness bottom-fishing demand when the index falls to the strong support zone of 1,240 - 1,245 points and the probability of breaking through this support zone is low.
Long-term investors can consider increasing their stock holdings when the VN-Index adjusts to the support zone of 1,240 - 1,250 points.
Source: https://tuoitre.vn/chung-khoan-giam-manh-nhat-3-thang-ly-do-la-gi-20241027233920732.htm
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