'Stocks expected to improve from now until the end of the year'

DNSE Securities Proprietorship Director predicts an uptrend cycle for "bank - securities - steel" stocks, in which securities stocks will increase thanks to psychological factors and improved cash flow.

According to Ms. Nguyen Ngoc Linh, Director of DNSE Securities, in recent sessions, cash flow focused on large-cap stocks, helping the VN-Index rise above the 1,100-point mark. Cash flow from domestic investors also helped liquidity improve significantly, despite foreign investors' continuous net selling in recent times.

In the past month, the average order matching value on the HOSE floor reached nearly VND 11,000 billion. More than 104,000 new accounts were opened in May, an increase of about 5 times compared to the previous month and the highest level since August 2022.

"The expectation of a new stock price increase cycle after the market bottoms out could become a reality," said Ms. Linh.

Securities are a channel to attract short-term cash flow. Photo: DNSE — Securities are a channel to attract short-term cash flow. Photo: *DNSE*

The reason for the market's improvement is explained by DNSE experts as the cash flow has improved, in the context of interest rates starting to decrease. The cash flow of individual investors returning to the stock market comes from the maturity of short-term deposits. At the same time, the decrease in interest rates makes the stock investment channel attractive again to investors in the short term.

When the market enters an uptrend, industries and stocks will benefit in turn. Industries with high interest rate sensitivity in the securities, banking, real estate groups, etc. will tend to increase strongly. However, the sustainable growth momentum of these stock groups must rely on supporting information and fundamental factors. In the short term, supporting factors will be consolidated and determined by business results in the second quarter of 2023.

In particular, banking, securities, and steel stocks have all shown an upward trend since March. Apart from the securities stocks that are rising thanks to psychological factors, DNSE experts believe that the remaining groups are still waiting for strong enough supporting factors to accelerate.

Price movements of the Banking - Securities - Commodities, metals and mining groups in the past 6 months. Photo: Wichart — Price movements of Banking - Securities - Commodities, metals and mining groups in the past 6 months. Photo *: Wichart*

For the steel industry , some positive signals have appeared such as steel prices recovering positively since the beginning of the year, when China reopened. At the same time, expectations for public investment at the end of the year and signs of recovery from the real estate market due to support policies have brought bright colors to this type of stock.

For the banking sector , the situation will be more positive in the second half of the year, despite the increasing trend of interest rate cuts. Circular 02 will also help banks stabilize asset quality. In fact, credit is growing quite slowly, but this can create opportunities for the banking sector and the economy when there is still a lot of credit space from now until the end of the year. Enterprises that can restructure their capital sources well and access cheap loans will be positive factors affecting the stock market - which is waiting for supporting factors from within the enterprise.

DNSE experts believe that not only the trio of banking - securities - steel stocks, but the entire market needs a positive impact from the main growth drivers of the economy. In particular, three key factors include taking advantage of support policies, credit growth, along with recovering purchasing power and trade flows of the entire economy... to help the stock market in particular and the entire economy in general grow.

Hong Thao

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