Looking for the group of stocks that play a leading role in the market

The past trading week was a technical recovery of the general market, after a sharp and deep decline before. Liquidity decreased, confirming a technical recovery, when the average trading value was only around 16,000 billion VND/session, down more than 40% compared to the previous trading week.

By industry, telecommunications, information technology and retail were the strongest recovering groups last week, with prominent stocks such as FPT, CTR, VGI, MWG, FRT. On the contrary, real estate, industrial goods and services, electricity - water, petroleum - gas maintained a downward trend.

Commenting on which industry stocks will play a leading role in the market in the coming time, it seems that experts' attention is directed to banking, real estate and securities stocks after the first quarter 2024 business results reports of these industry groups are bringing many expectations.

Banking stocks are considered “king stocks” because of their large growth potential and their pivotal role in the context of Vietnam’s economy being assessed by international organizations as having positive prospects. The VN-Index has recently fallen sharply, making the valuation of banking stocks even more attractive. Notably, the P/E and P/B ratios of this group are also tending to be “cheaper” because of their positive profit growth prospects. In addition, the “rain” of cash dividends from this group is gradually attracting the attention of investors, thereby creating momentum for stock price increases.

By anticipating the recovery opportunity of the real estate market, the real estate stock group is expected to bring opportunities to investors, especially in the second half of this year. Even in a difficult period like 2023, real estate stocks are still the market leader. From November 2022 to November 2023, the stock market had a strong increase, the VN-Index increased from 874 points to 1,245 points and leading this price increase was the impressive recovery of the real estate stock group, after many codes lost 80 - 90% of their value in the second half of 2022. In general, the increases and decreases of the VN-Index in 2023 are associated with the fluctuations of the real estate stock group.

Experts assess that favorable macro context such as economic recovery, completed legal corridor (Law on Land, Housing, Real Estate Business, Investment) is considered as support for real estate enterprises, bringing investment opportunities in stocks of this industry.

Meanwhile, the go-live of the KRX trading system, which was considered an opportunity for securities companies to launch new products, expand growth space and also the driving force for many increases in stocks in this industry, has continued to fail. However, experts assess that securities companies still have many positive business opportunities.

The stock market was vibrant in the first quarter of the year, helping securities companies increase revenue and profits from their operations. In particular, margin lending is currently the main source of revenue for securities companies. Revenue from this segment often accounts for about 25-40% of operating revenue, even the largest contributor at some companies. In terms of profit, interest from loans and receivables contributed more than half of the total pre-tax profit of the group of securities companies in the first quarter of 2024.

According to VIS Rating, the profit outlook of securities companies continues to improve after a positive growth in 2023. Strong increase in securities trading volume and improved market sentiment in the context of low interest rates will boost margin lending profits and fixed income investment.

Source