A week full of events
The stock market had a volatile trading week with four sessions of gains and one sharp decline on Thursday.
In the first session of the week of November 20, information about the case of tycoon Truong My Lan causing huge losses, up to 12.4 billion USD, had a significant impact on the psychology of investors, although the shock of Van Thinh Phat was reflected in the price around the same time last year, when Ms. Lan was arrested.
Selling pressure increased sharply in the stock market, causing the VN-Index to drop 15 points immediately upon opening on November 20. However, the issue has been resolved for the past year. The State Bank has submitted to the Government a restructuring plan for SCB Bank. Meanwhile, Van Thinh Phat hastily sold assets to remedy the consequences.
Bottom-fishing demand pulled the VN-Index up slightly again in the first session of the week.
The market maintained green in the next two sessions.
The recovery was led by steel stocks, securities stocks and some real estate stocks. Expectations of rising construction steel prices and forecasts of a recovery in the construction industry in 2024 helped steel stocks perform positively. Some steel companies have recently adjusted construction steel prices up by VND110,000-410,000/ton after about 3 months of flat prices thanks to improved consumption.
In the group of petroleum stocks, the decision to reduce the time to adjust the base price from 10 to 7 days, the premium (rewards, incentives, interest, insurance fees...) to calculate the price of petroleum from domestic production sources reduced from 6 months to 3 months or allowing retailers to receive gasoline from up to 3 distributors supported the increase in points of this group of stocks.
In addition, the real estate group, especially Novaland, was sought after by investors in the mid-week sessions when the Prime Minister held a heated meeting to remove difficulties and obstacles in implementing large real estate projects, including Novaland's Aquacity.
However, further information about the Van Thinh Phat case and then the indictment of the Tan Hoang Minh case as well as concerns about corporate bonds maturing in 2024... made many people worried.
The stock market unexpectedly sold off heavily in the afternoon session on Thursday (November 23), causing the VN-Index to close down 25 points in the final ATC session of the day. The unexpected plunge caught many investors off guard and triggered a sell-off. The decline continued for most of Friday (November 24) before bottom-fishing demand increased, helping the VN-Index recover and increase by 7 points in the final session of the week.
At the end of the week, VN-Index closed at 1,095.6 points, equivalent to a decrease of 0.5% compared to the end of last week; HNX-Index recorded a decrease of 0.2% to 226.1 points and Upcom-Index decreased sharply by 1.2% to close at 84.99 points.
During the week, the pillar stock that decreased the most was Mobile World MWG (-6.9%). Techcombank (TCB) decreased by 3.5%. Vinamilk (VNM) decreased by 2.4%. On the other hand, Novaland (NVL) increased by 9.3%. BIDV increased by 1.7%.
Liquidity on the stock market remained stable with a trading value of VND21,191 billion. Foreign investors continued to return to net selling on all three exchanges with VND954 billion, mainly on HOSE with a value of VND910 billion (-32% compared to last week).
Many bad forecasts, but the uptrend has not been violated
At the recent workshop "Macroeconomic and stock market outlook in 2024", Mr. Nguyen Quang Thuan, Chairman of FiinGroup, acknowledged that Vietnam's recent macroeconomic context has shown signs of improvement in many important indicators. However, FiinGroup believes that stock valuations are no longer cheap, and the price/earnings per share (P/E) ratio has reached a historic peak if the real estate group is excluded.
However, Ms. Do Hong Van - Head of FiinGroup Data Analysis - analyzed that although the macro context has many bright spots, investors need to look deeper into each industry layer and stock layer within to assess the real valuation of the market.
Accordingly, in the third quarter of 2023, the profit picture of listed enterprises has not had a breakthrough. The profit of the whole market decreased by about 1.7%. The P/E valuation of the whole market is at 13.1 times - lower than the average from 2015 to present. Excluding the real estate group, the P/E of the market has reached 23.5 times - higher than the valuation when the VN-Index surpassed the 1,500 point mark to set a historical peak.
But on the contrary, many experts and investors bet more on positive macro signals, abundant liquidity in the banking system and the possibility of strong cash flow into stocks.
Mr. Dinh Quang Hinh, Head of Market Strategy Department, VnDirect Securities Analysis Division, said that the recovery trend of the domestic stock market has not been violated, especially after the weekend session, November 24, when the stock indexes recovered impressively and closed at the highest level of the session.
According to Mr. Hinh, it is likely that the VN-Index has successfully formed a second bottom at the 1,070-1,080 point range. At the same time, the market also received more positive macroeconomic information. Specifically, the cooling pressure on exchange rates created conditions for the State Bank of Vietnam (SBV) to stop issuing treasury bills and pump liquidity back into the banking system.
In fact, in the past two weeks, the State Bank has not withdrawn money from the open market, while pumping money out through maturing treasury bills, about 40-50 trillion VND.
Some commercial banks continued to adjust their deposit interest rates, including BIDV, which reduced its 12-month deposit interest rate to 4.8%. These developments show that the domestic monetary policy environment continues to be maintained in a loose direction (supporting economic recovery and growth).
In that context, according to VNDirect experts, smart money will be less "cautious" and gradually return to the market.
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