The last trading session before the Lunar New Year holiday ended with a strong impression from the banking stocks, when they all increased and attracted strong cash flows, helping the demand spread widely, helping the VN-Index reach close to the strong resistance of 1,200 points. Looking back after more than a month, the VN-Index regained its upward momentum in early 2024. The banking group increased sharply when credit increased sharply in the last month of 2023 and the State Bank assigned the entire credit target for 2024 to banks from the beginning of the year. Foreign investors also stopped net selling.
In the February strategy report just released by Dragon Capital Securities (VDSC), the analysis team expects the stock market (TTCK) to not have many fluctuations due to entering a period of information void after the fourth quarter 2023 business results reporting season as well as due to the effects of the Lunar New Year holiday.
However, the analysis team also pointed out that the flow of information about the general meeting of shareholders (AGM) season with new business plans for 2024 will likely help the market become more vibrant in the second half of February. The expected fluctuation range of VN-Index is 1,160 - 1,200 points.
On the contrary, the risk of a deep market decline is considered limited thanks to the relatively cheap valuation of large-cap industries, the temporary end of foreign net selling trends, and the amount of investor deposits waiting to re-enter the market.
Assessing the most important data point, VDSC believes that the trend of increasing investment in the stock market channel continues to be reinforced when the amount of investor deposits at securities companies at the end of the fourth quarter of 2023 increased by 5 trillion VND compared to the previous quarter, estimated at 82 trillion VND.
VDSC also emphasized that the increase in investor deposits and outstanding margin loans compared to the previous quarter is somewhat contrary to the decrease in liquidity of the three exchanges in the fourth quarter of 2023.
This shows that, although investors have become more cautious in late 2023, most of them continue to choose to "stay in the market", especially when savings interest rates are still at rock bottom, and investment confidence in other major investment channels cannot recover soon, the analysis team commented.
The fact that the cash flow has chosen to temporarily "stay out" for a while is expected to return after the Tet holiday; especially when there is a more positive movement of large cash flows, which are highly market-oriented through the impact on blue-chip stocks, in the coming time with news flows of the 2024 AGM season. On the other hand, a sudden sharp decline with more attractive investment opportunities in the market may also reactivate this waiting amount of money.
Dr. Nguyen Duy Phuong, Director of DGCapital Investment, commented that, in general, the stock market is still the most attractive investment channel in 2024, with reasonable valuations and profit growth of industries expected to recover positively following the economic recovery. In particular, the boost for the stock market can come from two major factors. First, monetary policy continues to loosen. Second, Vietnam is actively preparing the conditions to be upgraded from frontier to emerging stock market. In the past, when one of these two factors appeared, it often created a strong increase in stock indexes.
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