'Stock shakeouts can be good buying points'

Expert Nguyen Hong Diep said the recent fluctuations create attractive buying points for investors as the market may still increase in the medium term.

Speaking at a seminar on securities on September 27, Mr. Nguyen Hong Diep, an expert in the field and founder of the personal investment consulting service provider VICK, said that the market currently has many good stocks that are decreasing in price. This creates a more suitable buying point for investors, especially stocks that they previously wanted to participate in but the market price of these codes has exceeded their target price.

According to this expert, the adjustment cycle that lasted 4-6 weeks is reasonable in an uptrend. After many sessions of decline, VN-Index is still held above 1,120 points. Mr. Diep said that if the supporting factors are maintained, the index representing the HoSE floor will easily bounce back.

Previously, VinaCapital also said that the market had a good continuous increase, so the correction trend was understandable. Similarly, Dragon Capital assessed that leaving the current market may not be a good decision because fluctuations of 5-12% in a bull cycle are not uncommon. According to this unit, fluctuations in the global economy and recent market trends have not created a reversal in the current trend.

Most securities companies have negative views in the short term but still maintain positive forecasts for the medium and long term. Saigon Hanoi Securities (SHS) believes that in the medium term, the Vn-Index will not lose its uptrend, although the growth momentum has been affected by the recent strong correction. Medium and long-term investors can continue to hold their current portfolios and monitor market developments.

From a technical perspective, Vietcombank Securities (VCBS) forecasts that if demand is maintained, the VN-Index may recover and rise to the 1,170-1,175 point area. Therefore, this unit recommends that investors with a high cash ratio can consider investing in stocks at the current stage.

Regarding the reason why the uptrend can be maintained in the medium term, Mr. Nguyen Hong Diep said that all three factors including macro policies, intrinsic value of the market and cash flow trends are supporting. He maintains a positive view for VN-Index from now until 2024.

In particular, the cash flow trend is the most positive and certain factor when the number of newly opened accounts continuously increases. In August alone, more than 150,000 new securities accounts were opened, reaching the highest level in 11 months.

Discussing more about the cash flow trend, Ms. Nguyen Thu Hang - CEO of VIG Securities Company, said that liquidity from August to now has reached an average of around 20,000 billion VND, equivalent to the peak of the market in 2021. This shows that investors are returning to the market.

In addition, in the current context, stocks have better potential performance than other channels when real estate is still facing many difficulties and takes a long time to recover, gold in Vietnam has a large phase difference compared to the world, deposit channels are reducing interest rates...

The second factor to predict market trends is intrinsic value. A report by the Vietnam Association of Securities Business (VASB) shows that macroeconomic conditions are starting to brighten as the decline in exports shows signs of bottoming out, there is room for public investment capital to be disbursed, FDI capital returns, and interest rates have clearly decreased.

Despite the correction, the VN-Index has still increased by more than 200 points since the beginning of the year. VASB cited Bloomberg statistics showing that Vietnam is the third fastest growing market in the world, after the US and Japan. The business results of securities companies also showed that the market recovered well when the total after-tax profit in the second quarter of 20 units reached VND3,790 billion, up 64% compared to the same period last year.

From left to right: Dr. Nguyen Huu Huan, Mr. Nguyen Hong Diep, Ms. Nguyen Thu Hang and Dr. Nghiem Quy Hao. Photo: Tat Dat

The final factor to consider is macroeconomic policy. According to Mr. Diep, the market is currently worried about the State Bank's money-sucking move. Investors fear that ineffective treasury bills will cause the USD exchange rate to continue to rise, forcing the regulator to raise interest rates, affecting stocks.

The State Bank has begun to restart the credit note channel, and as of September 26, it has withdrawn a net amount of about VND50,000 billion. According to Dr. Nguyen Huu Huan from the Ho Chi Minh City University of Economics, this is a professional measure to address USD speculation, the main cause of the increase in exchange rates. He believes that the State Bank will continue to withdraw money until the USD exchange rate cools down. At that time, interbank interest rates will increase, which may affect lending rates for businesses and individuals. However, Mr. Huan predicts that the impact will not be too large and "not as serious as what investors are worried about".

In fact, in the trading session on September 27, SHS assessed that the market began to react more calmly to the State Bank's move. The evidence is that the group of securities stocks after sharp declines has recovered well, many codes increased to the full amplitude with high liquidity.

Siddhartha

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