Scenarios for the stock market in December

Statistics on transactions on the HOSE floor last week showed that the VN-Index had only one session of decline on November 23 and four sessions of increase. Liquidity remained high, above average for three consecutive weeks, showing that short-term cash flow is still well maintained in the market.

According to stock analysts, the market is still in the process of retesting the support level of 1,100 points and although the week ended below this price range, the positive movement in the last session of the week on November 24 brought expectations that the VN-Index will continue to recover.

The Research Analysis Center, BIDV Securities Joint Stock Company (BSC) has just released a report assessing the stock market in the first 10 months of 2023 and forecasting the scenario for the remaining months of 2023 and in 2024.

According to BSC, the recent downward trend has been a common trend in the world stock market, including Vietnam, due to concerns about the global economic outlook. The VN-Index has fallen by nearly 11% and is the stock market with the sharpest decline in the world in October 2023.

However, as of October 31, 2023, compared to the same period last year, most industries had good growth with 15/18 industries increasing in points. On the contrary, only 3/18 industries had a decrease in points: Real Estate (down 13.87%), Retail (down 6.67%), Food and Beverage (down 1.31%).

In particular, BSC assessed that the Financial Services industry group was the group with the most impressive growth in the past months of 2023, with the bright spot being the securities industry group when it had the second consecutive quarter of impressive profit growth, after profits bottomed out in the fourth quarter of 2022.

BSC also gives forecasts on market prospects for the end of 2023 and 2024.

According to BSC, throughout 2023, world economic growth will be negatively affected by tightening global monetary policy, especially in the US.

As a highly open economy with export turnover accounting for over 90% of GDP, Vietnam is also deeply affected when the main export markets such as the US, Europe and China reduce demand.

The economy went through difficult periods in early 2023, gradually recovering step by step when the State Bank lowered operating interest rates 4 times, and looser policies for the economy were introduced.

Besides public investment which has been showing positive developments since the beginning of the year, import and export are the main driving force for the current economy as demand for Vietnam's export goods improves towards the end of the year.

However, in the context that the Fed and Europe are still tightening monetary policy and signaling that they will keep interest rates high for a long time and Europe is forecast to enter a technical recession, Vietnam's import and export cannot expect a strong recovery next year.

Regarding domestic factors, according to BSC, the corporate bond market is still performing extremely gloomy.

Based on the assessment of domestic and international factors, BSC builds a forecast scenario for VN-Index in 2023 and 2024. Specifically, in 2023, VN-Index will fluctuate in the range of 1,100-1,200 points.

In 2024, BSC proposed two scenarios. In the positive scenario, VN-Index could reach over 1,360 points; in contrast, in the negative scenario, this index could fall below 1,200 points.

Source