The right time to start disbursing and accumulating stocks

With low trading liquidity, the spillover effect of cash flow to industry groups will be affected, fluctuations may appear interspersed with recovery sessions, affecting investor psychology.

Stock Market Perspective for the Last Week of November: The Right Time to Start Disbursing and Accumulating Stocks

With low trading liquidity, the spillover effect of cash flow to industry groups will be affected, fluctuations may appear interspersed with recovery sessions, affecting investor psychology.

After 2 weeks of strong correction pressure, VN-Index recovered well last week at strong support around 1,200 points. This is a strong psychological support zone, as well as the trend line connecting the low price zones from April to August 2024, the growth trend line from 2020 to present. During the week, there were 2 positive sessions of increase after the initial breakthrough of the 1,200 point mark in the middle of the week. Real estate, securities and banking groups attracted cash flow and then spread to other industry groups.

The market in the afternoon session of November 22 saw increased selling pressure due to the supply of bottom-fishing stocks T+ in the 1,200-point area in the account. However, the general assessment is that the supply is not too much and is within the market's natural absorption capacity.

Forecasting the trading developments next week, investors' waiting mentality may return in the first session of the week. In a positive scenario, if the supply continues to be low in this session, the market may then quickly advance to the 1,240-1,250 point area, corresponding to the 20-day MA, creating a short-term balance in this area.

However, the story of low liquidity is still a matter of concern, showing the cautiousness in investor sentiment.

Agrisesco experts believe that low liquidity reflects a defensive mentality in the face of negative macroeconomic factors that are still being maintained: government bond yield differentials, short-term exchange rate pressure, escalating tensions in Ukraine-Russia, etc., while the market lacks supportive information.

However, note that the market has continuously discounted the above information into stock prices and indices for nearly the past 2 months, so the level of psychological impact may be near saturation and the room for a downward impact may not be much if there are no new risks arising and adding to the resonance.

Foreign investors' net selling pressure continues. In summary, last week, foreign investors net sold more than VND3,800 billion in the whole market. Foreign investors' selling pressure occurred in pillar stocks, in which VHM was net sold VND1,522 billion, SSI and HPG were also net sold strongly with values ​​of VND722 billion and VND541 billion. Thereby, foreign money has withdrawn about VND90,000 billion, equivalent to USD3.5 billion in the Vietnamese stock market since the beginning of the year.

Foreign net selling is a trend not only in Vietnam, but also in other markets in the region such as Thailand, the Philippines, and Malaysia in the context of the DXY strengthening when President Donald Trump was elected president. Cash flow is returning to the US stock market, causing the Dowjones and S&P500 indexes to continuously break new records. The increase in the DXY index and US government bond yields will continue to put pressure on the VND exchange rate in the coming time, partly affecting the net withdrawal trend of foreign investors.

In case the VN-Index has a deep enough discount to bring the market valuation to a level considered attractive to foreign investors, the net selling momentum of foreign investors may slow down and even reverse.

Agrisesco experts said that, in terms of valuation, the P/E of the whole market as of the end of the session on November 22 was 12.9x times, significantly lower than the average of the last 5 years (15.x times). In addition, many bluechip stocks with a solid long-term price increase foundation have been discounted to attractive price ranges, suitable for investors to increase their proportion and accumulate stocks in the current period. With the positive performance of the VN-Index in the past two sessions, the 1,200-point area is acting as a reliable support level when successfully activating short-term "bottom-fishing" demand.

However, with low trading liquidity, the spillover effect of cash flow to industry groups will be affected, fluctuations may appear interspersed with recovery sessions affecting investor psychology. Therefore, although this is the right time to start disbursing and accumulating stocks for medium and long-term portfolios, investors should still pay attention to maintaining a low proportion of trading positions, surfing T+ to ensure account safety and comply with the discipline of cutting losses in the scenario that the market retreats to re-test deeper support levels in the short term.

According to the perspective of SHS Securities Company experts, the market has had a year of fluctuations within a narrow range, under the pressure of sudden net selling by foreign investors, exchange rate pressure, cash flow pressure of stocks with a large proportion of real estate... VN-Index has also repeatedly tested the strong support zone around 1,200 points, corresponding to the total market capitalization of about 62% of GDP 2024. This is a relatively attractive capitalization zone of the market compared to the size of the economy when GDP growth in 2025 is planned to increase by 6.5-7%. With the current developments, it shows that the medium-term intrinsic quality of the market is gradually improving after a long period of accumulation with many codes and groups of codes at relatively attractive prices, opening up many good opportunities.

SHS believes that the market will be strongly differentiated. Except for new uncertain factors, VN-Index is expected to bottom at the price range of 1,200 points, corresponding to the highest price range of 2018, as well as support the medium- and long-term growth trend lines. Investors should maintain a reasonable proportion. The proportion is below average, good risk management should consider disbursing good fundamental stocks, with good growth in the third quarter, expected to continue to maintain growth. Investment targets are for leading stocks with good fundamentals.

Source: https://baodautu.vn/goc-nhin-ttck-tuan-cuoi-thang-11-thoi-diem-phu-hop-de-bat-dau-giai-ngan-tich-luy-co-phieu-d230823.html