Cash flows likely to return to market as sentiment improves

Monday, Nov 27, 2023 08:15

An investor watches the market's movements on a smart phone in the transaction office Bảo Viẹt Securities JSC. — VNA/VNS Photo

The stock market set a slight weekly fall last week, but experts believe that investor sentiment will improve this week, attracting the return of cash flows.

On the Hồ Chí Minh Stock Exchange (HoSE), the VN-Index closed the week to November 24 at 1,095.6 points, while the HNX-Index on the Hà Nội Stock Exchange (HNX) was last traded at 226.1 points.

For the week, the former lost 0.5 per cent and the latter was down 0.2 per cent.

The market’s liquidity was flat, with transaction value reaching VNĐ21.19 trillion (US$873 million), a 0.2 per cent decrease from the previous week.

Foreign investors continued to net sell on the market, mainly on HoSE with a value of VNĐ910 billion. However, the value was lower than that of the week before. Meanwhile, they net bought a value of VNĐ5 billion on HNX.

VNDirect Securities Corporation said it keeps its view on the domestic market’s recovery trend, especially after last Friday's session when stock indices recovered impressively and closed at session highs.

It is likely that the VN-Index has successfully created a second bottom in the area of 1,070 - 1,080 points.

According to the securities firm, the market also received more positive macro information. Specifically, the cooling exchange rate pressure creates conditions for the State Bank of Vietnam to stop issuing bills and inject liquidity back into the banking system.

Some commercial banks continue to adjust deposit interest rates, such as BIDV reduced the 12-month deposit interest rate to 4.8 per cent.

These developments show that the domestic monetary policy environment continues to be maintained in a loose direction to support economic recovery and growth.

Given that environment, investors will be less cautious, and cash flows will gradually return to the market.

On the real estate front, the Government is also drastically removing legal obstacles for real estate projects, including those of large real estate businesses on the exchange, such as No Va Real Estate Investment Group JSC.

In China, the government is also making drastic moves to stop the decline and revive the real estate market.

It can be seen that supporting growth is a common trend in many Asian countries, not just Việt Nam.

With such a policy orientation, VNDirect said that it can expect a recovery trend of economic growth and profits of listed enterprises in the fourth quarter of 2023 and 2024, creating momentum for the stock market.

The market has experienced a choppy week, with four gaining sessions and one sharp on Thursday.

The recovery was led by steel, securities and a few real estate stocks.

Expectations that construction steel prices will increase, along with forecasts of recovery of the construction industry in 2024, have helped steel stocks move positively in recent weeks.

Specifically, some steel enterprises have recently adjusted construction steel prices to increase from VNĐ110,000 - 410,000 a tonnes after about three months of moving sideways thanks to better consumption.

Looking at the current macro conditions, Saigon - Hanoi Securities JSC (SHS) said that the year-end economy is forecast to be vibrant when public investment projects continue to be drastically resolved.

Meanwhile, banking and credit systems will also improve.

However, the world's geopolitical situation remains unstable, and energy price developments are unpredictable as winter approaches. Moreover, the real estate and bond markets cannot recover soon.

As a result, experts from SHS said that the market, in the short term, still has momentum to inch higher.

According to Mirae Asset Securities (Vietnam) the current support mark is the 1,091-point area.

According to the observations of this securities company, the market is experiencing divergence in the direction of the blue-chip group, which includes stocks of large, industry-leading, stable, and highly reputable companies in the market, weighed by adjustment pressure as penny stocks are still attracting good cash flow in the short term. — VNS

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