While the less positive business results of listed companies have been mostly priced in, many recently issued supportive policies will help improve investor sentiment and increase cash flows on the stock market, according to analysts.

VNDirect Securities Corporation said that the profit of the whole market decreased slightly by 2.6 per cent year-on-year.

As of April 24, 697 listed companies on the stock exchange, accounting for 25.8 per cent of market capitalisation, released their first quarter business results, with a fall in net profit of 2.6 per cent over last year. Notably, the chemical industry's profit dropped by 67.6 per cent on-year, negatively affecting the profit growth of the whole market. The plunge in the prices of chemicals such as phosphorus and fertiliser drove the fall.

In contrast, the real estate industry grew 69.4 per cent over last year, leading the profit growth and contributing 16.2 per cent to the growth of the whole market.

If taking into account the estimated business results of the first quarter of 2023 of some listed banks, the banking industry's profit will grow by about 14 per cent year-on-year, contributing 5.8 per cent to the profit growth of listed companies.

This will lift the net profit growth of the whole market in the first quarter of 2023 by 5.6 per cent.

However, some industries, such as steel, securities, and oil and gas, are forecast to have negative results but have not yet announced their financial statements.

Currently, the VN-Index is trading at 0.7 times the 5-year average price-to-earnings ratio (P/E) and 0.7 times the 5-year average price-to-book value ratio (P/B).

The index's earnings-to-price ratio (E/P) averaged around 8.7 per cent in March, excluding the dividend yield of 1.7 per cent. The gap between E/P and 12-month bank deposit rates widened slightly in April as deposit interest rates maintained their downward momentum while E/P was almost flat.

Although the current gap between E/P and deposit interest rates is still not as attractive as last October and November, with the expectation of a high deposit rate likely to continue to ease in the coming months, the gap may expand further, analysts at VNDirect said.

They believe the less positive business results in the first quarter of 2023 have been mostly priced in. And the securities company expects that many recently issued supportive policies, such as the State Bank of Vietnam's Circular 02/2023 and Circular 03/2023 on debt rescheduling and allowing banks to continue buying corporate bonds, will help improve investor sentiment and increase cash flows on the market.

Meanwhile, public investment remains the focal point throughout 2023, said analysts at VNDirect.

In the first quarter of 2023, realised state capital jumped by 18.1 per cent over last year to VND91.5 trillion (nearly US$4 billion), higher than last year's growth rate of 12.3 per cent.

Last week, the VN-Index traded actively with the Ho Chi Minh Stock Exchange (HOSE)’s average matching level of over 480 million units per session, slightly improving compared to 460 million units per session the previous week.

During the week, the benchmark index dropped in the first two sessions, but after falling to the support level of 1,030 points, it started recovering and closed the week at 1,049.12 points.

Foreign investors witnessed a balanced trading week with a net buying of VND11.96 billion. Hoa Phat Group (HPG) and Maritime Bank (MSB) were bought the most, with a net buying value of VND373 billion and VND344 billion, respectively.

Mirae Asset Vietnam Securities believes the recovery helped the VN-Index escape the short-term downtrend and find equilibrium. In the medium term, it is approaching the resistance level at 1,054 points and is still in a downtrend. The threshold of 1,050-1,054 points is also an important resistance for the VN-Index in this recovery. — VNS