An investor holds her mobile phone, standing under an e-board showing stock indices. Statistics from securities companies reveal that investor deposit balances at these firms reached nearly VNĐ100.8 trillion by the end of the first quarter of 2024, representing an increase of over VNĐ21 trillion compared to the beginning of the year. — VNA/VNS Photo

The stock market in Việt Nam is experiencing an upward momentum driven by improved liquidity and positive Q1 results, with experts cautiously optimistic about an increased cash flow.

Despite a relatively softer information flow, experts maintain an optimistic outlook for a potential breakout rather than a significant decline.

However, they cautiously acknowledge the possibility of market volatility in certain expensive sectors.

The VN-Index has displayed a robust upward trend, surpassing critical price levels of 1,190 - 1,200 points and 1,240 - 1,250 points.

An important development is the positive momentum of the VN-Index attracting cash flow back into the market from outside sources.

This has contributed to increased liquidity on the HCM Stock Exchange (HoSE), with average daily trading values rising from around VNĐ15 trillion per session to approximately VNĐ20 trillion per session. While liquidity has improved, it remains relatively low.

However, cash flow has been circulating effectively from large-cap stocks to small and medium-cap stocks, prolonging the upward momentum of the index.

Notably, stocks of large-cap companies such as Vietjet (VJC), Hòa Phát Group (HPG), Petrolimex (PLX), FPT Corporation (FPT), and Mobile World Group (MWG) witnessed price increases in the past week.

Nguyễn Thành Trung, Director of Investment Consulting at Thành Công Securities (TCSC), said: "When investors feel more confident and perceive reduced risks, they will return to the market. Therefore, in the short term, the market is expected to be more stable as the exchange rate has been well controlled and is no longer subject to significant fluctuations. With limited optimism in alternative investment channels, stocks are currently not overly valued."

Statistics from securities companies reveal that investor deposit balances at these firms reached nearly VNĐ100.8 trillion by the end of the first quarter of 2024, representing an increase of over VNĐ21 trillion compared to the beginning of the year.

This marks the strongest quarterly growth in the past five years. Additionally, in April, there were 110,761 new securities accounts opened, indicating a considerable inflow of new funds waiting to be invested in stocks, given the less attractive nature of other investment channels.

Nguyễn Tuấn Anh, Chairman of the FinPeace Board of Directors, recognised that liquidity is expected to increase further when the VN-Index surpasses the threshold of 1,293 points, initiating a new uptrend. Conversely, a significant market decline may attract speculative cash flow seeking undervalued opportunities.

In the first quarter of 2024, SSI Research assesses that while certain industries like real estate, electricity, water, petroleum and gas are still experiencing a downward cycle, most other sectors are gradually recovering.

The overall financial health of businesses is improving, with many industry groups reporting positive profits. Additionally, some industries have reached their lowest point and are now returning to a growth trajectory.

According to SSI Research, business profits have likely surpassed the most challenging period and are entering a more stable growth phase.

Mirae Asset believes that the positive business results in the first quarter will generate momentum for growth throughout the rest of 2024.

With 395 companies listed on the HoSE disclosing their Q1 2024 financial results, the overall outlook presents a series of encouraging signals, particularly when compared to the profit growth targets set by listed companies for the year.

VNDIRECT maintains its profit growth forecast for HoSE-listed businesses in 2024 at 16-18 per cent compared to the previous year.

VNDIRECT said: "It is expected that the VN-Index will reach 1,300-1,350 by the end of 2024, corresponding to a target P/E ratio of 14-14.2 times."

Offering advice to investors, Bùi Văn Huy, Director of DSC Securities HCM City Branch, suggests adopting a moderate investment approach and allocating remaining funds according to the global market trends and their impact on the domestic market. Investors should reserve a portion of their funds to remain prepared for various scenarios.

Selecting the right stocks and maintaining a balanced portfolio proportion is crucial. — VNS