AAS EXPERT: STOCK MARKET WILL GRADUALLY INCREASE FROM NOW UNTIL YEAR-END, OPPORTUNITIES APPEAR IN MANY SECTORS

According to AAS experts, in the short term, the market will rise to a level of correction and accumulation. In the long term, the market will gradually move up from now until the end of the year, as macroeconomic factors and business results improve.The Vietnamese stock market is experiencing a relatively positive period with many sectors surging and liquidity improving. Whether the market trend will continue to rise, or which stock groups will strongly attract capital, is what many investors are interested in right now. At the Finance Street Talkshow on VTV8, Mr. Vu Duy Khanh, Analysis Director of Smart Invest Securities JSC (AAS), provided assessments on the current stock market trend,Editor Mui Khanh Ly: The market has recovered quite well after a period of sideways movement, along with a strong increase in liquidity. How do you evaluate this?Mr. Vu Duy Khanh, Analysis Director of Smart Invest Securities JSC (AAS)The State Bank has lowered policy interest rates three consecutive times, and this has rapidly pushed down the overall interest rate level, especially deposit interest rates. The 12-month savings interest rate is currently from 6.8% to 7.5%. With such an interest rate level, if compared to the stock market, calculated by P/E valuation, the fair value of the VN-Index would fall between 13.7 and 14.7 times. Even if corporate EPS does not grow, it is still attractive, and this has stimulated cash flow to return to the market. This has pushed up market liquidity, especially in the early sessions of June. Although the index did not increase much, in terms of individual stocks, we have many codes with returns ranging from 30% to 50%. And investors have forgotten their fears and started disbursing very strongly. Up to now, I see a relatively strong cash flow; we are in a relatively positive upward cycle.Starting from May, after the State Bank continued to lower interest rates, the expected capital flow into the market led to a series of low-priced stocks at 2,000, 3,000, or 4,000 VND. The high profitability of this group caused many people to start disbursing into the market. After that, almost all sectors took turns playing a leading role. We saw public investment emerge at one point, then the oil and gas sector, and then towards the end of the month, capital flowed back into the securities sector, a relatively positive rotation. However, after a new price level, I think there might be a correction, which is normal. And the story for June, as well as the upcoming period, will be about investors redefining the business stories of enterprises; investors will tend to choose enterprises with improving business results.So, according to you, which sectors will see further growth?First, speculation will emerge, and after prices are higher and profitability becomes more difficult, investors will re-evaluate. For example, if prices increase, will corporate profits increase accordingly, or what are their future business performance expectations? For instance, with the steel industry, which has been heavily traded in recent sessions, investors will be interested in whether this sector showed better signs in Q1, and if Q2 business results will be better than Q1. Or for some sectors like textiles, they will assess whether order difficulties persist. Investors will re-evaluate after Q2 business results are available.Looking at the current macroeconomic situation, is it favorable to drive the market to extend its recovery momentum in the coming period?The stock market and the economy are always related, but the stock market anticipates and reflects the economy 4 to 6 months, or even 12 months, in advance, which has been proven by historical data. Last year, when the economy grew positively, the market reflected this and fell sharply. And now, with the economy, looking at the data, it feels like it bottomed out in Q1 and Q2, and then started showing some signs of moving up, the stock market will anticipate and reflect this. And I think, as long as Q2 business results are better than Q1, the market will certainly have the momentum to rise.So, according to your forecast, how will the market perform in the coming period?As for the market, it is currently entering a resistance zone and needs time because we have had a relatively strong rally in May, especially in the early days of June. In the short term, the market will rise to a level of correction and accumulation. In the long term, I still think the market will gradually move up from now until the end of the year, as macroeconomic factors and business results improve.As for sectors, it won’t be a broad-based increase, but within each sector, some stocks will rise, and some will not. For example, there will be differentiation within the banking sector. State-owned banks, with stories about divestment or profits, I think will perform better because state-owned groups have higher provisioning and a good risk buffer, thus leading to more positive developments. And if liquidity continues to trade at the current high level, the securities sector will still be a group that attracts capital. For some fundamental sectors like steel and public investment, investors will monitor whether Q2 data for these groups improves; if it does, those groups will have opportunities.SOURCE: CAFEF