Is there an early holiday mood?
Mr. Tran Duc Anh – Director of Macro & Market Strategy of KB Vietnam Securities (KBSV) believes that the current low liquidity is not too surprising, and it is neither positive nor negative. The low liquidity condition may continue until Tet holiday.
In a sideways market trend with low liquidity, it does not indicate much and mainly relates to investor sentiment. There are no factors impacting the market in terms of upward or downward trends. After Tet, it is expected that liquidity will be more positive.
Before Tet, the VN-Index has been fluctuating with a moderate increase and decrease, without a clear trend. The reasons come from two factors, including the early holiday mood of investors and pre-Tet information with no surprises.
However, there are several factors to expect that the market will be more positive after Tet, which are related to the Fed’s story, which is likely to lower interest rates in March, the profit of listed companies with quite positive growth figures, and the return of foreign investors to the market… Looking further, we can expect new information related to the upgrade story, the deployment of the KRX trading system…
“Usually, the trading week after Tet has a quite optimistic trend due to the sentiment of investors after a long vacation. I predict that in the first 1-2 weeks after the holiday, the market will lean towards a positive direction,” said Mr. Duc Anh.
In general, the VN-Index is forecasted to end the Year of Mao with +/- 15 points compared to the level of 1,175 points. The market may reach 1,200 points at the end of February 2024.
From a business perspective, the Q4/2023 financial reporting season is showing promising figures, with companies reporting an average profit growth of 20-30%.
According to Mr. Duc Anh, the main driving force comes from the recovery of business activities of enterprises, which is a basis for believing that the stock market’s development in 2024 will be positive, especially in the context of low interest rates, with less room for further declines.
Should we pay attention to the post-Tet futures expiration week?
Observing the market trend at this time, Mr. Bui Nguyen Khoa – Head of Macro Team – Stock Market at Vietnamese Investment and Development Bank Securities (BSC) noticed that investors tend to keep their portfolios at a normal level and use less margin due to the upcoming holiday, which leads to a decrease in liquidity as in previous years.
In the week before the Tet holiday, the market will continue to move sideways. Previously, the banking stock group had a strong recovery, driving the index well, but at this point, this group starts to differentiate and lacks major drivers. It is normal for the market to have technical increases or decreases.
This year is special because immediately after the Tet holiday is the futures expiration week. However, in recent months, the futures market expiration has had a fairly normal market trend with no significant impact.
Therefore, the impact of futures in February is not strong, but it has a partial effect. Instead, the market has higher expectations for the General Meeting of Shareholders (GMs) and how companies plan and distribute dividends. These are factors that will support the market more. By the end of February, the market may approach the 1,180-point and 1,200-point levels.
The market is unlikely to have a negative scenario.
Mr. Nguyen The Minh – Director of Analysis at Yuanta Vietnam Securities said that usually, the market during the weeks before and after Tet tends to be positive but within a narrow range. In 2024, with the expectation of economic recovery and market upgrade, it is difficult for the market to have a negative scenario.
On January 31, 2024, the VN-Index dropped more than 15.34 points to 1,164 points, marking the sharpest decline in the past 2 months, since the end of November 2023.
Market liquidity also increased sharply, with trading volume exceeding 1.1 billion shares, and the trading value on HOSE reached nearly VND 21.9 trillion, increasing 80% compared to the previous session and reaching the highest level in nearly a month.
