The stock market had a relatively strong trading week from February 26th to March 1st with active liquidity and money flow. The VN-Index recorded its 4th consecutive weekly gain, approaching the 1,260-point level. The money flow remains strong in the market, spreading and rotating among different industries with many stocks reaching new highs in sectors such as banking, securities, steel, seafood, real estate, retail, and chemicals. Foreign investors had a net buying week, totaling VND 116 billion, with a net selling of VND 56 billion on the order-matching market and a net buying of VND 172 billion on the negotiation market.
With the positive developments, experts lean towards a continuation of the upward trend. However, caution is advised as there is a risk of correction when the index reaches high levels. Investors are recommended to avoid chasing and patiently wait for an opportunity to increase their holdings when the VN-Index experiences a correction.
The downside risk is low, focus on selecting companies with strong fundamentals
According to the viewpoint of Mr. Nguyen Anh Khoa, Head of Securities Analysis and Research Department at Agriseco Securities, despite the increased profit-taking pressure in the last two sessions, the successful defense of the VN-Index around the support level of 1,230-1,240 points indicates that buying pressure is still dominant and the upward trend in the medium term is still intact. The downside risk at this time is low as many large-cap stocks, including leading stocks, have not yet reached strong resistance areas. Meanwhile, the VN-Index sticking close to the upper band of the Bollinger band further consolidates the short-term upward trend of the market. In the coming week, the VN-Index is expected to continue its upward trend, approaching the notable resistance level around 1,280 (+-5) points.
According to statistics for February, stocks in the large-cap group, especially those in the VN30-Index, recorded significant outperformance compared to the general market. In the current context where the market is still active with improved liquidity and scores, the money flow is expected to continue rotating towards mid and small-cap stocks that have not seen strong gains yet, such as stocks in the real estate, construction, textile & garment, and insurance sectors.
With expectations of the money flow continuing to circulate in the market, Mr. Khoa recommends investors to focus on selecting companies with good fundamentals whose prices are still near notable support levels such as the MA20 or sideways accumulation within a narrow range with decreasing liquidity. For stocks in the portfolio that have increased excessively and moved away from the accumulation zone, it is advisable to consider reducing the proportion to preserve profits and wait until the stock price returns to a consolidation pattern before making new investments.
According to Agriseco’s expert, economic statistics for the first two months of the year show a relatively positive picture. Inflation remains under control, exports show positive growth, and FDI capital registration indicates that Vietnam continues to be a favored destination for foreign investors. In addition, the PMI index has exceeded 50 points for the first time and remained above that level for the past 2 months, indicating a gradual improvement in business conditions with order volumes recovering. Therefore, there is reason to expect that the worst is over and Vietnam in general, as well as listed companies, are on track for a sustainable growth trajectory in the medium and long term. The bright growth prospects will attract foreign capital back to Vietnam in the future.
Vibration on the upward trend, investors should avoid chasing stocks during strong rallies
According to the assessment of Mr. Nguyen Dinh Thuan, Analyst at KB Securities Vietnam, the market had a relatively positive trading week with money flowing into various industries. From banks, the money flow rotated to sectors such as seafood, securities, steel, and oil and gas.
In the base scenario for the upcoming week, Mr. Thuan believes that the VN-Index can continue its recovery with sustained liquidity but there will be more fluctuations on the way up. In particular, the expert notes that the risk of a short-term correction for the main index will also increase as the market approaches strong resistance levels at high points and selling pressure arises.
Mr. Thuan believes that the money flow will seek companies with positive factors from the business prospects for 2024 and whose stock prices are in accumulation zones or have just given bullish signals. Some sectors with expected stories in 2024 to consider include the retail sector with a growth recovery from a low base, industrial park real estate with FDI capital inflow, and the export sector with recovering demand. Meanwhile, some sectors that are lagging behind the market may also attract attention from the money flow in the coming sessions.
In the current situation, investors are recommended to hold stocks at a moderate proportion. Based on expectations of money flow rotation among different groups of industries, the portfolio should prioritize maintaining stocks with positive business prospects in 2024 and prices that are in accumulation zones or have just given bullish signals. For portfolios with a high proportion of stocks, investors should consider gradually reducing the proportion for stocks that have seen excessive gains and show signs of weakening or deviating from the upward trend.
Regarding the timing for new disbursements, investors should avoid chasing stocks during early rally phases and patiently wait for an opportunity to increase their positions only when the VN-Index undergoes a correction near notable support levels and the money flow continues to show positive signs.
KB Securities’ expert also expects the return of foreign capital in the near future. If Vietnam is upgraded by global organizations as a frontier market in 2025, billions of USD from large foreign investment funds will be allocated to the market. In addition, Vietnam is a country with strong economic development potential and stable political landscape. Recent efforts by the government to improve the investment environment make Vietnam even more attractive to foreign investors. In the context of stable macroeconomic conditions and relatively reasonable market valuations, there are still many driving forces for foreign capital to return to the Vietnamese market in the near future.
Investors should accept higher risks, corrections present opportunities to increase stock positions
From the perspective of Mr. Nguyen The Minh, Director of Securities Analysis, Yuanta Vietnam Securities, the positive momentum of the banking group has spread to some other stocks in sectors such as securities, steel, real estate, and food. In general, large-cap stocks have taken turns playing leading roles, helping the VN-Index make strong gains in points.
Currently, money flow into the stock market is too strong and the market’s nature does not provide many reasons for deep corrections. Mr. Minh believes that the support level of 1,200-1,210 points is quite strong for upcoming correction phases.
According to Mr. Minh, the VN-Index still has good upward potential reaching the 1,300-point level, and even more positively, the 1,414-point level. Vibrations cannot be avoided during the upward journey, but the expert believes that this is an opportunity to increase stock positions for short, medium, and long-term perspectives.
Regarding investment strategies at this time, Yuanta’s expert suggests investors to accept higher risks. Opportunities still exist for stocks that have just started to rise, such as steel, some real estate stocks, and securities stocks.
