The VN-Index experienced a relatively bumpy April, with a point where it dropped nearly 10% in just one week. However, the index successfully regained the 1,200-point mark. In total, the index closed the last trading session of April with a drop of over 70 points compared to the previous month, equivalent to a 6% loss.
According to Mr. Nguyen Anh Khoa, Head of Research at Agriseco Securities, the market’s short-term and medium-term uptrends have weakened and reversed into a downward trend. Increased buy orders in the 1,160-1,180 range indicate that this is currently a reliable support level for the index. Mr. Khoa believes that the market will continue to fluctuate within a wide range, aiding the index’s recovery momentum.
The immediate resistance level for the index is around the MA20 line, corresponding to the 1,230-1,240 point mark. Before the VN-Index confirms a breakout above this resistance zone, the medium-term trend will remain bearish. However, it should be emphasized that the correction trend is not significantly impacted by the “Sell in May” effect, as statistics show that this effect has a negligible impact on the Vietnamese market.
The expert from Agriseco believes that investors should currently focus on portfolio rebalancing as the market is recovering from a deep correction due to conflicting information. The 1,180-1,230 range will be the main fluctuation zone for the index in the coming period, and investors should increase/decrease their stock weightings based on the base scenario that the index will fluctuate around the lower/upper boundary of this level. VN30 and bluechip stocks should be prioritized for increased weightings during market corrections due to their strong fundamentals and reasonable valuations.
Commenting on the ongoing ETF rebalancing with a deadline of May 3rd, Mr. Khoa stated that the VNDiamond basket with the largest reference value will attract attention, especially for stocks being reviewed in/out of the portfolio during this period, namely BMP/MWG, as well as other stocks being bought/sold in significant quantities. However, the expert does not highly value speculative opportunities based on these events since the information has been disclosed since mid-month, and the rebalancing will only take place within one session with unclear profitability or risks.
Regarding the information that KRX has not yet been approved to operate on May 2nd, the expert generally assesses that this is to ensure smooth, safe, and uninterrupted system operation, thereby maximizing benefits for investors in the market. Moreover, the KRX go-live, which has brought high expectations for the market and the brokerage sector, is expected to resume soon. Therefore, the postponement of the official system operation will not affect the market, as it simply provides additional necessary preparation time.
In terms of financial results, as of the present, the announced first-quarter 2024 profits of listed companies have achieved a 20% growth compared to the same period last year. Moving into the upcoming second quarter, the Agriseco Research expert believes that market profits will continue to recover and maintain a good growth rate, around 15-20% year-on-year, in the context of the gradual emergence of positive signals in the economy, such as the PMI index improving and returning above 50; import and export turnover continuing to grow; and total retail sales of goods and consumer service revenue recovering. The industry groups with positive second-quarter profit prospects include steel, retail, and information technology.
