In its newly released mid-year strategic report, MB Securities (MBS) expects Vietnam’s economic growth in Q3 and Q4 to reach 6.6% and 6.5% year-on-year, respectively, driven by export recovery and improved investment disbursement.
Regarding the global macroeconomic outlook, MBS Research states that global growth is predicted to stabilize at 2.6% this year. “A few central banks have eased monetary policies, and with the Fed expected to cut interest rates once or twice in the second half of the year, a more favorable environment is expected for emerging market equities, including Vietnam,” the report noted.
VN-Index to reach 1,350 – 1,380 points
On the stock market front, the VN-Index ended June 2024 at 1,250 points, among the best-performing markets in the region. The recent surge in mid-cap stocks has pushed the VNMID valuation to 17.1 times P/E, about 17% higher than the VN-Index. Despite the market’s strong rally, MBS analysts believe there is still room for further upside.
The research team forecasts the VN-Index to reach 1,350 – 1,380 points by the end of the year, assuming a 20% earnings growth for listed companies in 2024 and a target P/E range of 12 to 12.5 times.
According to MBS Research, large-cap stocks offer attractive valuations regarding earnings growth potential in the 2024-2025 fiscal year compared to other segments. Currently, mid-cap stocks are trading at P/B valuations on par with large-cap stocks. In contrast, large-cap stocks (represented by VN30 and VNX50) are trading at valuations approximately 11% lower than the market average.
Market-wide earnings growth to surge in H2 2024
Additionally, MBS Research is optimistic about market-wide earnings growth in the second half of 2024, which bodes well for the stock market’s further expansion. Following a modest 5.3% growth in Q1 2024, MBS projects total market earnings to increase by 9.5% year-on-year in Q2 and 33.1% and 21.9% in Q3 and Q4, respectively.
For the full year 2024, the analytics team expects market earnings to grow by 20% year-on-year from the low base of 2023. Key drivers for the market’s improved earnings include robust performances from sectors such as banking, retail, construction materials, and electricity.
Investing in a volatile market: Should beginners consider putting money into high-yield bonds for 10-30% yearly profit?
Short-term stock market trading has proven to be a risky venture for many investors, leading to substantial losses. However, there are a few select open funds that have managed to achieve impressive returns, reaching up to 30%.
Bank stocks sold off heavily
Today (2/2), the VN-Index continues to rise, but in a cautious trading atmosphere. It is noteworthy that most banking stocks in the VN30 basket are facing strong selling pressure.
