Nguyen The Minh, Director of Research and Development at Yuanta Securities Vietnam, predicts that in the latter part of the year, the stock market will witness a clear differentiation, not all stocks will rise. Among them, penny stocks (stocks of companies with small market capitalization) will not perform well as there is not much room left for growth.
“At this moment, money will seek refuge in blue-chip stocks as they are the safest and most stable group in the market. These are stocks issued by well-known, reputable companies with strong financials and a more solid foundation,”
said Minh.
Minh also believes that the stock market’s growth trajectory will continue its upward trend until the end of September. The last three months of 2024 will depend on the Fed’s decision after September on whether to cut interest rates or not. The leading sectors for the last six months of the year could be banking, securities, transportation and logistics, food production, retail, chemicals, and industrial real estate.
Which industry’s stocks should investors choose for year-end investment? (Illustrative image)
Sharing the same view, Dang Tran Phuc, Chairman of the Board of Directors of AZfin Vietnam JSC, stated that, fundamentally, Vietnam’s macroeconomic picture for the first six months and the whole of 2024 is relatively positive. Therefore, the stock market from now until the end of 2024 will likely be positive. However, the market is unlikely to fluctuate strongly and will witness a strong differentiation among industries and stock groups.
The reason lies in the recovery process, where not all businesses and industries recover well; some may even be at a disadvantage or eliminated from the game. Conversely, some powerful enterprises can take advantage of the market share left by their competitors to thrive.
Phuc suggested that investors focus on stocks that meet the following criteria:
First, business performance grows again by at least 15%.
Second, the P/B ratio (a ratio used to compare a stock’s market value to its book value) is still lower or equivalent to its historical average.
Third, the company pays cash dividends with a minimum ratio of 3-4% of par value.
Analyzing further, Phuc said: ”
The construction materials sector, including the steel industry, will improve due to the recovery of the real estate sector, and favorable export conditions. The retail sector will also experience growth as people’s income and spending improve, especially with the recent salary increase from July 1. Thirdly, the banking sector will grow as credit growth is expected to be positive in the third and fourth quarters
.”
Dinh Quang Hinh, Head of Macroeconomics and Market Strategy, VNDIRECT Securities Corporation, opined that the positive information about economic growth in the first six months, recently published by the General Statistics Office, could be a “morale booster” for investors after a significant correction period. Along with this, the market enters the season of publishing second-quarter business results, with many forecasts indicating a continued growth in profits.
“Therefore, investors should stop selling off. We believe that holding stocks in this region will still bring quite positive profits in the next three months. At the same time, investors need to be ready to aggressively allocate if the VN-Index adjusts to the strong support region of 1,200 – 1,220 points, prioritizing sectors that have not increased strongly in the recent period, such as banking, real estate, securities, electricity, and exports,”
Hinh advised.
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