Is the Stock Market Unpredictable Post-Crash?

The VN-Index quickly recovered to surpass the 1,200-point mark last week, in line with the rebounding trend observed in various international markets. This recovery was supported by a multitude of positive domestic and international factors.

Notably, the listed companies’ Q2 business results exceeded expectations, with VNDirect Securities Corporation’s Analytics Block reporting a over 20% growth in net profits compared to the same period last year. This surpassed the market’s previous prediction of a 5-10% increase.

The market sentiment regained balance after the U.S. Department of Labor released data showing that the number of people filing for unemployment benefits for the first time was lower than expected, easing concerns about a potential recession in the U.S. economy. Additionally, the U.S. stock market recorded its strongest gain in two years, oil prices rebounded, and the yield on U.S. government bonds recovered to 4%.

In the short term, the analysis team from Saigon-Hanoi Securities Joint Stock Company (SHS) predicts that the market in August will experience a lull in news, as companies have already released their Q2 financial reports. As a result, the market’s performance will heavily depend on the growth prospects of large-cap companies and GDP growth.

“The fluctuation of the VN-Index, which dropped significantly around the 1,200-point level, presents opportunities to accumulate high-quality stocks. Short and medium-term investors should maintain a reasonable portfolio ratio and refrain from chasing purchases when the VN-Index rebounds to the 1,250-point level,” advised SHS.

Despite the fluctuations in the domestic and international financial markets, VNDirect maintains a positive outlook for the Vietnamese stock market in the medium term.

Supporting factors include the positive Q2 business results, with the market’s total profits expected to grow by 18% this year. Notably, the scenario of the U.S. Federal Reserve (Fed) cutting its policy rates two to three times by the end of the year is becoming more plausible, easing exchange rate pressures.

The State Bank of Vietnam can demonstrate greater flexibility in injecting liquidity into the system, especially in Q4, through open market operations and USD purchases. This will help maintain attractive interest rates to support economic growth.

With the market gradually regaining balance, many experts recommend that investors consider restructuring their portfolios for medium and long-term investment goals.