In its latest strategy update report, KBSV Research identifies that the Vietnamese stock market is entering a crucial phase in 2024, buoyed by positive signals from macroeconomic factors and monetary policies.
For the outlook in the second half of 2024, the analysis team points out five key factors shaping the trends in the Vietnamese stock market:
Firstly, the recovery trend in the profits of listed companies will continue, supporting the overall market trend in the fourth quarter. KBSV Research forecasts a 13% growth in the average EPS of listed companies on the HOSE floor.
Secondly, the US Federal Reserve’s (Fed) rate cut boosts global stock markets.
Thirdly, with the Fed’s 50-basis point rate cut, currency pressure has eased significantly. This enables the State Bank to maintain its loose monetary policy, with low-interest rates, promoting credit demand and economic growth.
Fourthly, the US presidential election in November 2024 presents a significant unknown for global stock markets, including Vietnam. A potential Donald Trump re-election could bring trade policy risks for Vietnam. Trump has previously declared intentions to raise import taxes by up to 10% on goods from several countries, including Vietnam, which could impact exports and, subsequently, the economy and stock market.
Fifthly, the weakening of the Chinese economy has been confirmed by several disappointing macroeconomic indicators. Given the high level of economic integration between the two countries, this also poses a notable risk factor for the Vietnamese stock market.
In summary, KBSV Research maintains its VN-Index expectation at 1,320 points by the end of 2024, corresponding to a market P/E of 15 times.
“In the first half of the fourth quarter, the market will fluctuate, especially when the VN-Index approaches the resistance threshold of 1,300 points in the absence of supportive information”, the analysts said, adding that the uptrend would become clearer in the second half of the quarter when business results are announced and expectations for the fourth-quarter reporting season emerge.
Regarding industry prospects for the second half, KBSV Research holds a positive view on the banking, securities, real estate, industrial real estate, port, and oil and gas sectors. The selected investment themes for the fourth quarter include economic recovery, progress in upgrading, La Nina, public investment, and FDI attraction.
Earlier, on September 18, 2024, the Ministry of Finance officially issued Circular No. 68/2024/TT-BTC, amending and supplementing a number of articles of Circular No. 120/2020/TT-BTC on securities trading.
KBSV Research considers this a significant step in meeting the FTSE Russell’s upgrade criteria by allowing foreign investors to buy stocks without requiring sufficient order placement funds and enabling settlement on T+1 and T+2 days.
However, the analysts believe that the earliest the Vietnamese market will receive official news of the upgrade is in the FTSE Russell’s internal review in March 2025, with the effective date one year later.
