Weighting stock market prospects

In contrast to the net-selling performance of foreign investors so far this year, local retail investors have remained active buyers. Le Duc Khanh, director of investment capacity development at VPBank Securities (VPS), explained why positive signs have taken hold of the stock market and economic development prospects.

Before a correction in the first week of April, the benchmark VN Index was one of the three best-performing stock indexes worldwide in the first quarter of this year. What are your forecasts for future stock market movements?

The first few trading sessions in April were not very favourable because selling pressure prevailed, causing the index to wobble and adjust downwards. Strong corrective pressure was seen mostly among large-cap tickers. This was a necessary adjustment following an extended upward cycle.

In Q1 of this year, Vietnam’s GDP expanded 5.66 per cent, and is expected to reach 6 per cent growth for the whole year. Foreign direct investment (FDI) disbursement, and import and export growth were all positive.

The macro situation has positive points and continues to have bright prospects. Accordingly, the stock market will continue on an upward trend in the long term, but investors should still be wary of further corrections.

What are your thoughts on current cash flow movements of both domestic and foreign investors?

Foreign investors remained net sellers in Q1, surpassing the $330 million posted in March, compared to just over $195 million in both January and February.

This can be attributed to strong fluctuations in the VND/USD exchange rate and positive developments in global stock markets.

In addition, a changing monetary policy stance from tightening to loosening may take place around the world in late 2024, causing investment funds and foreign institutional investors to change their investment allocation strategies.

Meanwhile, domestic investor cash flow remains good in diverse basic stocks in the financial, chemical, technology and telecommunications, oil and gas, real estate, and industrial real estate sectors. This is a good sign, showing investor confidence and trust in this year's macro prospects.

Do you think investors should be taking short-term profits at the moment?

The stock market is likely to continue climbing in 2024.

However, at strong resistance areas such as 1,300 points, the market could undergo fluctuations across different sectors.

At this stage, investors should review their portfolios to restructure, and take profits where they can, but hold on to stocks with long-term potential. There is no one formula that fits all investors.

Flexibility to adapt to the market situation is necessary.

Which ticker groups have high growth potential in 2024?

I think there is a raft of sectors that may record positive business results this year, including finance and securities, chemicals, steel, oil and gas, industrial real estate, and technology-telecommunications.

Thuy Anh

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