The stock market is expected to receive more supportive information, along with improved cash flow as the USD/VND exchange rate cools down and new laws are about to be passed. Investors also expect a boost in the real estate market.
The stock market has just experienced a week of strong fluctuations, with a quick recovery, with one session increasing by more than 33 points. However, profit-taking pressure also occurred immediately after that. Cash flow is not strong enough and caution is still common.
In the last session of the week, November 10, the market recorded a profit-taking session on a large scale. The VN-Index decreased by more than 12 points, equivalent to a decrease of 1.1% compared to the 5th session, after a strong increase of nearly 100 points from the bottom.
In the first sessions of the week, VN-Index moved positively, continuing the upward momentum of the previous weekend as the yield of 10-year US government bonds fell to 4.6%, helping to cool down the pressure on domestic exchange rates. Thanks to that, it improved the sentiment of domestic investors - who have been under a lot of pressure in recent months related to the exchange rate story.
However, profit-taking pressure gradually increased in the last two sessions of the week, especially in the Friday session after Fed Chairman Jerome Powell's statement that "the Fed is not confident enough that it has tightened policy strongly enough to rein in inflation to the 2% target level", and noted that "the Fed will do its job and raise interest rates further if inflation accelerates again".
The above statement caused many international stock markets to fall sharply, leading to a correction in the domestic market at the end of the week.
Overall for the week, the VN-Index still recorded an increase of 25 points to 1,101.7, equivalent to an increase of 2.3% compared to the end of last week. The HNX-Index increased by 4.08% to 226.65 points. The Upcom-Index recovered by 2.2% to close at 86.03 points.
Last week, a number of key stocks contributed greatly to the rise of the VN-Index, including Vingroup (HM:VIC) of billionaire Pham Nhat Vuong, up 8.11%3T, Vinhomes (HM:VHM) up 4.41%3T. Hoa Phat Group (HM:HPG) of billionaire Tran Dinh Long also increased 5.61%3T and Vietinbank (HM:CTG) up 51%3T.
On the other hand, Vietcombank (HM:VCB) decreased by 3.3%; Masan (HM:MSN) decreased by 3.4% and Sabeco (HM:SAB) decreased by 2.4%.
Stocks fell sharply in September and October, erasing all gains since the beginning of the year. (Source: VinaCapital) A notable positive point is the recovery of liquidity, with the average trading value increasing sharply by 27.5% compared to the previous week, reaching 20,306 billion VND. Foreign investors returned to net selling on all 3 exchanges, focusing on HOSE with a value of 1,217 billion VND, compared to a net buying of 300 billion VND in the previous week.
On the other hand, foreign investors continued to net buy on HNX and UPCOM with a value of VND240 billion (down VND20% compared to last week) and VND47 billion (up VND40% compared to last week). In total, foreign investors net sold VND930 billion on all three exchanges.
Cash flow expected to improve, waiting for boost from real estate
According to Mr. Dinh Quang Hinh, Head of Market Strategy Department, Analysis Division, VnDirect Securities (VND (HM: VND)), the trend from now until the end of November, the market still has a lot of supporting information along with improved cash flow.
Specifically, the domestic exchange rate has continuously cooled down in recent days, which will have a positive psychological impact on investors; at the same time, it will help monetary policy become more “breathable” in the last months of the year, thereby creating conditions for speculative cash flow to return to the stock market.
At the end of November, the market will turn its attention to the National Assembly with the expectation that three (amended) bills related to the real estate market will be passed, including the Land Law, Housing Law, and Real Estate Business Law. If passed, these (amended) bills will be a boost to the prospects of real estate businesses.
In the context of a lot of supportive information, it is expected that smart money will maintain its position in the stock market and keep the recovery momentum.
