After a period of rapid increase of tens of percent, technology and telecommunications stocks, especially those belonging to the "FPT family" and "Viettel family", showed signs of falling into a correction trend as they competed to decrease sharply.
At the end of the session on June 25, technology and telecommunications stocks continued to record a correction despite the VN-Index recovering after a steep decline. These include: VTP (Viettel Post), VTK (Viettel Consulting and Services), CTR (Viettel Construction), FPT (FPT Corporation), CMG (CMC Technology Group), ELC (Elcom Technology - Telecommunications Corporation), VNZ (VNG Corporation)...
All downhill
Previously, in the session of June 24, VN-Index dropped nearly 28 points, rushing to the 1,250 zone with strong liquidity increasing, showing a strong selling pressure. Technology and telecommunications stocks that exploded in the previous period also followed the trend of turning around and making a deep correction following the general market.
In the "Viettel family", VTP shares fell to the floor price of 6.9% to 89,000 VND/share, the capitalization of this delivery company "flew" more than 800 billion VND in just one session. CTR code also hit the floor price at one point, before narrowing the decline and closing down 5.7% to 151,000 VND/share.
On the UPCoM floor, VTK decreased by nearly 7% to 86,500 VND/share. Similarly, VGI of Viettel Global decreased by 5.4% to 104,000 VND/share, causing the only billion-dollar enterprise in the "Viettel family" to lose nearly 18,000 billion VND in capitalization, falling to more than 315,600 billion VND.
Overall, the decline in this session caused the total capitalization of the entire "Viettel family" group to lose nearly 19,900 billion VND.
Along with the Viettel group, the technology stocks also turned down sharply. In particular, the "growth machine" FPT of FPT Corporation decreased by 2.9% to 132,100 VND/share with exceptionally high liquidity with nearly 13.2 million shares changed hands, worth nearly 1,800 billion, the second highest in history. Capitalization decreased by more than 5,800 billion VND.
CMG shares also fell 5.9% to 66,400 VND/share, at one point hitting the floor at 65,700 VND before demand returned in the ATC session, pulling the market price back a bit. Similarly, ELC and VNZ shares were also in the red at the close.
Regarding the story of technology and the semiconductor industry, DGC shares of Duc Giang Chemicals could not avoid overwhelming selling pressure, pushing the market price down 5.5% to 124,600 VND/share with a strong increase in liquidity.
Previously, since the beginning of the year, technology stocks, especially the “FPT family” and “Viettel family”, have continuously made their mark on the stock market by racing to the top and setting new records. Even when the general market was in the red and under selling pressure, these two groups of stocks still “went against the majority”, attracting large cash flows. Most of the codes increased by tens of percent, some even quadrupled in a short period of time.
The interest in technology stocks in the stock market comes from the artificial intelligence (AI) “fever” that is expected to bring a leap forward for companies in the industry.
Not only that, the positive profit picture of technology group businesses is also a factor supporting the growth of this group of stocks.
Finally, investors' FOMO mentality of fear of missing out on the "wave" of telecommunications technology has helped stocks in the group continuously increase.
Short term negative
Notably, despite the strong growth, technology stocks are still forecast to have room for growth thanks to the wave of investment in artificial intelligence and led by many other technology stocks around the world.
Mr. Nguyen Khac Vuong, Head of Investment Consulting Department of VPS Securities, once commented that the strong growth of technology stocks comes from the smart money flow of investors. They have sought out state-owned enterprises such as Viettel, MobiFone or enterprises with world-class quality and scale such as FPT when signing a hundred million USD contract with technology giant Nvidia...
“Technology stocks belonging to the “FPT family”, “Viettel family” or CMG are still having big waves, the cash flow trend is increasing… so there are no signs of reaching the peak yet. The technology group will be one of the promising groups of stocks in the near future,” Mr. Vuong commented.
So, what causes technology and telecommunications stocks to reverse?
In general, the sharp decline in technology stocks or the “Viettel family” is not too surprising in the context of the recent upsurge in these stocks. In the short term, the market excitement is pushing the valuation of stocks in this industry to quite high levels. For example, software stocks (FPT) are trading at over 28 times and telecommunications stocks (ELC, FOX...) are valued at over 21 times.
However, currently, when the market prices of these stocks have turned around and dropped sharply, they are still significantly higher than the "baseline".
Not only that, the market is in an “information vacuum” phase, most investors are waiting for the picture of Q2 business results after the Q1 reporting season as well as information from the annual general meeting of shareholders has ended and is largely reflected in stock prices.
In addition, the pressure to adjust strongly is inevitable in the context of the exchange rate "heating up" again, the developments in other markets in the region are not very positive, plus the continuous net selling momentum of foreign investors. Since the beginning of 2024, the net selling value of foreign investors on HoSE has exceeded 48,000 billion VND.
According to Mr. Duong Hoang Linh, Director of Analysis, Sacombank Securities (SBS), stocks of enterprises belonging to the “FPT” group and the “Viettel” ecosystem have had a series of days of very strong price increases despite the unfavorable developments of the general market. With the current price level, these groups of stocks are no longer attractive to hold in the medium and long term.
From a positive perspective, Mr. Nguyen The Minh, Director of Analysis, Yuanta Vietnam Securities, assessed that the FPT and Viettel stock groups have had a strong growth streak in recent times thanks to the growth story of these two groups of stocks. Concerns about the valuation of these two groups of stocks are also understandable when the stocks have had a strong growth streak. However, fundamentally, these two groups of stocks are still in a long-term growth momentum.
Similarly, Mr. Nguyen Hong Khanh, Head of Analysis Department, Vietnam International Securities (VIS), commented that the “Viettel family” or FPT enterprises are special bright spots among large corporations but have been doing business effectively this year. The fact that stock prices are growing faster than profit growth partly reflects investors’ expectations for the future potential of the enterprises.
“Investors participating at current prices may be risky in the short term, but in the long term, many businesses still maintain stable growth. Therefore, the corrections in these groups of businesses are usually not too deep and they will soon return to long-term growth momentum,” VIS experts emphasized.
Source: VnBusiness
