With the prospect of profits unlikely to break out in the next 1-2 quarters, a broad-based adjustment in the mid- and small-cap group is appropriate. Opportunities in the second half of 2024 lean towards the VN30 group, in which banking stocks account for a large proportion.
Scenario One
In the stock market strategy report for the last 6 months of 2024, ACBS Securities presented two scenarios for the market, emphasizing that the VN30 group will lead the market.
Scenario 1: Vn-Index in the range of 1,000 - 1,280 points: The US economy has a soft landing but inflation is persistent. The Fed will only start cutting interest rates from the third quarter of 2024 with a slow rate of 0.75% in 2024 as the current Plot dot. The world economy has low growth, China continues to decline.
Domestically, Vietnam's GDP growth reached 5.6%. VND interest rates continued to remain low, so the difference between USD and VND interest rates remained high and lasted throughout 2024, putting pressure on the USDVND exchange rate. The depreciation was mainly concentrated in the first half of 2024 and then gradually recovered by the end of the year.
The investment strategy prioritizes industries and businesses with positive profits in 2024, not heavily dependent on economic recovery expectations, healthy financial situation, attractive valuations such as technology, industrial park real estate, oil and gas, chemicals, and public investment.
Second scenario
Second scenario: VN-Index accumulates sideways in the 1,150 - 1,300 point range: The Fed will start lowering interest rates from September. Inflation figures are all on a downward trend while the job market has clearly weakened in recent days, making the risk of a US economic recession a top concern. Currently, the Fed is even expected to cut interest rates three times this year, with a total cut of over 1%.
Vietnam's GDP growth could reach over 6.21% in 2024 thanks to the momentum of industrial production, construction and exports. Growth momentum could slow down in the fourth quarter if the US and major export markets face the risk of economic recession.
Exchange rate pressure gradually decreased by the end of the year. Inflation remained below 4.5%. Deposit interest rates may increase when credit demand increases, but the increase is insignificant. Net selling by foreign investors improved.
Regarding the two pillar groups of Banking and Real Estate, according to ACBS, while banks have maintained profit growth momentum with NIM tending to expand thanks to low mobilization costs, the real estate industry, especially residential real estate, has not yet shown any recovery.
In particular, the real estate industry faced difficulties in both profit growth and profit reduction of 22% in the first 6 months of 2024 when the residential real estate market had not recovered. However, quarterly profits had a slight growth.
Therefore, with the prospect of profits unlikely to break out in the next 1-2 quarters, a broad adjustment in the mid- and small-cap group is appropriate. Opportunities in the second half of 2024 lean towards the VN30 group, in which banking stocks account for a large proportion, especially in the context of the Fed lowering interest rates and foreign investors' cash flow possibly re-entering the market.
Previously, in the first 7 months of the year, foreign investors net sold 2.3 billion USD on the Vietnamese stock market. The selling pressure was especially strong in some stocks including VHM, VIC, VRE. In addition, FPT was also a stock that was strongly net sold mainly due to the reason that its valuation reached its peak thanks to its connection with the global semiconductor/AI story.
Source: VnEconomy
