The market is still in a period of strong fluctuations in a positive direction, so it is expected that the VN-Index will soon surpass the resistance level of 1,300 points.
The economic growth rate in Q2/2024 reached 6.93%, much higher than in Q1 (5.87%) and the same period in Q2/2023 (4.05%) thanks to the leadership of the Construction Industry and Services sectors.
In general, the domestic economy is recovering more and more clearly and each month is better than the previous month. Specifically, the economic situation in June showed more positive signs than in April and May when data on production, consumption, import and export activities grew better as well as macro fundamental factors such as interbank interest rates, exchange rates and gold prices all cooled down.
The industrial production index continued to grow compared to the previous month and increased sharply compared to the same period last year. Notably, the number of new orders and export orders increased sharply despite rising selling prices and input cost pressure.
The increase in labor demand promises to create a stronger increase in consumption in the coming time. The demand for goods from major exporting countries has increased again as the economies in major exporting countries are recovering better. The positive point is that the trade surplus has returned in June after a trade deficit in May, which will further support the issue of the exchange rate gradually cooling down.
Investment activities remain an important factor driving growth, while registered capital and disbursed FDI in June grew strongly again, while public investment activities are still being strongly urged. In addition, the situation of registering new enterprises and registered capital both increased compared to May and the same period last year.
Macro data shows that business conditions are more stable when: exchange rates cool down thanks to the intervention and regulation of the State Bank; gold prices cool down and narrow the gap with world gold prices after many measures from the Government; Although deposit interest rates increased slightly and created a new base level, lending interest rates remained low and interbank market liquidity was more stable.
Inflation alone remains a factor that needs to be monitored, although it only increased slightly in June due to pressure from input costs and increased transportation costs, in addition to the increase in basic wages applied from July 1, 2024, which will also create an additional burden on inflation.
With the domestic and global economic recovery becoming increasingly clear, Yuanta assesses that the GDP growth rate in the third quarter will continue to be higher than the second quarter, slightly decreasing in the fourth quarter due to the high base level in Q4/2023 and the economic growth for the whole year reaching about 6.2%, equivalent to the adjusted level at the end of the first quarter.
The VN-Index closed at 1,245 points, down 1.3% compared to May 2024 with reduced liquidity. At the same time, the price chart of the VN-Index has not been able to surpass the psychological resistance level of 1,300 points. However, the market is still in a period of strong fluctuations in a positive direction, so it is expected that the VN-Index will soon surpass the resistance level of 1,300 points next month.
Yuanta expects the Fed to cut interest rates soon in September 2024, a factor supporting the uptrend in Q3 2024. At the same time, positive macro data along with positive growth data of listed enterprises in Q2 2024 also support the market's uptrend in July 2024.
Low valuations in large-cap stocks along with the projected P/E of the VN-Index at 12.x, equivalent to a yield of 8.3%, show that the stock market is still more attractive than other investment channels even when savings interest rates are on the rise again.
Source: VnEconomy
