Domestic cash flow will return to the market strongly following Lunar New Year 2024, promoting the upward momentum of VN-INDEX towards the psychological resistance area of 1,200-1,220 points this month.
Vietnam’s stock market increased by 4.1% in January 2024, second only to the Japanese stock market in the region. The average transaction value on the 3 exchanges increased 5.4% last month (up 71.4% over the same period) to 19,145 billion VND/session.
Moving forward to 2024, Mr. Dinh Quang Hinh, a securities expert, expects four main drivers to help boost liquidity, including the Fed loosening monetary policy to help cool exchange rates and support investor psychology; Profits of listed companies recovered significantly; Low operating interest rates support stock market valuations and expectations regarding the operation of the KRX system.
Notably, following net selling 10,103 billion VND in the last month of 2023, foreign investors narrowed the net selling momentum to only 320 billion VND in January 2024, demonstrating the expectations of foreign investors in the stock market. new year.
The average earnings-to-price ratio (E/P) of VN-INDEX in January 2024 is regarding 7.0%, down compared to December 2023, mainly due to the increase of VN-INDEX in January/ 2024.
Meanwhile, the average 12-month deposit interest rate of commercial banks in January 2024 continued to decrease.
“In general, the gap between the market’s E/P and deposit interest rates remains high. In the context of the E/P gap and deposit interest rates remaining high and the prospect of profit growth of listed companies in 2024 is positive, we expect domestic capital flow to continue to flow into the stock channel in the near future,” Mr. Hinh said.
Regarding the stock market chart, this securities expert said that the market is moving towards the base scenario of VN-INDEX reaching 1,350 by the end of 2024 (based on P/E reaching 14.3x – growth). EPS 16- 18%).
In fact, VN-INDEX has surpassed the important resistance level of 1,150 points, thereby ending the previous correction. However, market liquidity has not improved much, showing that VN-INDEX has not yet formed a strong upward momentum
Market valuations are still attractive and the announced fourth quarter 2023 business results showed a significant recovery, helping to improve market sentiment.
Market liquidity may improve positively in the second half of February 2024, when individual investors gradually return to the stock market following the Lunar New Year holiday.
Increased domestic capital flow can boost the VN-INDEX’s upward momentum towards the psychological resistance zone of 1,200-1,220 points this month.
The Evergrande event is a potential risk for the international financial market in February 2024. Experts said it is necessary to carefully observe the impact of this event on the global financial market.
