Vietnam’s benchmark VN-Index will welcome capital flow from individual investors in 2024 and hit 1,300 points by the end of the year, according to Vietnamese broker Saigon Securities (SSI).
In a recent report, SSI states that record low interest rates will be the main growth driver for cash flow in the stock market, especially from individual investors.
According to the broker, bank deposits are continuing to increase because other investment channels still see limitations. For example, gold prices have increased significantly, while the real estate and corporate bond markets need a lot more time to recover. This capital flow may return to the stock market during parts of 2024.
"As individual investors’ cash flow accounted for 92.2% of the average daily trading volume of the entire market in 2023, we predict that the VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), will have some leaps in 2024 thanks to this capital flow," SSI comments.
Although foreign investors had a year of net withdrawals in 2023, this trend will reverse in 2024 following the U.S. Federal Reserve’s move to gradually lower interest rates and opportunities for the upgrading of the Vietnamese stock market status from “frontier” to “emerging” by FTSE Russell, a subsidiary of the London Stock Exchange Group (LSEG), in 2024-2025.
Foreign investors' capital inflow may not recover immediately, but SSI expects selling pressure from this group will not be as strong as last year.
It believes that some industries will recover significantly with after-tax profit growth greater than 30% year-on-year, including steel, retail and securities.
In summary, the top broker assesses that both individual and foreign investor capital flows will be favorable for the stock market this year, and 2024 is expected to witness strong fluctuations, with a strong recovery immediately following a deep correction. Therefore, investors should buy stocks during strong corrections, it advises.
Closing the Wednesday session, the VN-Index stood at 1,230.04 points, with trading value on the HoSE expanding 6.9% to VND22.59 trillion ($920.80 million).