Vietnam stock market to be more positive in second half: experts

The Vietnamese stock market is expected to continue climbing in the second half of this year, and its benchmark VN-Index is likely to reach the threshold of 1,400 points, said Nguyen The Minh, chief analyst at Yuanta Vietnam Securities JSC.

As efforts continue to have the market status upgraded from “frontier” to “emerging” by FTSE Russell, the VN-Index, representing the Ho Chi Minh Stock Exchange (HoSE), may return to its old peak of around 1,500 points, he predicted.

“Many investors are worried that the market has increased strongly, but the prices of large-cap stocks remain cheap. The market will still go up in Q3 and the first half of Q4 of this year, but in the second half of Q4, the market may have a break to observe whether the macro economy has really recovered, as well as deliver forecasts for 2025," Minh said.

Sharing the same view, Truong Hien Phuong, a senior director at KIS Vietnam Securities JSC, stated that barring unexpected factors, the market will be on a positive trend and gradually improve in the last months of the year based on many positive signals.

Typically, foreign investors will become net buyers again when the U.S. Federal Reserve (Fed) lowers interest rates, leaving U.S. looking less attractive. At that time, investment capital flows around the world will seek more appealing destinations, such as emerging or frontier markets.

“When the Fed reduces interest rates, central banks around the world, including Vietnam, will also follow. Reduced interest rates will be a positive factor supporting businesses and the economy because capital costs will be cheaper, leading to better profit margins for businesses. Therefore, investors will buy shares to anticipate this growth,” he analyzed.

In addition, he said many investors expect Vietnam's stock market to be upgraded. From now until the end of the year will be a sprint for Vietnamese regulators to complete policy mechanisms and processes to have the stock market status upgraded in 2025. The upgrade will provide a boost for the economy and motivate foreign investors to buy stocks in advance to catch opportunities.

“Last week, the VN-Index conquered the 1,300 point mark easily. This shows that the market in the last six months will be more positive," Phuong assessed.

In a recent report, leading broker Saigon Securities (SSI) forecast the VN-Index will stand at 1,300 points at the end of 2024, although there may exceed this threshold on multiple occasions. Profit growth will be the main driving force to help stocks increase significantly this year, it said, adding in the context of low interest rates, high dividends also become an attractive factor.

"Capital from individual investors may return to the stock market in the remaining months of 2024, and the VN-Index will benefit," it projected.

Echoing those thoughts, VNDirect Securities believed that improved business results in 2024 will be a strong supporting factor for the stock market.

The broker maintained its forecast of year-on-year net profit growth of companies listed on the HoSE at 16-18% this year.

Market leaders in H2

The VN-Index has expanded 13% since the beginning of the year, and is now hovering around 1,270-1,280 points.

The only negative point has been strong selling by foreign investors to the tune of more than VND40 trillion ($1.57 billion) so far this year. However, due to low bank deposit interest rates, domestic investors have turned to the stock market and helped cushion the blow.

Some stocks have made significant gains, many times higher than the 13% climb on the main index, and are continuing on an upward trend. However, not all investors have taken profits as expected.

Sharing about investment opportunities in the second half of 2024, securities experts believed that investors should increase the proportion of stocks when macro indicators improve, of which banking codes will still lead the market.

Although 2024 has not been a good year for banking stocks, their valuations are quite low, with a price to book ratio below 2, even below 1.5 times at some banks. On the other hand, banks with high current account savings accounts remain attractive, not to mention stories of share issuances to raise capital.

The securities group also has bright prospects despite slowing down over the past two months. Fundamentally, this group's margin space is still large.

The steel group is also an option as exports are expanding thanks to high demand in developed countries. In the long term, steel is expected to benefit when legal problems facing real estate projects are removed.

In addition, the information technology-telecommunications services group has the potential to gain in the near future thanks to supporting factors such as software exports maintaining double-digit growth and the digital transformation being adopted by businesses.

According to HSBC, 60% of businesses operating in Vietnam plan to invest in technology and digitalization, with a focus on digital payments, e-commerce, and artificial intelligence.