Vietnam stock market to grow strongly in 2024: KIS Vietnam Securities

The Vietnamese stock market will make a breakthrough in 2024 thanks to the recovery of the domestic macro economy and the positive influence of supportive policies from the government and the State Bank of Vietnam, said Truong Hien Phuong, senior director at broker KIS Vietnam Securities.

According to Phuong, the market outlook is bright as net selling momentum among foreign investors will gradually slow down or may turn net buying, while selling pressure on domestic cash flow has eased.

Domestic investors can wait for information such as Q4/2023 earnings and reports from different sectors and individual companies before stepping in, he said, forecasting that the stock market in the short term will move sideways until the end of the year.

Regarding information that the U.S Federal Reserve (Fed) will keep interest rates unchanged until the year-end and possibly reduce them three times in 2024, Phuong said it will clearly help central banks around the world have greater room to continue reducing their policy interest rates.

“This will also help the State Bank of Vietnam (SBV) maintain low interest rates, especially those for USD loans, thus reducing costs for the Vietnamese government and businesses when mobilizing foreign capital, particularly international bonds,” he said, adding interest rate cuts will ease pressure on the USD/VND exchange rate.

Low interest rates will reduce business interest costs, thereby improving profits. Thanks to that, companies will boldly invest in developing and expanding production and business, contributing to Vietnam's GDP growth.

On the other hand, the Fed's loosening of monetary policy will make cash flow tend to run into emerging and developing countries, including Vietnam, in two forms of direct investment and indirect investment, he stated.

Phuong held that the Fed's decisions will meet investors' expectations, partly benefiting the stock market. With such positive sentiment, domestic investors will tend to be bold as they anticipate future market growth opportunities.

On the other hand, indirect investment capital flow (injected by foreign investors) will find opportunities in emerging markets, especially Vietnam.

Although foreign investors in the year to December 14 net sold a total of nearly VND21 trillion ($865.8 million), he said he believes that this trend will reverse in 2024, and they may even accelerate disbursement into Vietnam's stock market.

Vietnam's benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) slipped 0.37% to 1,110.13 points on Thursday with the majority of blue chips in negative territory.

The major bourse saw trading value down 20% to VND14.68 trillion ($605 million), with up to 384 tickers losing and 138 gaining.

Foreign investors continued to be net sellers to the tune of VND358 billion ($14.78 million). The mainly net sold CTG of state-owned lender VietinBank and STB of Ho Chi Minh City-based lender Sacombank.