VN-Index to reach 1,200-1,220 points in February: broker

By Huu Bat, Minh Hue
Sun, February 11, 2024 | 8:09 am GMT+7

Increasing domestic capital flow is likely to push Vietnam’s benchmark VN-Index towards the resistance territory of 1,200-1,220 points in February, according to VNDirect Securities.

The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), was off to a good start in 2024 with an increase of 4.1% in January, ranking second in Asia behind Japan's Nikkei 225 (+6.8%).

In the five trading sessions leading up to the Lunar New Year holiday (Tet), the index pushed ahead impressively, reaching 1,198.53 points at the close on February 7 (the last trading day before Tet).

The VN-Index is expected to hit 1,200-1,220 points in February 2024. Photo by The Investor/Trong Hieu.

The VN-Index is expected to hit 1,200-1,220 points in February 2024. Photo by The Investor/Trong Hieu.

The early-year performance can be attributed to positive signals from the macroeconomic situation at home and aboard, the brokerage firm says.

Globally, the U.S. economic outlook improved with its consumer price index (CPI) in December 2023 increasing by 3.4% year-on-year and the world largest economy’s purchasing managers’ index (PMI) reached a seven-month high in January 2024.

Domestically, Vietnam's GDP recovered significantly with a year-on-year expansion of 5.05% in 2023, for an annual GDP per capita of $4,284.

Vietnam's credit growth also accelerated in the last months of the year, ending 2023 up 13.7% compared to 2022.

The State Bank of Vietnam has set a credit growth target of 15% for 2024 and allocated quotas to credit institutions right at the beginning of the year. In addition, the National Assembly passed the revised Land Law and the revised Law on Credit Institutions.

Banking stocks made the biggest gain of 11.1% with a series of positive information including the recovery of business results in Q4/2023 and the passage of the amended Law on Credit Institutions.

The transport group also witnessed impressive growth of 6.4% as investors expected businesses to benefit from the trend of rising freight rates due to Red Sea tensions.

The telecommunications industry also outperformed the VN-Index with a rise of 5.2%, mainly supported by FPT Corporation's positive business results.

The stock market’s liquidity improved in January thanks to positive domestic macro information. The average trading value on the three exchanges climbed 5.4% over the previous month and 71.4% over the same period in 2022 to VND19.15 trillion ($784 million) per session.

Of this, the figure on the HoSE reached VND17 trillion ($696 million) per session, an increase of 7.8% month-on-month; HNX VND1.4 trillion ($57.32 million), down 22.8%; and UPCoM VND737 billion ($30.2 million), up 30.4%.

Notably, foreign investors net sold stocks for VND320 billion ($13.1 million) last month, a sharp decrease compared to December 2023 with VND10.1 trillion ($413.5 million).

This reflects the expectations of foreign investors in the Vietnamese stock market in the new year, the report says.

Stock channel to remain a magnet

Stocks are set to continue being an attractive investment channel as bank deposit interest rates remain low. As of January 31, 2024, the average 12-month deposit interest rate listed by state-owned banks dropped to 4.77% per year, down 0.17 percentage points from December 2023. The average interest at private banks decreased by 0.15 percentage points month-on-month to 4.79% per year, with 12-month deposit rates in the 4.6-5.2% range.

VNDirect believes that there is not much room left to further reduce deposit interest rates in the context of recovering loan demand, leading to increasing capital mobilization by commercial banks. However, it forecasts that the average 12-month deposit interest rate will continue to remain low at about 4.5-5% in 2024.

The average earnings-to-price (E/P) ratio of the VN-Index in January reached about 7%, down from December, mainly due to last month’s stock market gains. Meanwhile, the average 12-month deposit interest rates at commercial banks continued to fall. In general, the gap between the stock market's E/P and deposit interest rates remains high.

“Amid a high gap between the stock market’s E/P and deposit interest rates and the positive profit growth prospects of listed companies in 2024, we expect that domestic capital will continue to flow to the stock channel in the near future," the VNDirect report says.

The broker believes that the market is aiming for a base scenario of reaching 1,350 points by the end of 2024 (based on the P/E of 14.3x and EPS (earnings per share) growth of 16-18%).

Market liquidity may improve in the second half of February, when individual investors gradually return to the stock market after the Lunar New Year holiday, the report says. The VN-Index may enter a resistance territory of 1,200-1,220 points within the month.

VNDirect Securities advises investors to pay attention to stock groups like banking, seaport and shipping, and consumer goods and retail.

Comments (0)
  • Read More
Vietnam's Vinafreight expects 47% decline in 2025 profit amid shipping cost slump

Vietnam's Vinafreight expects 47% decline in 2025 profit amid shipping cost slump

Vinafreight, a leading logistics service provider in Vietnam, expects its pre-tax profit to decline by 47% from last year due to a slump in air and sea freight rates.

Companies - Sun, March 30, 2025 | 9:54 am GMT+7

Brazil to import more products from Vietnam: President

Brazil to import more products from Vietnam: President

Brazil will import more products from Vietnam than other traditional partners in the coming time, said visiting Brazilian President Luiz Inácio Lula da Silva.

Economy - Sun, March 30, 2025 | 8:17 am GMT+7

Vietnam to have 34 cities, provinces, instead of 63: Party chief 

Vietnam to have 34 cities, provinces, instead of 63: Party chief 

Vietnam plans to reduce the number of cities and provinces from the current 63 to 34, as part of a scheme to streamline its administrative apparatus, Party General Secretary To Lam said Friday.

Politics - Sat, March 29, 2025 | 4:18 pm GMT+7

Thailand’s digital ad spending predicted to grow 10% in 2025

Thailand’s digital ad spending predicted to grow 10% in 2025

Thailand’s online advertising spending in 2025 is forecast to grow 10% to THB35 billion (over $1 billion), based on a gradual rebound of the local economy and intense competition in the digital industry, according to the Digital Advertising Association of Thailand (DAAT).

Southeast Asia - Sat, March 29, 2025 | 3:39 pm GMT+7

US Defence Secretary reaffirms alliance commitment during visit to Philippines

US Defence Secretary reaffirms alliance commitment during visit to Philippines

U.S. Secretary of Defence Pete Hegseth reaffirmed Washington’s strong commitment to its alliance with the Philippines during his official visit to the Southeast Asian country on Friday.

Southeast Asia - Sat, March 29, 2025 | 3:32 pm GMT+7

Southern Vietnam province Tra Vinh okays five more wind power projects

Southern Vietnam province Tra Vinh okays five more wind power projects

Vietnam's southern coastal province of Tra Vinh has granted in-principle approvals for five wind power plant projects, with a total investment of over VND 13.8 trillion ($540 million).

Southeast Asia - Sat, March 29, 2025 | 3:29 pm GMT+7

Vietnam, South Africa eye stronger air logistics links

Vietnam, South Africa eye stronger air logistics links

Vietnam and South Africa are seeking to strengthen air logistics cooperation to meet rising trade and transportation demands.

Southeast Asia - Sat, March 29, 2025 | 3:24 pm GMT+7

Net profit of Vietnam-Singapore Industrial Park nearly doubles in 2024

Net profit of Vietnam-Singapore Industrial Park nearly doubles in 2024

Vietnam-Singapore Industrial Park J.V. Co., Ltd, or VSIP, the largest industrial park developer in Vietnam, posted VND3.28 trillion ($128.37 million) in net profit in 2024, up nearly 93% year-on-year.

Industrial real estate - Sat, March 29, 2025 | 3:18 pm GMT+7

Trump Organization eyes golf course, hotel projects in Vietnam

Trump Organization eyes golf course, hotel projects in Vietnam

A consortium between the Trump Organization and its partner in Vietnam plans multiple investments worth billions of dollars in golf courses, hotels and real estate projects Vietnam, Reuters quoted the consortium’s spokesman as saying.

Real Estate - Sat, March 29, 2025 | 11:06 am GMT+7

Livestock major Dabaco invests in 8.2-hectare dry port in northern Vietnam

Livestock major Dabaco invests in 8.2-hectare dry port in northern Vietnam

Vietnam’s leading livestock firm Dabaco has invested in an 8.2-hectare inland container depot (ICD) in Bac Ninh province, an emerging manufacturing hub in northern Vietnam and home to a Samsung Electronics plant.

Infrastructure - Sat, March 29, 2025 | 10:51 am GMT+7

Phuong Tien Minh appointed CEO of life insurer FWD Vietnam

Phuong Tien Minh appointed CEO of life insurer FWD Vietnam

Hong Kong-headquartered FWD Group Holdings Limited has appointed Phuong Tien Minh as CEO of life insurer FWD Vietnam, effective Thursday, March 27.

Finance - Sat, March 29, 2025 | 10:40 am GMT+7

Vietnam's Deputy PM backs formation of free trade zone in Binh Dinh province

Vietnam's Deputy PM backs formation of free trade zone in Binh Dinh province

Vietnam’s Deputy Prime Minister Nguyen Chi Dung on Friday expressed his support for an early study of a free trade zone in Phu My Port area, the south-central province of Binh Dinh.

Economy - Sat, March 29, 2025 | 8:25 am GMT+7

Vietnam offers numerous advantages for Skoda Auto's investment: executive

Vietnam offers numerous advantages for Skoda Auto's investment: executive

Vietnam offers a range of advantages for investment by Czech automaker Skoda Auto, including its seaport system, logistics infrastructure, and skilled labor, the company’s chairman and CEO Klaus Zellmer said on Thursday.

Industries - Fri, March 28, 2025 | 7:33 pm GMT+7

Vietnam plans to cut import tax for LNG to 2%

Vietnam plans to cut import tax for LNG to 2%

Vietnam’s Ministry of Finance is drafting a decree on preferential import tax for some products, including a proposal of 2% tax rate for LNG.

Energy - Fri, March 28, 2025 | 4:31 pm GMT+7

AES’s $2.1 bln LNG power project needs solutions to meet deadline: Vietnam authorities

AES’s $2.1 bln LNG power project needs solutions to meet deadline: Vietnam authorities

The 2,250-MW Son My 2 LNG-fired power project, invested by the U.S.'s AES and state-run Petrovietnam subsidiary PV Gas, “needs solutions” to meet its deadline.

Energy - Fri, March 28, 2025 | 4:06 pm GMT+7

Over $9 bln pledged for investment projects in central Vietnam province Binh Dinh

Over $9 bln pledged for investment projects in central Vietnam province Binh Dinh

Binh Dinh province on Friday handed over MoUs on investment cooperation, in-principle approvals and investment registration certificates to 62 projects worth over VND231 trillion ($9.03 billion).

Industries - Fri, March 28, 2025 | 4:05 pm GMT+7