Year-end stock market outlook

VN-Index cannot be in a depression, but will continue to rise to the important resistance level of 1,200 points, as observed in 2007-2018, before reaching 1,280-1,300 points by year's end.

>> VN-Index heads closer to 1,200 points

Despite the economy's internal troubles, authorities are stepping up efforts to smooth financial flows and eliminate obstacles for enterprises.

Money flows into stock market

Despite stopping its rate-hiking campaign at the June meeting, FED Chairman Jerome Powell stated that the FED will continue to raise interest rates at the July meeting and that another rate rise may occur in 3Q23. Not only is the FED hawkish, but several other central banks, including the BoE and the ECB, are sending the same message.

In contrast to the previously stated major economies, the State Bank of Vietnam has decreased policy rates for the fourth time in order to alleviate economic challenges caused by high-interest-rate loans. The SBV's action has helped to free up capital flows and boost investor confidence in the Vietnamese stock market.

Following a severe liquidity fall in 1Q2023, stock market liquidity improved in 2Q23, particularly in April and June. Meanwhile, the total number of fresh opened accounts climbed by 413,976 accounts in the first half of 2023, bringing the overall number of securities accounts in Vietnam to more than 7.31 million accounts, a 6% rise from the end of 2022. The huge increase in liquidity, along with the increase in new accounts, suggests that investors are growing more interested in Vietnam’s stock market.

Not only are VN30 stocks performing strongly, but so are the bulk of basic stocks. Many stocks in the steel, construction and installation, finance, chemicals, seaports, building materials, and other sectors had large increases in trading volume when compared to the preceding 30 session average. Many largeCaps, including HPG, VCB, VNM, MWG, FPT, and others, not only reached an upward bottom, but also surpassed the 6-month high.

Many equities are in an uptrend on the weekly/monthly chart, with large trade values. This demonstrates that not only individual equities, but also the market as a whole, are on the rise.

>> VN-Index likely to head toward 1,180-1,200 points this week

Uptrend is maintained

Many positive signs, such as many stocks in uptrend, largeCaps with stable trading, stocks surpassing the MA200, or largeCaps, growth stocks making new highs, indicate that the Vietnamese stock market has returned to an uptrend, and this is likely to happen in the period 2024 - 2025.

The international investors' present transaction value may be fairly modest, but towards the end of the year, the KRX-based central clearing mechanism will help local investors, particularly international investors to boost their trade. Derivatives may be created in a variety of ways to satisfy the demands of investors and help them rebuild trust in Vietnan’s stock market.

VN-Index cannot be in a depression, but will continue to rise to the important resistance level of 1,200 points, as observed in 2007-2018, before reaching 1,280-1,300 points by year's end.

Despite numerous challenges in 2023, the stock market is typically ahead of the economy, even gaining before the economy completely recovers. For many years, the movements of global stock markets have demonstrated that the long-term tendency of major stock indexes of nations is upward. When the upswing reigns towards the end of the year, the VN-Index will be no exception.

Investors should keep their trust in the Vietnamese stock market for the time being; this is a chance for long-term investment. Equities in the fields of finance, building and installation, oil and gas, chemicals, basic resources, and other sectors are likely to draw investment in the second half of this year.