A week full of good news

Investors have just experienced a week of receiving important and quite positive macroeconomic news. Foreign direct investment (FDI) continues to flow strongly into Vietnam. This shows the confidence of foreign investors in the economy of 100 million people.

Multilateral and bilateral free trade agreements, relations with the world's largest economies from the US, China, India, EU, and Japan have been raised to new heights, making Vietnam a focal point attracting international capital flows.

Registered FDI capital in January 2024 increased by more than 40% over the same period, realized FDI capital increased by 9.6%. Industrial production indexes (IIP) and import-export indexes both improved positively.

Imports and exports have had a very good run in the first month of 2024, in the context of signs of recovery in world market demand. Exports in January increased by 4% over the same period, imports increased by 6.8%.

This is a signal that businesses have more confidence in production and business activities, import more and create momentum for growth throughout 2024. The domestic business sector has stronger export activities than the FDI sector. After a period of stagnation, private investment is expected to recover.

In addition, the Government is also promoting public investment with a series of highway and airport projects, along with the request to accelerate the power infrastructure for economic development. Last week, the Prime Minister inspected and requested to accelerate the progress of the 500kV line 3 project from Quang Trach to Pho Noi.

The market also received positive information from the manufacturing activity index. Vietnam's PMI index exceeded 50 points for the first time in 5 months. Meanwhile, the domestic USD/VND exchange rate cooled down from 24,700-24,800 VND/USD to 24,520 VND/USD (Vietcombank selling price on February 5).

Meanwhile, the US Federal Reserve (Fed) kept its policy interest rate unchanged at its January meeting at a 23-year high of 5.25-5.5%. The Fed said the possibility of a rate cut in March is low, which will not affect the exchange rate in Vietnam.

Along with positive signals from FDI and import-export, information on public investment and power grid has a positive impact on industry groups such as industrial real estate, construction materials, electricity, export enterprises, etc. Cash flow moves quite quickly into stocks of these industries.

In the stock market, short-term profit-taking before the Lunar New Year caused the VN-Index to slightly decrease by 0.3% to 1,172.6 points throughout the week. The HNX-Index increased by 0.5% to 230.6 points. The Upcom-Index increased by 0.8% to close at 88.4 points.

Sell ​​for money, or collect goods and wait for the wave after Tet?

Mr. Dinh Quang Hinh, Head of Market Strategy Department, VnDirect Securities Analysis Division, said that the market has just experienced a week of volatile trading between buyers and sellers, in the context of the approaching Tet holiday. A number of investors have the mentality of "taking an early Tet holiday" and selling to get money back. On the contrary, many investors took the opportunity to "pick up" stocks, in order to prepare for the period after Tet. This helped transactions on the market to be quite bustling.

Some securities companies believe that investors with a high cash ratio can take advantage of fluctuations to accumulate good stocks for the medium and long term.

According to SHS Securities, in the medium term, the market is moving in the balance zone to form a new accumulation base and is expected to form an accumulation base within the range of 1,150-1,250 points.

Recently, many large enterprises have had quite impressive business results such as Hoa Phat Group (HPG) of Mr. Tran Dinh Long, Masan (MSN) of Mr. Nguyen Dang Quang, FPT of Mr. Truong Gia Binh,...

Last week, foreign investors net bought thousands of billions of VND, focusing on buying construction stocks AIC on UPCoM. Some other stocks that foreign investors strongly bought were: PNJ, SSI, HPG, PDR, STB, NVL, etc. Foreign investors net sold Vincom Retail (VRE), Vinhomes (VHM) and Vingroup (VIC), etc.

CSI Securities believes that "after the rain comes the sun". The strong growth in liquidity in stocks of many industry groups shows that positive signals are still dominant. CSI maintains its expectation that VN-Index will reach the resistance level (1,200-1,210) points before the Lunar New Year holiday.

Mr. Dinh Quang Hinh said that investors can consider taking advantage of the pre-holiday declines to accumulate stocks. This is supported by positive domestic macroeconomic information recently such as the PMI index surpassing the 50-point mark for the first time in 5 months, and domestic inflation and interest rates maintaining a downward trend.

Notably, the recent increase in exchange rates shows signs of ending, helping to relieve psychological pressure on a segment of investors.

Cash flow from domestic investors, especially individual investors, may return to the market strongly after the holiday and push stock indexes up.

Outstanding securities loans of over 7 billion USD and the 'paradox' of the market Outstanding securities loans of securities companies hit a new peak in nearly 2 years, reaching over 7 billion USD. But paradoxically, liquidity in the market has decreased and securities companies have recorded lower profits than before.