Vietinbank Securities has published the Weekly Investment Strategy Report on 30th October, 2023 with the executive summary presented below:
- According to the report from the U.S. Department of Commerce on October 26, the GDP growth for Q3 in the United States reached 4.9%, which was higher than analysts’ forecasts. This information caused the DXY index to increase to 106.6 points as of October 27, marking a 0.38% rise compared to the previous week.
- The strengthening of the USD has had a negative impact on global stock markets, causing most indices to record declines ranging from 0.8% to 3% during the week of October 23 to 27. Among them, the VN-Index has experienced the most significant decline for the second consecutive week, with a drop of 4.28%, closing the week at 1,060 points. Investor sentiment has become notably cautious, leading to a slight decrease in liquidity and average trading value, with figures reaching 14,108 billion VND and 696 million shares, respectively, for each session.
- The notable corporate event in the past week is the news that Vingroup Group has issued 250 million USD in international bonds with an interest rate ranging from 9.5% to 10%, payable quarterly in USD and maturing in 2028. These bonds are also convertible into VHM shares at a price range of 51,635 to 53,880 VND. According to our research, Vingroup’s purpose in issuing these bonds is to partially refinance a portion of the 500 million USD bonds issued in September 2021 with a 5-year term.
- We forecast that the market focus in the week of October 30th – November 2nd, 2023, will center around the Fed’s policy meeting in November, especially in the context of the USD/VND exchange rate being at its highest level since the beginning of 2023. If the Fed maintains the current interest rate level (which has a 99.5% probability according to the CME Group’s observation tool), the VN-Index is expected to begin a mid-term bottoming process and fluctuate within the range of 1,030 to 1,080 points. Investors are advised to maintain a 40/60 equity/cash ratio, focusing on stocks with favorable Q3 earnings reports and significant growth potential going into 2024.
