Vietinbank Securities has published the Weekly Investment Strategy Report on 11th December, 2023 with the executive summary presented below:
- On December 4th, the government bond yields of the Eurozone dropped to the lowest level in several months. The data showed that inflation in the Eurozone had decreased from 2.9% in October 2023 to 2.4% in November 2023. With low government bond yields and cooling inflation, there are increased predictions that the Fed will start cutting interest rates earlier than previously anticipated.
- Meanwhile, the State Bank of Vietnam (SBV) is considering extending the implementation period of Circular 02 related to debt rescheduling, maintaining debt groups, and considering removing credit limits. Extending the implementation period of Circular 02 would provide more favorable conditions for banks to improve the credit growth rate. However, these expectations are anticipated to materialize only in 2024.
- In the context of deposit interest rates at banks decreasing to record lows, funds continue to pour into the stock market, boosting liquidity and average trading value per session significantly, reaching values of 20,908 billion VND and 991 million shares, respectively. The VN-Index also recorded an increase of about 2% compared to the previous close, closing at the level of 1,224 points. It’s noteworthy that money is flowing strongly into the groups of stocks related to communication (8.42%) and construction materials (4.8%).
- With signs of money flowing back into the market in the past week, the strength of this capital will be tested as the VN-Index gradually approaches the strong resistance level of 1,133 points. Investors may continue to maintain a stock/cash ratio at the threshold of 30/70 and are advised to increase the proportion of holding stocks again if the VN-Index surpasses the important resistance level of 1,133 points with the market liquidity well maintained. Expectations are for the market to continue heading towards the next short-term resistance level at 1,165 points. On the contrary, if the index fails to exceed the 1,133-point level and loses the support level of 1,082 points under increasing adjustment pressure, investors may consider increasing their portfolio weight again as the VN-Index returns to test the price support level created at 1,020 points in November, with the possibility of forming a double-bottom scenario. Investors may pay particular attention to the following stock groups during this period: industrial real estate (KBC, SZC, IDC, VGC), real estate (NLG, PDR, DXG, CEO), construction & building materials (HSG, HPG, VCG), securities (VND, SSI, VCI, VIX), and oil and gas stocks (PLX, PVS, PVD).
