VIETNAM, September 5 – HÀ NỘI — After declining in the first two quarters, the VN index showed signs of recovery in the first half of the third quarter.
Last month, the benchmark index even experienced an exceptional breakthrough with a gain of more than 74 points, or 6.2%, compared to the previous month.
The strong rally helped the VN-Index become one of the best performing stock markets in the world in August, the financial website said. cafef.vnciting statistics from Stockq.
The index’s performance outpaced most markets in the region, such as Malaysia, Singapore, Indonesia and Thailand, with these markets growing between 0.5 and 4.3%, but it is just behind the Philippines benchmark, which rose 6.9%. % in August.
The market capitalization of the Ho Chí Minh Stock Exchange (HoSE) also increased by VNĐ300 trillion ($13 trillion) last month, with the average trading value across three exchanges reaching VNĐ18.5 trillion, in up 34% month-over-month.
While the benchmark VN index ended last month at 1,280.51 points, its price-to-earnings (P/E) ratio was 13.67x, or 12.95 times higher than at the end of July, according to the Algo Platform data. Attractive valuation was one of the factors that drew bottom fishing cash flow to the market.
Capital inflows over the past month flowed into many sectors like retail, securities, chemicals, oil and gas, and building materials, supporting market rallies.
According to VNDirect Securities Corporation, the rebound in the index was fueled by certain events, including lower inflation in the United States and Việt Nam, improving domestic market sentiment with expectations that the Federal Reserve US should slow its rise in rates in the last quarter. of the year and speculative cash flows.
Liquidity has also recovered significantly, with average trading value on HoSE nearing VN15.8 trillion per session in August, a 36% increase from the previous month. Liquidity rebounded across all sectors.
However, the recovery in liquidity was not in line with a gain in new investors. In July, the number of new accounts was just 198,988, down 57% from the record high set in June. It was also the lowest since last November.
Foreign investor activity was also more positive after net selling in July. Their trade value totaled VNĐ45.46 trillion last month, of which they bought nearly VNĐ23.3 trillion and sold VNĐ22.29 trillion. Consequently, foreign investors bought a net worth of 980 billion VNĐ, the lowest monthly value since the beginning of 2022.
In its latest update, VNDirect said the current market valuation is attractive for long-term investors, who are looking for high earnings growth companies.
With the strong growth in earnings per share (EPS) over the 2022-2024 period, the securities firm said the Vietnamese stock market is still more attractive than in the past and other markets in the region.
Việt Nam is a beacon of hope among emerging markets with a forward P/E of 12.2x in 2022 and the expected 10.4x in 2023, well below the average P/E of the past five years. The market backdrop is improving and the correction is creating outflow opportunities for investors to build portfolios in the fourth quarter and into 2023.
Meanwhile, according to the Vietnam Maritime Commercial Join Stock Bank (MBS), the market is expected to be affected by the global market correction, but could rebound quickly on the back of diversified cash flows. Therefore, declines will be opportunities to restructure portfolios.
Data from the past ten years have shown that September is still the month with a positive growth rate. Thus, the domestic stock market may move in a different direction from the global negative trends.
In its bullish scenario, if the VN index returns to 1,300 points, cash inflows will increase to surpass the July high of 1,315 points and head towards the 1,350 level. However, in the base scenario, the index will trade sideways and hover around 1,280-1,305 points. VNS