Long-term perspective remains optimal approach
Long-term perspective remains optimal approach
Entering the final weeks of 2024, investors are eagerly anticipating more optimistic updates from macroeconomic developments and the financial results of listed companies for the year. Le Duc Khanh, director of analysis at VPS Securities, talked with VIR’s Hoang Anh about considering portfolio selection for the next year.
The VN-Index just experienced a fairly positive trading week, gaining more than 20 points. Do you anticipate a strong upward wave in the final few weeks of 2024, and will the exchange rate continue to be a significant factor for the domestic stock market in the near future?
Le Duc Khanh, director of analysis at VPS Securities |
The index’s strong support zone has been confirmed, and the market has entered a good recovery phase. With favourable macroeconomic prospects and the monetary easing policies of central banks around the world, the VN-Index may witness a recovery, slightly increasing towards the 1,280-1,300-point range in December.
The sharp fluctuations in the USD/VND exchange rate past November were quite similar to previous years. The DXY index’s rise during Q3 and the first half of Q4 appears to be seasonal, influenced by factors such as the US election, positive US macroeconomic data, and a strengthening USD.
Domestically, the State Bank of Vietnam’s (SBV’s) active purchase of foreign currency, coupled with a shortfall in foreign currency supply, also contributed to exchange rate volatility. Exchange rate factors, along with the recent net selling by foreign investors, have somewhat impacted investor sentiment in the stock market.
However, this is not a major concern, as exchange rate control remains a top priority for the government. Over recent times, the SBV has implemented flexible monetary policies to ensure this goal. The DXY index is expected to shrink in December and should not pose a significant challenge to the stock market.
The VN-Index has confirmed its first bottom. Do you think a second accumulation zone will form this December, and should investment portfolio restructuring be considered now?
The first bottom of the VN-Index can also be viewed as an oversold area, where increased selling pressure has pushed the market towards a balanced zone around 1,240-1,260 points. This range may serve as a supportive accumulation area before the index rallies towards 1,280-1,300 points by the end of the year.
A distinct second bottom might not form. Instead, the market could fluctuate within a narrow range, accumulating before continuing its upward momentum.
Portfolio restructuring activities can be carried out periodically or occasionally throughout the year. Over the next few weeks, investors might consider carrying out a few rounds of portfolio adjustments, especially after the market’s recent challenging correction phase.
Which stock groups will be the market’s focal point in the upcoming period, and what approach should investors take over the next year?
We are particularly focusing on technology and telecoms with key stocks such as FPT, VTP, VGI, and CMG. In addition, there is the growth stocks group, including pharmaceutical stocks, although their status remains divided.
Other stock areas include real estate and construction materials, chemicals, natural rubber, and tyre manufacturing, with prominent stocks such as CSV, DDV, DGC, CSM, and DPM.
2025 is likely to be a more favourable year for the stock market. Prominent stocks with strong business performance or leading positions in their industries could see price increases that outperform the broader market and other sectors.
Adopting a long-term investment perspective remains a suitable approach for the majority of investors. The opportunities for investment are becoming clearer at this stage. However, it’s advisable to prioritise cautious buying with moderate allocation to minimise risk while positioning for potential growth.
