Research Center

At the end of the third quarter of 2023, the VNIndex established a shorterm downtrend, targeting a range of 1,050 1,070 points, influenced by the double top pattern. We predict economic activities to accelerate in 4Q23 with a growth rate of 7.5% YoY, resulting in an increase of 5.18% YoY for 2023. of 7.5% YoY, resulting in an increase of 5.18% YoY for 2023. On the upside, we expect an impressive turnaround in exports due to the increasing demand from the U.S. and China, especially the inventories of U.S. wholesalers and retailers becoming leaner. The Banking industry could sustain in 3Q23 but we are not confident about 4Q23 given the sluggish credit growth and slower than expected NIM recovery

We expect the stock market to maintain its uptrend with a target range of 1,260 to 1,340 points for late 2023 thanks to macro factors such as (1) Improvement in Foreign Direct Investment and (2) The easy money policy.

July showed clear signs of economic recovery, highlighted by robust FDI inflows. Moreover, despite a 0.25% Fed rate increase, Vietnam's manageable inflation permits an expansive monetary strategy for supporting the economy. In the second half of 2023, the VNIndex aims for a 1,260 to 1,340 pts range, backed by a June breakout and established new 3-year cycle.

Although the economic performance picked up in 2Q23 in the late stage of the global interest rate hike, we believe that the acceleration of economic activities will need more time to be material due to the insignificant improvement of external factors and the weakening recovery in domestic consumption. On the upside, public investment will continue to be a spotlight in 3Q23 thanks to the government's effort in realizing the significantly higher workload than last year. Investment opportunities exist in Power and Agriculture, Seafood industries that backed by El-Nino and China consumption themes. Besides, crushed stone industry also offers a lucrative choice from 3Q23 for those investors seeking for rising public spending theme. We expect the target range for VNIndex in 2H23 to be 1,260-1,340 points.

Vietnam stock market shows some positive signals thanks to the improvement in FDI and the expansion of retail sales. FDI has increased since May, indicating a recovery in inflows as global businesses expanded their production capacities. Additionally, retail sales have witnessed growth, driven mainly by the influx of Chinese tourists following the reopening of tourism. We expect the VNIndex may reach 1,300-1,350 pts in 2H23.

The global condition has exerted pressure on the stock market in the short term because (1) companies have faced difficulties in 1Q23 and (2) the corporate bond market poses future financial pressure. We expect two scenarios may unfold. Firstly, in the bullish scenario, the VNIndex can reach 1,220 pts in 2H23. Secondly, the bearish scenario suggests the VNIndex retest the zone of 780-910 pts.

We predict Vietnam’s real GDP to accelerate in 2Q23 with an impressive growth rate of 6.92% YoY due to a solid retail sales growth, higher public investment, and improving external factors, especially the promising China’s rebound. Besides, we expect inflation to be well-controlled although facing challenges related to raising retail electricity prices and the potential AFS outbreak. Seafood and agriculture, in our view, would be benefitted from China's reopening and global uncertainty themes in 2Q23. Oil&Gas is the bright spot in the long run thanks to recent positive catalysts.

The stock market shows a consolidation phase or sideway trend in the short term. However, the downside risks are still intact in the medium term due to (1) the low liquidity, (2) the slowdown of the global economy (3) the pressure of the maturity of corporate bonds from May to Sep 2023. We expect the market to resume a downtrend and then form an important bottom from May 2023 to Sep 2023. The target price of this bottom is a range of 780-910 points.

The short-term uptrend from Nov 2022 may be reversed as (1) business activities of companies face difficulties (reduced net income) due to the slowdown of the global economy (2) pressure of the maturity of corporate bonds in 2023 with a net value of VND82tn in 2Q23 and VND114tn in 3Q23. We expect the market may resume to a bearish trend in the short term and then form an important bottom from May 2023 to Sep 2023. The target price of this bottom is a range of 780-910 points.