Weighing stock market appeal in September

The top attention of global investors these days has been focused on on the Fed’s upcoming meeting, slated on September 20-21, with expectations that the central bank would relieve the scope of the base interest rate increase from 0.75 percentage points to just 0.5 percentage points.

That is because, by the end of July, the rate of unemployment in the US fell to just 3.5 per cent thanks to soaring newly added jobs surpassing half a million during the month. Meanwhile, the consumer price index remained intact in July after picking up 1.3 per cent in June.

Earlier, the Fed had twice raised the basis point by 0.75 percentage points each in June and July to contain inflation.

Investors expect the stock market retains a bullish trend in the new month

Lam Gia Khang, head of Research at VietinBank Securities, noted that if the Fed gave a decision as what the market has expected – and with the recently improved liquidity of Vietnam’s stock exchange – the benchmark VNIndex is likely to continue the bullish trend and approach 1,350 score mark in September.

Upbeat assessments about stock market performance linger as investors expect the shortened payment scheme T+2, applicable from August 29, would bring positive impacts.

In addition, several banks with high-safety rates and good asset quality might have their credit limit loosened by the central bank in the middle of September.

Currently, the blue chips in the finance and banking sectors are enticing money flow, creating motivation to aid the benchmark index growth.

According to Truong Thai Dat, director of Analytics at DSC Securities, with the price per book averaging 1.39x in 2022 and the discount level compared to the average set price reaching 40 per cent, bank tickers are deemed attractive.

Among bank tickers with potential price upsurge, ACB and VPB are regarded as noteworthy.

The group of lenders with state ruling including VCB, BID, and CTG also deserves attention, leveraging the proposed escalating third-quarter profit prospects compared to one year ago, when these banks had to push up loan-loss provisioning.

Moving forward, diverse organisations forecast that Vietnam’s GDP would surpass 10 per cent in the third quarter.

Accordingly, the tickers of sectors with robust rebounds like aviation and tourism would appeal to investors.

Meanwhile, tickers of businesses expected to catch a bonanza season in the third quarter like seafood and textile apparel have seen a slow rebound in their price compared to tickers of other fields.

The stock market movement in September in many previous years, however, has not been positive both in Vietnam and globally.

Weighing up risks of a bubble from bond squeeze The Vietnamese government has implemented a range of measures to control and tighten credit in real estate bonds. Broadly speaking, there are three channels of debt capital that the real estate sector can call on to secure credit: senior bank lending, the broader capital markets, and private credit.

Gold appeal sparkles amid rise of inflation The latest increase in interest rates by the US Federal Reserve is foreshadowing more rises this year and a long-term strategy to control inflationary pressure – and so institutional demand for gold is also expected to increase.

As such, the stock market would soon see a correction, particularly in the second half of September.

KB Vietnam Securities; however, forecast that the correction would not be strong, as the market has constituted much better conditions compared to several months ago.

Accordingly, investor sentiments are now more stable, paired with fading inflation risk and a sound rebound in listed firms’ operations.