Given the historical context of robust stock market performance during US presidential election years, there is optimism that this trend may persist into 2024. The intersection of various supporting factors adds complexity to the forecast for the Vietnamese stock market in the coming year. As we navigate this landscape, it becomes imperative to analyze and consider the multifaceted elements that could potentially influence market dynamics.
Positive Factors
In the realm of burgeoning economic growth, experts anticipate several positive factors to shape Vietnam's economic landscape in 2024. These include:
Export Growth: Economic pundits foresee a positive growth of 6-7% in exports for 2024. This optimistic outlook is attributed to a notable alleviation of supply chain pressures and a simultaneous stabilization of demand for phones and electronic components.
Investment Disbursement: Efforts by management agencies have propelled conventional investment disbursement to reach 85-90% of the plan, indicative of proactive measures to boost investment activities.
Monetary Policy: A more balanced monetary policy is expected to actively support growth. Input interest rates are projected to hit bottom in the first quarter, with a marginal increase from mid-year while maintaining a low base.
GDP Growth: Projections for Vietnam's GDP growth in 2024 range from 5.5% to 6.7%, indicating a significant improvement. Divergent forecasts from domestic and foreign organizations, with Standard Bank predicting the highest at 6.7% and the World Bank (WB) forecasting the lowest at 5.5%. The IMF anticipates a growth rate of about 5.8%, positioning Vietnam among the top 20 countries globally with the highest GDP growth in 2024. The key drivers for this growth, as outlined by various organizations, include improvements in public investment, robust domestic consumption, recovery of import and export activities, and growth-oriented monetary policies.
Stock Market Prospects: Beyond these positive economic factors, the stock market in 2024 is poised to benefit from various supporting elements. Forecasts indicate a robust 16.8% growth in profits for listed enterprises (DNNY), driven by a favorable macroeconomic environment. The low-interest rate environment is expected to attract foreign investors seeking opportunities in emerging markets, with Vietnam being a preferred destination. Moreover, the resolution of legal obstacles in many real estate projects in Ho Chi Minh City and Hanoi sets the stage for market recovery. Additionally, the operationalization of the KRX system is anticipated to lay the foundation for new trading solutions, potentially expediting Vietnam's path to market upgrades.
Collectively, these positive factors paint an optimistic picture for Vietnam's economic growth and stock market performance in 2024.
Can VN Index Climb Beyond 1,400 Points?
MB Securities Company (MBS) experts foresee a positive trajectory for the VN Index in 2024, projecting a potential rise to 1,250-1,280 points. This optimistic outlook is underpinned by key factors such as a anticipated 16.8% surge in corporate profits, elevating the market's foundational strength. Additionally, the stock market maintains an appealing attractiveness to investors with a P/E ratio ranging from 12 to 12.5. Global influences, particularly the robust performance during the US presidential election year, are expected to have a favorable spillover effect on Vietnam's markets. Furthermore, the prospect of an expedited market rating upgrade could serve as an additional enticement for foreign investors, contributing to the positive forecast for the VN Index.
However, MBS also cautions against potential roadblocks. Firstly, there are real estate woes. A prolonged slump in the property market could burden banks with bad debt, restricting the flow of capital to other sectors like stocks. Secondly, inflation exceeding 4-4.5% could force the government to tighten its monetary policy, dampening investor sentiment. Overall, while risks remain, the experts paint a promising picture for the VN Index in 2024. Expecting both growth and potential hiccups, they see the index on track to surpass 1,250 points, and possibly even higher.
Petrovietnam Securities Incorporated (PSI) shares a similar optimistic outlook for the VN Index in 2024, expecting it to land somewhere between 1,137 and 1,287 points. Their prediction hinges on two key factors. Firstly, the rising incomes: Businesses are projected to see earnings climb by 15% compared to 2023, providing a strong foundation for market growth. Secondly, policy-driven recovery: Government initiatives aimed at boosting the economy are expected to take hold, leading to growth in various industry sectors. This combination of stronger corporate performance and government support sets the stage for a positive year for the VN Index, according to PSI.
Vietcombank Securities (VCBS) paints the most bullish picture, predicting the VN Index could reach up to 1,300 points in 2024. They see a close connection between the stock market's movement and interest rates, particularly long-term rates for Vietnamese dong loans. However, VCBS warns that while the index might climb, expect some sharp dips along the way due to ongoing global economic uncertainties.
Tien Phong Securities (TPS) has presented three distinct scenarios for the VN Index in 2024, each depicting potential market movements and outcomes. The scenarios include a positive outlook with a point range of 1,281-1,400, a base scenario ranging from 1,000 to 1,280 points, and a negative scenario spanning 900 to 999 points.
In the neutral scenario, TPS asserts that the market successfully established a long-term bottom in 2023. In this context, the index's performance in 2024 is not anticipated to experience a significant decline to this established bottom level. However, TPS notes that this scenario may lack macro catalysts, and the recovery speed of listed companies might not meet expectations.
Within this neutral scenario, the market is expected to transition into a medium-term accumulation trend, characterized by a sideways or flat pattern. It is important to highlight that this scenario unfolds under specific conditions—namely, the index's inability to surpass the resistance threshold of 1,020 points while maintaining the established bottom of 1,120 points from November 2023. TPS draws parallels to a similar market pattern observed from March to December 2019.
As investors navigate the intricacies of the market landscape, TPS's outlined scenarios provide valuable insights into potential outcomes, allowing for informed decision-making amid uncertainties in the financial environment.
In an optimistic projection, Petrovietnam Securities Incorporated (PSI) anticipates various scenarios for the VN Index in 2024 based on the application of Elliott Wave theory. In the positive scenario, PSI envisions the VN Index adhering to Elliott Wave theory, surmounting the 1,250 point barrier. The index is expected to extend a 5-wave rising pattern towards an ambitious target of approximately 1,400 points. This achievement would mark the completion of the first rising wave in this scenario.
Conversely, in the negative scenario, PSI foresees a substantial market decline, breaking through the support zone at the psychological level of 1,000 points. During this period of decline, the index is likely to continue its downward trajectory until a robust demand resurgence occurs at the bottom in December 2022. Within this negative scenario, TPS anticipates that a bottom-catching demand will once again aid the index in successfully establishing a second bottom around 900 points, forming a double-bottom reversal pattern before initiating a recovery.
As market participants navigate the uncertainties ahead, these contrasting scenarios offer valuable insights into potential market movements, aiding investors in making informed decisions based on varying outcomes and market conditions.
