The overall increase over the past three months is approximately 14.08%. Considering the impact of the financial reporting season for the fourth quarter of 2023, starting from December 2023 up to the present, the amplitude is about 7.4%. When compared to the average increase during the same period in previous years, this performance is reasonably positive.
Gloomy Business Results for Q4 2023
One of the most notable price surges observed during this period is the upward trajectory of banking stocks. This accumulation of stock activity, preceding the release of business results, began in early December 2023 and intensified in January 2024 when several securities companies provided profit estimates for this sector.
Statistics reveal that from the start of December 2023 until now, the VN-Index has experienced a growth of approximately 7.2%. Among the 19 bank stocks listed on HoSE, only four stocks (NVB, BAB, VPB, and SSB) exhibited weaker increases compared to the index. The remaining stocks all saw stronger gains. Leading the pack were BID with a 25.9% increase, MBB with a 23% increase, CTG with a 21.7% increase, TCB with a 19.5% increase, ACB with a 17.5% increase, and HDB with a 17.5% increase...
This marks a remarkable development, as the average stock on HoSE exhibited much lower increases. For instance, in the VNAllshare basket, which includes 286 stocks on HoSE, only 25.9% of codes experienced an increase greater than the VN-Index's growth margin, and less than 8% of codes saw a price increase of over 15%. In essence, the banking stocks during the "pre-financial reporting season" period have stood out prominently in the market.
Confirmation came later as many banks released official or estimated financial reports for the fourth quarter of 2023, showcasing impressive profit growth. According to aggregate data from FiinTrade, 10 out of 17 listed banks, representing 60% of the entire industry's capitalization, achieved an 8.2% increase in after-tax profit in Q4 2023 compared to the same period the previous year, and a significant 22.4% increase compared to the previous quarter.
However, this revelation also sheds light on the reason why the market seemingly "abandoned" many other stocks. The business results of non-financial enterprises in Q4 2023 appear weak or unremarkable, with the after-tax profit of 433 out of 1,518 non-financial enterprises decreasing for the fifth consecutive quarter, registering a negative 11.8%.
This financial reporting season is notable for its clear differentiation in price increases, with cash flow predominantly focused on stock groups demonstrating predictable and easily confirmable business performance, such as banks. With the exception of these groups, there are only a few isolated cases that are not representative. In general, the prices of remaining stocks increased very little, with the VNAllshare basket recording up to 32% of shares having prices either decreasing or not increasing since the beginning of December up to the present time.
In approximately two weeks, businesses will publish full quarterly financial reports, and there is a high likelihood that the decline in revenue and profits for non-financial groups will be even more pronounced. Unlike other reporting seasons, there was no notable surge, or to put it simply, the peak excitement of this earnings reporting season has passed.
Short-term opportunities are on the decline
It is common in the stock market for early speculation to occur as investors anticipate business results data. However, this activity tends to subside as soon as the official data is released. The increase in stock prices before the official data becomes available is essentially an early reaction, and there is a subsequent phase of confirmation and re-pricing based on the new data. From the perspective of reacting early to these expectations, the stock market's short-term upward trend has passed its most favorable period.
In the last few sessions of the week, the market started displaying a certain weakness, primarily due to the leveling of prices among the leading group of stocks—specifically, banks. From the beginning of December 2023 to the highest peak on January 22, 2024, the VN-Index saw an increase of approximately 143 points. Among the top 10 stocks contributing the most to this surge, seven were from the banking sector, collectively accounting for 55 points. Notably, the banks that played a significant role, including BID, VCB, CTG, MBB, TCB, ACB, and HDB, began experiencing profit-taking as their prices increased and business results became clearer, leading to a weakening of bank stocks.
Typically, when business results are anticipated to stay positive, cash flow tends to shift towards other stocks or stock groups, sustaining the upward momentum for the VN-Index and the market in general. However, as highlighted earlier, the profits of non-financial enterprises are presenting a rather lackluster picture.
Consequently, the market did not experience the usual cash flow pattern. On the contrary, as cash gradually withdrew from the banking group, the total market liquidity also decreased. Statistics indicate that from November 2023 to the first half of December 2023, the correlation between the liquidity of the bank stock group and the total liquidity on HoSE was relatively weak, with the weekly average matched value of this group of stocks ranging only from 15% to 17%.
From the second half of December 2023 to January 2024, bank stock liquidity surged, and the transaction proportion increased to over 20%, even exceeding 30%, contributing to an overall rise in HoSE floor liquidity. However, in the past week, bank transactions sharply decreased, leading to an overall decline in liquidity, although the proportion remained above 25%. Consequently, non-bank stocks were unable to boost liquidity, even though there were indications of cash flow moving away from this leading group.