Positive prospects for Vietnam’s stock market this year

The HCM Stock Exchange (HoSE) in HCM City (Photo hsx.com)

The market's uptrend will continue to be consolidated in the first trading session of the Year of Cat.

The VN-Index, which tracks the performance of the Ho Chi Minh Stock Exchange (HoSE), closed above the resistance area of 1,100 points, equivalent to 1,120 points of the VN30-Index, in the last trading week. Although cash flow has not improved much, supply pressure has not put great pressure on the market.

The market is expected to continue to be supported and gain points in the next trading sessions. Therefore, investors can still expect the market to expand the uptrend and exploit some short-term opportunities in stocks with positive accumulation background, said Viet Dragon Securities Co.

2022 was an eventful year for the Vietnamese stock market with many records set.

After a prosperous 2021, the VN-Index continued to stay at its historic peak for the first three months of 2022. However, the market then declined, putting itself on the list of the worst performers in the world. As of December 27, the benchmark had dropped 34.2% to 1,004.57 points, from the 1,520-point peak gained in April.

In some months in 2022, half a million trading accounts were opened. Foreign investors’ net purchases reached a record high. The liquidity of some shares at times reached hundreds of millions of units each trading session.

In November and December, the market witnessed the strongest recovery sessions in the world.

In 2023, economic growth will be somewhat slower than the previous year. Some pressure from tight monetary policy in the world will make money flow into the stock market more difficult, said La Giang Trung, CEO of Passion Investment Co.

“Two major factors affecting the stock market in 2023 are cash flow and the process of restructuring and shifting resources of the economy. If interest rates continue to rise sharply, the stock market will face difficulties, whereas when interest rates cool down, it can help the market grow,” he added.

“I am quite optimistic about the picture of the stock market in 2023. The first three to six months of the year will be a period of continued difficulties. But when the difficulties are over, the monetary policy will start to be loosened, which will open a new cycle for the stock market. Then the market will easily conquer new heights in the following years.”

|There are two scenarios for the stock market in 2023. Firstly, the bottom of the VN-Index this year will not be lower than the level of 873 points set in 2022, and the market will go up gradually.

Secondly, the VN-Index will look for a new bottom before recovering at the end of the year. The market may fall to the old bottom of about 780-800 points. This possibility becomes real if the US economy falls into a sharp recession in 2023.

With the forecast that monetary policy will be eased soon in the second quarter of 2023, the market can increase by 50% from the bottom, equivalent to 1,200 points at the end of this year. In 2023, there may be quite big fluctuations, but the general trend towards the end of the year is still positive, Trung said./.