The real estate and construction group gained quite impressively with codes like DIG, HBC, NTL, SCR, etc.
Information about the stimulus package to support the economy is having a positive effect on the stock market. Investment money flowed into the market since there were 13 out of 19 industries with positive increases. The groups that helped the market gain points are banking, tourism & entertainment, and financial services.
Market breadth turned positive with increased liquidity compared to the previous session. Foreign investors were net buyers on both HoSE and HNX. With the trend of domestic and foreign cash flow supporting the market, VN-Index may move in the range of 1,380-1,400 points in the upcoming trading sessions.
Due to the impact of the COVID-19 pandemic, the State Bank of Vietnam estimates that the potential bad debt ratio, including bad debt on the bank's balance sheet, restructuring debt, etc., could be up to 7.1 - 7.7%. Banking is the group that accounts for one-third of the total market capitalization, so the negative movement of banking stocks in the past three months has restrained the gaining momentum of the whole market.
Experts analyzed that the growth rate of the banking industry is closely correlated with the GDP growth rate. By reopening the economy, GDP will grow at a better speed from the fourth quarter of 2021, thereby boosting the profit growth rate of the banking group from the fourth quarter onwards.
The need for capital for production and business after the pandemic is huge and has been pent-up during the past time, so when the new credit room is granted at the beginning of 2022, the first quarter of 2022 will be booming in terms of credit, then profits will be very high. That will be the foundation to boost bank stock prices from November 2021 onwards.
In the short term, banking stocks may still be under correcting pressure, but the medium and long-term outlook of this group is quite optimistic, on the basis that credit will grow stronger, fee income will increase. Stable provisioning creates a basis for ROA to increase to a sustainable level of 1.8 - 2%.
The VN-Index is struggling within a narrow range of 1,330 - 1,360 points. The market is lacking the main leading industry group. The positive point is that cash flow remains well in the market while sheltering in low-cap groups and some industries are expected to have positive business results in the third quarter while waiting for the upcoming trend. For example, TCD stock in the third quarter has gained impressive momentum and has maintained a steady uptrend since the beginning of October.
The two leading nitrogen fertilizer stocks are DPM and DCM, with domestic fertilizer prices continuing to soar at the end of September and expected profit growth in the first nine months of the year, keep attracting cash flow.
While the profits of domestic consumption-related industries such as retail, beer, automobiles, motorcycles, oil and gas, and banking will be greatly affected by the lockdown; some industries such as iron and steel, sugar, fertilizers, chemicals, etc., will benefit when commodity prices have increased sharply since the beginning of the year. Container shipping and some export-related industries are also expected to have positive business results.
The steel industry is forecasted to be a bright spot with good business results in the third quarter, has become one of the pillars supporting the market in the past week. Along with steel is the rise of oil and gas stocks. This group attracted good cash flow in many sessions last week.
While waiting for a clear signal from the leading stocks, the cash flow turned to look for short-term opportunities from small and medium-sized stocks.
Source: The Ministry of Industry and Trade
