Stocks need more support to improve liquidity

The market had another week of declines, although the decline was significantly narrowed compared to the previous week. Although cash flow returned positively after the corrections, it mainly went to small, highly speculative stocks. At the end of the trading week, the VN-Index fell 5.51 points (-0.44%) to 1,236.6 points. The HNX-Index fell 5.1 points (-2.15%) to 231.56 points. Liquidity on both exchanges improved compared to the previous trading week when the matched volume increased by 8.95% on the HOSE and nearly 19% on the HNX.

According to experts, the market fluctuations last week were partly affected by information compiled from the financial reports of the second quarter of 2024 of securities companies, showing that the total margin debt reached a new peak of nearly 230,000 billion VND, higher than the market's peak debt in early 2022. In addition, bad news from the international stock market has caused many investors to trade in anxiety, even panic when the VN-Index continuously decreased, breaking through the support level of 1,240 points, at times falling below 1,220 points. Investors are worried about the sell-off effect appearing in the context of high margin debt and increasing margin call pressure.

Normally, a widely recognized technical support level is easily penetrated like the 1,245 - 1,250 point level, then a sell-off often occurs. However, the market's reaction at the end of last week shows that the money flow "controlling" the game is not too concerned about that technical level to decide to withdraw from the market, they can even take advantage of that psychological level to "break" the position of short-term traders.

Investors and experts still maintain confidence in the market outlook for the next 2-3 months on the basis of stable domestic and foreign macro, the time when the Fed will lower interest rates is approaching, and the profit growth of enterprises is forecast to continue to improve in the last quarters of the year. The recovery in the overall economic outlook will boost the profit growth of listed enterprises.

Some analysis reports from securities companies estimate that market profit growth will be around 20% and 15% in 2024 and 2025, respectively. In 2024, after a modest increase of only 5.3% in the first quarter, market net profit is estimated to increase by 9.5% in the second quarter, 33.1% in the third quarter and 21.9% in the fourth quarter.

Sectors expected to see strong profit growth in 2024 include banking, retail, construction materials and electricity. Technically, if the VN-Index “patches” the 1,250-point mark, a new wave is likely to form.

Source: https://laodong.vn/kinh-doanh/chung-khoan-can-them-nhieu-tro-luc-de-cai-thien-thanh-khoan-1375707.ldo