According to BSC, in positive case, Vn-Index would increase to 960 points with rotation of large stocks. Liquidity would remain at medium level and tend to increase gradually at the end of the month.
BIDV Securities Company has just released economic update report of January and stock market outlook in February 2019.
According to BSC, in January, the market appeared quite a lot of remarkable information. The first was many positive economic indicators in January, signaling a prosperous 2019.
Specifically, total retail sales of goods and services increased by 12.2% over the same period; industrial production index increased by 7.9%; registered FDI increased by 27% while disbursed FDI increased by 9.2%; CPI index increased slightly by 0.1%. The trade deficit phenomenon appeared in January with about USD 800 million due to high demand for goods at the end of the year. However, Vietnam increased foreign currency reserves by 4 billion USD in January along with depreciation of the USD has increased the room for stabilizing exchange rate in 2019. The CPTPP Agreement, which came into effect on January 14, is opening up many opportunities for the economy.
The positive changes in January are in the upward trend of the economy in 2018, which will create a premise for the completion of socio-economic objectives in the context of fluctuating world economic environment and hidden unpredictable factors.
Companies announced positive business results in Quarter 4 and fiscal year 2018. As of January 31, there were 677 companies announcing business results of 2018 with a total net profit after tax of 197.4 trillion, up 21.5% compared to 2017. Business results of 2018 were divided when there were 302 companies, accounting for 45% of companies, negative growth. 52 companies accounted for 7.7% of announcement of losses in 2018.
Among 5 companies announcing the most improved business results in terms of profit, VHM, VCB, ACB, MBB and GAS accounted for 75.6% of absolute increase in profit of VND 35,027 billion. Along with VHM and GAS, Banking stocks were the group with the best profit improvement with average growth of 33.9% compared to 2018. General Meeting of Shareholders season announced business plan for 2019; Dividends taking place right after that would provide information to support the market. Domestic cash flow might return after the holiday, moving in the same direction with foreign investors to form more obvious opportunities in 2019.
FED is likely to keep interest rate of 2.25 - 2.5% for a long time, reducing the risk of fluctuations in monetary and securities market. FED kept interest rates at its policy meeting in January. The next time to raise its interest rates is unclear and depends on clearer signals of the economy. This move is considered to be the end of monetary policy normalization period that has lasted for 3 years. However, the interest rate stopped at this level will also narrow FED’s ability to cope with future recession. According to survey of Bloomberg, there is almost no possibility of raising interest rates at the March and May sessions; this probability would increase to 7% in the June and July sessions and to 10% in September, October and December ones. This data also shows a high consensus about the possibility that FED will not raise interest rate this year. The fact that FED does not raise interest rates would also limit adverse fluctuations from exchange rates, thus facilitating cash flow to return to newly emerging market area.
FED will not raise interest rates; it will limit adverse fluctuations from the exchange rate, thus facilitating cash flow back to emerging market areas.
Vn-Index headed to 960 points in February
In January, the market fluctuated and increased slightly, returning to safe prices. According to BSC, this trend is expected to continue in February when post-holiday blues still dominates. However, when foreign investors continue to maintain current net purchasing uptrend, domestic investors will soon catch up with the market. Results of trade negotiations between two US - China heads in February will strongly affect the forecast result.
However, BSC said that VN-Index would continue to maintain a slight upward uptrend towards 940 - 960 points in February.
In positive case, Vn-Index would increase to 960 points with rotation of large stocks. Liquidity would remain at medium level and tend to increase gradually at the end of the month.
In case of negative, Vn-Index might return to check 900 points in case of non-positive information from the world.