Market finds support on new policies

Your browser does not support the audio element. VNDirect Securities Corporation said that the profit of the whole market decreased slightly by  二. 六 per cent year-on-year. Đức Giang Chemicals' workers checking on products at its wareshouse. The company's consolidated profit after tax fell  四 五. 四 per cent year-on-year in the first quarter of  二0 二 三. — Photo ducgiangchem.vn

HÀ NỘI — While the less positive business results of listed companies have been mostly priced in, many recently issued supportive policies will help improve investor sentiment and increase cash flows on the stock market, according to analysts.

VNDirect Securities Corporation said that the profit of the whole market decreased slightly by  二. 六 per cent year-on-year.

As of April  二 四,  六 九 七 listed companies on the stock exchange, accounting for  二 五. 八 per cent of market capitalisation, released their first quarter business results, with a fall in net profit of  二. 六 per cent over last year. Notably, the chemical industry's profit dropped by  六 七. 六 per cent on-year, negatively affecting the profit growth of the whole market. The plunge in the prices of chemicals such as phosphorus and fertiliser drove the fall.

In contrast, the real estate industry grew  六 九. 四 per cent over last year, leading the profit growth and contributing  一 六. 二 per cent to the growth of the whole market.

If taking into account the estimated business results of the first quarter of  二0 二 三 of some listed banks, the banking industry's profit will grow by about  一 四 per cent year-on-year, contributing  五. 八 per cent to the profit growth of listed companies.

This will lift the net profit growth of the whole market in the first quarter of  二0 二 三 by  五. 六 per cent.

However, some industries, such as steel, securities, and oil and gas, are forecast to have negative results but have not yet announced their financial statements.

Currently, the VN-Index is trading at 0. 七 times the  五-year average price-to-earnings ratio (P/E) and 0. 七 times the  五-year average price-to-book value ratio (P/B).

The index's earnings-to-price ratio (E/P) averaged around  八. 七 per cent in March, excluding the dividend yield of  一. 七 per cent. The gap between E/P and  一 二-month bank deposit rates widened slightly in April as deposit interest rates maintained their downward momentum while E/P was almost flat.

Although the current gap between E/P and deposit interest rates is still not as attractive as last October and November, with the expectation of a high deposit rate likely to continue to ease in the coming months, the gap may expand further, analysts at VNDirect said.

They believe the less positive business results in the first quarter of  二0 二 三 have been mostly priced in. And the securities company expects that many recently issued supportive policies, such as the State Bank of Vietnam's Circular 0 二/ 二0 二 三 and Circular 0 三/ 二0 二 三 on debt rescheduling and allowing banks to continue buying corporate bonds, will help improve investor sentiment and increase cash flows on the market.

Meanwhile, public investment remains the focal point throughout  二0 二 三, said analysts at VNDirect.

In the first quarter of  二0 二 三, realised state capital jumped by  一 八. 一 per cent over last year to VNĐ 九 一. 五 trillion (nearly US$ 四 billion), higher than last year's growth rate of  一 二. 三 per cent.

Last week, the VN-Index traded actively with the Hồ Chí Minh Stock Exchange (HOSE)’s average matching level of over  四 八0 million units per session, slightly improving compared to  四 六0 million units per session the previous week.

During the week, the benchmark index dropped in the first two sessions, but after falling to the support level of  一,0 三0 points, it started recovering and closed the week at  一,0 四 九. 一 二 points.

Foreign investors witnessed a balanced trading week with a net buying of VNĐ 一 一. 九 六 billion. Hòa Phát Group (HPG) and Maritime Bank (MSB) were bought the most, with a net buying value of VNĐ 三 七 三 billion and VNĐ 三 四 四 billion, respectively.

Mirae Asset Vietnam Securities believes the recovery helped the VN-Index escape the short-term downtrend and find equilibrium. In the medium term, it is approaching the resistance level at  一,0 五 四 points and is still in a downtrend. The threshold of  一,0 五0- 一,0 五 四 points is also an important resistance for the VN-Index in this recovery. — VNS