Vietnamese stocks will continue to “turn into bears” next week?

The stock market had the most negative trading week (May 9-13) since the COVID-19 outbreak in March 2020, with a sharp drop of 11.02%, or 146.49 points. .

Analysts said that with the current movements of the market, the downtrend is still overwhelming.

Analyst Pham Binh Phuong from Mirae Asset Securities (Vietnam) said that in the last session of the week (May 13), VN-Index reacted at the previous bottom at 1,260 points. However, the selling pressure along with the “conservation” of investors when the stock price increased continued to drag the VN-Index down further, especially in the last 2 sessions of the week with a drop of nearly 120 points. . Therefore, the downtrend is overwhelming.

Analysts from Saigon – Hanoi Securities Joint Stock Company (SHS) said that it was a long time ago, more than 10 years ago (the end of 2011), the new market had a six-week decline. consecutive. With this decline, the VN-Index has “flyed” and lost more than 22% of the market capitalization value, and the VN30 index also lost more than 21% of points in the past 6 weeks.

After 6 consecutive weeks of decline, the market’s valuation has returned to a very attractive level with the P/E (the coefficient between the market price of a share and the income it brings) of the VN-Index about 13 times and the P/E. E of VN30 is about more than 12 times, all of which are lower than the average of the last 5 years. If calculated according to the forward P/E (expected P/E) for 2022, the above valuation will become even more attractive. Therefore, this can be considered as an opportunity for long-term investors following the school of value investing.

Besides, from the point of view of technical analysis, the market represented by the VN-Index seems to be near the target of the theoretical correction wave of 1,200 points.

However, if the situation becomes more negative, the VN-Index can still drop to deeper support levels, the closest is 1,100 points.

According to analysts, it is rare for investors to be under so much pressure today

SHS forecasts that in the next trading week from May 16 to 20, the buyers and sellers will become more balanced because the market has dropped to the target area of ​​the correction wave and also does not rule out the possibility that the market will had a recovery week after 6 consecutive weeks of decline.

With a combination of market valuation and technical perspective, SHS believes that the area of ​​1,000-1,200 points, corresponding to a P/E VN-Index in the range of 11-13 times will be an attractive area to disburse for the vision. long-term.

According to analysts, it is rare for investors to be under so much pressure as now when in the world we have information that the US Federal Reserve (Fed) will raise interest rates, the policy “zero COVID-19”. of China and inflation showed signs of increasing. Therefore, the first quarter business results of enterprises were quite positive, but the stocks continued to drop to the floor.

In the weekend highlight program with the topic “calm” organized by MB Securities Joint Stock Company (MBS), Mr. Hoang Cong Tuan – Chief Economist of MB Securities Joint Stock Company (MBS) said that he strongly agrees. feel and share with investors who have experienced losses in recent times.

At this point we are probably surprised because the company’s stocks have very impressive business results, good corporate foundations, even there are very stable businesses, paying high dividends. like power production and trading companies, but stocks still tend to fall sharply, Mr. Tuan said.

According to Mr. Tuan, the pressure on borrowing in recent times has also caused some investors to be concerned and disciplined investors will have to reduce margin (borrowing for margin trading).

“I have shared many times that investors who are “stretching” margin must reduce it in order for us to go through this difficult period,” said Mr. Tuan.

In fact, at this time, the factors of enterprise value, as well as technical factors, are difficult to support the VN-Index. The market’s sharp drop is not due to psychological factors. It can be seen that in the morning sessions, market sentiment was very stable, there was no sell-off, but in the afternoon, the selling pressure increased very strongly, mainly investors are under pressure. on margin were forced to sell stocks, because they waited forever for the market to have no rebound to restructure the portfolio.

Therefore, the market can only stabilize again if margin pressure is reduced. We may have to wait for the next time, when the authorities synthesize the data, then we will know what the current situation is, Mr. Tuan stated.

Mr. Tuan also recommended that investors should trust and invest in long-term companies when they have a clear understanding of business prospects. Besides, the investment capital structure is in a certain direction to go through this difficult period.

Good companies, after the stock price plummeted and bottomed, will quickly bounce back. However, companies with weak shares will find it very difficult or never to return to the old price.

Mr. Tuan said that the market in difficult times is most important for investors to be “calm” and “persistent”. In fact, after strong declines, the market often rebounds and reaches new heights.

Mr. Ngo Quoc Hung – Senior Analyst at MBS Market Strategy said that the VN-Index has fallen by about 20%, but there have been many stocks in the VN-Index that have fallen by 50% or more. For example, a stock group has 80% of stocks falling by 50% or more. If we refer to the market, the decrease of about 20% of VN-Index does not fully reflect the decrease of stocks that investors are holding in the portfolio. That is, the investor’s portfolio falls more than the market.

“In stock investment, the most difficult thing is to “live a long life”, because the long-term trend is that the stock will still go up”, Mr. Hung said.

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