From the beginning of April 2020, the stock market (stock market) has returned to a "new normal" state with increasing liquidity, supported by low interest rates and government support packages as well as easing trend. liquid of central banks in the world.

However, after a period of nearly 40% increase from the bottom, the stock market is entering an adjustment phase when the trend of increasing Covid-19 cases in the world. 

Backup bad script

In the second quarter of 2020, Vietnam’s GDP was estimated to increase by 0.4% over the same period last year, the lowest growth rate in the second quarter within a decade when all sectors were affected by the Covid-19 pandemic. . Generally, in the first half of 2020, Vietnam’s GDP increased by 1.8% compared to the same period in 2019.

Meanwhile, Vn-Index has dropped sharply since the beginning of February and hit the bottom of 659.2 points on March 24 before recovering strongly again in April and May. As of June 26, only Vn-Index recorded a decrease of 10.8% compared to the end of 2019.

Patience at this stage is essential for investors

Accordingly, the business results of listed companies may be differentiated among industry groups. Rong Viet Securities Co (VDSC) said that enterprises mainly doing business in the country will have better results than the group of export companies.

For example, consumer goods and utilities will recover faster than textile, aviation or seaport groups. Meanwhile, the business season of construction and real estate companies usually falls in the second half of the year. Therefore, enterprises in this group are also difficult to record positive results.

For the banking sector, second-quarter results may contain surprises as low net interest income as credit growth can be offset by low provision expenses.

However, according to VDSC this is only an accounting book, because the banking industry is hard to avoid being negatively affected in the context of the prospects of the whole economy are not positive, the problem is only the time of revealing.

In fact, the good news on the business results has been reflected in the stock prices on the stock market in recent trading weeks. Typically, securities stocks have had more than 1 month of sublimation before the information will improve business results thanks to the general market recovery, the number of new accounts opened increased "dizzy".

In the second half of the year, investors received a series of negative information from the second wave of infection of the Covid-19 epidemic that continued to cause harm to the economy. If this wave really occurs, the psychology of investors will certainly be strongly affected, especially in the context of market movements that are heavily dependent on the cash flow of "F0 investors". experience and vulnerability.

Investment strategy

From the aforementioned difficulties, experts recommend that investors should be cautious when making "down money" decisions because the market is about to enter the supportive information gap in August.

Accordingly, VDSC recommends that investors save part of their purchasing power in case of a worse scenario. Short-term strategy in the business season, investors should only disburse in corrections and realize profit in the gaining sessions.

Having a more optimistic view than VDSC, VNDirect still expects Vietnam’s economy to recover strongly in the second half of 2020, helping the whole year GDP to grow 4.5%. The main motivation was due to the recovery of manufacturing industries and increased disbursement of public investment, in the context of monetary policies continued to be relaxed and the USD / VND exchange rate was stable; inflation was curbed at 3.2%.

VNDirect’s analyst estimates that the profitability of businesses across the VN-Index will decrease by 5-6% over the same period. "Vn-Index can maintain at the current valuation and forecast VN-Index at around 840-920 points by the end of 2020," experts of VNDirect said.

According to VNDirect, industries recovered faster than expected, especially consumer, retail, electricity, aviation, and technology in the second half of 2020. “However, investors should buy in the corrections. adjusted to minimize risks, ”VNDirect said.

Also having a positive view on the stock market in the second half of 2020, Mr. Tran Hoang Son - Director of MBS Securities Market Strategy recommended, increasing the proportion of consumer goods / retail, technology and real estate. real estate, electricity; reducing the proportion of the banking industry; Neutral view with oil and gas group.

Mr. Son emphasized that the current correction phase of the market may cause investors to panic, but this is a potential buying area for the increase span that can occur in the fourth quarter of 2020 when the risks of disease decline. and economies regained momentum. The support around 780 points will be an area that selectively accumulates opportunities in potential sectors.