An investor watches her phone's screen in front of an e-board. The market would find support during retracements and has the potential to surpass the 1,130 point barrier at the start of 2024, moving towards the 1,150 point level to assess supply. VNA/VNS Photo

The VN-Index is projected to have a good chance to surpass the 1,130 point threshold at the beginning of the new year and advance towards the 1,150 point level, according to experts.

During the last trading week of 2023, the VN-Index displayed a series of recovery sessions, surpassing its previous peak of 1,130 points. While short-term profit-taking activities were active during the index's positive upward movement, foreign investors witnessed a decrease in net selling liquidity and an increase in active buying liquidity.

Over the entire trading week, foreign investors net purchased VNĐ467.6 billion on the HOSE, breaking a streak of seven consecutive weeks of net selling. However, cumulatively for the year 2023, foreign investors still recorded net sales of VNĐ24.38 billion, equivalent to over US$1 billion.

In the early trading session of 2024, Vietcap Securities Joint Stock Company (Vietcap) predicted a potential weakening in the upward momentum of the VN30 basket, which could result in downward adjustments for large capitalisation groups leading the VN-Index. At that point, the VN-Index is expected to test the range of 1,123-1,125 points. However, if selling pressure remains weak, Vietcap believes there is an opportunity for the VN-Index to reverse and increase in the 1,145 point area.

Sharing a similar view, Việt Dragon Securities Joint Stock Company (VDSC) said that the market would find support during retracements and has the potential to surpass the 1,130 point barrier at the start of 2024, moving towards the 1,150 point level to assess supply.

Looking ahead to the long term, KB Việt Nam Securities Joint Stock Company (KBSV) released its 2024 stock market outlook report, stating that the VN-Index was expected to reach a reasonable range of 1,330 points by the end of 2024.

Throughout 2024, KBSV identifies four key factors that will shape Việt Nam's stock market trend. Firstly, the domestic economy is expected to recover with a GDP increase of around 6 per cent, creating a conducive environment for listed businesses to resume their growth trajectory.

The main growth drivers included a more robust real estate market and supportive monetary and fiscal policies, low interest rates, increased public investment, and continued tax exemption and reduction policies. Additionally, traditional growth drivers such as FDI, domestic consumption, and export recovery will contribute to a favourable environment for listed businesses to expand their activities, increase revenue, and generate profits.

Secondly, low interest rates and promoted public investment will support the market. With forecasts indicating a cooling down of objective factors related to inflation pressure and exchange rates in 2024, and with public debt at a manageable level, monetary policy and expansionary fiscal policy are expected to be maintained, bolstering economic growth and improving cash flow into the stock market. This will have a direct impact on increasing stock valuations, particularly in industries benefiting from these factors.

Thirdly, the US Federal Reserve (FED) is anticipated to officially reverse its monetary policy by the end of the first quarter of 2024, as inflation in the US cools down and the economy weakens. This shift is viewed as a positive supporting factor for the global stock market, including the Vietnamese stock market. However, the risk of the US economy slipping into a recession remains notable and could exert significant pressure on the global stock market under severe scenarios.

Lastly, China's economic growth is expected to slow down in 2024 but avoid a collapse. The potential collapse of the Chinese economy poses a significant risk factor in 2024, particularly as the country faces challenges in managing the end of its zero-COVID policy in early 2023 and ongoing defaults of major domestic real estate enterprises. VNS