The VN-Index is expected to fluctuate and increase to at least between 1,280 and 1,380 points in 2024, supported by positive signals from the macroeconomic outlook and a recovering stock market.
Economic Prospects
This forecast does not seem overly optimistic given the more positive economic outlook for 2024 compared to 2023. The trend of monetary easing has taken place at Central Banks, including the State Bank of Vietnam (SBV), and the US Federal Reserve (FED) has signaled a more dovish policy when it is expected to cut interest rates at least 3 times following the December 2023 FOMC meeting. Economic growth forecasts for various regions, developed economies, and developing countries in 2024 also contribute to this optimism.
Vietnam's economic growth could return to a range of 6.5-6.8% per year, driven by improvements in manufacturing, exports, FDI, and credit growth. Although challenges remain, issues related to capital flows in the real estate market and corporate bond market are gradually being resolved. After continuous net selling by foreign investors at the end of 2023, they may return to net buying from Q2 2024. The wave of investment in anticipation of market upgrades, with 2025 being a pivotal year, could begin as early as Q3 2024. The VN-Index might exceed the 1,200-1,250 points range in Q2 before reaching 1,280-1,380 points from Q3. Investment funds could mainly focus on Financials, Chemicals, Technology, Retail, Seaports, and Oil & Gas stocks, with some stocks potentially growing by 50-100%. Market capitalization and trading value could rise significantly, offering more investment opportunities from mid-2024 onwards.
Monetary Policy Shifts
Macroeconomic investors are paying attention to policy "reversals" in 2024, as "hawkish" stances gradually shift to "dovish" ones. The FED halted its rate hikes in December 2023 after 11 consecutive increases, and Chairman Jerome Powell indicated that the FED might consider at least three rate cuts in 2024. Despite global challenges, U.S. companies continued to perform well, with better-than-expected revenue and profit growth. Many countries, including Vietnam, are focusing on stimulating consumption, supporting production, and fostering growth.
Vietnam's monetary easing policies over the past year have been proactive compared to many other countries. Despite the pressures on the SBV to lower interest rates multiple times, which occasionally led to a high USD/VND exchange rate, these efforts reflected the challenges faced by the Vietnamese economy. The government has shown determination in overcoming difficulties by promoting public investment and infrastructure development, making Vietnam an attractive destination for investment in industrial zones and manufacturing. With deposit interest rates returning to lower levels, investment funds are likely to flow into attractive investment channels, particularly the stock market, as liquidity improves and corporate bond markets receive support.
Market Recovery
The stock market hit its lowest point in November 2023, and the VN-Index is poised for a significant upward trend in 2024-2025. Concerns about low market liquidity and continuous net selling by foreign investors in December 2023 led to declines below key support levels (1,080-1,085 points). Despite some pessimistic views predicting further corrections to strong support levels (980-1,000 points), the current low-interest-rate environment and the restructuring of foreign investment portfolios suggest a recovery scenario. The VN-Index is expected to rebound from its lowest point in November and gradually return to 1,130-1,150 points in early 2024 before increasing to 1,200-1,250 points in Q2.
Expectations for the Market
The implementation of the KRX system in early 2024 is one of the market's expectations. This modern system supports central clearing, high-frequency trading, and the development of complex financial products, providing significant support to the stock market. Foreign investors are forecasted to return to strong net buying from Q2 2024, anticipating economic growth and market upgrades in 2025. This will likely drive the stock market into a new growth phase, enhancing investor confidence in the coming year.
Although the stock market might not recover strongly in terms of index points, financial, oil & gas, chemical, steel, and seaport sectors are expected to be favored by investors in 2024.
Invest with VPS to receive dedicated support from top experts today:
- Open a VPS stock account with a beautiful number series: [VPS Account Opening](https://openaccount.vps.com.vn/)
- Download and access VPS SmartOne - Vietnam's leading stock investment application: [VPS SmartOne](https://bit.ly/VPSSmartOne)
(*) Disclaimer: This report is intended to provide information for investors' reference only. The views, forecasts, and estimates in this report reflect the author's opinions at the time of publication and are subject to change without notice. Investors should independently assess the information in this report.
