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Market Strategy Oct 2021 – Capture the arising opportunities

Strategy Note 30/09/2021    222

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  • The VN-INDEX fluctuated in a narrow range within 1,316-1,366pts in Sep as market’s sentiment remained cautious after the warning of SSC about closely monitoring unusual transactions, along with fear of prolong 4th wave of COVID-19 infections
  • Liquidity declined slightly in Sep. Total trading value decreased 5.5% mom to VND27,445bn/session (+342.3% yoy).
  • We saw money ran into small caps in Sep. Liquidity of VNSML (representing small caps) rose 17.9% mom, resulting an impressive increase of 5.2% mtd of VNSML Index. On the contrary, money ran away from large caps and mid caps with daily liquidity falling 21.9% mom and 4.5% mom, respectively, in Sep.
  • We see some positive catalysts in Oct, including: (1) expecting further decline in the number of daily new cases thanks to higher vaccination rate (35.4% at as 25 Sep 2021); (2) expected recovery of listed companies’ earnings in 4Q21F as the economy would be gradually reopened; (3) the valuation of Vietnam’s stock market looks attractive in a longer view.
  • We maintain our forecast for 2021F EPS growth of listed companies on HOSE at 26%. We expect earnings of several sectors such as Oil & Gas, Real Estate, Retail, Food & Beverage and Banking to bounce back in 4Q21 while profits of Brokerage and Steel companies remain strong. For 2022F, we expect EPS growth of listed companies on HOSE to remain strong at 21% yoy. Some sectors could see strong improvement in earnings growth, including Industrial goods and Services, Real Estate and Oil & Gas.
  • We expect the VN-INDEX to fluctuate in the range from 1,280-1,380 points in Oct. The 1,280-1,300 points would be strong supporting level for the VN-INDEX in Oct. Investors could raise proportion of stocks in their portfolios if the index drops to the supporting zone. We prefer leading companies in the Oil & Gas, Banking, Public investment-related companies and Export-oriented companies.

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