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Market comment
Drop in Vietnam index is healthy
The current consolidation phase is long overdue and healthy in nature, given that the market is running far ahead of its fundamentals.
We continue to believe that a more sustainable rally is coming at the latter part of this year and maintain our year-end target at 550 points.
We are not too concerned about the recent sell-down by funds and corporate members given that it is a normal profit-taking activity in view of the explosive run-up of the market.
Furthermore, the listing of these corporate giants may temporarily absorb some liquidity in the near term, but serve as an important milestone to improve the attractiveness of the exchange.
We believe that the majority of cash will remain in the market, eagerly waiting the next catalyst to re-enter. Nonetheless, we do foresee that the near-term risks will continue to outweigh the upside potential.
The psychological level of 400 points should serve as a strong support level for the market, and we believe that buying interest will accelerate should the market drop close to this level.
Cheah King Yoong,
Head of Investment Research at Kim Eng Vietnam Securities
thanhnien
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