As headwinds subsided, the stock market rebounded robustly in May. Strong Q1 earnings surpassed expectations, laying the foundation for the market's recovery. Additionally, the cooling of U.S. inflation data bolstered global and domestic market confidence regarding the prospect of a FED rate cut.

Looking ahead to June, with Q2 earnings season yet to heat up, macroeconomic factors at home and abroad will remain the primary market catalysts. In this context, we observe the following:

1. Positive Macroeconomic Data: Recent Vietnamese macro data indicates positive trends in production and consumption, supporting a favorable GDP growth outlook for Q2.

2. Monetary Market Stability: Despite recent strong exchange rate pressures and decisive actions by the State Bank of Vietnam (SBV) to alleviate these pressures, we anticipate no unusual fluctuations in policy rates and market interest rates.

3. Focus on Central Bank Meetings: The market will closely watch the "rate decision" meetings of major central banks, including the Bank of Canada (BoC), European Central Bank (ECB), Bank of Japan (BoJ), Federal Reserve (FED), and Bank of England (BoE). We expect BoC, ECB, and BoE to each implement their first-rate cuts in two years. Meanwhile, the FED is likely to maintain its current rates but may issue more dovish statements based on recent growth, inflation, and employment data.

4. Legislative Developments: The government has submitted a proposal to the National Assembly's Standing Committee to expedite the implementation of amendments to laws on Land, Housing, Real Estate Business, and Credit Institutions. If approved in June, this could positively impact the real estate sector (which accounts for 14% of VN Index capitalization) and the broader market.

Regarding market volatility, we expect the VN Index to trade within the range of 1,250-1,320 in June. In our base scenario, positive macro developments could help the index maintain momentum and surpass recent short-term peaks. Conversely, stronger exchange rate pressures could challenge SBV’s current interest rate stance, negatively impacting investor expectations and market performance.

With the expectation of positive economic growth prospects in the second quarter overshadowing the unfavorable monetary market conditions, we believe that investors can still accumulate shares of companies whose profits can gradually recover on a quarterly basis or grow annually amidst market fluctuations in June. Regarding stocks, steel is one of the sectors we favor next month. In which, we pick HPG and GDA. Additionally, IMP is also a stock we highly value due to its benefits from the Bidding Law regulations on the use of domestic drugs, effective from early 2024.