The market in October was unable to hold the 1,100 level - the low of our previous forecasted range - after unexpected events related to VHM (foreign investors’ sell-off on October 24) and the war in the Middle East (from October 7). These headwinds, along with the worse-than-expected Q3 profit of some large-cap stocks, have exacerbated the drop in the last week of October.

We see that, during this crash, market sentiment, which was already cautious after SBV started issuing T-bills at the end of September, has further weakened, seemingly due to concerns that the risks related to VIC and Israel-Hamas war may develop more negatively and pose systemic risks. The extreme caution is clearly shown through the "paradox" that despite investor deposits at securities companies at the end of Q3 continued to increase, the market liquidity fell.

We speculate that the market may have "digested" the bad news after a deep discount of 18% from the peak in September. For November, we lean towards the scenario that the market will recover as things are unlikely to get worse and based our expectations on: (1) selling pressure in stocks that hit the record low in valuation will cool down, (2) risks related to bonds VIC's international market are manageable, (3) there are no unexpected developments from the Middle East war or the Fed funds rates.

We expect the VN Index to fluctuate in the 1,000 - 1,100 range.

For the next twelve months, we realize that the global and Vietnam macro and monetary policies outlook still contain many shades of gray that should bring a cautious outlook. However, in the short term, we believe that these risks are priced in. Therefore, following a sharp decrease in October, we expect the market to recover in November. Some of our suggestions for November include VNM, GMD, and DCM