The legal and interest rates environments have shown signs of change. SBV has issued decisions to cut the discount rate (14/3) and refinancing rate (31/3) respectively by 100 bps and 50bps to 3.5% and 5.5%, along with reducing the ceiling of short-term deposit interest rates, in order to create conditions for lowering lending rates, stimulating credit flows to support the economy. In addition, after Decree 08 was issued last month, a draft amendment to SBV’s Circular 16 was proposed, with new conditions allowing banks to purchase newly issued corporate bonds to finance working capital and repurchase unlisted corporate bonds, which was also put forward by SBV for comments and we expect this draft to resolve the cash flow bottleneck for real estate developers.

Regarding international markets, the Fed, amid recent bank failures, has decided not to change the terminal interest rate since December 2022, although inflation has decreased more slowly, and the economy is temporarily not as weak as expected lately. While we believe that the rate of inflation decline should be increasing in the coming months due to last year's high base of energy prices, and the Fed's tightening policy will gradually have more far-reaching impacts on the US economy, the banking systematic risk seems temporarily under control when the Fed has withdrawn money back in late March.

Given these favorable developments and improving liquidity, we expect that Vietnam's stock market in April be increasing with medium volatility within a range of 1,040-1,120.

The downside risk is likely to come from weaker-than-expected Q1-2023 profit growth. However, we believe that the negative impact of this factor might be limited as businesses, which are forecasted to have bad Q1 earnings, have also provided low 2023 guidance, and the market has also partially discounted this information into stock prices.

In that context, we believe that market is offering short-term trading opportunities, particularly in industries like Banking, Securities, and Real estate - Construction that are highly sensitive to interest rates. Additionally, businesses having Q12023 results that outperformed the market average are also worth taking into account for potential short-term trading opportunities. Besides PVD, PVT, ACB, GMD, FPT, and QNS that were recommended in February and March, two new ideas were added in April, VCB and KBC. We reserve the recommendation that investors should only allocate 30 - 50% of the portfolio value to these investment ideas in order to take advantages of short-term chances, and consider realizing profits when quarterly business figures are officially announced.