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Investment Strategy Report – August 2022: TEMPORARY EASING INFLATION PRESSURE TO BOOST MARKET SENTIMENT IN SHORT-TERM

“Currently, according to data gathered in the upcoming July, 2022, we noticed some positve signs about the possibility of cool down inflation globally when indices on oil price, general commodity price and goods movement activity tend to improve in compare with June, 2022. We evaluate that this will be the most positive information to support VN-INDEX in August, 2022. In the meantime, inflation is expected to cool down if oil prices remain stable, or tend to decrease in the near future, making FED have room to review the extent as well as roadmap of raising interest rate for better economic recovery.

Domestically, in view of the SBV's credit growth target of 14% in 2022, in order to stabilize domestic interest rates and exchange rates. By the end of July 2022, credit growth of the whole industry was at 9.42% YTD, so the remaining five-month credit limit is 4.6%. This leads to commercial banks not having much incentive to increase deposit mobilization. From that, we expect that the deposit interest rate will not change much in August 2022. In terms of business activities, after the Q2/2022 financial statements season, August will often go into the lack-of-information territory so that market has the basis for pricing changes. Moreover, looking beyond the business outlook of all sectors in Q3/2022, Rong Viet still maintains a neutral - positive view on the overall impact of industries on the VN-INDEX.

In August, we expect VN-Index to fluctuate in the range of 1,200-1,300 points. Investors could disburse part of the portfolio for short-term strategies and still prioritize keeping a certain amount of cash for long-term investment strategies when the information supporting industry groups gradually becomes clearer. Besides, in this period, we notice that investors should still monitor oil price movements.

In the negative scenario, if oil prices return to above 130 USD/barrel, this will affect inflation data in the following months and scenarios of the Fed's interest rate reduction momentum. Hence, VN-INDEX will possibly have lower performance in compare with our expectation.”