The low interest rate environment will still be the main support for the market not only in July but also in the second half of this year, when the term deposits from 6 months to 1 year from the time deposit rates reached the peak at the end of 2022 will gradually mature and look for new investment channels with higher yields such as the stock market.

The focus in the month will be the Q2 earnings season. For this period, we think the profit growth picture of the whole market is still relatively bleak, with this quarter's profit forecast to decrease by about 4% YoY. However, we believe that HOSE's earnings YoY growth may have bottomed out from Q4-2022 and will start to improve from Q2-2023. The profit of the whole market in this quarter is to be led by the Banking, Finance, IT, Pharmaceutical, and Oil and Gas industries, while the Materials, Consumer Goods, Utilities, Industry industries is to continue recording a double-digit YoY decline in profit.

With the expectation of stock market liquidity and YoY earnings growth improving in the second half of the year, we believe that the primary trend of the market will be shifting to uptrend compared to the accumulation trend in the first half of this year. For July, the expected range of the VN Index is 1,090 – 1,170.

The market's downside risk is likely to be driven by (1) adverse movements of the exchange rate, in the context that the gap between VND and USD’s overnight interest rates is wide and the Fed is highly likely to raise the fed funds rate by 25 bps this July meeting as the US Core PCE in May did not fall as expected, and (2) some large cap stocks miss earnings expectations.