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Investment Strategy Report – March 2022: TIMING IS KEY

The war between Russia and Ukraine suddenly started in the last week of February, bringing the market to a negative state. In economic terms, we believe that the Russia-Ukraine war will not have a direct negative impact on Vietnam's economy, because the trade value with the two countries above is negligible. However, in the short term, the defensive sentiment against economic uncertainties that may arise from the reciprocal responses between the parties in the Russia-Ukraine war will create strong volatility sessions. When the market is still potentially volatile, we believe that maintaining a certain purchasing power ratio will help investors to be in a better position during stock price declines.

We believe that the Fed's interest rate hike at the March meeting has been predicted since before US inflation reached a record high. In which, the expectation of the Fed's interest rate hike can reach 0.5 percentage points compared to the previous forecast of 0.25 percentage points. However, in a better-than-expected scenario of an increase of only about 0.25 percentage points amid escalating political conflicts in Russia and Ukraine, this could have a short-term impact on overall market sentiment.

In general, we expect the VN-Index to fluctuate in the range of 1,450 -1,540.

At present we believe that the events in Eastern Europe may shake markets, however the impact should not be too negative on the general sentiment as expectations of increasing tensions may abate. In this month, we believe that Fishery and Seaport stocks will partly support the market. In addition, Technology is also expected well with the momentum from digital transformation helping to support this year's profit story. Moreover, long-term cash flow can flow into Bank stocks on mid-to-long term outlook from second half of 2022 and the impact of geopolitical tensions gradually disappearing. For large-cap stocks, we tend to be Neutral for Steel, Oil and Gas (if any) will support the index slightly when the price has strongly reflected the impact of escalating political tensions