e expect that Vietnam’s stock market to keep fluctuating in a narrow range given the mix of both positive and negative factors. Despite the gloomy outlook globally, the economy continues to show an enduring recovery, making the Dong depreciates less compared to currencies of its neighbors such as Thailand, Philippines, Malaysia, and Indonesia. Therefore, we expect that inflow from foreign investors will keep coming back to Vietnam, as it has been in the most recent five months. We expect that banking, F&B, retail and O&G stocks will rotate their roles to support the VNIndex reach 1300. Meanwhile, negative events from the world, such as FED’s rate hike, China’s issues, or geopolitical tensions will be the downside risks. In the base case, we forecast the VNIndex to fluctuate in the range of 1250 – 1315.

While we think that the market can still head to the 1,300 level in the short term due to supportive information such as the SBV’s move to increase credit quota, the fact that the FED and other developed economies’ central banks are having aggressive stance toward inflation control will still weigh on global economic growth as well as on the market sentiment in the medium term.

In accordance with this expectation, we think that investors should consider taking profit in stocks that have rallied well recently or have valuations (P/E, P/B) that are too high compared to the historical level to maintain a balanced proportion of stocks and cash. Maintaining reasonable amount of cash will be a good preparation when stock prices drop. In the short term, investors can pay attention to oil and gas stocks. In addition to PVT stock that has been recommended since April with the expectation of recording profit from the sales of Athena vessel, we also favor PVD for medium term.