Mr. La Giang Trung emphasized that "boom" will be the main keyword for the stock market in 2024 and investors need to be ready to seize rare opportunities in the stock market.
In a discussion with us at the beginning of last year, Mr. La Giang Trung - CEO of Passion Investment commented that "ready" is the mindset that stock investors need to prepare in 2023, ready to face turbulence and be ready. ready to seize opportunities in the stock market. And in fact, despite experiencing many unpredictable fluctuations, VN-Index also ended 2023 with an impressive increase of more than 12%.
By 2024, the main keyword for the stock market emphasized by CEO Passion Investment is "boom". The Fed's policy reversal, loose monetary policy and Vietnam's accelerated fiscal policy will be the premise for a market boom in 2024.
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2024 is forecast to mark the reversal of the Fed's monetary policy from tightening to loosening. In your opinion, how could the Fed's move affect the management of the State Bank of Vietnam?
The Fed's monetary policy is always the factor that has the greatest impact on global financial markets. In essence, when the Fed turns to reduce interest rates, it means that a monetary easing cycle is coming and this is beneficial for financial markets around the world, including Vietnam.
In the context that Vietnam's economy has just gone through a difficult period, the Government will take measures to stimulate economic growth when inflation remains low. Although the exchange rate is still under pressure, the Fed's ability to reduce interest rates can help the world money supply improve and interest rate differentials become less tense.
However, it is difficult for Vietnam's monetary policy to loosen further because deposit interest rates are currently very low. The most important thing is how long those low interest rates last and whether the M2 money supply can increase or not. Currently, interest rates are very low but M2 money supply increases very slowly because money turnover has not recovered due to the subjects in the economy not absorbing capital well. With interest rates continuing to move sideways and the economy recovering, M2 money supply will increase sharply and this will positively impact the economy in general and the stock market in particular.
Many expect that when the Fed reverses its policy, it could help Vietnamese stocks increase sharply. What do you think about this?
Not really. We need to clearly see whether the Fed's interest rate reduction is active or passive. In a scenario where inflation falls, the economy does not suffer a severe recession and the Fed lowers interest rates slowly, a "soft landing" scenario takes place, helping the world and Vietnam stock markets continue to rise. The second scenario is a "hard landing" when the Fed has not loosened policy but the world economy has weakened, forcing the Fed to suddenly reduce interest rates, which will be a difficult period for the world financial market. world and Vietnamese market. In particular, Vietnamese stocks have a close correlation with world stocks, especially US stocks, so investors also need to closely monitor these indices.
The US stock market has grown well for many years, mainly led by technology groups, while the Vietnamese market structure is mainly real estate and banking. Is there a case where US stocks continue to increase but the VN-Index is still "stagnant" because there are no such hot trending stocks?
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The story of America having quality businesses is reflected in the difference between the increase of SP&500 and VN-Index. While VN-Index is still far from the peak, the US has already surpassed its old peak. The nature of the Vietnamese market is that there are not many businesses that create great value, strong growth and new inventions.
Vietnamese businesses are mainly cyclical in nature and stocks are similar. While technology stocks in the US could increase by a factor of their previous peak, Vietnamese stocks could return to previous levels or slightly higher if the Fed loosens monetary policy. Even though they are going up in the same direction, US stocks are going up strongly and that shows the difference between the quality of businesses.
In fact, US stocks have recently gone up strongly in response to forecasts that the possibility of a recession in this country is very low. Although Vietnamese stocks have not increased too strongly, they have still gone up since the bottom because the economy is still a bit slow. This is also a bright spot for the market in the near future, because there is still room for good growth if world stocks continue to go up.
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From your perspective, what will the macro picture look like in 2024? And what will be the biggest influencing factor on the stock market next year?
2022 and 2023 are two very difficult years but the economy still grows over 5%. Vietnam has gone through the most difficult economic period, so the growth target of 6% or more is quite feasible in the context that the US economy is expected to continue to recover positively on a basis of interest rates that will decrease in the near future. .
At any time, the most important event for the stock market is still monetary policy and fiscal policy. All movements of businesses follow this