GLOBAL & VIETNAM MACRO UPDATES

• The economic data released in May of most economies showed positive signals. In the US and Europe, inflation and employment data moved in line with expectations, creating favorable conditions for policymakers’ plans regarding cutting interest rates. Accordingly, the S&P 500 index successively set new historical peaks in May.
• Meanwhile, in Asia, the world’s second largest economy is also showing efforts to recover from manufacturing activities, in addition to the Government’s efforts to get the economy back on track.
• On the other hand, geopolitical conflicts also pose significant obstacles to the global trade restoring trend.
• Faced many conflicting information streams, the investment channels outside the stock market such as dollars, gold or government bonds (USA, Japan) continues to appeal the investors.
• Returning to the Vietnam economy, bright spots strengthening the macroeconomic foundation including investment, trade, production and domestic consumption continue to flourish. Meanwhile, challenges still exist for the economy. The inflation increased in May under pressure from food & electricity prices… At the same time, the VND has depreciated 4.6% compared to the USD since the beginning of the year.
• At the end of May 2024, VN-Index closed at 1261.72 points, equivalent to an increase of 4.32% mom and 11.66% YTD.
• Technically, we believe that in the short term VNINDEX will face challenges with the resistance level of 1,290. The current support zone is 1,250 points. The market is waiting for new information including international and domestic macro data and businesses’ earnings in Q2. We believe that money may still circulate among different stock groups in the market, so there will still be opportunities for short-term investors. However, we also recommend that short-term investors avoid “the fear of missing out” and bring the weight of stocks in their portfolio, or the level of margin loan, to appropriate levels. With the VN-Index increasing by more than 11.6% YTD, the selling pressure to take profits at the current price range is also something that short-term investors need to pay attention to. On the other hand, in a positive scenario where the VN-Index ends above 1290 at the end of June, VN-Index may enter an upward trend in the following months.
• INVESTMENT STRATEGY: allocate portfolio to sectors that are benefiting from the recovery trend in domestic consumption (retail-consumer), and global trade activities (exporting businesses); In the long term, the industrial park real estate group benefits from the strong wave of FDI into Vietnam and the steel and infrastructure construction stocks benefit from the public investment disbursement plan and the warming real estate market.