VNMidcap, the index representing the group of mid-cap stocks on the Vietnam’s Ho Chi Minh City Stock Exchange (HOSE), has been trending upwards since late April, supported by the MA20 at 1,345 points.
However, as the index approaches the strong resistance of the MA200 at 1,385 points, there is expected to be selling pressure and profit-taking among heavily speculated stocks in the upcoming trading sessions.
The State Bank of Vietnam (SBV) has announced a further 50 basis point reduction in some key interest rates, effective from May 25. These rates include the refinancing rate and the maximum interest rate applicable to deposits with maturities from 1 month to less than 6 months, as well as the maximum interest rate for deposits in Vietnamese dong at the People’s Credit Fund, microfinance institutions, and other financial organizations.
Vietcap’s Analysis Department believes that these additional interest rate cuts will support credit demand, especially from individual customers, and contribute to the recovery in the second half of 2023. This will also make the SBV’s target of achieving a 14% credit growth for the entire system this year more feasible.
ETF Restructuring Forecast: Based on data as of May 19, Vietcap’s Analysis Department predicts that KDC will be added to the FTSE Vietnam Index, and EIB will be added to the MarketVector Vietnam Local Index, both with equal weightings of 1.8%.
On the other hand, VJC may be removed from the FTSE Vietnam Index due to its average liquidity in the past three months not meeting the criteria to remain in the index.
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Source: Vietnam Insider