There are three scenarios for the stock market in the last months of the year

Analysts say the VN Index has been increasing in the last two months thanks to shares with large capitalization value, especially shares of banks and enterprises from which the state is going to divest.

Bank share prices are supported by predictions about good business performance of banks this year and by the draft law on bank restructuring and bad debt settlement. 

Meanwhile, the shares of enterprises from which the state is going to divest are being sought by investors after Vinamilk’s successful second sale campaign.

Vincom Retail shares (VRE) have seen prices increase by two times thanks to news about a series of projects by Vingroup (VIC), its holding company.

The continued increase of stock prices which have exceeded resistance thresholds has worried investors. They fear the hot market may lead to sharp falls in the near future. 

Analysts say there are three scenarios for the stock market in the last months of the year. First, the VN Index increases and the cash flow will go into shares with large capitalization value. Second, the cash flow will go to midcap and penny stocks which have good business performance. Third, the cash flow will leave the market.

Analysts don’t think the first scenario will occur because some shares have seen the prices rise too sharply within a short time. The VIC price has doubled, while VCB has increased by 40 percent, and VRE by 28 percent.

The second scenario is the most likely to happen. The trading session on November 24 showed that cash was headed for real estate, oil & gas, steel and construction shares.

With the rising oil price tendency becoming clear, the PVD, PVS and PXS of oil and gas firms have bounced back after a period of decrease. Meanwhile, real estate shares are supported by the expected high profit of property firms thanks to the warming up of the real estate market.

The third scenario would happen only if there is unexpected bad news.

According to the National Finance Supervision Council, by the third week of November, foreign investors had bought more than they had sold by $1.77 billion.

Meanwhile, Bloomberg reported that by the end of November 21, the P/E of the VN Index had increased to 18x, a very high level. However, excluding four shares with high P/E (VIC, FLC Faros, SAB and VRE), the average P/E would be 14.7x.

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Mai Chi