Filter information to seek good investment opportunities

Investors must understand the business to invest.

Positive signals from money flow

During the trading week from August 17 to 21, investors witnessed the slump on the international stock market. Despite slightlyshaking, this has also put pressure on the VN-Index, as it had previously had a "shortness of breath" compared to the global market. However, in the next week, there was a positive change with two sessions in a rowhaving impressive gains.

Many investors were excited when the VN-Index closed the first session of this week at 868.68 points. The most remarkable point to mention is that the liquidity in each session is quite impressive. In the stock trading session on August 19, the liquidity on the VN-Index and HNX-Index was only over VND4,800 billion, then on August 20, the liquidity increased strongly with the total value reaching more than VND7,400 billion. Cash flow continued to pour into the market and reach an impressive level of more than VND8,200 billion on the session on August 25 (higher than the 20-day average). This shows that investor sentiment is considered to be positive in the fluctuations of the week when sellers have not had a real reason to leave the market.

According to many experts, the information at the weekend about the Taiwan fund that will mobilize and invest in shares in the VN Diamond with the initial scale of US$100 million continues to be the driving force to support investors. Besides, the liquidity of the market is improving gradually when speculative cash flow is more confident. The most positive highlight is the fact that the cash flow from buyers is more active than the cash flow from sellers. This is the main driving force for the market's ability to rise in the future.

According to the Ho Chi Minh City Securities Company, cash flow is gradually returning stronger in pillar stocks (the stocks that have the most influence on the VN30 index) after a period of searching for opportunities in the group of small and medium capitalization stocks. In the context that small and medium-cap stocks do not have much room to increase, cash flow is likely to change direction to find opportunities in stronger large-cap groups.

“The general market is gradually regaining its balance; the cautiousness has been largely relieved after the derivative maturity session of August 2020. Along with that, the lack of seller's determination and the spread of cash flow in pillar groups that are improving and the stability of the international stock market will be a positive catalyst for the ability to break out of the overall market in the near future, despite foreign net selling pressure still exists,”according tothe Ho Chi Minh City Securities Company.

Looking for businesses which benefit from wave of public investment

Looking at the market movements, it can be seen that the Covid-19 pandemic has made a significant change in the business market. A few businesses are struggling to survive, and it may be difficult to survive if the pandemiclasts longer. In contrast, there are also businesses that will take advantage of this opportunity to thrive.

According to securities expert Nguyen HuuBinh, the market is giving investors great opportunities for long-term investment but investing in any business is not easy.

“The Covid-19 pandemichas left many businesses lagging and others have risen strongly. Whether the 2020 plan is complete or not is less important than how the business is planning in the future and assessing whether ithas the power to do it. Therefore, to get results, investors must understand the business to reduce the investment money. As for the short term, let's look at the cash flow that the transaction and the immediate target is the 880-900 point-area,”said Mr. Nguyen HuuBinh.

Mr. Phan Dung Khanh, Investment Advisory Director of Maybank Kim Eng Securities Company, said that if you really invest according to fundamental analysis, it is difficult to have any stocks worth buying when the economy goes down. Because business is difficult, the profits of the best businesses are also affected, the businesses that go against are very few, but if there are mainly in the US such as Apple, Amazon, Netflix. Vietnamese enterprises whose business results go against the economy or take advantage of Covid-19 are even more difficult except for some businesses that have advantages from selling pork. Even some businesses are similar in industries like Amazon, but e-commerce in Vietnam is still in the period of cost over revenue, so the profit is still negative, and even worse due to the Covid-19 pandemic.

“Therefore, this year, new investors (F0) are beating those who are too cautious, have technical analysis and long-term investment when they only need to surf skillfully that they will benefit. However, these investors also need skills to survive for a long time before this trend passes,”said Mr. Phan Dung Khanh.

A professional investor also said the story exchanged by many investors in recent sessions surrounding their expectation that disbursement of public investment will be accelerated by the end of 2020. Specifically, in an online briefing meeting with ministries and local agencies to urge the disbursement of public investment capital in 2020 (taking place on August 21), the Prime Minister affirmed the spirit of resolving the disbursement of all investment capital according to the plan.

Therefore, information related to the Eastern North-South expressway project and businesses having the opportunity to take advantage of these projects such as construction enterprises will become the focus of attention. Investors should pay attention to "filter" information to seek valuable investment opportunities during this period.