Stocks of most banks were listed as sunken points in the strong uptrend of the market. The session on March 5, for the first time after about five months, the VN Index regained 1,000 point. Banking stocks contributed to briefly touch this psychological milestone.
According to investors’ traditional way of speaking, BID’s Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) had made a breakthrough by surging strongly with explosive volume in this session.
About one year ago, BID was the only banking stock that often created mutations, making a spillover effect for the industry.
However, during March 5 session, the “king stock” was not the momentum spreading the uptrend for the whole banking stocks in the market as expected, even in the framework of one session.
Looking back on the process, the lack of interest in banking stocks in general has lasted for the whole year, after the peak in April 2018. It was also the time when this group was almost silent, with 20-30 percent decline in many stock codes compared to the peak of the year.
And this time, after Tet holiday, VN Index has reached over 1,000 points from 900 points in less than a month. Unforturnately, banking stocks were still on the sidelines, in which many stocks in the market price group were lower than the level achieved before Tet.
Except for the case of VCB stock of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and BID, the remaining stocks are mostly struggling to hold prices.
Typically MBB of Military Joint Stock Commercial Bank (MBBank) with more than a dozen sessions blocked on the reference millions of units, but the price is almost unchanged. VPB of Vietnam Prosperity Joint Stock Commercial Bank (VPBank) has not escaped from the range of 21,000 and 21,500 dong per share. TCB of Vietnam Technological and Commercial Joint Stock Bank (Techcombank) always receive orders to sell massively whenever the price is over 27,500 dong.
The accumulation process is also a perspective, after this group has many codes that have increased 7-10 percent compared to the decline before Tet.
But after Tet holiday, when the stock price increased in many sectors, the stagnation on the margin of banking stocks became noticeable.
At the end of 2018, in the flow of comments on the prospects of banking industry, there was a view of the profitability of banks that had been in the “top zone”, the growth rate started to slow down.
There are specific concerns for individual investors, except for codes such as BID of BIDV, VCB of Vietcombank, CTG of VietinBank due to specific characteristics, most bank stocks have huge amount of floating stocks.
The above concerns can be calculated from the actual transaction: in order to have a strong session, each code such as MBB, TCB, VPB… needs to be liberated with five to ten million units, even around 15 million units. This scale requires investment amount of 100200 billion dong per session for each code.
But the above aspect is only relative. Because, in the previous hot sections, banking stocks increased well associated with the market transaction size of four to five trillion dong per session. Currently, the market has appeared several sessions of size from five to six trillion dong, but bank stocks are generally weak.
On the other hand, the uptrend of the market in general since the Tet holiday has so far been strongly motivated by net buying activities of foreign investors, while many bank stocks are now closed or temporarily locked.
Indeed, in a series of codes like MBB, TCB, CTG and VPB, price movements lacked motivation from new foreign capital.
At the recent securities industry conference, once again, it is suggested to loosen the foreign ownership threshold at Vietnamese banks. However, almost every year this proposal is not approved, and it is unclear when it will be possible to realise, even if the ownership does not have voting rights.
Turning around, the basic factors related to bank stocks are generally the same, even improved. After the business results in 2018, with changes in prices and through deep adjustment last year, banking stocks became more attractive by basic indicators such as Price to Earning ratio (P/E), Price to Book ratio (P/B) and Earning per Share (EPS).
However, when the stock market has been vibrant, bank stocks generally remain stagnant and lie on the sidelines, that attraction may cause many individual investors to wonder.
Because, in an up-price market, stocks do not create or limit investors’ profitability, they become less attractive, even bury capital.
Perhaps the attractiveness of bank stocks is becoming more suitable for value investors, with medium and long-term plans and expectations?
