Macro/ Strategy

The Fed's aggressive 0.5% interest rate cut, the first in four years, marks a significant shift in monetary policy from tightening to easing. The domestic stock market (VNINDEX) has maintained trading within the 1,200-1,290 range for the past six months. Anticipating the Fed's policy shift, we expect the market to receive a significant influx of capital, helping the index surpass the 1,300 peak in the near future.

Since the beginning of 2024, the “going green" investment portfolio has yielded a return of +6.49%, lower than the VNINDEX's return of 14.15% due to the prolonged difficulties faced by the power industry. The first-half 2024 business results update shows a 9% YoY decrease in net revenue and a 19% YoY decrease in net profit. This is attributed to a significant decline in hydropower output due to unfavorable hydrology, a sharp decrease in selling prices in the competitive electricity market, a severe gas shortage, the absence of a pricing mechanism for renewable energy, and a significant increase in financial costs. In late 2024 and 2025, the hydropower group is expected to benefit as the probability of La Nina increases, benefiting companies such as PC1, REE, HDG, and VSH.

Notably, the first LNG power plants in Vietnam, NT3 and NT4, are expected to be operational during this period, which is expected to be a catalyst for POW's growth. With the trend of promoting LNG power generation, GAS will also benefit significantly from this trend.