Macro Strategic Reports | [Equity Strategy] - US Election, Exchange Rate and Vietnam Stock Market

[Equity Strategy] - US Election, Exchange Rate and Vietnam Stock Market

01/11/2024

Summary

After the Fed's rate cut, we expected that the exchange rate would cool down and the inflow from the foreign investment funds would return to the Vietnam stock market from October. But things did not go as expected.
VNIndex dropped 23.36 points (-1.82%) and foreign investors sold VND 9,835 billion in net. Excluding transactions related to VIB, foreign investors still sold VND 4,433 billion in net.
By the end of October, the Vietnamese Dong depreciated more than 4% against the US Dollar. The DXY index also increased from 100 at the end of September to 104 at the end of October. In addition to concerns about geopolitical risks in the Middle East, the DXY index increased sharply due to the expectation of the results of the US presidential election.
Some investors believe that Mr. Donald Trump will become president in the next term and his policies will cause inflation to increase. With high inflation, the Fed will slow down its rate cuts, which is completely different from the expectations of the market in September 2024. In addition, Mr. Trump's policies can also affect the US's trading partners and appreciate USD against other currencies.
In this report, we will discuss the US presidential election, exchange rates and the impacts on the Vietnamese stock market.

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