Vietnam Insight

AI selloff weighs on global equities. US stock indices wavered on Monday amid a fresh selloff for chip producers ahead of a Fed decision and major economic updates this week. The S&P 500 swung to 0.3% lower while the Nasdaq 100 dropped 1%. Nvidia dropped 4.5% after announcing a $500 billion AI memory chip supply deal from SK Hynix. Separately, Nvidia guaranteed $250 billion for OpenAI to lease computing from a data center project, reigniting concerns that circular deals in AI computing could trigger contagion and unwind the AI trade should capex growth be halted.

Short-term correction with expected technical rebound. The VN-Index closed the trading session at 1669.01 points (-17.10 points, -1.01%), with trading volume at the average level of the past 20 sessions. 79 stocks increased in price, while 258 stocks decreased. Stocks positively impacting the index included LPB, VHM, and MCH; while BID, MWG, and TCX negatively affected the index. Foreign investors net sold 732 billion VND during the session, primarily buying LPB and MBB, and net selling VPB, SHB, and TCB.

Trading Strategy: Following the recent sharp correction, valuations of many stocks have become more attractive, creating opportunities to accumulate fundamentally sound companies with positive growth prospects. Investors may take advantage of market corrections to gradually deploy capital while maintaining an appropriate cash position to manage risk and remain ready to increase exposure once a recovery trend is confirmed. Investors should avoid using leverage (margin) to bottom-fish before the market confirms that the downtrend has ended.In addition, technical rebounds during this week could provide investors with an opportunity to restructure their portfolios by reducing exposure to companies whose business performance has fallen short of expectations.

Watchlist: HPG, POW, REE

High-risk stocks to avoid: Real estate (PDR, KDH, NLG) and oil & gas (GAS, PVS, PVD, ...).