(Hanoi Iron and Steel – HSV) The recovery of real estate supply and policies to promote public investment are forecast to be a big driving force to help boost steel industry stocks at the end of the year.
Influenced by the world market, VN-Index at one point dropped more than 20 points, before closing the session on September 14, down 7.63 points (0.61%) to 1,240.77 points thanks to bottom-fishing demand entering the afternoon session. Among them, there are two groups that recovered significantly: stocks and steel.
Particularly in the steel group, HPG had the best liquidity with 27 million units and returned to reference, while NKG reversed to increase 1.1% to 23,650 VND, matched 17.7 million units and HSG increased its momentum to 3.4%, closing at 18,100 VND, matched 14.5 million units.
Notably, HPG stock is continuously the focus of foreign investors' net buying list. In the session of September 14, HPG was the code that this block collected the most with a value of 108 billion VND. Previously, on the session of September 9, foreign investors also net bought HPG more than 5.99 million units, corresponding to a total net buying value of 140.72 billion VND, or like the red market session (September 8), although trading was quite limited, this block still collected HPG quite strongly with a total value of 99.77 billion VND.
In general, the prosperity of this group largely came from information about steel mills in Europe stopping production due to energy problems, causing a number of energy-intensive industries to cut output, including steel production.
On the other hand, steel prices also recorded signs of recovery, creating a supporting factor for this group of stocks. Accordingly, after 2 rebound increases on August 31 and September 6, by September 14, construction steel prices continued to increase for the third time in a row with rolled steel prices increasing by nearly 900,000 VND/ton. After 3 consecutive increases, construction steel prices are at 15.2 - 15.6 million VND/ton.
Take advantage of opportunities from challenges
In the current period when major economies tighten monetary policy to control escalating inflation, the demand for goods in general and iron and steel in particular tends to cool down. This poses many big challenges for Vietnam's steel export industry.
However, in the context of many steel mills in Europe being closed due to rising energy costs, Vietnamese steel enterprises will still have many opportunities to export to these potential markets in the end of the year.
In addition, some securities companies predict that real estate supply will recover and policies to promote public investment will be a big driving force to help boost steel consumption.
"In the first half of the year, the price of steel production raw materials fluctuated greatly, making business activities of steel companies difficult due to falling selling prices, provision costs for inventory devaluation and increased transportation costs, mainly in the second quarter. However, construction steel demand will soon recover when Vietnam's public investment capital disbursement accelerates from the end of the year after the mid-term public investment plan for 2021 - 2025 completed the procedural approval stage", Rong Viet Securities (VDSC) commented.
VDSC notes Nam Kim's medium and long-term growth potential from the investment to double capacity from 2027. As for Hoa Sen and SMC, this securities company still maintains a more cautious stance due to unclear growth prospects in the coming years.
Nam Kim's NKG is also a code recommended by KBSV to buy with higher profitability than savings interest rates thanks to benefiting from the energy crisis in the EU and competitive advantage in production capacity costs.
In addition, in the Financial Street Talkshow on the evening of September 12, Mr. Phan Dung Khanh, Director of Investment Consulting Maybank Investment Bank, highly appreciated the steel industry group because after previous years of strong growth, although it has now recovered, it is still very far from the peak.
According to Mr. Ngo The Hien, Director of Analysis, Saigon - Hanoi Securities Joint Stock Company (SHS), in the current context, the steel industry is still very potential because it is related to public investment.
"Steel industry stocks have had a period of cumulative sideways movement for a long time. In addition, steel mills in Europe, due to high energy costs, have either reduced output or closed factories, thereby creating expectations that world steel prices will also increase. In addition, the process of disbursement of public investment in Vietnam at the end of the year is usually a peak period, this will help a number of businesses in the field of construction materials production, including The steel industry will benefit," said SHS experts.