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Analysts bullish on stock market outlook for 2009
Despite last year’s freefall, most analysts are upbeat about what lies ahead for the stock market in 2009.
Economist Dinh The Hien said one of two scenarios is likely to play out for the stock market this year.
“If the US economy becomes steady in the first two quarters of 2009, foreign direct investment will be poured heavily into Vietnam in the last two quarters, which will help the stock market to close at around 400 points at the end of 2009,” Hien said.
“But if it takes the US economy a year to recover, foreign investors will be less eager to enter in Vietnam, which will show that the market will rally slightly to close at around 350 points.”
He also said last year’s crash of 66 percent created many opportunities to buy blue chips at pretty low prices.
Of the VN-Index’s 174 members, 39 stocks currently have their share prices below the face value of VND10,000 (57 cents).
Some analysts say investors could earn huge profits from those low-priced stocks, most of which paid cash dividends of 15 percent, higher than present bank deposit interest rates.
Slowing inflation has allowed the central bank to cut its benchmark interest rate by 5.5 percent since October to 8.5 percent now. Commercial banks are allowed to set interest rates on dong loans at a maximum of 50 percent above the benchmark rate, which is now 12.75 percent a year.
“At 8.5 percent, Vietnam’s base rate is still high compared with other countries. Therefore, we can expect lower interest rates in the near future,” said Cao Thi Hong, deputy general director of the Hanoi-based Vietnam International Securities Co., known as VISecurities.
Listed firms, meanwhile, said their cash dividend rates will remain unchanged this year despite suffering losses from last year’s sharp fall.
“We’ve never had any intention to lower the cash dividend rate. We’ll even raise the rate gradually in the coming years in accordance with our plans,” said PetroVietnam Finance Joint Stock Co.(PVFC)’s General Director Tong Quoc Truong.
The firm announced it paid cash dividends at the rate of 13 percent last year.
According to HCMC-based brokers, transport and plastic stocks look set to give large returns over the sharp decline in internal oil prices, which slid below US$37 a barrel Wednesday, heading for a fall of more than 60 percent in 2008 as the global economic slowdown bit deep into energy demand.
Rubber stocks are “defensive stocks” in difficult times, broker Nguyen Hai Son from FPT Securities Co. told Thanh Nien Daily. “Rubber firms always earn steady profits as Vietnam is one of the world’s major rubber exporters,” Son said.
Tuong Chau
Thanh Nien
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