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Aug. 11: Probability of sharp market drop ‘very low’
The market is in a long-term uptrend although it may experience corrections from time to time.
In the short term, Vietnam’s stock market will go through a relatively tough period as investors expect stock supply to rise because many companies are planning to list shares or hold initial public offerings. Stock demand may fall in part because of worries about the government watching out for credit growth.
It will be hard for local enterprises to have strong growth in the third quarter, like in the second quarter, due to rapid increases in commodity prices.
The probability of the market dropping sharply is very low because economies all over the world are showing positive signs.
In the medium- and long-term, given the current improvement in economic conditions and the optimistic outlook for corporate earnings for the whole year, I think the VN-Index will be hovering around 560 by the end of 2009.
And now is a good time to invest in sectors that will post good performances when the economy recovers, such as industry, finance, consumer goods and real estate.
Pham Thanh Thai Linh
Hanoi-based Deputy Head of Research at Bao Viet Securities Inc.
thanhnien
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