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Brokerage issues 2010 stock market forecast
The VN-Index will climb to about 650 points this year, predicts Bao Viet Securities Company, in a forecast released on Moday of domestic stock market potential.
Bao Viet Securities also forecast that the average price-to-earnings (P/E) ratio of listed shares, the most common measure of how expensive a stock is, would fall from a 2009 level of 14 to 12 in 2010.
"Viet Nam's overall market P/E is the lowest in comparison with similar developing countries," said Bao Viet analyst Pham Thanh Thai Vinh at a meeting here yesterday to announce the forecast.
In addition to stable economic growth this year which would facilitate the business performance of listed firms, new capital was likely to flow into the stock market, Vinh said.
"Many foreign investors are coming to us, intending to invest, not only because Vietnamese stocks are cheap but also because the procedure for forming investment funds in Viet Nam this year has become easier," he added.
The State Securities Commission was likely to be more active in regulating the market this year, Bao Viet predicted, but regulations would be eased to allow services such as faster clearance (T+2 transactions), margin trading and derivative products.
While forecasting some industries would see revenue decreases in 2010, Bao Viet believed overall business earnings would increase by 22 per cent in 2010 and profits by 15 per cent from the last year's levels.
Steel producers were expected to see the strongest rise in the first quarter, while commercial banks and exporters were likely to benefit from interest rate and foreign exchange policies in the second quarter. Property developers and raw materials suppliers would gain in the last two quarters, Bao Viet analysts reckoned.
Nonetheless, they also reminded investors that companies this year would no longer enjoy the benefit of last year's economic stimulus package and would therefore see production cost increase, affecting profit targets.
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