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Securities investors put high hopes on macroeconomic stability
The Vietnamese Government has announced that macroeconomic stability will be the top priority for 2011. Therefore, securities investors have one more reason to hope that the stock market will gain momentum in 2011.
Optimistic atmosphere pervading stock market
SME Securities Company believes that in 2011 the stock market will see strong growth if the inflation is controlled right after Tet and curbed at 7.5 percent in the whole year; The dong/dollar exchange rate is stabilized at 20,500-21,000 dong per dollar, the gold price is stable at $1400 per ounce, and interest rates gradually go down to 12-14 percent in the second quarter of 2011.
SME Securities believe that Vietnam does not lack capital, but the problem is where the capital flows. The pressure of having to curb inflation, preserve the value of the currency and maintaian payment balances proves to be the driving force that leads cash flowing back into the stock market.
SSI Securities Company believes that in 2011, the VN Index will see the growth rate of 20-25 percent. If Vietnam has a growth rate of seven percent in 2011, exports continue to increase, and the trade deficit reduces, then investors will return.
Sharing the same optimism, Au Viet Securities Company believes that the stock market will recover from three factors – the stability of the inflation rate and exchange rate; good conditions for integration, and stable monetary policies.
Nguyen Viet Cuong, Deputy Director of VinaCapital, believes that the capability of curbing inflation, easing interest rates, stabilizing the exchange rate and expectations on businesses’ higher profit will decide the growth rate of the VN Index.
The VN Index will see strong growth in the second half of 2011, hovering around 500-600 points when the inflation rate stands at 8-9 percent, the interest rates go down to 12 -15 percent.
Tran Dac Dinh, General Director of the HCM City Stock Exchange HOSE has also predicted that the stock market would witness a stronger growth rate in 2011 than in 2010.
The unknowns
Though keeping optimistic about the stock market performance in 2011, securities companies and analysts are still cautious when drawing up the scenarios for stock market development.
Le Xuan Nghia, Deputy Chair of the National Finance Supervision Council, said that the inflation rate, exchange rate and interest rates, which may have strong impacts on the stock market, remain the unknowns.
As for the exchange rate, Nghia said that exchange rate stabilization does not mean that the government will not adjust the exchange rate. Regarding interest rate policy, interest rates are still high and they will only go down if the inflation rate goes down. Meanwhile, the inflation rate reductions may only occur in the second quarter of the year. Besides, the messages sent by management agencies show a possible tightening monetary policies for 3-6 months.
Meanwhile, the inflation rate, the key to everything, will still depend on prices in the world market.
The Thang Long Securities Company has predicted that the CPI will begin decreasing from the second half of the first quarter, then decrease even more sharply in the second quarter and reach the bottom in the third quarter. Therefore, interest rates will go down from the first quarter and decrease sharply in the second and third quarters. After that, the interest rate may increase slightly in the fourth quarter.
Meanwhile, SSI Securities Company is very cautious when saying that the State Bank will not loosen the monetary policies soon, because it prioritizes the task of fighting inflation.
MeKong Securities Company said that many investors in the world really want to invest in Vietnam’s stocks, but they are facing many administrative barriers. Vietnam needs to amend some current regulations in order to help make the stock market more attractive, especially modifying the regulation that every client can only use the services provided by one securities company.
Le Khac
vietnamnet
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