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Brokers expect VN-Index to hit 650 points in 2011
Given Vietnam’s better economic indicators in 2010, securities companies expect a brighter prospect for the stock market this year, with most saying the main index can hit 650 points despite macroeconomic uncertainties.
Support and difficulty
Au Viet Securities Co. in its report reviewing the 2010 economy and forecasting the 2011 trend said that the forex rate and inflation rate would capture the attention of investors especially in the first half of this year but the stock market would have less negative reaction to such news as investors have got used to those fluctuations in 2010.
Meanwhile, Vietnam International Securities Co. (VIS) in its report said that if the country could attain the growth target of 7-7.5% this year, that would certainly give support to the equity market.
VIS said many foreign funds have come to explore Vietnam market since the end of 2010 which would be a positive sign for the market this year after a strong decline of foreign capital inflow into the stock market over the last three years. VIS expected that the foreign indirect capital in Vietnam by end-2010 totaled around US$7 billion, falling 40% from 2007.
The local stock market will be impacted by banks’ capital raising plans as seen in 2010. Banks’ raising capital is good for the market in the long term but it will create negative response on the stock market as the capital flowing onto the market will decrease, brokers said.
Bright prospect
Given stronger economic fundamentals, both securities companies above forecast that the main index of VN-Index would hit a high of 600-650 points during the year although it did not have good performance last year.
The VN-Index ended the last session of 2010 up 3.26 points to 484.66. This level was 2% lower than that at the beginning of 2010. However, during the year, VN-Index at one point even hit 551.4 points.
Last year also witnessed a dwindling capital flow into the stock market due to numerous factors including the high gold price, volatile forex rate, and increasing interest rates.
On average, each session last year saw 46.4 million shares changing hands on the southern bourse with a traded value of VND1.5 trillion. On both bourses, the daily traded volume averaged out at 81.5 million shares worth VND2.48 trillion.
However, while the local capital flow was unpredictable, foreign investors were patient buyers during the year as their net buying volume was the highest in the 10-year history. According to VIS’ statistics, their net buying volume was over 266 million shares worth VND15.5 trillion on the southern bourse, or 7.7 times and 5.7 times higher than in 2009, respectively.
In its technical analysis, Au Viet predicted that the VN-Index would struggle within 480-520 in the first half this year and then start rising by the third quarter to hit 600-650 at the end of this year.
Meanwhile, VIS forecast the VN-Index would hit 545 points in the first four months this year and then start growing to 650 points level in rest of the year. The broker also expected that Hanoi’s index would hit 165 points by the end of this year.
In the last session of 2010, HNX-Index rose 1.6 points to 114.24. However, this index declined a sharp 32% in 2010.
vietnamnet, saigontimes
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