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Promising outlook ahead for the market: analysts
The stock market is resuming its uptrend following a recent steep decline after receiving positive information, creating a driving force for a new recovery phase.
After falling from 1,530 to 1,160 points in less than two months, the VN-Index has recovered more than 110 points over the past two weeks.
S&P Global Ratings raising Viet Nam's credit rating from BB to BB+ with a stable outlook, reflecting a strong recovery of Viet Nam's economy, also contributes to helping the market gain investors’ confidence.
The movement in the past two weeks shows that investors are still cautious after the plunge of the stock market, but analysts believe that this is a good time to accumulate stocks. A series of stocks with good business results are at their two- or three-year lows.
According to analysts, the recent handling cases of a series of leaders and business managers related to securities manipulation, have helped investors regain confidence. Foreign investors net bought VND2.12 trillion from May 30 to June 3.
Can Van Luc, chief economist of BIDV Bank, said that the stock market would continue to make necessary adjustments, but this helped it become more stable and healthier. The VN-Index could rise to 1,610 points, according to a positive scenario.
Regarding the prospects in the last six months of 2022, VNDirect Securities Company said that many factors have appeared to promote the stock market's growth. The restoration of commerce, tourism, and entertainment, new economic stimulus packages, the recovery of FDI inflows and strong export activities are the great drivers for the prosperity of the stock market.
Listed companies have very good net profits after the pandemic has been controlled. It is forecast that net profit of companies listed on HoSE will increase 21 per cent in the next two years. This growth rate is twice the rate of the past 15 years, VNDirect said.
Le Quang Minh, investment analyst at Mirae Asset Securities Company, also said that the stock market in the short term was showing many positive signals.
“There are many reasons for the stock to recover even though it is difficult to reach the peak of the previous 2 months, Minh said.
"Large-cap stocks with good fundamentals or industries benefiting from the world's recent situation such as oil and gas, fertilisers, chemicals, agricultural products, seafood, and textiles will increase.
"It is likely that the banking industry will also outperform if the credit growth limit is extended to serve production - business activities, and economic development," he said.
Le Dat Chi from the University of Economics Ho Chi Minh City added: "The risks always come with opportunities. In terms of prices, comparing internally the economy and business activities of enterprises, now there is a higher chance for the market to recover.
"The message from the Government as well as the securities management agency shows that the market will orient a sustainable and healthy way, so investors are more secure."
Deputy Minister of Finance Nguyen Duc Chi, who is directly running the State Securities Commission, recently asked the relevant units to speed up the completing process of the KRX trading system, creating conditions to launch new products and services for the stock market. This system is expected to provide many new utilities, such as odd-lot trading on a separate board, and intraday trading.
According to economist Can Van Luc, with the roadmap approved by the Government, 2022 is the first year Viet Nam implements a Financial Strategy to 2030 with a number of development goals such as: by 2025, the size of the stock market capitalisation will reach 100 per cent of GDP.
Decree 153 on the issuance of corporate bonds of the Government is expected to be revised to enhance transparency and control risks for investors, especially for private issues along with a review of relevant decrees and Securities Law.
He said: "The inspection, supervision and violation handling are being promoted, helping the stock market to operate publicly, transparently and more discipline. These steps contribute to increasing the likelihood of Viet Nam's stock market being upgraded by MSCI in the period of 2024-2025."
At the Viet Nam Economic Forum on Sunday, Pham Hong Son, Vice Chairman of the State Securities Commission, said that the agency would study and report to the Ministry of Finance to propose the review of general provisions in the Securities Law, including the scope of the public offering, the private placement, the concept of professional securities investors and the regulations on handling violations in the market, prioritise the development of long-term investors such as investment funds, voluntary pension funds, insurance companies.
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