The Hanoitimes - In the first half of the year, the total stock market capitalization increased dramatically leading to the steady rise of VN-Index. More and more foreign investors taking part in mergers and acquisitions (M&A).
Meanwhile, other policies encouraging the private sectors continue to be reinforced. These are the factors allowing for hope that VN-Index would peak at 800 points by the end of the year.
Despite certain fluctuations, VN-Index is still able to touch to the 770 points. The market liquidity was consistent, particularly in the foreign transactions.
Both VN-Index and HNX-Index have experienced strong boost in the first half of this year. VN-Index hit nine-year peak at the beginning of July, an expansion of nearly 17 per cent since the beginning of this year. Meanwhile, the HNX-Index has also risen over 23 per cent in the first half of 2017. The foreign capital inflows reached approximately VND 9 trillion in the first six months. In addition, the derivative securities market to be launched soon is expected to make more products available.
According to Lam Minh Chanh, the Chairman of LMC Investment Corp., the eagerness of foreign investors has motivated the market as they poured into the Vietnamese market an amount of over VND 9 trillion in the first six months of the year.
As the government is accelerating the sale of state owned enterprises, the securities market will be further boosted. “For experienced foreign investors, the Vietnamese market is a good prey and they indeed have strong expectations ”, Chanh said.
Financial and banking analyst Nguyen Tri Hieu said that the securities market has received strong boost from the foreign capital inflows. In order to facilitate M&A, the government has conducted measures deemed as flexible including creating more rooms and relaxing some regulations for foreign investors
Customer at Vietcombank stock exchange.
Also, that the government is expected to issue more policies to favor the private sector and restructure the SOEs in the coming time is said to trigger the hike of the market. Seven hundred state-owned enterprises that have been sold but yet to be listed in the stock exchange are required to turn to the floor. As a result, the capitalization outlook will increase.
As the economy is posting a positive outlook, more products will be made available in the market leading to the conviction that VN-Index will hit over 800 points.
The head of BIDV training school Can Van Luc said the prediction is based on positive outlook of the global economy, the performance of the national economy which is expected to grow 6.7% this year and the acceleration of the selling of SOEs. At the same time, the stable interest rates making feasible the credit growth of 18%. Moreover, the 730 already sold SOEs, including 10 banks will be traded in the unlisted public companies market (UPCOM) in the next 6 months.
For VN-Index to rise, banking analyst Nguyen Tri Hieu said it depends on two factors. First, GDP in the fourth quarter has to increase by 7% so that the GDP of the whole year can reach 6.5%. GDP growth is fundamental for boosting VN-Index. Without GDP growth, any rise to over 800 points would be securities bubble. Second, that the State Bank of Vietnam continues to relax the monetary policies by cutting interest rates and pumping liquidity into the market will trigger the rise to 800 points of VN-Index. Not only rising higher, market liquidity is expected to improve as well with the listing of giant public enterprises including PV Oil and Mobifone.
The former Chairman of the Ho Chi Minh Stock Exchange (HOSE) Tran Dac Sinh also predicted the peak of 800 points for VN-Index by the end of this year. “The deposit interest rates are low. The money is expected to be drawn in a more profitable channels including the securities “, Sinh said.
The market is still improving. From now until the end of the year, there are many positive signs. I hope that the liquidity of the market will improve up to 6,000 to 8,000 trillion VND per day, and VN-Index will reach approximately 830 points - Luu Duc Quang, CEO of the ARTEX Securities Joint Stock Company.
The stock market of 2017 has witnessed many breakthroughs hitting its nine-year peak. The accelerating withdrawing of state participation in large SOEs is attracting foreign investors . Even though listing regulations become stricter, the selling of large SOEs such as Habeco, Sabeco, Novaland, Vietjet, Petrolimex, and Vietnam Airlines will go on. Many of them have registered for trading the UPCoM floor, with a capitalization of up to 19 billion USD, more than double the value of the Hanoi securities market which is 8 billion USD.
Ha Lam - Ngoc Thuy