Vietnam’s GDP (gross domestic product) growth in the third quarter of 2012 may reach 6 percent against 4.5 percent in Q2/2012, according to Alan T.Pham, chief economist of VinaCapital Group.
Vietnam’s stock market is falling into the “fault” in terms of both confidence and profitability prospects of businesses. This explains why the market has continuously lost points in recent sessions. However, this situation will be improved by the end of Q3/2012, Alan T.Pham said.
Vietnam’s economy has basically special characteristics that GDP growth depends heavily on credit growth. This means that even if giving priorities for taming inflation, credit should not have been squeezed too tightly as the past time because it would lead the economy to the current stagnation. The economic picture in the first six months showed that because inflation control has reached the results exceeding targets, it has caused side-effects that the economy has fallen into stagnation.
This is the main reason causing the unsatisfactory situation of the stock market after the first two quarters this year. Another important reason that has caused continuous falls of the stock market recently is that the market has made pre-reflection of the business results in Q1/2012 of listed firms. Due to companies are still difficult to access capital, the business results in the quarter were not very satisfactory.
In addition, regarding the equitisation issue for state-owned enterprises (SOEs), Alan T.Pham said that investors, especially foreign investors, will look at changes of equitisation process not only in the implementation progress but also in the equitisation commitment implementation of management agencies as well as SOEs, especially large SOEs.
The equitisation roadmap of SOEs in the past time was less transparent and changed frequently such as Vietnam Airline Corp (Vietnam Airlines), which has impacted negatively on the confidence of investors as well as the market.
If for the reason that the stock market is unfavourable for making IPO (initial public offering) and equitisation process has slowed down, investors will be hard to accept. The capital flows of foreign investors can not wait for investment opportunities in IPOs that have unclear and uncertain factors.
This is one of two main reasons why foreign investors have paid little attention to participate to the market since early this year. While their first concern is stagnant economic situation that is being resolved urgently, the equitisation process has not had clear signs. Vietnam Airlines is a valuable commodity that will attract the participation of foreign investors. Thereby, it promises to bring in new vitality to the stock market after a long gloomy period.
With efforts of management agencies, banks and enterprises, from Q3/2012, enterprises will gradually be able to access capital sources, Alan T.Pham said.
Alan T.Pham believes that the stock market will thrive by the third quarter of 2012.