Equity market prospects seen bright this year

05-Jan-2017 Intellasia | The Saigon Times Daily | 6:00 AM Print This Post

A number of securities experts have said prospects for Vietnam’s equity market would be bright this year given macro-economic stability, high gross domestic product (GDP) growth and improved business conditions.

Ngo The Hien, deputy head of analysis at Saigon-Hanoi Securities Company (SHS), said in Dau tu Chung khoan newspaper that he is upbeat about stock market growth this year.

High GDP growth and the stable macro economy are among the factors that will support the market, Hien said. The equitisation and listing of State-owned enterprises (SOEs) are expected to increase the volume of shares, especially quality ones, on the market.

Authorities are expected to take measures to improve Vietnam’s ranking in global equity markets. New products such as derivatives, covered warrants and short-selling transactions will be introduced.

Expert Hoang Thach Lan said 2016 was a good year for the local stock market as it rose steadily and faced no significant setbacks. Vietnam’s economy recovered last year and its growth this year could be higher.

Lan stressed that the listing of SOEs on the stock market in the final months of last year gives an optimistic outlook for the market.

However, Hien of SHS said a number of factors might pile pressure on the stock market in 2017 such as another interest rate hike by the US Federal Reserve and unfavourable economic and political conditions in Europe. He said the Trump administration’s economic policy remains unpredictable.

Le Nguyet Anh, director of analysis at ACB Securities Company, said the real estate, consumer goods and banking sectors would gain higher profit this year. Meanwhile, petroleum enterprises might see little or no change in profit.

Overall, the indexes, liquidity and market capitalisation would go up, she said.

Last Friday, the final trading day of 2016, saw the VN Index rising just 0.02 percent, according to Viet Capital Securities Company (VCSC).

Energy names GAS and PVD led the advancers, bolstered by Brent crude oil prices which shot up to above $57 per barrel in Asian trade, while bank stock MBB soared for a fourth day.

The VN Index ended December down slightly, the third straight month of its losses following eight consecutive months of gains. The main index jumped 14.8 percent versus 2015 to 664.87 points in 2016.

VCSC said the market capitalisation of the index was dominated in much of the year by four stocks: VNM, GAS, VCB and VIC. Since SAB’s debut on the equity market on December 6, it has become the third largest stock, having soared 79 percent. The Big Five account for 44.7 percent of the market cap on the HCM City bourse.


Category: Stocks

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