The banking sector ranks highly on the list of Vietnamese stocks

12-Dec-2020 Intellasia | VnEconomy | 6:02 AM Print This Post

Statistics showed that the role of banking stocks was increasing in Vietnam’s stock market.

The group of banks with the largest capitalisation in the market

In the past month, banking stocks had recorded an increase of 11.5 percent and ranking the sixth highest growth sector, surpassing the VN Index and VN30. Since the beginning of the year, many bank shares had exceeded expectations. Notably, SHB, shares of Saigon Hanoi Commercial Joint Stock Bank had increased by over 200%, bringing the stock market price to over 17,000 dong per share after a long time below par value. Together with Asia Commercial Joint Stock Bank (ACB), SHB also moved to change the stock exchange from Hanoi Stock Exchange (HNX) to Hochiminh Stock Exchange (HOSE).

Two other stocks also had an increase of over 50 percent from the beginning of the year to date were CTG (60.4%) and STB (55.88%). Although the industry was not uncommon for stocks with lower market prices at the beginning of the year, the number of stocks with increasing value in the past year outperformed them with the rate of 13 advancers and seven decliners.

Thanks to that, the proportion of the banking group contributing to the entire stock market had been significantly improved. By the end of 2019, the group of banks accounted for 26.39 percent of the total market capitalisation, by the end of November 2020, this number had increased to 28.52%.

Banking was the industry with the largest proportion in the structure of market capitalisation. On the economy’s volatile level last year, the increase in weight had shown the resilience to economic shocks of banking stocks, next to some industry groups like real estate. The proportion of essential products, consumption and utilities all decreased, indicating remarkable results above.

It was also worth mentioning that, in the second half of the year, the busy listing of banks had significantly contributed to the increase in the proportion of the industry on the stock market. By the end of the trading session on December 9, after welcoming ACB back to the stock market after a week of suspending to change the exchange, the total market capitalisation of 21 banks on the stock exchange was at over 1.171 quadrillion dong.

Previously, the Unlisted Public Company Market (UPCoM) had welcomed three new shares namely BVB (Viet Capital Commercial Joint Stock Bank (Viet Capital Bank), SGB Saigon Bank for Industry and Trade (Saigonbank) and NAB Nam A Commercial Joint Stock Bank (Nam A Bank). Recently, NamABank also announced to bring 456 million NAB shares to be listed on HoSE.

In the near future, the appearance in the plans of Vietnam Maritime Joint Stock Commercial Bank (MSB), Southeast Asia Commercial Joint Stock Bank (SeABank), Orient Commercial Joint Stock Bank (OCB) would strengthen the role of the banking group on the exchange. In addition, the floor-changing wave of some banks was also expected to bring better upside potential compared to the present.

Positive news came to investors in banking stocks when many analysts came up with positive numbers for the business prospects of this industry.

A detailed report by FiinGroup recently assessed, with the disease control and the economic recovery, the business results of banks had shown positive signs in Q3/2020 and were expected to continued in Q4/2020. According to that prediction, in Q4, the net income margin (NIM) of banks would remain at a high level as the deposit interest rates continued to decline. In addition, net profit from services and other profitable activities still grew compared to Q3/2020, while the cost to income ratio (CIR) also increased in the last quarter as in previous years. Besides, banks would balance their business results with the provisioning in Q4 to partially plan for the future when Circular No. 01 expired.

Hence, with the well-controlled Covid-19 epidemic, FiinGroup predicted that the after-tax profits of 21 listed banks would increase by 10.2 percent compared to 2019, a significant decrease compared to the previous years. However, it was still a positive level in the context that the epidemic had not yet ended and the business results of enterprises were expected to decline compared to the previous year.

 

Category: Finance, Vietnam

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