Experts optimistic about stock market

VNStockNews.com - The recovery of the world stock market along with positive changes in Vietnam's macroeconomic will be the factors affecting positively on Vietnam's stock market in the near future. It is common opinion shared by experts in the informal talk held on Saturday, November 14 in HCM City.

The talk "Identify opportunities back to market' held by the Saigon Thuong Tin Commercial Bank (Sacombank)'s Securities Co (Sacombank-SBS attracted over 500 investors in the hall of the HCM City University of Economics.

Le Ba Hoang from SBS said that, the Vietnam's stock market has undergone 10 months of successes compared with the whole last year. Vietnam's macroeconomic situation has made good strides such as the economic growth target at 5-5.2 percent in 2009 and the 6.5 percent growth target for 2010 is not too hard. The recent brisk stock transactions showed that many investors are expecting on soon restore ability of the economy. This also confirmed the confidence of investors into the stock market.

Quach Manh Hao, deputy general director of Thang Long Securities Co (TSC) predicted the Vietnam's stock market could be up to 700-800 points in two last months this year.

However Hao added we should consider forecasting about global economic scenario and Vietnam's economy because at present Vietnamese stock market is not affected by the issues of real economic, but it is affected from faith and money supply. Most investors would buy according to the rumour and sell according to the news.

The flourish of Vietnam's stock market is strengthening confidence for investors, but in order to maintain this flourish, it needs to have upwards movements of the international market. In addition, business results in Q3 2009 are also important factors affecting on the recovery of the domestic market.

As for the foreign indirect investment (FII) capital flow, Nguyen Viet Cuong, deputy chief executive of Vina Capital investment fund, said that foreign investment is returning to Vietnam's stock market and became the market's belief focus.

According to Cuong's analysis, growth rate of companies would average at 18 percent in 2010. High profit also reduced the P/E index (price index on earnings per share) at the end of October in comparison with previous month. Cuong also said that with the P/E index at 14 (based on the profit of latest four quarters), the Vietnam stock market is more attractive than many other countries in the region and it will be an opportunity to attract more investors.

Also, Tran Hoang Ngan, vice Rector of HCM City University of Economics, warned credit growth has exceeding the target raised worries about the limitation of money supply as well as the risk on policy will negatively affect on the stock market.

Till the end of October, total outstanding debt increased to 33.29 percent compared to last year, exceeding 3.29 percent compared with this year's growth target of 30 percent. This made the State Bank of Vietnam (SBV) may apply measures to tighten credit and investors may be affected because most of their investment capital into the stock market is from loans of banks through the methods of financial levers consumer loans.