How will investment funds and securities companies fare in 2020?

The VN Index may bounce back and reach the 1,000 point threshold again in 2020, or it may come closer to its peak in 2018 thanks to good macroeconomic conditions, foreign capital flow and reasonable valuations.

2019 finished with the VN Index at 961 points, a 7 percent increase compared with the year’s first trading session. The index mostly hovered around the 1,000 point threshold most and dropped to the 950-970 point area at the end of the year.

How will investment funds and securities companies fare in 2020?



Most investment funds and securities companies were stilloptimistic about the stock market performance in 2020 thanks to macroeconomic stability and more attractive market prices.

VinaCapital predicted that the VN Index may increase by 10-15 percent in 2020. Petri Deryng, president of PYN Elite Fund, still keeps his prediction that the index would reach 1,800 points within 2-3 years, even though it is now at below 1,000 points.

Like investment funds, securities companies also have more positive outlook for 2020. Rong Viet Securities believes that the VN Index would be between 950 and 1,120 points this year.

Vietcombank Securities thinks that the peaks of major indicators in 2020 would be 5-10 percent higher than the peakof 2019. This means that the VN Index would reach the 1,076-1,127 point area.

The basis for the stock market growth is macroeconomic stability. The economy performed well in 2019 with high GDP growth rate and low inflation. Meanwhile, the US-China trade war has triggered new investment in Vietnam, accelerating production expansion.

The basis for the stock market growth is macroeconomic stability. The economy performed well in 2019 with high GDP growth rate and low inflation. Meanwhile, the US-China trade war has triggered new investment in Vietnam, accelerating production expansion.


“We hope that the stability will continue in 2020,” the report of VinaCapital said.

Despite the geopolitical world events, the investment fund believes that Vietnam and its stock market wi maintain a good position to continue to overcome most "external storms".

The prospect of the emerging and frontier markets, including Vietnam, is expected to be more positive thanks to four main factors.

First, the measures to loosen the monetary policy are being used more actively.

 

Second, the US dollar is expected to depreciate.

Third, the valuation of the markets has become more attractive.

Fourth, central banks of many countries, including Vietnam, have taken actions like the US FED and have slashed prime interest rates.

As for PYN Elite, the fund has never seen profit soar since the day it entered Vietnam, but is confident in the profitability of long-term investment items.

Rong Viet Securities doesn’t think that there will be big cash flow from foreign and domestic investors in the stock market. Instead, it believes the stock price increase will occur with some specific stocks, not on a large scale.

Kim Chi 

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