The strong cash flow to the stock market in recent days has helped stock prices bounce back.
The VN Index has for the first time in the last six months regained the 900 point peak after falling from the threshold in February, while liquidity has been profuse in recent days with the trading value of VND6-8 trillion for each trading session.
The rise of the HCM City Stock Exchange (HOSE) at the September 3 trading session was mostly created by bank and real estate shares. Foreign investors bought more than they sold by VND400 billion.
The market maintained the excitement after the National Day holiday on September 2 and went up thanks to large-cap stocks, especially Vingroup (VIC), Vinhomes and Vincom Retail of the dollar billionaire Pham Nhat Vuong.
Among bank shares, Vietcombank saw an impressive growth rate of 3.6 percent, while HDBank of billionaire Nguyen Thi Phuong Thao grew by 4.6 percent. These were the shares that saw net purchases by foreigners on the day.
|The VN Index soared by 38 percent from its low on March 23. The capitalization value of the stock market has increased by tens of billion of dollars.|
HDBank reported a significant increase in H1 profit and good financial health. Sacombank and ACB shares also saw impressive rises.
The price of steel shares, especially HPG and HSG, also increased sharply. Gelex price hit the ceiling price and saw trading volume surging.
The VN Index soared by 38 percent from its low on March 23. The capitalization value of the stock market has increased by tens of billion of dollars.
Huynh Minh Tuan from Mirae Asset said that the Vietnamese stock market has been rising continuously in recent trading sessions. It is now benefiting from the low-cost capital period, or easy money, when assets like stocks caught the attention of investors thanks to heavy fluctuations and high liquidity.
Tuan also thinks that Vietnam’s stocks have bounced back thanks to the good news about Covid-19 vaccines. It is highly possible that the US and Europe will begin producing vaccines in Q4.
The policies applied by the government of Vietnam to deal with the difficulties caused by Covid-19 have also caused high expectations for economic development.
Contrary to the worry that the stock market cannot reflect the true value of the economy, the cash flow continues to stocks as a shelter. The VN Index is predicted to see further increases.
Mirae Asset believes the VN Index will hit the 900-920 point zone in September, when the outbreak is controlled in the hotbeds of Da Nang, Quang Nam and Hung Yen, while economic stimulus policies, including the increase of disbursement for public investments, will help the economy recover.
Tuan thinks Vietnam’s GDP growth rate will be only 2-3 percent this year, but Vietnam has inner strength to obtain a high growth rate the next year. The VN Index is expected to regain the 1,000 point peak in 2020.
Le Quang Tri of Tri Viet Securities also thinks the stock market will continue rising in the time to come, thanks to new cash flow, and will prosper in 2021.
The business fields with bright prospects include Industrial Zone real estate development, the businesses with no more room for foreign investors, turnaround businesses, ones recovering rapidly after the crisis, and businesses benefiting from policies on infrastructure development.
Asia Times quoted experts as saying they were optimistic about Vietnam’s economy in the long term. The EVFTA trade agreement will help attract FDI and more European enterprises will set up production in Vietnam.
Earlier, HSBC predicted that Vietnam would be the only ASEAN economy to see positive GDP growth rate this year.
The new wave of Covid-19 infections has caused heavy pressure on the country’s economy.
Many large corporations, valued at billions of dollars, do not intend to list their shares on the bourse.