Vietnam will celebrate the 20th anniversary of the stock market establishment in 2020.
Dinh The Hien, economist: three factors needed for stock market
To make the stock market develop in a sustainable way, it is necessary to settle problems in transparency to gain investors’ confidence, have high liquidity, and have quality goods.
From left: Dinh The Hien, Truong Hien Phuong, Nguyen The Minh
There are three factors needed. First, securities companies need to act as ‘market markers’ for the shares listed on HOSE in order to ensure transparency and liquidity.
Second, it is necessary to develop funds which invest in companies planning to list shares as Mekong Capital is doing. These funds will help standardize and develop the companies with good business performance to provide quality goods to the market.
Third, it is necessary to give independent credit ratings to listed companies.
Truong Hien Phuong, high-ranking director of KIS Vietnam: market is promising in 2020
|The P/E of the Vietnamese market is believed to be relatively cheap compared with other regional markets, which means a lot of opportunities for investors in 2020. The growth rate of the economy will have strong impact on the market this year.|
The P/E of the Vietnamese market is believed to be relatively cheap compared with other regional markets, which means a lot of opportunities for investors in 2020. The growth rate of the economy will have strong impact on the market this year.
The launch of new indexes and the appearance of non-voting shares will lead to an increase in the demand for the shares of the companies where the foreign ownership ratios have hit the ceiling. This will have positive impact on the stock market.
In addition, the prospects about the market upgrading will also support the VN Index.
Foreign investors are showing their special interest in the Vietnamese stock market as they can see investment opportunities which can bring high profits. However, because of some barriers, foreign investors still have not made big investments. The barriers include the T+2 payment method and the lack of risk prevention with low costs.
In 2020, investors will pay attention to the shares of companies operating in the fields of banking and finance, power, garments and seafood.
The low interest rates will help businesses increase borrowing, which will increase banks’ profit. The application of Basel II standards will allow some banks to get licenses for higher credit growth limits.
Nguyen The Minh, analysis director of Yuanta: VN Index may bounce back to 1,100-1,200 point threshold
I think the trade war and geopolitical factors will cause difficulties for the market in 2020. Meanwhile, in Vietnam, I can see production growth slowing down because of the effects of the global economy decline. However, I think the market performance will be good in Q1 and the half of Q2.
I think the VN Index will hit the 1,100-1,200 point peak early this year. But the risks will increase later.
In 2019, foreign investors bought in shares worth VND3.7 trillion (US$159.67 million), but offloaded over US$4.4 trillion (US$189.88 million).
Vietnam’s stock market is expected to lure more foreign capital in 2020, according to brokerages.