VietNamNet Bridge – Viet Nam's stock market will consolidate in a gradual uptrend during the rest of the year, fuelled by expectations over stable macroeconomic recovery, according to Vietcombank Securities.

The price-to-earnings ratio of the HCM City Stock Exchange fell slightly from 14.25 in the first quarter to 13.59 in the second quarter, but it was still lower than the other countries in the region.— Photo giaoduc.net.vn

Le Xuan Nghia, member of the National Financial Supervisory Council, said at the Vietcombank Securities' workshop held on Friday that economic recovery was on track and that it would become the basis for the stock market's growth.

Nghia was quoted by Dau Tu Chung Khoan (Securities Investment) as saying that the gross domestic product (GDP) had been growing since last year's third quarter, and that the council expected the nation's GDP growth for the whole year to reach between 5.7 and 5.8 per cent.

The consumer confidence index also saw improvement in June compared with the beginning of this year, despite fall in consumer confidence in May due to the East Sea tensions.

The signs of recovery in the realty market, coupled with the efforts to resolve non-performing debts in the banking system, also had positive impacts on the stock market.

Stocks retain their appeal

The benchmark indices on both the national stock exchanges soared by more than 15 per cent in the first seven months of this year, after posting growths of 22 per cent on the southern bourse and 13 per cent on the northern bourse last year.

According to Quach Thuy Linh, analyst from Vietcombank Securities, the stock market will not grow as fast as in the year's first half, adding that it was in an accumulative period after growing rapidly for a long time.

However, the stock market remained an appealing investment channel for investors in comparison to others such as gold, deposits, foreign currencies or the property market, according to Vietcombank Securities' report about the stock market's prospects in the second half of the year.

The report pointed out that the gold market had stabilised with the State Bank of Viet Nam's efforts. Deposits were also less attractive after the ceiling for mobilising interest rate was cut by 1 per cent to the current 5.5 to 6 per cent in the first six months of this year. Further cuts are expected.

The price-to-earnings ratio of the HCM City Stock Exchange fell slightly from 14.25 in the first quarter to 13.59 in the second quarter, but it was still lower than the other countries in the region.

This showed that Viet Nam's stocks were relatively cheaper and appealing to foreign investors.

However, the report warned investors to watch out for risks such as low credit growth, bad debts and the East Sea tensions.

VNS/VNN