The Vietnam Securities Depository Center (VSD) has reported that in March 2022, investors opened 271,619 accounts in March, a record high number of new accounts opened monthly. 

The goal of having 5 percent of population investing in securities was reached three years earlier than planned.

With the growth rate, the target of 10 percent by 2030 is attainable. 

The sharp rise in the number of newly opened accounts helped liquidity increase. The average trading value on the three bourses in March rose by 60 percent compared with the same period last year to VND31 trillion per trading session. Of this, the average trading value at HOSE was VND26 trillion.

Individual local investors continue to lead the stock market, making up 88 percent of total transactions. The number of transactions and the influence of foreign investors and institutional investors continue to decrease.

The number of newly opened accounts is increasing amid a bustling stock market, low bank deposit interest rates, and the expected strong recovery of the national economy.

Reports show that Vietnam’s stocks are more attractive than in  other regional countries and Vietnam’s stock market is expected to be upgraded into an emerging market in the next two years.

The stock market has become attractive because investors now have fewer investment opportunities as the dollar price is stable and gold prices are high, while real estate prices are increasing too sharply and cash flow to the real estate market has been put under strict control.

Liquidity falls slightly

The stock market in a recent trading session witnessed strong selling pressure with stock prices decreasing and liquidity getting weaker.

On April 8, selling pressure was seen in many groups of shares, from banking and securities to steel and “hot” shares. Many shares saw prices fall. The VN Index dropped for the second consecutive session and fell far below the 1,500 point threshold. 

The selling pressure was strong, while demand was weak and investors became more cautious following rumors about certain businesspeople. Earlier, the FLC Group chair was arrested because of stock market manipulation and Tan Hoang Minh’s chair was arrested because of fraudulent appropriation of assets.

FLC-related shares continued sliding with FLC and ROS falling to the floor level. The shares of Gelex ecosystem (GEX, MHC and VGC) simultaneously decreased and oil and gas shares decreased in accordance with oil price decreases. 

The Ministry of Public Security asked eight commercial banks, namely VCB, TCB, STB, VPBank, BIDV, VIB, SHB and NCB, to provide documents related to FLC to serve the investigation of the case involving stock market manipulation.

Bright outlook

Despite the recent falls, analysts believe the stock market has a positive outlook in the long term, and the VN Index may reach new peaks this year.

According to BSC, the VN Index may climb to a new height of 1,600 points in a best-case positive scenario. In another scenario, the index would be around 1,470 points ± 30.

With the first scenario, the VN Index may reach 1,600 points if the economy recovers well, tourism fully reopens, business projects expand, the Russia-Ukraine conflict cools down, and goods prices show positive signs.

The second scenario assumes continued geopolitical tensions between Russia and Ukraine and supply chain disruptions caused by the pandemic in China. These factors will put pressure on inflation and have an impact on the Government’s support policies. The moves by large central banks around the world will affect investors’ sentiments.

According to BSC, the P/E ratio in late Q1 was 17.33x, a slight increase of 0.4 percent over the quarter before and higher than the 5-year 16.44x.

The P/E of the VN Index is still at an average level and is in the 11th position in Asia. Some business fields are expected to benefit from a public investment program and an economic stimulus package, including building materials, execution and real estate.

Yuanta Vietnam (YSVN) believes that Vietnam’s stocks are still very attractive with the lowest P/E in the region.

YSVN predicted that the VN Index will march towards the 1,550-1,570-point threshold in April when enterprises resume production and business. 

M. Ha