Tran Hoang Son, Market Strategy Director of VPBankS, gave positive forecast at a workshop themed ‘Stock market foundation, accumulation, and acceleration’ held by Dau Tu newspaper on March 5.

He said the stock market has been recovering strongly since the second half 2023. Cash flow is seeking investment channels with promised high profitability. The stock market is destination for cash flow when commercial banks all offer low interest rates for dong deposits.

Low interest rates are a positive factor for stock market development. Also, the government’s strong determination to obtain the upgrading of the stock market from frontier to emerging has created confidence for investors. The transaction infrastructure will also be improved with the KRX transaction system put into operation soon.

The risk of global economic recession is declining. After a period of tightening, the US FED has stopped raising prime interest rates and may ease interest rates in 2024. Also, US stocks have increased sharply thanks to the strong rise of technology shares amid heavy investment in AI. 

A report showed that the Vietnamese stock market had capitalization of over $240 billion by the end of 2023, or 56 percent of Vietnam’s GDP. The figure is $186 billion for the HCM City Stock Exchange (HOSE).

With the current growth rate, analysts have predicted that the Vietnamese stock market’s value may reach $270 billion.

The market witnessed trading sessions with increased VN-Index after Tet holiday. On March 5, the VN-Index rose by another 8.6 points to about 1,270 points.

According to SSI Research’s Pham Huyen Trang, the stock market has increased by 12 percent so far this year, which was the result of the investors’ confidence restoration.

According to Trang, the government’s timely policies on supporting the corporate bond market and real estate markets have helped the stock market.

The State Bank of Vietnam (SBV) has cut operating interest rates to pave the way for commercial banks to further ease interest rates. The move has helped drive cash flow to the stock market since the third quarter 2023. The profits of listed companies have also recovered.

Also according to SSI Research, the profitability of different business fields and listed companies have bottomed out and are on the recovery path, which will help investors’ confidence.

In general, the prospects of business fields and listed companies have become brighter, which helped the stock market prosper in the first two months of the year.

VN-Index rise expected

Pham Thi Thuy Linh, deputy director of the State Securities Commission’s (SSC) Market Development Department, said under the government’s plan on developing the stock market by 2030, upgrading is one of the key tasks.

The goal SSC set is upgrading the stock market to emerging by 2025.

Linh said SSC has submitted to the Ministry of Finance (MOF) a plan to amend legal documents issued by the ministry. The removal of the 100 percent pre-funding requirement has been suggested. Other amendments include ceiling foreign ownership ratios and information exposure in English.

In order to support businesses’ capital mobilization, SSC is considering amending Decree 155 by shortening the time from IPO (initial public offering) to listing or registering share transactions.

Amid the good news, many experts believe that opportunities for growth of the stock market are great.

Ho Sy Hoa from DNSE Securities said with the basic scenario, the VN-Index may increase to 1,200-1,300 point areas. If the market conditions are favorable, i.e. the stock market gets the upgrading in September, the VN-Index may surpass the 1,300 milestone in 2024.

Tran Hoang Son predicted that the VN-Index will be around 1,326-1,350 points this year. He said that there would be two spells of corrections this year before the market continues to go up.

However, Son said it is now not the ‘cheap money’ time, even though the operating interest rates are lower than in 2019. The real lending interest rates have not decreased proportionally to the decrease in the deposit interest rate.

Manh Ha