return icon Vietnamnet.vn

Stock market expected to cross current threshold

During the last trading sessions of 2021, the stock market was not particularly active. The effect was being felt of unfavorable news on the macro, the most notable of which was the GDP growth of the whole year at only 2.58%.

{keywords}


The news of a new variant of the Covid-19 called Omicron was also detected in a few people in Vietnam. However, despite this turbulent news, the stock market did not react in shock. The VN Index is still moving sideways between 1,480 points to 1,500 points.

Optimistic scenario

The GDP growth rate of 2.58% in 2021 was not a surprise. Even if viewed from a future perspective, this is a positive result, because there have been many poorer growth forecasts before. For example, at the end of October 2021, the World Bank estimated the GDP growth in 2021 in the range of 2% to 2.5%. There are also a few organizations such as UOB Bank that gave 3%, and the optimistic scenario of the General Statistics Office also giving 3%. Therefore, the actual growth rate of 2.58% is still a better result than many organizations predicted, although it is still at a very low level.

However, just when there are no longer any more surprises, the stock market reacts indifferently. In the last trading sessions of 2021, the VN Index went up and down mainly due to the influence of some large-cap stocks. Statistics in the past show that the last week of the market usually grows quite positively due to the impact of maintaining a portfolio value. This year the situation is very different, especially after the growth spread of the second year of Covid-19, where the VN Index increased by about 35%, and it is no longer urgent to support the portfolio, and even profit-taking transactions determine the annual bonus. Therefore, the threshold attained of 1,500 points will still be the historic peak of the market and of 2021.

In fact, indifference to bad news is an important psychological indicator in the market. The sentiment factor and the emotional action of the crowd has always been a part of the market. So when bad news appears, the level of emotional action shows that investor sentiment is not easily swayed, because the more indifferent the market reacts, the stronger the sentiment is. Looking at it from this perspective, the volatile days at the end of 2021 of the stock market ended a wobbly economic year, with a record low growth rate, which is a good sign.

Worst maybe over

There have been many forecasts about a positive recovery of Vietnam's economy in 2022 along with an initial forecast of a weak growth in 2021. Of course, forecasts will still be affected by many variables, such as whether the Omicron mutation can trigger a more dangerous pandemic wave, but basically the stock market still hopes that the worst is over.

Not only Vietnam's stock market, but securities around the world are also feeling the same. The more the Omicron mutation spreads in the US, the S&P 500 set a new historic high in the last week of 2021. French, German, and British stocks are all at historic high, although the number of cases of the new strain called Omicron has also increased rapidly. The fact that the VN Index is sticking to the historical threshold of 1,500 points these days is actually an opportunity. The market has a golden opportunity now to hit a new historic high, but what is missing is an expectation to lead.

In the first week of 2022, that expectation may arise when the Extraordinary Session of the National Assembly will take place from 4 January to 11 January 2022, the important content being the consideration of the draft resolution on fiscal and monetary policies to support the implementation of the program on socio-economic recovery and development. This resolution will pave the way for the implementation of the economic stimulus package that the stock market has been waiting for since October 2021.

The market has bet in advance on this stimulus package with a growth of nearly 13% in October and November, which is the time when the VN Index made its historic peak of 1,500 points for the first time. The whole December market stopped accumulating to wait for a confirmation.

Growth forecasts of the stock market in 2022 all consider this economic stimulus package to be a push to create a boom. According to the Vietcombank Securities 2022 outlook report, growth in public spending can have a positive effect on consumer spending and private investment as consumer demand has gradually recovered and a reasonably sized economic stimulus package targeting the right sectors before the Lunar New Year will help Vietnam keep up with world recovery. GDP growth in 2022 may also reach 6.8% to 7.2%.

VNDS also expects that the Government will issue a large-scale economic support package and maintain an easy monetary policy until at least the end of the second quarter of 2022 to promote economic recovery, while GDP is expected to grow by 7.5% in 2022.

Although forecasts are regularly updated and changed based on new variables appearing over time, the above scenarios show that the stock market expectations are well-founded. The market cycle is more closely associated with the cycle of expectations, starting with a response to receive information, followed by a pause to assess the future impact and build expectations then continue an uptrend based on expectations and finally waiting time, even adjusting to confirm expectations. This cycle is often phased out compared to actual figures due to going faster. So it wouldn't be surprising if the stock market hits a new historic high before the effects of the stimulus policies are actually seen.

The market has a golden opportunity now to hit a new historic high, but what is missing is an expectation to lead. It is expected that the Extraordinary Session of the National Assembly which will take place from 4 January to11 January 2022, will have the main focus on decision to implement the program on socio-economic recovery and development.

 

Source: SGGP

Stock market sets new record on billion dollars of capital inflow

Stock market sets new record on billion dollars of capital inflow

The Vietnamese stock market continued to reach another historic record, with the largest number of new accounts opened in December after 21 years of operation.

MORE NEWS

Garden on mountaintop brings VND5 billion a year to Pa Cop village farmer

Farmer Do Quy Hanh in Pa Cop village, a Thai ethnic minority man in Pa Cop hamlet in Son La province, has his own secrets to growing bountiful orange and longan orchards, bringing profit of VND5 billion a year.

Young people invent anti-cheating software for online exams

As the fourth wave of the COVID-19 pandemic hit the country in 2021, students had to study and take exams online. However, cheating on online exams has caused headaches for schools.

Fed rate hike's impact on Vietnamese economy not significant

The latest interest rate hike by the US Federal Reversal (Fed) will weigh on the global economy, including Vietnam, but experts expect impacts of the Fed’s move on the country will not be significant.

Vietnam Blockchain Union officially debuts

The Vietnam Blockchain Union (VBN) debuted on May 17 with the aim of connecting the local blockchain community to state management agencies to develop legal frameworks for the technology and to accelerate the development of VN's digital economy.

Vietnamese students champion int’l environmental competition

A team of three Vietnamese high school students has won an international prize on environmental sustainability.

NA Chairman meets with Lao PM, discussing measures to boost ties

National Assembly Chairman Vuong Dinh Hue met with Lao Prime Minister Phankham Viphavanh in Vientiane on May 17, where the two leaders discussed measures to promote bilateral relations.

Vietnamese e-commerce likely to reach US$39 billion by 2025

Vietnam’s e-commerce market has recorded strong growth over the years and is likely to bring in US$39 billion in value by 2025, according to data released by the German market research firm Statista.

The results of press privatization

The number of news articles and other articles published in electronic newspapers and magazines have soared recently.

Prime Minister meets representatives of investment funds, groups in New York

PM Pham Minh Chinh have met with leaders of global investment firm Kohlberg Kravis Roberts (KKR) and Visa Group in New York and held phone talks with the Deputy Managing Director of the International Monetary Fund (IMF) during his trip to the US.

SEA Games 31: Vietnam bags 88 gold medals as of May 16

Vietnam has so far obtained 197 medals, including 88 golds, at the ongoing SEA Games 31, topping the tally and leaving other competitors far behind.

Vietnam to play more active role at UN: PM

Vietnam will continue bringing into play its role and making more active and constructive contributions to the common work of the UN in all the three pillars – security-politics, development and human rights, PM Pham Minh Chinh has affirmed.

Billionaire list: Tran Dinh Long loses position, new names emerge

The HPG shares of Hoa Phat Group have seen a fall in price to VND35,900 per share, while billionaire Tran Dinh Long fell from the second position on the list of Vietnamese stock billionaires.

Building a national brand for Vietnamese rice

At wet markets, consumers can find varieties of rice stored in bowls and baskets from age-old brands such as Nang Thom Cho Dao, Huong Lai, Tai Nguyen and Bong Su.

National Development Master Plan: confusion due to conflicting legal provisions

The Law on Planning was approved by the National Assembly in 2017 and took effect on January 1, 2019, but after more than three years, the planning work has not been completed. Many problems have arisen and need the National Assembly’s comments.

First Vietnamese woman reaches summit of Mount Everest

Nguyen Thi Thanh Nha, also known as Céline Nha Nguyen, has become the first Vietnamese woman to conquer the summit of Mount Everest.
back_to_top