Analysts steer Vietnamese investors to good stock hoarding

06:00 | 29/09/2020 Economy

(VEN) - Financial analysts are advising investors to pay heightened attention to stocks with the real estate market stagnant, interest rates plummeting, and gold prices unstable.

analysts steer vietnamese investors to good stock hoarding
Local investors opened over 28,300 securities trading accounts in August

Positive developments

The Vietnamese stock market experienced positive developments in August, regaining ground lost over June and July. Following a straight four-week rally, the VN-Index closed the last session of August at 881.5 points, an increase of 10.5 percent compared to the previous month. In addition, some 25 percent of the stocks listed on the two major exchanges saw a surge in profit of more than 20 percent.

According to financial experts, the government’s efforts in the prevention and control of the Covid-19 pandemic stemmed a further VN-Index decline. Following several corrections sessions, the VN-Index exceeded 900 points in September.

The Vietnamese stock market plunge in March attracted many investors as most stock prices dropped below their book values. After a difficult time, there will be a period of growth and opportunities will come for long-term investors who dare to hoard selective stocks.

Pham Quang Huy from the KB Securities Vietnam said stock hoarding is still a reasonable decision, especially of stocks in major sectors. Stocks are suitable for medium- and long-term investors.

Pham Thien Quang, director of VNDIRECT’s Investment and Asset Management Services, said investors should recognize stocks as a sustainable investment channel and develop an appropriate investment strategy.

For investors participating in stock hoarding, the selection of good stocks is a top priority in order to limit risks, and they should use cash accumulated monthly to purchase stocks.

Opportunities for long-term investors

Although the stock market poses many potential risks, its prospects remain positive. In addition, it is also a suitable playground for individual buyers due to limited capital sources and high liquidity.

Many investors have decided to withdraw their savings and invest in stocks and corporate bonds. Since the beginning of the year, corporate bonds have drawn investors as companies offered annual yield rates higher than banks’ saving rates. In addition, the steep fall of the stock market in March attracted investors as most stocks on the market had market prices lower than their book values.

Investing in stocks is a trend not only in Vietnam but also in other countries around the world. According to a KIS Vietnam report, individual buyers from the Republic of Korea have increased their presence on the Vietnamese stock market since March, with net buying value recording high growth in the past decade. Similar developments have occurred in other Southeast Asian countries, such as Thailand and Malaysia.

The number of securities trading accounts has increased. According to the Vietnam Securities Depository (VSD), more than 28,300 securities trading accounts were opened by local investors in August, an increase of 4.8 percent compared to the previous month.

Given the numerous economic uncertainties, new investors need to thoroughly understand the market, strictly comply with investment discipline to promptly realize profits or cut losses, and diversify investment portfolios to avoid risks.

Ngoc Thao