Secure yearend outlook for Vietnam’s shares

15:00 | 18/10/2019 Finance - Banking

(VEN) - The performance of the securities market is expected to improve in the final quarter of 2019, given domestic macroeconomic stability, the optimistic outlook for a number of industries and some newly emerging factors.

secure yearend outlook for vietnams shares
Bank shares are expected to help the VN-Index exceed 1,000 points in the fourth quarter of 2019

VN-Index drops below 1,000 points

Domestic macroeconomic stability is important for the stable growth of the securities market.

According to the General Department of Vietnam Customs, from January 1 to September 15, 2019, Vietnam’s foreign trade reached US$357.87 billion, up US$25.98 billion or 7.8 percent from the same period last year and resulting in a trade surplus of US$5.57 billion in the same period.

The high trade surplus supported the stability of the dong and increased its value compared to currencies of other countries in the region. The dong/US dollar exchange rate remained stable in the context of fluctuating foreign exchange market, which increased the confidence of foreign investors and the macro environment stability for investors and import-export enterprises.

The VN-Index reached 940-1,000 points from January to mid-September 2019. It sharply dropped to 880 in late 2018, reached 1,014 points in the first quarter of 2019 (on March 19), three times decreased to 940 points in the second quarter of this year, and reached almost 1,000 points in the third quarter. The index is expected to conquer the 1,000-point milestone later this year.

Optimistic signals

The upcoming publication of companies’ business results will indicate the direction of their share prices in particular and the securities market in general in the last months of this year.

Bank, real estate, ocean shipping, technology and textile/garment shares are expected to maintain their stability or slightly increase in terms of price in the fourth quarter of 2019. Particularly, bank shares are expected to help the VN-Index exceeded 1,000 points in the fourth quarter. The fact that the Vietnam Investment Fund Management Company (VFM) raised capital for two exchange-traded funds (ETF) based on the VN-Diamond Index (Vietnam-FOL index) and VN-Capped Financial Index (N-Finance) is expected to help attract foreign capital to the Vietnamese securities market.

According to Dr. Bui Quang Tin from the Banking University - Ho Chi Minh City, 2019 is not an easy year for the securities market to make a breakthrough, but macroeconomic growth remains relatively stable, and exchange rates, foreign trade, inflation and gross domestic product (GDP) growth are expected to achieve the year’s targets, promising stability for the securities market and long-term development potential.

Ngoc Thao