Faster cash flows foreseen on securities market

Investors are expected to circulate their capital faster on the securities market from now to yearend to maximize profit

Stable growth

There were only two shares listed on the Vietnamese securities market when it was launched 17 years ago. The number of companies having shares listed on the market increased to 1,340 as of late August 2017, with the market’s capitalized value equaling 57.4 percent of the country’s gross domestic product (GDP). The market is expected to grow well in the long term, given ensured macroeconomic stability and increasing investor trust.

The Ho Chi Minh Stock Exchange (HOSE) welcomed four more shares in August alone. Prices of many shares on HOSE doubled, tripled and even quadrupled in August.

In August, Vietnam launched its derivative market, with the first 10 transactions implemented from August 10 to August 23 with 25,000 contracts worth VND1.77 trillion signed.

In the first eight months of 2017, the State Treasury raised more than VND143.89 trillion through issuance of government bonds, fulfilling 78.5 percent of the 2017 plan.

In the first eight months, foreign investors purchased bonds worth US$669 million and shares worth US$646 million, taking their total holdings on the Vietnamese securities market to an estimated US$26.4 billion as of late August, up 29.4 percent from late 2016.

Real estate, steel, and banks

The capital flow is running to shares with positive prospects, such as real estate, building material, stock and bank shares. Prices of many of those shares have increased.

Steel shares have attracted investors since the third quarter of 2017, when the steel billet and hot-rolled steel prices increased considerably in domestic and foreign markets after a sharp decrease in the second quarter of this year.

In the first half of 2017, after-tax profit of securities companies rose compared to the same period last year, mainly due to the increase in liquidity on the HOSE, which increased about 40 percent compared to late last year. The forecast for the rest of the year in this field is rosy.

Bank shares are expected to drive the securities market from now to the yearend, as the banks are expected to earn increasing profit when the credit room is expanded, revenue from credit that accounting for 80 percent of the banks’ profit structure, and well addressed bad debts.

In the final months of the year, investors are expected to circulate their capital faster on the securities market to maximize profit.