The stock index has become unpredictable as there are signs of weaker liquidity, while investors are becoming more cautious.
Though agreeing that the national economy will perform well this year, analysts think the stock index is not likely to increase sharply.
Nikkei Asia Review recently published an article with positive comments about Vietnam’s economy, citing the high GDP growth rate and benefits from the US-China trade war.
The article pointed out that Vietnam has avoided monetary shocks and become a safe shelter for enterprises. In 2018, Vietnam surpassed Singapore in IPO (initial public offering) value, collecting $2.6 billion from IPOs.
Nikkei also commented that Vietnam’s stocks are relatively cheap with the P/E having dropped from 20x in April 2018 to 14-15x, lower than 20x in the Philippines and 19x in Malaysia.
However, Nikkei said there are two risks which may crush optimism in the next 12 months. These include unpredictable events associated with the trade war and the government’s concentration on short-term goals, while the economic reshuffling is going more slowly than predicted.
Nikkei is skeptical about Vietnam’s stocks, though macroeconomic indicators are very good.
With the VN Index at 892 points at the beginning of 2019, experts believe the index will not exceed the threshold of 1,000 this year.
“We are outlining business plans based on the 1,000 point-VN Index scenario. This is what we have predicted,” said Nguyen Duy Hung, chair of the Saigon Securities Incorporated (SSI).
Optimistic experts give higher figures of 1,000-1,100 points.
Bloomberg, for example, has released results of research by nine investors with knowledge of Vietnam’s market, saying that the index will be 1,049 on average, or 18 percent higher than the beginning of the year.
However, Bao Viet Securities predicted that the stock market would close at 895-960 points at the year end, which means a slight increase of 8 percent.
Nguyen Nhat Cuong from VietinBank Securities thinks the VN Index may climb to 937 points. Meanwhile, Rong Viet Securities projected the 900-1,000 point range for VN Index, which means that the fluctuation will be slight compared with 2018.
BIDV Securities’ prediction includes a relatively wide range, from 800 to 1,265.6 points. Meanwhile, Vietcombank Securities predicted a range of 300-350 points.
BIDV Securities researchers believe that index growth will depend on new cash flow and the expectation of the market being upgraded to an emerging market.
According to a report on Vietnamnet