Rosy signs for domestic securities market
admin 8-09-2020, 14:22

An investor looks at stock prices on the screens at a brokerage in Ho Chi Minh City. Photo: VnExpress

In August, VN-Index enjoyed the largest gain in the last ten years and became the top gainer globally, with daily average trading value reaching VND5.1 trillion, up 12 percent from the previous month.

As the VN-Index trades around 900 points, September may become the most exciting month for the Vietnam stock market this year, VnExpress cited a report by stock brokerage firm KIS Vietnam as saying.

Despite the potential challenges, the Vietnamese stock market may fly high in September with the VN Index expected to touch 920 or 940 points, securities firms forecast.

The growth of the VN Index based on the efforts of the government, local authorities and people to restrain the spread of coronavirus,” Dinh Quang Hinh, VNDirect Securities’ head of macroeconomics and market strategy told Vietnam News.

Representative image. Source: VNA

“Another reason is the positive performance of global stocks, especially the US market, and the introduction of the Taiwanese Vietnam-focused investment fund with total committed capital of US$160 million,” he said.

The Taiwanese fund managers plan to buy fund certificates of the domestic exchange-traded fund VFMVN Diamond.

The ETF debuted on the Ho Chi Minh Stock Exchange on May 12 and tracks stocks in the southern bourse’s VN Diamond Index, which represent companies that have reached their foreign ownership limit.

The appearance of the new fund on the Vietnamese equity market helped boost large-cap stocks such as Mobile World Investment (MWG), tech group FPT Corp (FPT) and Refrigeration Electrical Engineering Corp (REE) as well as other blue chips, in which there is limited room for foreign investors to buy shares, such as realty firms Vinhomes (VHM) and Vingroup (VIC) and dairy producer Vinamilk (VNM).

Stock trading at Tan Viet Securities Company. Photo: VNS

According to securities companies, other factors that will lift the market in September include the cheap valuation of Vietnamese stocks compared to other regional markets, declining interest rates, better control of the disease, the recovery of trade activities, and improved disbursement of the State budget for State-funded projects.

Meanwhile, money deposited with the largest 40 securities companies in the country in H1 2020 was nearly double that of H2 2019 at VND31 trillion (US$1.3 billion).

The funds available for trading as of August 20 was twice the daily average trading value of March 2018, when the VN-Index hit an all-time high of 1,204 points, implying that the market is not overbought (being traded above its fair value), KIS Vietnam reported.

In August, domestic investors opened 28,300 new trading accounts, up 60 percent year-on-year.

These figures show that this year, “instead of sunbathing or swimming, many people have become F0 investors and made trades around the clock,” said the report, referring to first-time investors in the stock market./.