Illustrative image (Source: VNA)Hanoi (VNA) -Vietnamese shares may advance in 2017, analysts say, cautioning that marketconditions can get volatile with international events of 2016 continuing toexert unpredictable impacts on Vietnam.
Both market indicesended 2016 on a positive note, helping them advance over 2015’s closing levels.
The benchmark VN Indexfinished 2016 at 664.87 points, up 14.8 per cent over 2015. The southern marketindex had been forecast to reach 680 points by the end of the year.
The HNX Index on theHanoi Stock Exchange closed at 80.12 points, almost unchanged after a year.
Some analysts say 2017will be the year that the benchmark VN Index will tip new highs on prospects ofstable macroeconomic growth and investor confidence bolstered by positiveinternational market conditions.
“We expect that themarket will grow with increases in score levels, market liquidity andcapitalisation in 2017” because “the macroeconomic conditions are stable, GDPgrowth improves and companies will likely make more earnings,” said Le NguyetAnh, ACB Securities Co’s head of market analysis.
“Businesses with higherearnings could be those in real estate, consumer and banking sectors whileenergy firms’ profits will move sideways or grow slightly compared to the dropin 2016.”
The future is bright forenergy stocks after the Organisation of Petroleum Exporting Countries (OPEC)and non-OPEC producers in mid-December reached an agreement to cut outputlevels in order to stabilise the oil market and lift crude prices.
US crude West TexasIntermediate finished 2016 trading at 53.72 USD a barrel, up 100 per cent fromits 13-year low of 26.21 USD on February 11. Brent crude also doubled to closeat 56.82 USD a barrel.
Ngo The Hien, deputyhead of market analysis at Sai Gon-Hanoi Securities Co (SHS), said that thestock market in 2017 will move in a positive direction because the country’seconomic growth for 2017 is seen higher than last year, the regulatory systemwill be improved and new products such as derivatives and covered warrantieswill be introduced.
The listing andequitisation of large-cap State-owned enterprises and private corporations willalso bolster investor confidence in 2017 as they will find tradingopportunities for high-quality products when they are available on the stockmarket, according to analysts.
“The listing of SOEs andprivate companies will raise market capialisation, offer more tradingopportunities and help investors improve their understanding and analysis ofdifferent sectors in the economy, especially when those newly listed companiesare large-cap and have big effects on their industries,” said analyst HoangThach Lan.
Those companies wouldmake local stocks more attractive to institutional and foreign investors, andraise the average level of share prices like it happened for the KiDo Group,Sacombank and dairy producer Vinamilk in the past, he said.
“A lot of newly-tradedcompanies, such as Sai Gon Beer-Alcohol-Beverage Corporation (Sabeco), arepriced 15-20 times the market’s average price but still attract foreignbuying,” Lan said. “Those firms have great development potential as they havecomparative advantages in market shares, business scales and market coverage.”
But analysts also warnedthat the impact of international events happening in 2016 has remainedunpredictable and could affect the local stock market in negative ways.
“The local stock marketcould suffer from some of the international events, which have not beenevaluated accurately,” said Hien, senior analyst at SHS.
For example, theincreases of the US interest rates could trigger more foreign selling, thesocio-economic conditions in Europe and unpredictable policies of DonaldTrump’s administration could affect Vietnam’s policies.
“Investment will notflow into all local stocks across the market like it did in 2016, in fact, itwill be decentralised in some particular periods and concentrated in thesectors with high growth prospects.”
Meanwhile, the listingof large-cap companies will make investors distracted and dilute the moneyflow, thus making the stock market more volatile in some specific periods, Hienadded.
The first trading weekof 2017 will be positive, according to analysts, as investors count oncompanies doing well when their fourth-quarter and whole-year performancereports are released.
“Investors are preparingfor companies to publish their financial reports,” analyst Lan said. “As usual,good news will come first, then the bad news, so the market will see large-capcompanies advance in short term to boost market sentiment.”
“The industries thatcould improve in the near future based on their performances in the pastquarter are in building materials production, plastic and rubber, food andbeverages, textile and garment, electronics and property sectors,” headded.-VNA
Both market indicesended 2016 on a positive note, helping them advance over 2015’s closing levels.
The benchmark VN Indexfinished 2016 at 664.87 points, up 14.8 per cent over 2015. The southern marketindex had been forecast to reach 680 points by the end of the year.
The HNX Index on theHanoi Stock Exchange closed at 80.12 points, almost unchanged after a year.
Some analysts say 2017will be the year that the benchmark VN Index will tip new highs on prospects ofstable macroeconomic growth and investor confidence bolstered by positiveinternational market conditions.
“We expect that themarket will grow with increases in score levels, market liquidity andcapitalisation in 2017” because “the macroeconomic conditions are stable, GDPgrowth improves and companies will likely make more earnings,” said Le NguyetAnh, ACB Securities Co’s head of market analysis.
“Businesses with higherearnings could be those in real estate, consumer and banking sectors whileenergy firms’ profits will move sideways or grow slightly compared to the dropin 2016.”
The future is bright forenergy stocks after the Organisation of Petroleum Exporting Countries (OPEC)and non-OPEC producers in mid-December reached an agreement to cut outputlevels in order to stabilise the oil market and lift crude prices.
US crude West TexasIntermediate finished 2016 trading at 53.72 USD a barrel, up 100 per cent fromits 13-year low of 26.21 USD on February 11. Brent crude also doubled to closeat 56.82 USD a barrel.
Ngo The Hien, deputyhead of market analysis at Sai Gon-Hanoi Securities Co (SHS), said that thestock market in 2017 will move in a positive direction because the country’seconomic growth for 2017 is seen higher than last year, the regulatory systemwill be improved and new products such as derivatives and covered warrantieswill be introduced.
The listing andequitisation of large-cap State-owned enterprises and private corporations willalso bolster investor confidence in 2017 as they will find tradingopportunities for high-quality products when they are available on the stockmarket, according to analysts.
“The listing of SOEs andprivate companies will raise market capialisation, offer more tradingopportunities and help investors improve their understanding and analysis ofdifferent sectors in the economy, especially when those newly listed companiesare large-cap and have big effects on their industries,” said analyst HoangThach Lan.
Those companies wouldmake local stocks more attractive to institutional and foreign investors, andraise the average level of share prices like it happened for the KiDo Group,Sacombank and dairy producer Vinamilk in the past, he said.
“A lot of newly-tradedcompanies, such as Sai Gon Beer-Alcohol-Beverage Corporation (Sabeco), arepriced 15-20 times the market’s average price but still attract foreignbuying,” Lan said. “Those firms have great development potential as they havecomparative advantages in market shares, business scales and market coverage.”
But analysts also warnedthat the impact of international events happening in 2016 has remainedunpredictable and could affect the local stock market in negative ways.
“The local stock marketcould suffer from some of the international events, which have not beenevaluated accurately,” said Hien, senior analyst at SHS.
For example, theincreases of the US interest rates could trigger more foreign selling, thesocio-economic conditions in Europe and unpredictable policies of DonaldTrump’s administration could affect Vietnam’s policies.
“Investment will notflow into all local stocks across the market like it did in 2016, in fact, itwill be decentralised in some particular periods and concentrated in thesectors with high growth prospects.”
Meanwhile, the listingof large-cap companies will make investors distracted and dilute the moneyflow, thus making the stock market more volatile in some specific periods, Hienadded.
The first trading weekof 2017 will be positive, according to analysts, as investors count oncompanies doing well when their fourth-quarter and whole-year performancereports are released.
“Investors are preparingfor companies to publish their financial reports,” analyst Lan said. “As usual,good news will come first, then the bad news, so the market will see large-capcompanies advance in short term to boost market sentiment.”
“The industries thatcould improve in the near future based on their performances in the pastquarter are in building materials production, plastic and rubber, food andbeverages, textile and garment, electronics and property sectors,” headded.-VNA
VNA
