Speakers at an investment conference in HCM City last week agree that securities remain an attractive asset class. (Photo: VNA)Do Hong Van, head of the data analyst team, financial information division,Fiin Group, an integrated service provider of financial data, businessinformation, industry research, credit rating reports and other data-drivenanalytics services, said, "Compared with other asset classes such as goldand real estate, stocks remain an attractive option.
“Retail investors have been sellers since April, but there a large amount ofmoney is still in investors’ accounts."
According to data from securities companies, around 70 trillion VND (2.96billion USD) was in investors’ accounts at the end of the second quarter.
"It is a very large amount compared to the recent trading of 10 trillion-12trillion VND a day, and is waiting for a favourable opportunity to return tothe market," Van told a conference organised by ACB Securities (ACBS) andFiinTrade in Ho Chi Minh City last week.
Van said investments by retail investors increased sharply last year and thiscash flow supported the market.
But since December 2021 they had tended to be cautious and reduced theirinvestments, she said.
Among the main reasons for the recent poor sentiment among retail investors arethat they are not seeing any “promising story” in the near future and theGovernment’s regulatory crackdown on certain companies to improve the market’stransparency has resulted in sharp price volatility, according to Van.
But they are expected to return to the market this quarter and next.
According to attendees at the conference, sectors such as industrial realestate, electricity, animal husbandry, pharmaceuticals, dairy, and banking havepositive growth prospects this year.
The power sector is expected to grow by 5.1% in 2022 as consumption by themanufacturing sector increases after the COVID-19 pandemic.
Besides, the La Nina weather phenomenon is expected to last until early 2023,helping increase water storage in hydropower reservoirs, and the sector’saverage full market price (FMP) in July and August was nearly 50% higher than ayear earlier.
Speaking about the industrial real estate sector, Nguyen Binh Thanh Giao,deputy head of the analysis department at ACB Securities, said though the stockprices of industrial real estate enterprises had experienced remarkable growthvis-a-vis the VN-Index in the three years since the CPTPP was signed, therewould be still much room for them to rise thanks to the high profit margin andreturn on investment.
The sector was expected to grow by 49.7% this year, she said.
“Foreign enterprises continue to flock into Vietnam and rentals for land andready-built warehouses and factories are expected to increase due to limitedsupply.
“Multinational corporations tend to choose smart eco-industrial parks with manyutility services, standard wastewater treatment systems and logistics, and arewilling to pay higher rentals, creating opportunities for businesses havinglarge vacant lands.”
Industrial real estate businesses often have higher profit margins than thosein the housing segment, which is facing many challenges.
They pay cash dividends regularly based on their high profit margins and ROEand bright development prospects, but their stocks’ liquidity is often lowbecause their managements are usually tight-lipped and so do not attractinvestors’ attention.
Speaking about the banking sector, Cao Viet Hung, head of the financialanalysis division at ACBS, said the sector accounted for only 31% of the marketcapitalisation but 44% of the total profits in the VN Index.
It was expected to grow strongly this year based on supporting factors such asimproved net interest margin thanks to an increase in lending interest ratesamid tight credit and well-controlled cost of capital, he said.
Banks also had lower provision costs thanks to improved asset quality andlarger capital buffers, and they were back to 1.4-1.5% of outstanding loans,the same level as before COVID-19.
These would augur well for profit growth, he said.
Profit before tax for banks that ACBS tracks was forecast to grow by 45.2% inthe second half of 2022 and 34.6% for the whole of 2022.
This stock group had an attractive valuation with a P/E of 9.5x and P/B of1.7x, he added.
Experts also listed a number of sectors that achieved a breakthrough in profitsin the first half of the year like residential real estate, steel, chemicals,seafood, fertilisers, garments, and logistics./.
VNA
