Vietnam’s stock market, which has seen a deep correction over the past two months, is forecast to regain its uptrend momentum in the first quarter of 2010 with improving liquidity by rising money inflows, analysts said at the online talk Dec. 16 on the market’s prospect next year.
The market may rise 50% by the end of next year as stock prices are becoming cheap after recent deep decline, and revenues of listed companies may increase 20% during the year, said Fiacra Macana, head of the Analysis Division of the Ho Chi Minh City Securities Corp. (HSC).
Phan Quoc Huynh, CEO of Vietinbank Securities JSC (CTS), said money inflows will rise from the first quarter as banks will start lending and institutional investors will disburse money in the new fiscal year.
Banks will be full of funds from January as 4% interest rate-subsidized short-term loans worth over VND400 trillion will be halted on December 31, said Tran Anh Tuan, director of the Research Division of VietFund Management JSC (VFM).
Once liquidity is improved, the market will rise strongly, Macana said.
Although loans for stock investors are now available, banks have still restricted stock lending on concern of risks while the credit growth of the domestic banking system at end-November reached over 36% since early 2009.
The central bank’s decision on raising prime interest rate to 8% hurt investors’ sentiment despite improving macro-economic indicators, said Nguyen Son, head of the SSC’s Stock Market Development Department.
The market will not have a deep decline in coming weeks, he said, noting that the benchmark VN-Index may reach 600-700 in 2010.
For 2010, VFM forecast CPI at 9%-10%, GDP growth at 6.2%-6.7%, credit growth at 20%, export growth at 6%-8%, and the Vietnamese dong’s depreciation of around 3% from end-2009, Tuan noted.
He said VFM plans to set up a new fund with a capital of VND300 billion in early 2010 to take opportunities during the post-crisis period. The fund, operating in three years, will use quantative analysis model.
Goldman Sachs forecast Vietnam may have a GDP growth of 8.2% next year while the government expects the growth at between 6% and 6.5%.
The VN-Index has fallen 30% from the year’s peak at 624.1 on Oct. 22. The market capitalization of all listed firms reaches VND550 trillion. (Securities Investment)
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