Topic: stock market

Despite unpredictable fluctuations around the world and the trend of cash flows shifting back to developed economies, foreign indirect investment (FII) has not yet left Vietnam’s stock market.

The fall of 276 points during September has resulted in a decline in the VN-Index of 500 points since the beginning of the year; one of the largest in the world. Not only domestic individual investors lost and withdrew funds, with many foreign funds also reporting record losses.

A target has been set of there being at least 25 State-owned enterprises (SOEs) with equity or capitalization on the stock market in excess of $1 billion, of which ten are to have over $5 billion.

Before the State Bank of Vietnam decided to increase the operating interest rate from October 25, Yuanta said the increase would negatively affect the valuation of stocks. However, bank stock valuations remain very attractive.

Mr. Petri Deryng, Head of Finland’s Pyn Elite Fund, has some comforting words for investors in its portfolio.

As of the end of September, customer deposit balances at 32 leading securities companies had reached nearly VND67 trillion ($2.69 billion), down by more than VND3 trillion ($120 million) compared to the end of the second quarter. This shows that the amount of money withdrawn from the stock market is not significant and individual investors still consider securities an attractive investment channel compared to other channels such as gold, virtual currencies, bank savings, and real estate.

Mr. Michael Kokalari, Chief Economist at VinaCapital, said the valuations of Vietnamese bank stocks are currently quite low compared to expected earnings growth of at least 30 per cent in 2022 and 20 per cent in 2023. In the long term, the banking sector will continue to be attractive due to high margins, well-controlled asset quality, low mortgage and retail penetration, and rising earnings.

Vietnam’s stock market fell from 1,500 points at the beginning of 2022 to 1,074.52 points on October 6, and foreign capital has continued to be withdrawn. However, VinaCapital analysts still have a positive assessment of the prospects for Vietnamese stocks and believe now is a good time to accumulate stocks.

The average transaction value per session in the stock market reached nearly VND23 trillion ($963 million) in the first nine months of 2022, down 14.5 per cent compared to the average in 2021. In the derivatives market, the average trading volume of futures on the VN30-Index reached 210,910 contracts per session, up 12 per cent from the average last year.

Many securities investors are concerned with the stock market being under a lot of external risk pressure, as it is now. However, analysts have pointed out many advantages in the country’s stock market, such as low price-to-earnings (P/E) ratios and a higher return on equity (ROE) in the VN-Index than in the region.