Vietnam’s stock market is still green, what’s up?

Vietnam's stock market continues to grow

Following the previous day, VN-Index opened the last session of August 2021 in the green. Although there were some fluctuations, the index quickly got back on track and kept it at 1330 points until the closing. On another note, the World Bank Group and the Australian Government will cooperate to support the development of Vietnam’s stock market.

VN-Index gains point three sessions in a row

According to VNExpress, VN-Index increased by 0.25 percent to 1331.47 points while HNX-Index gained 0.44 percent and UPCom rose 0.59 percent.

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Trading value on the Ho Chi Minh Stock Exchange (HOSE), on which the index is based, rose 7 percent to VND22.9 trillion ($1 billion), the highest in the past five sessions.

Cafef said real estate and construction stocks are the leaders of Vietnam’s stock market today with many gainers such as CEO, NVL, DIG, HDC, KDH, IJC… Besides, steel stocks also attracted cash flow and ended the session with the dominant green color. However, foreign investors were still net sellers for the fourth consecutive session, mainly focusing on MSN and VHM.

The VN30 basket, including the 30 largest capped stocks, saw 14 tickets gaining, led by BVH of insurance company Bao Viet Holdings with 3.6 percent.

On the other hand, banking stocks decreased sharply in both price and trading volume. The VCB of Vietcombank only increased by 0.1%, while the LPB of Lienvietpostbank decreased by 1.1%, even though it reached the ceiling during the last session. The only positive point for the banking group today was that foreign investors were still net buyers in some stocks.

Recently, there was some negative information regarding the operation of the banking industry, including the act of cutting interest rates as well as waiving and reducing service fees to support businesses and customers during the pandemic. Consequently, many believe that the profit results of the banking group in the second half of the year may not grow as high as the first half.

Vietnam's stock market continues to grow
Vietnam’s stock market continues to grow

Will Vietnam’s stock market slip soon?

Trading Economics predicts the stock market will end up with an average of only 1281 points in the third quarter of 2021, which is pretty far from what we are now – 1331 points. Can the market keep up its recovery momentum?

In a publication of Vietstock, Asean Securities Company (Aseansc) forecasts that the market will face selling pressure when many traders want to protect their profit. This will cause the market to go back to 1325 – 1330 points to test the support zone, and even further as 1315 – 1320 points.

On the other hand, the Bank for Investment & Development of Vietnam Securities Company (BSI) said that the Index of Vietnam’s stock market will maintain a short-term accumulation of around 1330 points. After three gaining sessions, the uptrend will likely slow down before heading to 1350 points in September.

KB Securities Vietnam (KBSV) also suggests the investors hold the stocks for some more time and continue to apply a flexible buying and selling strategy. It seems that everyone is still optimistic about the recovery trend of VN-Index.

MB Securities Company (MBS) thinks the investors should gradually sell all stocks of small-cap companies and switch to investing in blue-chip stocks for more safety.

The World Bank Group (WBG) and the Australian Government cooperate to support the development of Vietnam’s stock market, focusing on attracting foreign investors

Reporting by Cafef, on August 31, IFC, World Bank, and the Australian Government have cooperated to promote the development of Vietnam’s stock market. The purpose is to improve the operation of the stock market to attract foreign investors and diversify capital sources to support the growth of domestic enterprises, leading to a sustainable economy.

The conference co-organized by the WBG and the State Securities Commission (SSC) discussed the draft of Vietnam’s stock market development strategy for the 2021-2030 period. This was developed by the SSC, and the WBG also proposed a multi-stage roadmap that focuses on improving investor access.

The World Bank Group (WBG) and the Australian Government cooperate to support the development of Vietnam's stock market
The World Bank Group (WBG) and the Australian Government cooperate to support the development of Vietnam’s stock market

 

Mr. Vu Chi Dung, Director of the International Cooperation Department, SSC said: “The goal of this plan is to make the capital market an important medium and long-term capital channel for the economy, unlock the potential of the market, contribute effectively to the economic growth, mobilizing reasonable and balanced capital sources for the economy and businesses. The plan will be built following the best international standards, ensuring investor safety.”

The roadmap proposed by the WBG focuses on addressing key barriers to foreign investors by introducing new mechanisms to loosen the pre-trading margin requirements for securities transactions, resolve foreign ownership limits on securities, and promote information announcements in English.

The IFC and the World Bank, in partnership with the Australian Government, are implementing a multi-year advisory program that will improve the regulatory framework, market infrastructure, quality of regulatory agencies, and develop new products. This cooperation is part of the Joint Capital Markets Development Program (J-CAP) – a WBG initiative to develop equity and debt capital markets in several countries, including Vietnam. The J-CAP program was established in 2017 to help developing countries realize the benefits of strong domestic capital market development.

“Developed, well-regulated capital markets that meet international standards are critical to diversifying financing options and will play a crucial role in the next phase of Vietnam’s economy. Developed capital markets will provide an important source of domestic financing and effectively support foreign investors,” said Mr. Mark Tattersall, Australian Deputy Ambassador in Vietnam. “Following Australian Prime Minister Morrison’s announcement in January 2021 of 2.2 million AUD in support for Vietnam’s capital market development, the Australian government is pleased to announce that we have partnered with The World Bank and the State Securities Commission to approve the J-CAP program to innovate and develop Vietnam’s stock market.”

In Vietnam, the Australian government’s support for the J-CAP program on stock market development goes hand in hand with the Swiss government to promote the development of the bond market – a part of the capital market. Globally, the J-CAP program in other countries receives support from the governments of Germany, Norway, Australia, Luxembourg, Japan, the Netherlands, and Switzerland.

Source: VnExpress, Cafef, Nhip song kinh te, Trading Economics, Vietstock

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