Vietnamese stock market attracts foreign investors – VTV.VN
Positive signals at the beginning of the year
Returning after a long Tet holiday, the stock market is still expected to show positive developments. The enthusiastic sentiment spread throughout stock groups, helping the main index close the Quy Mao year with a gain of over 10 points, approaching the 1,200-point mark. Looking further, VN-Index has recorded the third consecutive month of growth, thanks to improved internal cash flow and reduced pressure from foreign capital.
Compared to the bottom in November 2023, the VN-Index has recovered by about 17%. This is the highest level of the index in almost 5 months.
In the new year 2024 and the Year of the Rat, the focus is still on the safe, transparent, efficient, and sustainable development of the stock market. Recently, Prime Minister Pham Minh Chinh signed Directive No. 04 dated February 11, 2024, on promoting the implementation of the Project on developing population data, identification, and electronic authentication applications to serve the national digital transformation phase in 2022-2025, vision to 2030 in ministries, sectors, and localities in 2024 and the following years. The Prime Minister directed the State Securities Commission to reconcile and verify information with the national population database, clean up data on securities investors and certified securities practitioners, to be completed in March 2024.
Mr. Pham Hong Son, Vice Chairman of the State Securities Commission, said: “Firstly, regarding the legal framework, following the guidance of the Ministry of Finance, we will consider revising Decree 155 guiding the Securities Law and some related circulars to establish a solid and clear legal corridor for enterprises, organizations, and individuals to implement the Decree and Circulars.”
The second issue is the market upgrade. Currently, the State Securities Commission has coordinated with ministries, especially with departments and depositories, and securities companies have held numerous meetings to find the most suitable solutions to ensure the upgrade process while minimizing risks. These are relatively good options with opportunities for us to meet the requirements of foreign investors. From there, we can achieve the market upgrade as soon as guided by the Government and the Ministry of Finance.”
Efforts to upgrade the Vietnamese stock market
Will attract foreign investors
Many investors this year have high expectations that the stock market will take off, with many new projects being implemented such as the new KRX trading system, new commodities, new products, and many new sources of capital entering the market.
Macroeconomic factors are expected to improve in 2024 with Vietnam’s economic growth forecasted to be between 6.5% – 6.7%.
The low-interest rate environment is forecasted to be maintained, with the spillover effect on the people, businesses, including the real estate sector. The recovery of business results is the basis for more optimistic forecasts about the Vietnam stock market in 2024.
Mr. Nguyen Thanh Tung – CEO – Yuanta Securities Vietnam shared: “The fiscal policies such as maintaining the VAT rate at 8%, the Government’s determination in disbursing public investment has spread throughout the economy. The improvements in GDP, monetary policies, and fiscal policies are definitely the factors helping the Vietnam stock market improve and be better than in 2023.”
After a period of continuous net selling, foreign investors have returned to net buying since the beginning of the year. The net buying volume is more than 875 million shares. The net buying value is over 787 billion dong, separately on HOSE. Currently, the projected P/E ratio for the Vietnam stock market in 2024 is only around 10 times. The attractive valuation is also one of the factors attracting foreign capital back to the market.
Ms. Nguyen Hoai Thu – CEO of Investment Group – VinaCapital said: “There are many factors that are attractive to foreign capital to return to Vietnam. Including the forecasted double-digit profit growth of listed companies. We are forecasting a growth rate of 13%. And looking to 2025, this profit growth rate can reach over 20%. At the same time, the valuation of listed companies is currently the cheapest in the past 10 years. This cheap valuation has attracted the attention of many foreign investors.”
“The second thing that foreign investors are observing in the Vietnamese market is the development of the market in relation to the deployment of the new trading system, new products, or the progress of market upgrade. Vietnam’s achievement of that development milestone will be evidence for foreign investors to consider disbursement and return to the Vietnamese market” – Mr. Nguyen Quang Hung – Dragon Capital Fund Management Company expressed his opinion.
Not only foreign investors but all market members are also expecting the early operation of the KRX system. And Vietnam may be upgraded to the emerging market by FTSE in September and upgraded by MSCI in the following years. If the issue of capital repatriation and ownership limitation for foreign investors is resolved, VinaCapital predicts that Vietnam could attract 5-8 billion USD of foreign capital.
