Will Vietnamese stock market boom in the new year?

Mr. Huynh Anh Tuan, CEO of Dong A Securities (DAS)

VN-Index could reach 1,500 points

In 2024, I believe that the economic situation both domestically and internationally will have a mix of positive and negative aspects.

The Federal Reserve (FED) still hasn’t made it clear when they will cut interest rates, so there is still a risk of a sharp decline or recession in the US, Europe, and China. There is also a continuing risk of political instability affecting oil prices and increasing logistics costs, disrupting the transportation of goods and posing inflation risks…

On the flip side, Vietnam is showing many bright spots. Real estate is gradually recovering from the bottom; savings interest rates continue to be low; export signals have rebounded in Q1/2024, and inventory levels are decreasing. In addition, foreign direct investment (FDI) is also increasing, and public investment is being strongly pushed by the Government, ensuring a positive circulation of capital…

Particularly, investor confidence in the bond market is being reinforced. Many real estate businesses have successfully issued bonds. Many companies have also restructured their bonds and started introducing products to the market in 2024.

It is projected that the average corporate profit growth in 2024 will be around 18-20%, so the current P/E ratio (Price-to-Earnings ratio) of the market at around 11 times is considered quite attractive for stock investment.

Regarding the stock market, the State Securities Commission is actively implementing solutions to develop the market until 2030 according to the Government’s plan. The operation of the KRX trading system will increase the number of products and liquidity for the market. The plan is that by September, the Vietnamese stock market will be included in the list of emerging markets to be officially upgraded to a frontier market by 2025.

At that time, the capital inflow from foreign investment funds will automatically increase, stimulating the “compressed” capital of other investors.

In reality, foreign investors have recently shown positive signals by net buying after a long period of continuous net selling. “Domestic” investors who are still hesitant will certainly participate in the market in the coming time.

Currently, the banking sector is providing strong support for the VN-Index. Institutional funds have abundant liquidity, so market liquidity in Q1/2024 will increase sharply. From there, large capital flow will return, especially personal savings will shift more into the market.

With these foundations, I predict that the VN-Index will unlikely fall below 1,100 points and could even reach 1,500 points if the market receives more positive signals.

Dr. Nguyen Anh Vu – Head of Finance Department, Banking University HCMC:

Huge money waiting to be poured into the stock market

In the general context of the economy, I believe that there are several factors that make the stock market the most potential and stable investment channel compared to other channels.

Observing deposits at banks, they are at a record level. This shows that all investment channels are still unclear. Among them, real estate is difficult to invest, the supply of apartments is still limited, and suburban land needs more time to recover; gold prices are controlled strictly, so there are not many opportunities; digital currencies are still not popular and not legal in Vietnam.

Especially, in 2025, the Government aims to upgrade the stock market, so 2024 is a turning point, with many transparent and professional policies being strongly promoted to realize this goal.

However, in my opinion, there are still risks, including risks from bad debts at banks. Insurance distribution activities through banks will also be tightened, affecting the profitability of banks and this group of stocks.

I assess that the stock market in 2024 will continue to have differentiation among various industries. Non-transparent businesses, speculative ones, and manipulated stock prices will be filtered out. Businesses with good business models, promoting digital transformation, green finance, having social and environmental responsibilities, will continue to attract the attention of investors.

Mr. Vu Tran Vinh Thuy – Investment Director of Viet Long Financial Company:

Stocks are still the most potential channel

I believe that the economy of Vietnam has passed the bottom and positive signals have emerged. With decisive actions from the Government, interest rates continuously decreasing and currently at a low level, I believe that in just a few months, the economy will recover more clearly, possibly in Q3 or Q4.

It is always the case that the stock market takes the lead as the “thermometer” of the economy. Therefore, from the beginning of the year, the market has shown many positive signals, with large, healthy capital flows increasing.

And overall, channels such as real estate are still difficult, the supply is still scarce, activities to boost the market, increasing supply have to wait until 2025 when related real estate laws take effect and are enforced. Meanwhile, gold prices are unlikely to rise significantly in the short term, so stocks are the most attractive channel.

Moreover, investors will no longer worry about the story of choosing manipulated stocks or manipulated prices because fundamentally, regulatory agencies have gradually cleaned up the market.

In terms of choosing industries to invest in, according to me, companies engaged in continuous public investment have many advantages as the Government is vigorously promoting public investment. Consumer demand is also being stimulated to spread to other manufacturing and business sectors. Regarding the banking industry, although there is still concern about bad debts, the balance between mobilization and lending is well calculated, so the profit of this group is still high.

In the past, when the stock market entered a rising wave, large, leading stocks usually “ran” first, attracting the participation of investment funds, then spreading to other sectors.