Vietnam's stock market is expected to maintain its growth momentum of last year at 15-20 per cent based on positive supporting factors, experts have said.
Speaking at a seminar on opportunities and challenges for the stock market in 2021 held in Ho Chi Minh City on March 27, Can Van Luc, chief economist of the Bank for Investment and Development of Vietnam (BIDV), said: “Vietnam has successfully implemented the dual goal of containing the Covid-19 pandemic and reviving the economy.
“With its economic recovery momentum, most organisations forecast that Vietnam’s economic growth is likely to surge to 6.5-to-seven per cent in 2021. And at the same time, we can control inflation well at below four per cent.”
In this context, domestic and foreign investment flows to the country will be stronger than those of last year, he said.
The number of new trading accounts opened more than doubled last year, driven by the desire of local investors to achieve higher returns as the interest rates paid on their bank deposit accounts plunged. And the momentum will continue this year, he added.
Central Institute for Economic Management director Dr Vo Tri Thanh said production and trading activities have been maintained and export growth has recovered quickly, while the new generation of free trade agreements (FTA) will also increase export and investment cooperation.
This will help promote the stock market in 2021 and the years to come, he said.
Dang Duc Thanh, chairman of the Economists Club, said: “With the government’s promotion of public investment, policies to attract foreign direct investment [FDI], maintenance of low interest rates, adjustment of economic stimulus packages, and effective control of Covid-19, it has made an important contribution to boost the stock market’s growth.”
The VN-Index surpassed 1,200 points on March 18, creating optimism among investors, he said.
Dr Nguyen Son, chairman of the State Securities Commission’s Vietnam Security Depository, said: “Having vaccines to prevent Covid-19 and the trend of shifting international capital flows from the banking sector [which yields low interest rates] to other investment channels such as stock and valuable assets such as gold and real estate will help the global stock market in general and Vietnam’s stock market, in 2021.
“Vietnam continues to be evaluated as a bright spot for regional investment by international organisations as it is one of the few countries that has effectively controlled Covid-19 and achieved positive growth in 2020,” he said.
He said the VN-Index would increase by hundreds of points this year.
Despite many opportunities, the stock market in 2021 still faces risks, notably the unpredictable development of Covid-19, an increase in trade defence globally, risks involved in inflation and exchange rates, and diversion of investment flows to other areas, he said.
Son also mentioned problems faced by the Vietnamese stock market, such as the slow process of equitisation of state-owned enterprises and divestment of state capital in equitised enterprises. Moreover, the upgrading of the market from frontier to emerging status still faces obstacles and the current IT system has not met the fast development of the securities market.
To enable the market to develop in a sustainable manner, the securities sector will focus on putting new regulations and policies in the Law on Securities into practice to support businesses and protect the legitimate rights and interests of investors, he said.
It will also map out a Stock Market Development Strategy for the 2021-2030 period to shape goals, solutions and a roadmap for the development of the stock and capital market in the long run, he said.
In addition, the sector will enhance the modernisation of information technology systems and administrative procedure reform, launch new products, restructure the security market, and speed up equitisation and divestment of state capital in state-owned enterprises and the listing of these firms on the stock exchange to increase market liquidity and supply, he said.
At the seminar, which was held by the Economists Club, Ho Chi Minh Securities Corp (HSC) and Green Plus JSC, Green Plus signed a cooperation agreement with Japan’s Sato Yakuhin Kogyo, HSC, and Vietcombank’s Binh Tay branch.
VIET NAM NEWS/ASIA NEWS NETWORK