Analysts from the Au Viet Securities Company(AVS) said that Vietnam’s stock market has ended the medium term downtrend since 2010 and the indices will rally in 2011 for the 7 reasons as follows:
1. Vietnam macro economy will likely be more stable from the second half of 2011 when the pressure on macro economy of higher consumer price index and VND/USD exchange rate will be under control as the VND/USD exchange rate is forecast to rise by between 5%-7% in the first half of 2011, while higher dollar supply from foreign direct investment and official development assistance capital in the second half is expected to help ease dollar constrain.
2. Banks’ task of raising the chartered capital to VND3,000 is likely to be completed in 2011 as many banks has raised their chartered capital to VND3,000 billion before deadline of the end of 2011. The bank activities are predicted to become more favorable in the coming time, making banks’ stocks outperform in 2011 and more bank shares will be listed on the bourses.
3. Foreign investors will continue to pour more money in Vietnam stock market after net buying for above VND15,000 billion in 2010. Their money flows are expected to support for liquidity of the market.
4. Shares issuing in the market will be regulated stricter to ensure quality of listed enterprises.
5. Blue chips with medium market cap will attract investors while bank shares will early rally as the interest rate falls. Shares of real estate and petrol sectors are also believed to increase in next year.
6. Market volume will be improved as the investors wait for new rules to cut down the clearance and settlement from transaction day + 4 (T+4) to T+2 and new investment tools to expand market size such as derivatives as well.
7. The Securities Laws reformed will help to protect the investors from illegal speculation.
AVS also suggest the investors five potential sectors to invest in 2011 including bank, real estate, seafood, mineral and shipping.
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