Stocks to become more attractive than bank deposits: VNDirect analyst

By Nhat Huynh, Huong Dung
Thu, December 1, 2022 | 8:51 am GMT+7

Income from the securities market is expected to increase by about 14% in 2023, meaning that stocks would be more attractive than bank deposits, said Tran Khanh Hien, chief analyst at top broker VNDirect Securities.

December is always considered a golden time for investors to review their investment portfolio to prepare for the next stages. However, this year-end is different, according to Hien.

At the recent "Finance Street" talkshow, she said that now not only Vietnam but almost all major economies in the world are under pressure from rising interest rates and tightening financial conditions.

Besides, after a series of incidents in the market, most commercial banks have strengthened their solvency, and financial institutions have consolidated their defensive foundations. Therefore, interbank and deposit interest rates have increased sharply.

"Deposit interest rates of some banks can reach 10% per year. Businesses will have relatively few opportunities to access capital to restructure loans and pay for debt in the short term. In general, our economy will face more difficulties in the year-end and early 2023," Hien noted.

Tran Khanh Hien, chief analyst at VNDirect Securities. Photo courtesy of Business Review

Tran Khanh Hien, chief analyst at VNDirect Securities. Photo courtesy of Business Review

"Under pressure of the above factors, market players are tending to increase their defenses and seek to sell the most liquid assets, including stocks and corporate bonds. This will cause a drop in trading volume as well as scores in the stock market.

"Normally, many large financial institutions choose the last quarter of the year to restructure their portfolios and put their money down for the new year, as companies’ third-quarter and annual business results have somewhat loomed. In the context of increased input interest rates, the securities investment channel will become less attractive. However, this correlation will be broken when the profits of listed firms continue to increase," she argued.

In 2023, although profit growth momentum will weaken, listed companies are expected to post a profit increase of 12 to 14%, Hien said, adding that with this rate of return, income from the stock market will grow about 14%, meaning investing in stocks will become more attractive than depositing money at banks.

In addition, since the beginning of October, foreign investors have actively poured money into the Vietnamese market, with a total net buying value of about VND8 trillion ($324.6 million). This development is in stark contrast to the first half of 2022. Recently, ETF Fubon - one of the major ETFs investing in Vietnam also announced it would raise about VND4 trillion ($162.3 million) to continue investing in the Vietnamese market.

"It proves foreign investors see that Vietnamese stocks have become very cheap and started purchasing," Hien noted.

The VNDirect analyst said that as market liquidity has improved but remains limited, industry waves like previous years are unlikely to occur. However, some industries will benefit from the growth drivers of the economy and public investment disbursement. Besides, difficulties no longer affect aviation-related industries, especially after re-opening of the international tourism market.

"In addition to focusing on industry groups, investors should pay attention to the story of each stock. They can choose tickers of leading companies in an industry, with low risk to interest rate hikes, a strong financial structure, and attractive valuation compared to the three-year average," she recommended.

The Vietnamese stock market has made a strong recovery in recent days, with the VN-Index, which tracks the performance of the Ho Chi Minh Stock Exchange (HoSE), gaining for the fifth consecutive session on Wednesday.

The benchmark closed the Wednesday session at 1,048 points, an increase of 16 points or 1.58%, with more than 1.1 billion shares changing hands for VND17.76 trillion ($720.6 million).

Comments (0)
  • Read More
Vietnam spends $1.8 bln on coal imports in Q1, mainly for power plants

Vietnam spends $1.8 bln on coal imports in Q1, mainly for power plants

Vietnam spent more than $1.8 billion importing 17.27 million tons of coal in Q1, primarily to fuel thermal power plants, according to the General Department of Customs.

Economy - Mon, May 5, 2025 | 10:24 pm GMT+7

Vietnam’s utility major REE records 27% net profit growth in Q1 on power segment surge

Vietnam’s utility major REE records 27% net profit growth in Q1 on power segment surge

Private utility firm REE Corporation posted strong profit growth in Q1, primarily driven by a significant improvement in its power segment compared to the same period last year.

Companies - Mon, May 5, 2025 | 10:00 pm GMT+7

Vietnam to hold first round of trade talks with US on Wednesday

Vietnam to hold first round of trade talks with US on Wednesday

Vietnam will hold its first round of negotiations with the U.S. on bilateral trade Wednesday, Prime Minister Pham Minh Chinh said at the ongoing session of the country's parliament.

Economy - Mon, May 5, 2025 | 4:40 pm GMT+7

Nestlé Vietnam announces new investment in flagship coffee plant

Nestlé Vietnam announces new investment in flagship coffee plant

Nestlé will make an additional investment of $75 million to expand its Nestlé Tri An plant in the southern Vietnam province of Dong Nai, bringing its total investment in the facility over 2024-2025 to $175 million.

Companies - Mon, May 5, 2025 | 4:35 pm GMT+7

Vietnam legislature’s ongoing session to mark 'historic breakthrough in institutional reform'

Vietnam legislature’s ongoing session to mark 'historic breakthrough in institutional reform'

The National Assembly's session which opened on Monday morning will make a critical step forward in institutional reform, paving the way for a new era of modernization, digital transformation, green growth, and sustainable development, said the parliament's Chairman Tran Thanh Man.

Politics - Mon, May 5, 2025 | 3:53 pm GMT+7

Business confidence in Vietnam drops to 44-month low over US tariff concerns: S&P Global

Business confidence in Vietnam drops to 44-month low over US tariff concerns: S&P Global

Business confidence in Vietnam dropped sharply in April to the lowest since August 2021, as manufacturers were concerned about the impact of U.S. tariffs on production in the months ahead, according to S&P Global.

Economy - Mon, May 5, 2025 | 3:24 pm GMT+7

Ford distributor City Auto chairman’s wife plans $5 mln buy to become major shareholder

Ford distributor City Auto chairman’s wife plans $5 mln buy to become major shareholder

Ngo Thi Hanh, wife of Ford distributor City Auto (HoSE: CTF) chairman Tran Ngoc Dan, has registered to buy 6 million CTF shares to increase her ownership to 6.4%, according to the Ho Chi Minh Stock Exchange (HoSE).

Companies - Mon, May 5, 2025 | 11:41 am GMT+7

HCMC street retail spaces vacant despite rent cuts

HCMC street retail spaces vacant despite rent cuts

Street retail spaces in Ho Chi Minh City, Vietnam's economic hub, continue to face persistent vacancies, as they struggle to compete with modern retail spaces that offer a wider array of goods and services.

Real Estate - Mon, May 5, 2025 | 11:14 am GMT+7

State-controlled giant Vietnam Rubber Group reports strong Q1 profit on high latex prices

State-controlled giant Vietnam Rubber Group reports strong Q1 profit on high latex prices

Vietnam Rubber Group-JSC reported a net profit of VND1,184 billion ($45.5 million) in Q1/2025, 2.5 times higher than Q1/2024, which was largely driven by sustained high rubber latex prices amid rising global demand and tight supply.

Companies - Mon, May 5, 2025 | 8:22 am GMT+7

KRX trading system to go live on Monday: A 'pivotal milestone' for Vietnam's market status upgrade

KRX trading system to go live on Monday: A 'pivotal milestone' for Vietnam's market status upgrade

The official launch of the new KRX trading system on May 5, after more than a decade of preparations, will mark a pivotal turning point for Vietnam’s stock market status upgrade, said Nguyen Duy Hung, chairman of leading broker Saigon Securities Inc. (SSI).

Finance - Sun, May 4, 2025 | 10:02 pm GMT+7

Vietnam distributor of Chinese EVs reports big profit growth in Q1

Vietnam distributor of Chinese EVs reports big profit growth in Q1

Vietnam’s TMT Motors Corporation (HoSE: TMT), the distributor of Chinese electric vehicle brand Wuling, reported VND33.76 billion ($1.3 million) in Q1 after-tax profit, about 125 times higher than Q1/2024.

Companies - Sun, May 4, 2025 | 7:38 pm GMT+7

Vietnamese EV maker VinFast signs loans worth $190 mln for Indonesia plant

Vietnamese EV maker VinFast signs loans worth $190 mln for Indonesia plant

VinFast, the electric vehicle arm of Vietnam's leading private conglomerate Vingroup, has secured a long-term syndicated loan agreement worth IDR1.85 trillion ($110 million) and an $80 million accordion facility from two Indonesian banks to finance the construction of its plant in Indonesia.

Companies - Sun, May 4, 2025 | 12:55 pm GMT+7

Vietnam's logistics major Transimex targets 20% profit growth in 2025

Vietnam's logistics major Transimex targets 20% profit growth in 2025

Transimex, a top logistics firm in Vietnam, targets net profit of over VND204 billion ($7.8 million) for 2025, up 20% year-on-year, on revenue of over VND3.36 trillion ($129.2 million), up 1%.

Companies - Sun, May 4, 2025 | 12:23 pm GMT+7

Vietnam's retail giant Petrolimex seeks foreign partnership in green energy technologies

Vietnam's retail giant Petrolimex seeks foreign partnership in green energy technologies

Vietnam's biggest gasoline retailer Petrolimex has started selling biofuels and is actively seeking opportunities to partner with international players to invest in green energy technologies. Chau Anh reports.

Companies - Sun, May 4, 2025 | 9:37 am GMT+7

Vietnam's major tire maker Danang Rubber to be supplier of EV maker VinFast

Vietnam's major tire maker Danang Rubber to be supplier of EV maker VinFast

Danang Rubber JSC (DRC), a subsidiary of Vietnam’s state-owned chemical giant Vinachem, will develop a dedicated line of electric vehicle (EV) tires while rolling out products to support its new partnership with the country's leading EV manufacturer VinFast.

Companies - Sun, May 4, 2025 | 8:00 am GMT+7

Vietnam’s VN-Index world’s second-worst performer in Apr amid US tariff turmoil

Vietnam’s VN-Index world’s second-worst performer in Apr amid US tariff turmoil

Vietnam’s benchmark VN-Index dropped by more than 80 points, or 6.2%, in April, ranking as the second-worst performing stock index globally, according to data compiled by IndexQ.

Finance - Sat, May 3, 2025 | 6:48 pm GMT+7