Stocks to become more attractive than bank deposits: VNDirect analyst
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.
"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).
- Read More
Vietnam steel major SMC remains bogged down with difficulties
Steel manufacturer SMC Trading Investment JSC has been actively selling assets to generate cash for debt repayment and maintain operations since the beginning of this year.
Companies - Thu, October 31, 2024 | 10:41 am GMT+7
Vinhomes’ earnings fall 39% to $777 mln in Jan-Sep
Vinhomes, the largest residential housing developer in Vietnam, booked a net profit of VND19,642 billion ($777 million) in the first three quarters this year, down 39.2% year-on-year.
Companies - Thu, October 31, 2024 | 9:58 am GMT+7
AI cannot replace customer service staff: MoMo exec
AI cannot replace customer service staff, but it can give them more time to prepare and provide better care for customers, says Thai Tri Hung, senior deputy general director and chief technology officer of e-wallet app MoMo.
Companies - Thu, October 31, 2024 | 8:11 am GMT+7
Vietnam property developer Novaland posts skyrocketing Q3 profit
Novaland, a leading real estate developer in Vietnam, reported its after-tax profit hit VND2.95 trillion ($166.62 million) in the third quarter of this year, a 21.6-fold rise year-on-year.
Companies - Wed, October 30, 2024 | 10:59 pm GMT+7
Thailand fruit prices increase at the end of successful season
Thailand’s fruit season is wrapping up this year with a notable surge in prices for durian, mangosteen, rambutan, longkong, and mango.
Southeast Asia - Wed, October 30, 2024 | 10:30 pm GMT+7
BlackBerry launches regional cybersecurity headquarters in Malaysia
Canada-based BlackBerry Ltd has established an Asia Pacific regional headquarters for its cybersecurity division in Cyberjaya, Malaysia, which is now fully operational.
Southeast Asia - Wed, October 30, 2024 | 10:27 pm GMT+7
Malaysia faces rising cybersecurity threats
Malaysian users are facing a high level of cyber threats, which may coincide with the rapid expansion of data centers in the country.
Southeast Asia - Wed, October 30, 2024 | 10:24 pm GMT+7
Indonesia to develop 3 million more hectares of rice fields
The Indonesian government is working to implement a program to develop 3 million hectares of new rice fields to strengthen the country's food resilience amid global challenges and increasing population demands, national news agency Antara reported.
Southeast Asia - Wed, October 30, 2024 | 9:24 pm GMT+7
Singapore’s digital economy thriving
Singapore’s digital economy accounted for 17.7% of the island state's GDP in 2023, up from 17.3% in the previous year, according to its Infocomm Media Development Authority (IMDA).
Southeast Asia - Wed, October 30, 2024 | 9:21 pm GMT+7
Viettel, UAE’s Presight to boost Applied AI, digital transformation in Vietnam
Vietnam’s Viettel AI and the UAE’s Presight have agreed to jointly advance the development of Applied AI and digital transformation initiatives in Vietnam.
Companies - Wed, October 30, 2024 | 8:30 pm GMT+7
Vietnam utility EVN to build $277 mln transmission line to import power from China
State utility Vietnam Electricity (EVN) has got the go head to build the VND7,010 billion ($277.2 million), 500 kV Lao Cai-Vinh Yen line for transmission in the northwestern region and to import power from China.
Energy - Wed, October 30, 2024 | 8:09 pm GMT+7
Jack Ma-invested fund unloads Vietnam holdings worth $130 mln in Q3
China’s Tianhong Vietnam Market Stock Initiated Securities Investment Fund (QDII) saw outflows of around RMB930 million ($130.4 million) in the July-September quarter.
Finance - Wed, October 30, 2024 | 4:53 pm GMT+7
Private lender HDBank reports strong profit growth in 9 months
Ho Chi Minh City-based private creditor HDBank's pre-tax profit surged 47% year-on-year to VND12.65 trillion ($499.6 million) in the first nine months of this year.
Banking - Wed, October 30, 2024 | 4:42 pm GMT+7
Real estate M&As gather pace as local firms struggle with capital insufficiency, restructuring: experts
2024 is considered a vibrant year for mergers and acquisitions (M&A) in Vietnam’s real estate sector, as domestic property companies still face challenges related to capital and restructuring, according to experts.
Real Estate - Wed, October 30, 2024 | 4:14 pm GMT+7
Vietnam conglomerate Vingroup, UAE partner seek to build $3.5 bln data center
Vietnam’s leading conglomerate Vingroup and the Middle East-focused Benya Technologies will jointly explore opportunities to invest in a $3.5 billion data center in Vietnam.
Industries - Wed, October 30, 2024 | 3:43 pm GMT+7
Commonwealth Bank of Australia further sells 10% stake in Vietnam bank VIB
The Commonwealth Bank of Australia (CBA) has sold a further 10% stake in Vietnam International Commercial Joint Stock Bank (VIB).
Banking - Wed, October 30, 2024 | 1:17 pm GMT+7
- Consulting
-
Remove roadblocks to lure foreign investment into Vietnam: HSBC exec
-
Rethinking resilience: How typhoon Yagi redefines supply chain strategies in northern Vietnam
-
In trade and investment, ASEAN and China are better together
-
AI can be a game changer for Vietnam tourism
-
Investment opportunities in LNG-to-power projects in Vietnam
-
Pepper prices 2024: will the dream of 'black gold' repeat?