Vietnam's benchmark VN-Index may reach 1,500 points: analyst

The current valuation of the Vietnamese stock market is quite attractive, and the VN-Index may return to its historical peak of 1,500 points by the end of this year, says Phan Dung Khanh, director of investment advisory at Maybank Investment Bank.

After a positive session on Monday, VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), rose strongly in the Tuesday session, driven by securities stocks.

The benchmark index maintained green throughout the Tuesday session, at times touching the 1,350-point mark before narrowing the increase in the final minutes.

At the close, the HoSE had 195 stocks increasing and 119 stocks decreasing. VN-Index gained 10.95 points (+0.82%) to 1,347.25 points.

The total trading volume reached more than 1,152 million units, worth VND25,628 billion ($983.6 million), up 23% in value compared to the Monday session.

VN30, comprising the 30 largest blue chips on the HoSE, rose by 14.83 points, or 1.04%, to 1,437.87 points, in which SSI of SSI Securities Corporation gained the most, up 3.4% to VND24,500 ($0.94).

The securities group maintained strength throughout the session, with all stocks in this group closing above their reference prices. In particular, VND of VNDIRECT and APG of APG Securities went up at maximum, respectively to VND17,450 and VND12,600.

Besides SSI, other codes also increased well such as HCM (4.1%), VCI i(2.5%), MBS (5.2%), VDS (1.9%), and AGR (2.7%).

After seven consecutive net selling sessions, foreign investors returned to net buying to the tune of VND908 billion ($34.85 million), focusing on APG (VD413 billion), VND (VND208 billion), and SHB (VND158 billion).

Speaking in the recent Financial Street talk show on the VTV 8 channel, Phan Dung Khanh, director of investment advisory at Maybank Investment Bank, said: "If we look at the cash flow and liquidity of the market, we will see that liquidity has been continuously improving in the recent period."

The cash flow is quite steady and continuously growing, with bottom-fishing demand always waiting for when the market adjusts. This shows that the stock market is growing more stably and sustainably, he noted.

“Given the policies focusing all resources on economic development, with an expected GDP growth of 8% this year and double digits in the following years, and the prospects of market status upgrade by the end of this year, we can expect the market to return to the historical peak of 1,500 points recorded in the previous years,” said Khanh.

Currently, the current P/E (price-to-earnings ratio) and projected 2025 P/E 2025 are above 10 and below 15 times, respectively. Compared to Southeast Asia and Asia, the valuation of the Vietnamese stock market is quite attractive and much lower than the regional and Asian markets, according to Khanh.

The Maybank Investment Bank expert noted that in case the stock market continues to maintain the growth momentum as the economy does, focusing on bluechip stocks, leading stocks, and stocks with good fundamentals will bring good profits to investors in the coming period.

Investors can also divide their portfolio into several parts such as medium and long-term investment in stocks with good fundamentals, leading stocks, and stocks with positive business results and low valuations compared to the general market. The remaining part can be for short-term trading, but this ratio should not exceed 50%, he advised.

Khanh believes that "going surfing" too much will make your profits and profitability decrease. The current trend of the Vietnamese economy and the stock market is positive in the medium and long term, so investors should hold on a little longer to optimize profits, Khanh suggested.

Khanh commented that when the market grows, the industry groups with a large proportion in the index and the market-leading groups will benefit, such as banking and finance, public investment, energy, technology, and transportation.

It is especially important to pay attention to the sectors that have been quiet for a long time despite the market grows. Such groups can have a strong rebound momentum, for instance the real estate group.