Leading securities CEOs predict happy new year

Leading securities CEOs predict happy new year

Nhu Dinh Hoa CEO, Bao Viet Securities

Nhu Dinh Hoa

We maintain an optimistic outlook for this year.

As with 2017, the Vietnamese stock market will continue to be dominated by positive factors, as listed businesses are expected to perform significantly better this year.

Specifically, based on business forecasts for major firms, the earnings-per-share ratio is expected to grow by 12 per cent.

If the market’s rate of price-per-earnings (P/E) remains relatively stable, the VN-Index is likely to jump by 12 per cent as well.

This year, investors are particularly keen on major state divestments and initial public offerings (IPO) of high-profile state-owned firms.

These sales are an important source of high-quality stocks in Vietnam, and can improve the market’s sentiments.

On the other hand, investors should be careful with this increasing supply of new stocks in 2018.

Investment funds may have to restructure their portfolios and sell off some listed stocks if they wish to join the trend of IPOs and state withdrawals.

In 2018, we continue to focus on sectors that benefit from the new recovery cycle of Vietnam’s macro-economics, including property, banking, and construction materials.

In our opinion, other sectors with good prospects include oil, information technology, and consumer.

Tran Hai Ha CEO, Military Bank Securities

Tran Thai Ha

I believe the market will do well in 2018, given the country’s positive macro-economic performance and stronger business outcomes from listed corporations. Foreign investors are also likely to strengthen their presence in this robust market.

That said, there will be a clear classification of stocks on the market. Companies with solid fundamentals, good business prospects and a high standard of corporate governance will receive the bulk of attention from investors. This is the same for firms that benefit from Vietnam’s increasing openness to the global economy.

Liquidity is showing positive changes, and in my opinion at least VND7 trillion ($308 million) will change hands during each trading session this year. Thanks to increasing liquidity, the VN-Index may hit 1,300 points in 2018.

All in all, the market will receive good news from various sources, including new stocks, an increase in market size and liquidity, and supportive regulations from the government. All of these developments will create a larger and more exciting playground for investors.

Le Manh Hung CEO, Vietcombank Securities

Le Manh Hung

In 2018, all indicators are pointing toward an expansion of the stock market. For example, foreign direct and indirect capital continues to enter Vietnam. The country’s macro-economics are stable, and interest rates and inflation rates remain at reasonable levels.

With high GDP growth amid a backdrop of steady macro-economic factors, Vietnam will become the next hot spot for international capital.

In particular, major state divestments will draw in long-term foreign funds, helping the market grow in quantity and quality this year.

At the same time, Vietnam is expected to soon receive an upgrade to its status of being an emerging market, bringing the country closer to international markets.

Khong Phan Duc CEO, VietinBank Securities

Khong Phan Duc

Everyone has good faith in the market this year, as various positive factors will push it forward.

Significant ones include the overall stability of Vietnam, as well as the government’s drive to create a progressive business environment for firms and investors. The Vietnamese market will continue to lure in foreign capital, in turn helping the market improve its size, quality, and liquidity.

2018 is an important year in terms of restructuring and selling major state-owned enterprises. These large businesses provide a high-quality source of new stocks for the market, and investors will have a great opportunity to buy in bulk. The market will also welcome two new products: covered warrants and futures contracts of government bonds. This will further boost investors’ confidence in the Vietnamese market.

Moreover, Vietnam’s economy enjoys advantages such as a young population, fast urbanisation rates, growing incomes, and strong domestic consumption. With these in mind, promising sectors in 2018 are the likes of financial services (such as banking and securities), real estate, construction materials, retail, consumer goods, and aero services.

However, risks will go hand in hand with rosy outlooks. Hot money is flowing into the market, driving up risks of sell-offs in some trading sessions.

For major investment funds, the over-dominance of blue chips in the VN-Index is another cause for concern. In particular, the five largest stocks already take up 40 per cent of Vietnam’s main index.

Mac Quang Huy CEO, KB Vietnam Securities

Mac Quang Huy

The market is expected to grow in terms of quality and quantity, and investors will become more confident thanks to the forecast GDP growth of approximately 7 per cent, and business results growth of 15-20 per cent.

The government has already scheduled major IPOs and sales of state-owned firms, adding to the appeal of Vietnamese stocks.

The P/E ratio of Vietnamese stocks may reach 24x – the highest that will have been recorded since 2007.

Capital, especially from overseas funds, will continue to flock into Vietnam this year.

Nevertheless, as the country becomes increasingly connected to the world at large, any negative updates on the global market may have a larger spillover effect.

As I have just mentioned, investors will have more opportunities in blue chips as the government pushes equitisation of state-run firms.

Besides, investors can also find hidden gems in smaller firms, whose P/E ratio is less than 10x and 50 per cent lower than blue-chips.

Offers for new derivatives will be another important source of profit and diversification.

I believe that banking and finance is the most promising sector.

Industrials, real estate, and consumer goods are also up-and-coming sectors to consider.