Vietnam Stock Market to Bottom out at 220 Points by Early Q4

The stock market of Vietnam may reach its bottom with the benchmark VN-Index at 220 points by the beginning of the fourth quarter before the local and global economy recovers in early 2010, said Ken Tai Chee Ming, a prominent stock analyst with the Singapore-based Kim Eng Securities.

 

The VN-Index will be supported at 221 points; if the supporting benchmark is broken, the index will slide to 213 and even 176 points, Ken Tai said.

 

Many institutions forecast the economic growth will plunge from 6.23 per cent last year to 4 per cent or 5 per cent for the year of 2009, given the export slowdown and massive layoffs at many enterprises and government expenditure and investment growth may be subjected to further de-rating, he noted.

 

Vietnam’s economy is getting gloomy, with falling export value, foreign direct investment and rising unemployment. Foreign investors may also be standing out the local stock market, Ken Tai said.

 

The analyst added that many listed companies reported big losses in 2008, some of them have been put under special surveillance, and they may face more challenges this year, which is eroding investors’ confidence.

 

Ken Tai suggested investors to buy shares of companies which are not exporters or trading luxury goods and services and those who can benefit from the government’s bailout package.

 

The VN-Index touched the benchmark of 255.09 points on February 18. (Saigon Economic Times)