Securities companies have given a brighter forecast for the Vietnamese stock market this year, with most saying the key benchmark VN-Index can hit 650 points, given the country’s better economic indicators in 2010.
Au Viet Securities Co. (AVS) said in its report reviewing the 2010 economy and forecasting the 2011 trend that investors would continue keeping a close watch on fluctuations of the forex rate and inflation rate especially in the first half of this year; but these factors would have less negative impacts on the market than in 2010.
In a report, Vietnam International Securities Co. (VIS) said if the country could attain the GDP growth target of 7%-7.5% this year, the equity market would have a great support.
The broker said many foreign funds have come to explore Vietnam market since late 2010, which would be a positive sign for the market this year after a strong decline of foreign portfolio inflows over the past three years due to the global economic slowdown. VIS estimated the foreign indirect capital in Vietnam by end-2010 totaled $7 billion, down 40% from 2007.
Capital-raising plans of local banks would continue affecting the market as seen in 2010 as cash inflows will decrease, brokers said.
Given stronger economic fundamentals, both AVS and VIS forecast the VN-Index would hit as high as 600-650 during the year although it fell 2% last year from 494.37 at end-2009.
Capital inflows to the stock market shrank in 2010 due to various factors including the high gold prices, volatile forex rates, and soaring interest rates. On average, the daily trading volume was 46.4 million shares valued at VND1.5 trillion on the Hochiminh Stock Exchange (HOSE).
Foreign investors remained net buyers of local shares during the year. Statistics from VIS showed that they bought a net volume of over 266 million shares worth VND15.5 trillion on the HOSE, rising 7.7 times and 5.7 times from 2009, respectively.
In technical analysis, AVS predicted the benchmark would range in 480-520 in the first half and then start rising by the third quarter to hit 600-650 at the end of 2011. Meanwhile, VIS forecast the index would hit 545 in the first four months, then growing to 650 in rest of the year.
VIS said the HNX-Index is expected to reach 165 by end-2011 after a sharp decline of 32% to close at 114.24 in 2010. (Saigon Economic Times, Vietstock)
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