Since Circular 36/2014/TT/NHNN took effect a month ago, commercial banks have halted loans for securities investment and collected existing debts, thus causing certain impact on the investor sentiment. However, according to economic experts, this necessary move will provide an opportunity for the market to be healthier.
Positively, the market has maintained growth momentum after the Lunar New Year holiday, which is contrary to expert forecasts as Circular 36 became effective just one month ago. The correction was mainly caused by profit-taking selling.
An analyst at Bao Viet Securities Company said market corrections became buying opportunities for investors. However, the share hoarding needs reasonable roadmaps and steps. Viet Capital Securities Company recommended investors avoid buying chase or intense buying in one session so as not to fall into a disadvantage in case corrections take longer than expected. VN-Index may exceed the 600-point sentimental benchmark and reach 610 points in the short term.
Maritime Bank Securities Company (MSBS) noted that bank shares will still uphold rally momentum on strong foreign buying. Oil and gas shares are expected to make a strong bounce after a long time of quietness. This move may drive up the VN-Index to the 600-point benchmark and a continued strong rally is envisaged.
BIDV Securities Company (BSC) noted that the market rally is volatile, citing low liquidity and hard-to-break resistance of 600 points. Therefore, BSC maintains its view on careful buying and selling to ensure safe portfolios.
Mr Pham Tuyen, an independent economist with extensive experience in financial and stock markets, said buyers were very active in trading sessions after Tet, liquidity increased steadily and speculative cash movement in the market was active and purposeful. Besides, the stock market may react positively to potential rate cuts by the State Bank of Vietnam (SBV).
In medium and long term, the market will not be affected by Circular 36 but driven by optimistic market development policies adopted by the State Securities Commission of Vietnam (SSC). Besides, according to the International Monetary Fund (IMF), global economic growth was only 3.3 percent in 2014 but inflation remained low and stable. Prices of basic commodities are still in a bearish trend. Notably, falling crude oil prices also bring certain benefits to production and business operations. Global financial markets are forecast to be stable.
In Vietnam, the Government’s macroeconomic policies will continue to focus on improving the business environment and advancing free trade agreement negotiations in 2015. The country will pursue macroeconomic stability and implement prudent and consistent fiscal policy. Besides, Vietnam will accelerate the restructuring of banks and SOEs. The nation also targets at macroeconomic stability, faster economic recovery, controlled inflation and interest rates, and increased foreign direct investment (FDI). These will give a boost to the stock market.
In addition, Prime Minister Nguyen Tan Dung’s presence and bell-striking at the first trading session after Tet (Lunar New Year) is believed to herald positive effects on the financial industry this year. At this event, he urged transparency and effective operation of the stock market.
Remarking on the market in the short term, Pham Tuyen said that cash flow will be still channelled into stocks with good fundamentals and low valuations, especially real estate stocks. In March 2015, the market may shape a big wave and reach the peak of the year at this time.
Luong Tuan
Vietnamese
