|Deputy General Director of Vietnam Construction Securities Joint Stock Company Do Ngoc Bao|
This explains why the Vietnamese stock market did not sharply decline compared to the others around the world.
Deputy General Director of Vietnam Construction Securities Joint Stock Company Do Ngoc Bao spoke to Customs News about this issue.
The stock market has fluctuated since the beginning of the year. The VN-Index is around the threshold of 1,500 points and does not see a breakthrough. Could you tell us about your assessment of the market development?
Vietnam’s stock market since the Lunar New Year has seen trading in a narrow range and fluctuated in the range of 1,470 to 1,520 points.
The market development has been affected by the turbulence of information. First of all, inflation in the world has surged, so the central banks may tighten monetary policy.
The Fed plans to increase interest rates in March. This is the reason why the transaction of the securities markets worldwide and in Vietnam have seen a downward trend.
In addition, the conflict between Russia and Ukraine has negatively affected the stock markets. Currently, VN-Index is at the threshold of 1,473 points, under the range of 1,470 to 1,520 points. The negative impacts of the conflict have caused a sharp increase in the price of raw materials, goods and inflation around the world. The situation may become more serious, and stock markets may drop.
After the Lunar New Year, the market has suffered from negative impacts from information. The investor sentiment and the valuation of markets have been affected by this information. Although blue-chips stocks have not seen positive development, the stock prices of groups benefiting from the conflict and the increase in the prices of goods such as seaports, fertilizer, gasoline and steel have surged.
Meanwhile, the stocks of other sectors such as banking, securities, and real estate tended to move sideways or decline.
Many stocks have seen an increase in price with the large daily trading limit, what do you advise investors to do when trading these stocks?
The conflict has had an impact on world goods prices over the past 3-4 weeks. The prices of beneficiary stocks increased sharply. Regarding the current risk, I think the stocks will see a divergence. The stock prices of oil, gas, seaports and fertilizers are at quite a high level. The effects of world prices may reach their climax; the factors that have caused the increase in prices have occurred. Therefore, the world stock prices may decrease.
The factors related to the stock price of the steel industry may take longer, so the stocks may still maintain upward momentum, but stocks of other sectors may be at their peak.
It is difficult to forecast the prices of oil and gas stocks. The oil price always fluctuates. Therefore, it is very hard to predict the peak of oil prices this year. Therefore, investors holding these stock groups should continue to keep taking advantage of the upward momentum.
However, for new investors, this is not the time for them to invest. Because the market is at the high price zone and may be adjusted for the surging stock groups. Therefore, these investors should wait for adjustment and divergence to see which groups can maintain favorable momentum in the long term, and should not invest in the stocks that only increase in the short term and will be adjusted in the long term.
Amid the high gasoline prices affecting inflation, in your opinion, is this a concern for the stock market?
The recent market trend sees a decrease. The blue-chip stocks have declined sharply. In the long term, inflation will affect the stock market due to the changing monetary policy. Currently, inflation around the world is quite high. This issue in Vietnam is under control.
Vietnam has controlled inflation quite effectively. The State Bank of Vietnam has not yet changed its monetary policy in the short term, at least from the first six months to nine months of the year, so the pressure on inflation in the country is not too high for the State bank to adjust policy.
However, major central banks have suffered rising inflation and they are oriented to tighten policy, which will affect the valuation of the stock market. But this has not yet occurred in Vietnam, so it is expected that when the conflict ends, the oil price will reduce and inflation will fall and not put pressure on monetary policy, thereby minimizing risks affecting the stock market.
How do you forecast the VN-Index results in 2022? At the end of 2021, some people said that the VN-Index in 2022 will close at 1,800 points, in your opinion, is that target positive or not? How do you predict the cash flow in the near future?
I think that in the first quarter of 2022, the stock market will not be affected by cash flow, but the market has been hit by problems related to inflation and Russia-Ukraine conflict.
In the first quarter, the cash flow has remained and many investors still opened large accounts. This factor explains why Vietnam’s stock market has not dropped. In the past month, while the world market has fallen by nearly 10%, Vietnam has only decreased by 3-4% because cash flow still supports the market.
From now to the annual meeting of shareholders at the end of April, the market still has the opportunity to grow. I do not expect a target of 1,800 points because this is a challenge for VN-Index in the current context. However, VN-Index may reach the threshold of 1,550 to 1,600 points due to maintenance of the cash flow and the increase in the number of new investors.
From the second quarter of 2022, factors related to the reopening of the world economy, the recovery of Vietnam’s economy, the cash flow may be invested in the major sectors. At this time, the risk to the stock market may be higher, especially amid the USD interest rate rising about 1-2 times.