Positive year seen for stocks, but 2016 shadow hovers
ANALYSTS CAUTION that volatile international events of 2016 might have unpredictable impact on Vietnam.
Vietnamese shares may advance in 2017, analysts say, cautioning that market conditions can get volatile with international events of 2016 continuing to exert unpredictable impacts on Vietnam. Both market indices ended 2016 on a positive note, helping them advance over 2015’s closing levels.
The benchmark VN Index finished 2016 at 664.87 points, up 14.8 per cent over 2015. The southern market index had been forecast to reach 680 points by the end of the year.
The HNX Index on the Hanoi Stock Exchange closed at 80.12 points, almost unchanged after a year.
Some analysts say 2017 will be the year that the benchmark VN Index will tip new highs on prospects of stable macroeconomic growth and investor confidence bolstered by positive international market conditions.
“We expect that the market will grow with increases in score levels, market liquidity and capitalisation in 2017” because “the macroeconomic conditions are stable, GDP growth improves and companies will likely make more earnings,” said Le Nguyet Anh, ACB Securities Co’s head of market analysis.
“Businesses with higher earnings could be those in real estate, consumer and banking sectors while energy firms’ profits will move sideways or grow slightly compared to the drop in 2016.”
The future is bright for energy stocks after the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers in mid-December reached an agreement to cut output levels in order to stabilise the oil market and lift crude prices.
US crude West Texas Intermediate finished 2016 trading at $53.72 (Bt1,930) a barrel, up 100 per cent from its 13-year low of $26.21 on February 11. Brent crude also doubled to close at $56.82 a barrel.
Ngo The Hien, deputy head of market analysis at Sai Gon-Ha Noi Securities Co (SHS), said that the stock market in 2017 will move in a positive direction because the country’s economic growth for 2017 is seen higher than last year, the regulatory system will be improved and new products such as derivatives and covered warranties will be introduced. The listing and equitisation of large-cap state-owned enterprises and private corporations will also bolster investor confidence in 2017 as they will find trading opportunities for high-quality products when they are available on the stock market, according to analysts.
