Five highlights of the stock market in 2017

In 2017, the stock market will welcome a series of "big companies". Photo: N.Hien.

Commenting on the stock market in 2017, experts of Vietcombank Securities Company (VCBS) said that growth opportunities always exist.

Accordingly, in 2017, the growth opportunities of the stock market revolve around five main highlights. First, the supply on the market is forecast to be improved in both quality and quantity based on the orientation of the government to continue to push equitization and listing of State enterprises. In 2017, investors awaited the listing after the initial public offering of Petrolimex, VEAM, Vinatex, Vietnam Airlines or businesses preparing for IPO such as Vietjet Air, PV Power, Mobifone, etc.

Along with that is the floor transition of some corporations with the largest market capitalization after the listing time on Upcom as Habeco (BHN), Viglacera (VGC), and Aviation Airports Corporation (ACV). Investors are also interested in the timing and level of commitments of implementation in the state divestment roadmap in 10 large enterprises at SCIC that have been approved by the Government. In particular, after the failed state divestment implementation in VNM, investors are waiting for the reform of procedures to ensure the purpose of preventing losses of State assets and businesses continuing to grow after divestment.

Second, investors’ perspective in the market, in 2017, saw VCBS recognize the support from the Central Bank to maintain the easing policies like the European Central Bank, Central Bank of Japan, and Central Bank of China. Accordingly, in terms of positive views, experts expect in the next year Vietnam will still benefit from foreign capital flows especially from Asian countries such as China, Japan, Taiwan (China), and South Korea based on the capital cost factors in these countries being relatively low compared to Vietnam and the competitive advantages of Vietnam on political stability; and inflation and exchange rates are under control. The Vietnam market also had relative good resistance to the uncertainties in the world in the past year.

Third, the schedule to deploy the derivatives market also promises to bring new products. As planned, the derivatives market will be officially put into operation in the first quarter of 2017. It is still too early to predict the welcomed degree of investors with this new product. However, experts of the VCBS believe that the orientation in preparing of human resources, technical infrastructure, and the legal system of the agency is still fully on track and can be expected to become a highlight in 2017.

Fourth, the appearance of a series of "big companies" on the stock market from sectors like beer, aviation services, and real estate etc., would significantly alter the contribution proportion of the sectors to the general index basket. This will lead the investment funds to restructure their portfolio to closely follow the overall index movement. Accordingly, opportunities in the newly listed large-cap stocks mean that there will be more pressure on the current large proportion stocks in the index basket such as banking, oil and gas, food, and consumption goods.

Finally, from November 1 2016, Circular No 115/2016/TT-BTC on guidance for the initial sale of shares, and the management and use of proceeds from the equitisation of 100 per cent State-owned enterprises transforming into joint stock companies took effect. Notably, this circular stipulates share auctions on the stock exchanges will be automatically traded on the Unlisted Public Companies Market (UPCoM) within 20 days of the auction date. This regulation also helped speed up the process of listing, and equitisation of SOEs.