The attraction of the Vietnamese stock market

VCN- The Vietnamese stock market and mortgage market often moved in the same direction in the past, but recently, this rule no longer exists. Why does the Vietnamese stock market move so strongly in the opposite direction?
Varying forecasts for stock market, plenty of opportunities for investors Varying forecasts for stock market, plenty of opportunities for investors
Retail businesses Retail businesses "transform" during the pandemic season
5054-1153-chung-khoan-viet-1545884929443557871889-crop-1545884938055287972462
Vietnam's stock market is changing positively. Photo: Internet

Moving upstream

The Covid-19 pandemic is still a factor that strongly affects the world economy. In addition, the US-China trade tensions, monetary and the fiscal policies of each country and the US presidential election that will take place in November will be factors that strongly affect the stock market.

The world stock market is not moving positively. For example, the US stock market since the beginning of the week has not started very well. At a stock trading session on September 23, the Dow Jones decreased by 524 points, equal to 1.92%, the S&P 500 also decreased by 2.38% and the Nasdaq Composite fell by 3.02%. The US stock market fell for many recent sessions, meaning all three indices have declined significantly since the beginning of the month.

In Asia, major indices such as Hang Seng, Nikkei 225, Shanghai Com and Singapore Straits Times also sank into the red.

Meanwhile, Vietnam's stock market is changing positively when it surpasses 900 points - the most difficult resistance level for many months. As of 10 o'clock on September 24, the VN-Index was firmly at 912 points. Since the beginning of September, the VN-Index has increased by more than 3%.

According to many experts, investor sentiment in the Vietnamese stock market has been much more stable, even amid the negative movements of the pandemic, the investment cash flow will not weaken but also become stronger. The stability of the Vietnamese stock market is attracting the attention of foreign investors. In the stock trading session on September 23, foreign investors have been net buyers for a fourth consecutive session. This is a very positive signal absent positive factors affecting the market.

Waiting for foreign capital flow

In a recent analysis report by VNDirect Securities Company, the world's leading stock index research and analysis organisation, Morgan Stanley Capital International (MSCI), announced it would delay upgrading Kuwait to an emerging market (Emerging Markets - EM) until the semi-annual market review and classification period in November.

Therefore, Vietnam will have to wait until as early as November to become the country with the largest share in the frontier markets (FM) of MSCI.

According to the MSCI report, the proportion of Vietnam in the MSCI Frontier Markets Index and MSCI Frontier Market 100 Index can jump from 17.2% and 12.2% to 25.2% and 30%, respectively.

VNDirect said Vietnam will benefit the most when Kuwait is upgraded to an emerging market because Vietnam's proportion is currently the second-largest in the MSCI Frontier Markets Index and MSCI Frontier Markets 100 Index (after Kuwait).

Based on data on September 14, 2020, VNDirect estimates Vietnamese stocks can absorb US$120 million from ETFs currently simulating the two MSCI's frontier market indices mentioned above (assuming net assets of ETFs remain stable at current levels). The scale of foreign capital inflows into Vietnam might be even larger, up to US$200-210 million, if additional contributions from active funds are included. This foreign capital inflow will strengthen the cash flow in the market as well as create an exciting sentiment among domestic investors.

VNDirect said foreign funds track net-buying frontier market indices of Vietnamese stocks in the MSCI Frontier Markets Index and MSCI Frontier Markets 100 Index's portfolio after Kuwait was upgraded to an emerging market, especially large-cap stocks with a high proportion such as VNM, VIC, VHM, MSN, VRE, HPG and VCB.

According to VNDirect, in a positive scenario, if Vietnam completes the implementation of a new stock exchange system in the first half of 2021, it may be put on the watch list to upgrade to an emerging stock market of MSCI in its annual market review in May 2021. After that, Vietnam may be upgraded to an emerging market in MSCI's annual market review in May 2022, and the upgrade will officially take effect a year later in June 2023.

In an optimistic scenario, Vietnam's stock market could be announced to upgrade to the secondary emerging market of FTSE during the market assessment period in September 2021.

By Bao Minh/Kieu Oanh

Related News

Fiscal policy needs to return to normal state in new period

Fiscal policy needs to return to normal state in new period

VCN - To recover the economy during and after the Covid-19 pandemic, fiscal policy has been flexibly and promptly managed, becoming a solid foundation to help businesses and the economy gradually overcome difficulties. After nearly 5 years, although there are still difficulties, the economy is gradually returning to a high growth trajectory. In that context, it is necessary to let fiscal policy return to normal state.
Risks for the economy when cash flow has not yet been put in to production and business

Risks for the economy when cash flow has not yet been put in to production and business

VCN - Investment channels in Vietnam have a lot of potential, but financial and banking expert Dr. Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, said that cash flow into production and business is still modest, leading to risks for the economy.
Vietnam to achieve credit rating as set target

Vietnam to achieve credit rating as set target

VCN - With the current credit rating scale, Vietnam is getting closer to the target of raising the investment rating grade by 2030 set out in the National Credit Rating Improvement Project by 2030.
Note for businesses when converting green and digital

Note for businesses when converting green and digital

VCN - Green transformation and digital transformation have been identified by businesses as a mandatory path if they want to develop long-term. However, there are many issues that businesses need to pay attention to right from the start of the transformation if they want to achieve efficiency.

Latest News

Banks increase non-interest revenue

Banks increase non-interest revenue

VCN - Slow credit demand and fierce competition have forced banks to seek ways to increase non-interest revenue, especially when there is a lot of support from the digital transformation of the entire banking system.
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN – In order to achieve goal of strictly managing public debt and maintaining security and safety of the national financial system in 2025, it is necessary to ensure the borrowings and repayments of public debts is within the approved estimate; closely monitor public debt indicators to ensure that they are within the ceiling and warning thresholds approved by the National Assembly.

More News

Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

VCN - On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws. Concluding the session, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized the need for the Government to direct the drafting body and relevant agencies to collaborate closely to finalize a persuasive and widely supported report, ensuring the quality of the draft law for the National Assembly's consideration and decision.
Transparency evates the standing of listed companies

Transparency evates the standing of listed companies

VCN - According to the Hanoi Stock Exchange (HNX), the number of companies placed under warning, control, or restricted trading on the listed and registered markets has increased over the past two years compared to 2022.
State-owned securities company trails competitors

State-owned securities company trails competitors

Contrary to the outstanding performances in the banking sector, the securities subsidiaries of major banks have yet to fully leverage their potential, despite numerous inherent advantages.
Strengthening the financial “health” of state-owned enterprises

Strengthening the financial “health” of state-owned enterprises

VCN - The state economy plays a key role in the socio-economic development process, but it is necessary to strengthen the financial health and competitiveness of state-owned enterprises (SOEs).
U.S. Treasury continues to affirm Vietnam does not manipulate currency

U.S. Treasury continues to affirm Vietnam does not manipulate currency

VCN - In its latest report, the U.S. Department of the Treasury has positively assessed Vietnam's monetary policy, reaffirming that Vietnam does not engage in currency manipulation.
Exchange rate fluctuations bring huge profits to many banks

Exchange rate fluctuations bring huge profits to many banks

Net profits from the foreign exchange trading segment of many banks have gained positive results thanks to a strong USD/VNĐ exchange rate fluctuations this year.
A “picture” of bank profits in the first nine months of 2024

A “picture” of bank profits in the first nine months of 2024

VCN - Pre-tax profits for banks during the first nine months of 2024 remained positive, exceeding 200 trillion VND, solidifying the sector's position as a market leader.
Many challenges in restructuring public finance

Many challenges in restructuring public finance

VCN - Restructuring public finance is an important step to improve state financial management, ensure resources are allocated reasonably and effectively, contributing to the country's sustainable development. In addition to the achieved results, the process of accelerating public finance restructuring also faces many pressures.
Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

Tax declaration and payment by e-commerce platforms reduces declaration points and compliance costs

VCN - E-commerce platforms that declare and pay taxes on behalf of traders not only help to reduce the number of tax declaration points but also reduce the cost of compliance with administrative procedures for the whole society because only one point as the e-commerce trading platform implements tax deduction, payment and declaration on behalf of tens, hundreds of thousands of individuals and business households on the platform.
Read More

Your care

Latest Most read
Banks increase non-interest revenue

Banks increase non-interest revenue

VCN - In the first 9 months of 2024, the group of banks leading in profit has focused on increasing the ratio of non-term deposits (CASA) to help reduce operating costs, resulting in positive credit growth.
Monetary policy forecast unlikely to loosen further

Monetary policy forecast unlikely to loosen further

It will be difficult for the State Bank of Vietnam (SBV) to further loosen monetary policy due to a rising USD/VNĐ exchange rate pressure, experts said.
World Bank outlines path for Vietnam to reach high income status

World Bank outlines path for Vietnam to reach high income status

The World Bank (WB) has released a report which explores how Vietnam can upgrade its participation in global value chains to become a high-income country by 2045.
Strictly control public debt and ensure national financial security  2025

Strictly control public debt and ensure national financial security 2025

VCN - According to the plan for borrowing and repaying public debt and foreign debt of the country in 2025, the total borrowing demand of the Government in the year is expected to be at VND 815,238 billion, an increase of 20.6% compared to the Government'
Revising the title of a draft of 1 Law amending seven finance-related laws

Revising the title of a draft of 1 Law amending seven finance-related laws

On November 19, 2024, the Standing Committee of the National Assembly (SCNA) discussed amendments and refinements to the draft of a law revising seven existing finance-related laws.
Mobile Version