Ms. Ta Thanh Binh, Director of the Securities Market Development Department under the State Securities Commission
Following the uptrend of 2021, the Vietnam stock market continues to maintain positive momentum in the first months of 2022. The VN Index has set a new position at 1,528.48 points. However, from March until now, the market has been adjusting, moving sideways and decreasing slightly in the context of risk factors from the periphery such as the US Federal Reserve raising interest rates, or the conflicts Russia – Ukraine, said Ms. Ta Thanh Binh.
However, she said peripheral factors have increased global inflationary pressure, especially the pressure on the price of input materials, especially energy, which has affected Vietnam's economic growth prospects. In addition, the domestic stock market is also partly affected by news of events at some enterprises, or rumors and unfavorable news in the real estate market. All these unfavorable factors have made investors increase profit-taking activities.
In the first quarter of 2022, the VN Index decreased by 0.4 percent in points but the average trading value increased 1.6 times compared to the same period in 2021.
According to Ms. Ta Thanh Binh, although the fluctuation amplitude and rate of volatility at which the price of a stock increases or decreases over a particular period may be larger, Vietnam's stock market in 2022 still has room for growth because many positive factors continue to be maintained such as the coronavirus epidemic under control, economic recovery, better domestic consumption, resumption of international travel activities, interest rate level at a low level to support economic recovery. That will promote a stronger recovery prospect for the economy and cash flow is likely to continue to be collected. attracted to the stock market.
Regarding the internal factors of the stock market, the performance of the enterprise is still positive. As of March 31, out of 1,293 listed companies and large-scale public companies registered for trading on the UPCoM exchange to publish audited financial statements for 2021, 1,156 companies reported profits accounting for 89 percent, said Ms. Ta Thanh Binh.
Stock investors should be alert to fake news and rumors
Additionally, out of 632 listed companies, 598 of them have been reporting profits, accounting for 95 percent. With the prospect of economic recovery, enterprises’ outcomes on the stock market are expected to continue to maintain a high growth rate in 2022.
Besides, Vietnam's stock market still has good supporting factors compared to many regional markets, such as the expectation of upgrading to an emerging market, promotion of equitization and divestment, attractive valuation of the Vietnamese stock market as the international news agency Reuters announced that the 12-month forecast P/E ratio of the VN Index as of early March is about 13.3 times, 16-17 times lower than in other markets in the ASEAN region.
Recently, management bodies have imposed punishments on violators. For instance, those who have been manipulating the stock market or making mistakes in the issuance of private corporate bonds have been prosecuted, arrested or detained. Ms. Ta Thanh Binh believed that such drastic directions and actions will create favorable conditions for the stock market to develop healthier and more sustainable in the future.
The Prime Minister has issued two consecutive dispatches directing the adoption of different measures to ensure the stable, transparent and sustainable operation of the stock market and corporate bond market. Under the PM’s direction, the Ministry of Finance was determined to ask the State Securities Commission and responsible agencies to work for the stable and healthy development of the stock market, said Ms. Binh.
She revealed that in the near future, the SSC will continue to promote supervision, inspection and handling of violations in the market; at the same time, the quality of goods and the quality of information disclosure on the market will be announced publicly. Above all, authorities will continue correcting and strictly handling violations, as well as throwing the book at those who spread fake news and false rumors to cause chaos in the market.
She advised in that context, investors need to be really calm, analyze and thoroughly evaluate the macro situation in the world and in the country and enterprises’ performance carefully. Investors should choose stocks with good fundamentals, benefit from the economic recovery, avoid trending investments and high-risk speculation.
