That is the sharing of Ms. Ta Thanh Binh, Director of the Securities Market Development Department, State Securities Commission (SSC) with the media when the stock market has had major fluctuations recently.
The intrinsic factor of securities is still good, investors need to be alert to fake news and rumors
Madam, Vietnam’s stock market is in an unpredictable situation, investor sentiment is very cautious before many recent cases and rumors. How do you assess the stock market movements in the first quarter and now?
Ms. Ta Thanh Binh: Following the rally of 2021, Vietnam’s stock market continued to maintain a positive upward momentum in the first months of 2022. The VN-Index gained well and set a new position at 1,528.48 points.
However, from March until now, the market is having a correction, moving sideways and decreasing slightly in the context of risk factors from the periphery such as the US Federal Reserve (FED) raising interest rates, or Conflict suddenly broke out in Russia – Ukraine. External factors have increased global inflation pressure, especially the price of input materials, especially energy. Those factors that affect Vietnam’s economic growth prospects are no exception, although they are not considered too large. Besides, the domestic stock market is also partly affected by news of events at some specific enterprises, or some rumors and unfavorable news in the real estate market, etc. , especially individual investors are cautious and increase profit-taking activities.
The movements of Vietnam’s stock market are similar to those of international markets. Signals about the possibility of central banks of other countries applying tight monetary policy to deal with inflation and political tension between Russia – Ukraine also affected the psychology of stock investors around the world. Many European and American stock markets and some Asian markets also fluctuated strongly and tended to decrease.
However, the positive outlook of the economy, as well as the growth of profits of listed companies in 2022 are still important supporting factors to help the stock market avoid deep corrections. For the whole first quarter of 2022, the VN-Index decreased by -0.4% in points, while the average trading value increased 1.6 times over the same period in 2021. Besides, the number of accounts Investors’ accounts continued to increase strongly, especially in March, the number of newly opened individual investor trading accounts recorded an increase of 271,619 accounts. Accumulated to the end of March 2022, the number of individual investor accounts reached nearly 5 million accounts, officially reaching the target set by the Government of 5% of the population before 3 years.
Reporter: Although the market is forecasted to not be able to escape the sideways trend in the short term, however, in the long term, Vietnam’s stock market is still considered at an attractive level. In your opinion, what are the fundamental macroeconomic and internal factors that will support the growth market in 2022?
Ms. Ta Thanh Binh: Although the fluctuation range and tempo may be larger, Vietnam’s stock market in 2022 still has room for growth as many positive factors continue to be maintained.
Accordingly, despite the complicated developments of the Covid-19 epidemic in the first months of the year, up to now, it has been better controlled, economic activities have been restored, domestic consumption has recovered, and domestic consumption has been restored. The gradual reopening of international tourism will promote the prospect of a stronger recovery of the economy. Officially announced data also showed that GDP growth in the first quarter increased strongly again, reaching 5.03%.
At the same time, interest rates are likely to remain stable at low levels to support economic recovery. In 2022, the State Bank will continue to manage interest rates in a stable direction, so cash flow is likely to continue to be attracted to the stock market. Besides, the pressure on inflation is real and cannot be subjective, but Vietnam still has a lot of room to control in the set target.
Along with that, the Government has also mastered many fiscal and monetary policies to promote economic growth. As for fiscal policy, the Ministry of Finance has submitted to the Government for approval many solutions in the field of tax, customs, … to support people and businesses. For the securities sector, many policies have been timely supported by the Ministry of Finance for businesses and the market and have proven effective in the context of the recent significant impact of the Covid-19 epidemic.
Regarding the internal factors of the stock market, the business results of enterprises are still positive in the context of the strong impact of the Covid-19 epidemic. As of March 31, 2022, 1,293/1,609 listed companies and large-scale public companies registered to trade on UPCoM have announced their audited financial statements for 2021, equivalent to 80% of the total number of companies. company reported. In which, 1,156/1,293 companies reported profits, accounting for 89% of the total number of companies that made reports, 88% higher than the same period in 2020. If only listed companies are counted, there are 598/632 listed companies reporting profits in 2021, accounting for 95% of listed companies making reports, higher than the number of listed companies reporting profits in 2020. is 584/632, or 92%. With the prospect of economic recovery, business results of enterprises on the stock market are expected to continue to maintain a high growth rate in 2022.
In addition, Vietnam’s stock market still has many supporting factors for “special specialties” compared to many regional markets, such as the expectation of upgrading to emerging markets, equitization, and divestment. capital is promoted.
Cash flow in the market in 2022 is expected to continue to be positive from both domestic and foreign investors. When global risks are reduced, foreign investors will look to markets with potential and unique factors such as Vietnam. As for domestic cash flow, despite the sharp increase in recent years, Vietnam’s stock market still has a lot of potential to attract the participation of domestic investors.
In addition, the valuation of Vietnam’s stock market is still attractive compared to many regional markets. According to Reuters, the 12-month forecast P/E ratio of the VN-Index at the beginning of March 2022 reached about 13.3 times, lower than the level of 16-17 times in ASEAN markets.
However, besides the positive factors, Vietnam’s stock market can still face many risks and challenges. Accordingly, in the world, there are still many potential complex and risky factors such as: a new strain of Covid-19; economic stimulus packages cut; interest rates tend to increase; inflationary pressure; geopolitical tensions;… For domestic factors, despite the positive outlook, Covid-19 is still an uncertain factor, inflation pressure, input material prices, energy prices increased sharply, … also directly affects production costs and profits of enterprises.
Strictly handle those who spread rumors and spread fake news
In the context that the market is very easily affected by outside information or incidental information, or false rumors, do you have any recommendations for investors?
Ms. Ta Thanh Binh: The Prime Minister has issued two consecutive notices in which he has directed many measures to ensure stable, healthy, transparent, safe and sustainable development of the stock market and corporate bond market. As for the management agency, the Ministry of Finance is also very interested in and strongly directs the SSC and functional units in enhancing the stable and healthy development of the stock market. Recently, a series of violations have also been strictly handled by the management agencies. Typically, the competent authorities have prosecuted, arrested and detained many subjects for manipulating the stock market, or making mistakes in the issuance of private corporate bonds.
The drastic directions and actions of the Government, the Ministry of Finance, competent agencies and management agencies, we believe, will create favorable conditions for the stock market to develop healthier and more sustainable in the future. future. Under the drastic and close direction of the leadership of the Ministry of Finance, in addition to solutions to support the development of the market, the State Securities Commission will continue to promote supervision, inspection and handling of violations in the market; at the same time, improve the quality of goods and the quality of information disclosure in the market. On the other hand, the SSC will continue to closely coordinate with relevant authorities to correct and strictly handle violations, as well as review and handle those who spread and spread fake news and false rumors. The truth in the market…
In that context, investors need to be really calm, analyze and thoroughly evaluate the global and domestic macro situation, as well as the production and business situation of each enterprise. As we have analyzed above, Vietnam’s stock market 2022 is still evaluated positively, therefore, investors should choose stocks with good fundamentals, benefit from the economic recovery process, and avoid Trend investment, high-risk speculation. Besides, in the context of many fake news and rumors as recently, investors need to closely monitor information at official information sources, to avoid unwanted psychological impact leading to mistakes. in investment.
Thank you ma’am!
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