VinaCapital expert proposes not to allow business leaders to comment, “cheer” stock prices

At a seminar on the stock market held by Nguoi Lao Newspaper this morning (May 25), Ms. Nguyen Hoai Thu, Member of the Board of Directors, Executive Director of the Public Securities and Bonds Investment Division – Investment Management Company. Vincapital Fund manager said that most foreign investors have long-term investment vision and goals. They are optimistic and believe in the long-term development of the Vietnamese stock market.

According to Ms. Thu, the attractive factor comes from the economy which has been growing steadily and high. Before the epidemic, Vietnam’s economy maintained a growth rate of about 6.8% for 10 years, after the epidemic, economic growth is forecasted at 6.5% for many years to come. Economic development took place in the context of stable interest rates, well-controlled inflation, positive trade balance, and good foreign exchange reserves.

In addition, the profit growth of listed companies is forecasted to grow by 15-20% in the coming years. During the epidemic period, the profit growth of listed companies is attractive compared to other regions and markets in the same marginal bloc, even compared with emerging markets.

The economic factor continues to strengthen, with a large population, attractive demographics, more than 70% of the young population of working age, labor costs are still cheap, attractive half of China. The important thing is that the economy is shifting strongly in the private sector, modernization in the whole economy, consumption as the main pillar of the economy, the growth of retail consumption over 12% for many years.

The current Vietnamese stock market with the recent decline started from the event that happened in a few companies. This purification, to foreign investors, they understand is good for the long term. Since the beginning of the year, foreign investors have sold a net of 130 million USD, but if counting from the beginning of April – when the market started to fall, this block has bought 170 million USD.

“It proves that foreign investors consider the Vietnamese market to be cheap at the moment. Currently P/E is attractive in the region of 10.6 times, lower than the 5-year average, usually occurs with a probability of 2.5%. Bloomberg forecasts that, if Vietnamese corporate profits are still growing 18-19%, the market is in an attractive valuation area. From the perspective of foreign investors, both short-term and long-term are attractiven”, said VinaCapital expert.

Regarding recommendations, firstly, Ms. Thu raised the issue of enhancing transparency, control and supervision mechanism for market members and listed companies.

“The Stock Exchange and the Securities Commission need to have a mechanism to monitor and detect abnormal fluctuations, ask enterprises to explain, or even request to stop trading for investigation if serious violations are detected.

For example, there is a continuous ceiling increase chain if there is nothing special in production and business. There are two reasons, one is insider trading, disclosure of material information, or price inflation share for small groups to profit“, said Ms. Thu.

Second, Ms. Thu said that there should be clearer regulations on insider trading information, which is important, and it is necessary to devise a mechanism for this information to create fairness for investors.

She mentioned that in the foreign market, if this type of information is shared before it is published, the violator may be subject to criminal penalties. While in Vietnam, the mechanism is not strict leading to listed companies, possibly because of close relationships, shared relationships with a group of target groups before being announced to the public, leading to unfairness and distortions. unusual price movements.

Third, may consider not allowing company insiders to comment on the share price of the shares they participate in management.

“In foreign countries, the Board of Directors or the executive board of a business are not allowed to say that their shares are cheap, you invest with us for sure x2, x3 accounts, this is oriented, implies sharing information. some important news“, Mrs. Thu said.

Fourth, it is necessary to separate research analysis activities from proprietary consulting. There are 2 points, self-employment consulting does not affect analysis and report writing. In contrast, analysts do not receive material, inside information to bring information to the market.

Fifth, the bond market is closely related to the stock market. Along with cleaning up securities, do the same with bonds. In the long term, developing stocks and bonds is a long-term investment channel.

Ms. Thu mentioned, individual investors currently participate in the market at a large rate, over 90%, previously more than 80%. In the last few months, foreign investors have come back to participate strongly, the ratio is around 10%, individuals have decreased slightly. The participation rate of individuals is overwhelming institutional investors. This is unusual for markets around the world. The market developed healthily when speculative activities were reduced and prices inflated.

Regarding advice to investors, expert VinaCapital said that when you do not have the skill to enter and exit the market, you should identify risky securities channels, which require expertise and research time.

“Do not invest according to friends, listen to 3 words, very risky. It is necessary to identify in the financial market there is specialization. This is like when building a house, a house designed by yourself with hiring an architect, the results are different. Investors do not have a lot of time and expertise, so they should use social resources that are professional investment funds“, Mrs. Thu said.