Expert: Banks seen leading VN-Index to 1,000 points

The local stock market will receive positive support from macro-economic information in the country, with the banking sector expected to drive the VN-Index of the Hochiminh Stock Exchange to the 1,000-point mark, said a securities expert.

Speaking to the press last week, Nguyen Duy Linh, director of Saigon Securities Incorporation’s individual customer brokerage division, said investor concerns over the U.S. Federal Reserve’s interest rate hikes or the trade war between China and the U.S. had been priced into the recent downtrend.

After strong net withdrawal due to global uncertainties, foreign investors have shifted to the buying side, with their net buying value hitting a two-month high on September 11. This is a positive signal for the market, Linh was cited by vietstock.vn as saying.

Further, the market will see more supportive information from the macro economy. Last month, the nation reported numerous bright notes such as the US$4.7 billion trade surplus and the stabilized exchange rate between the Vietnam dong and the greenback.

The Government continued to put inflation under control and gross domestic product (GDP) growth remained strong. Therefore, listed enterprises may have good business results given such favorable conditions.

According to the expert, large caps on the Hochiminh Stock Exchange may enjoy after-tax profit growth of up to 26% this year. From a technical perspective, the main index may reach 1,000 points and approach a new resistance of 1,022 points after recent plunges.

In the long term, the market will be supported by divestment plans of State-owned enterprises and the Government’s efforts to transfer local equities from a “frontier” to an “emerging” status.

Banks would remain bellwethers in the upcoming uptrend as the sector reported better profits than others in the first six months of 2018, followed by stocks in the steel and consumer sectors, Linh predicted.

The VN-Index spent another day trading in positive territory last Friday, closing up 0.34% and extending its rising streak to the sixth straight session. The index rose each day last week for a 2.5% gain, bouncing back from a 2.1% pullback in the previous session.

The market was pushed higher by modest gains in a trio of the largest listed companies, namely lender VCB, property giant VIC and dairy enterprise VNM. FPT, a technology company, rose to a three-month high after the company had announced that its after-tax profit in the January-August period jumped 19% year-on-year.

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