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Friday,  Apr 27,2018,15:47 (GMT+7)

Banking stocks to drive market higher, experts say

Phuong Thao
Monday,  Dec 25,2017,21:15 (GMT+7)
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Banking stocks to drive market higher, experts say

Phuong Thao

HCMC – Most bank stocks are entering a short-term correction after their recent strong rallies, but securities experts still expect such securities to continue advancing in the first months of 2018.

Nguyen Hong Khanh, head of analysis at Sacombank Securities Company (SBS), said on tinnhanhchungkhoan.vn website that the market has resumed its uptrend. After the correction, the VN-Index is poised to rise to new highs again.

Notably, the market saw no negative impact from recent quarterly rebalancing by exchange traded funds and the U.S. Federal Reserve’s interest rate hike.

However, Tran Anh Tuan from Vietcombank Securities Company (VCBS) said the VN-Index would miss the 1,000-point level in the last week of 2017. Though the main index still sees a positive outlook in the short term, the market will be obstructed by poor cash flow.

Securities enterprises may fail to improve margin lending as large banks have met their credit growth targets. However, in the first quarter of 2018, the main index is expected to beat new highs as listed firms will announce their 2017 financial reports and banks will continue boosting lending activities, Tuan said.

The VN-Index traded in the green for almost the entire session last Friday, closing up 0.66%. After starting on Monday with the best day of the year, up 2.5%, trading during the rest of the week was choppy, with the index up 1.9% for the week, breaking a two-week losing streak.

Lender VCB jumped to a record high, extending a 15% surge over the last seven days amid investor speculation the bank will announce strong earnings in the last quarter.

According to Khanh from SBS, the banking sector reports the biggest market capitalization on the stock market and causes significant impact on the economy. More banks are going to list on the market next year while their operations will be strengthened to meet higher standards and deal with bad debts.

Besides, bank stocks are attractive to both foreign and domestic investors. Though many lenders have increased sharply, banks remain the key drivers in the upcoming index rises early next year, the expert said.

According to Tuan from VCBS, the banking sector has made positive contributions to the recent rallies. In 2018, bank stocks will be shining thanks to better credit growths, focusing on the retail segment.

Furthermore, the bad debt handling process will go smoothly given supportive policies from the Government and the State Bank of Vietnam. The banking system is projected to run healthy operations and make quality growth in the future, Tuan said.

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