Tuesday,  Sep 25, 2018,08:23 (GMT+7) 0 0
VN-Index predicted to beat 1,130 points
Phuong Thao
Monday,  Feb 26, 2018,17:00 (GMT+7)

VN-Index predicted to beat 1,130 points

Phuong Thao

HCMC – Stocks are seen continuing their rallies this week, driving the VN-Index up to the recent high of around 1,130 points.

According to Bao Viet Securities Company, big-cap stocks would continue sending the index of the Hochiminh Stock Exchange up early this week. However, the market may encounter volatility when the index rises to the above level.

The VN-Index resumed its strong rises around the Lunar New Year (Tet) holiday, closing up 2.49% last Friday. In the three-day trading week last week, the index gained 4.1%.

If the two trading days at the start of the previous week were added, the market would have surged 9.9% over the last five trading days, regaining almost all of the losses from the beginning of the month. The index has been up 12% so far this year and 54% from a year ago.

Financials remained attractive, led by VCB, CTG, BVH and MBB. Meanwhile, Eximbank (EIB) saw its capitalization slumping VND500 billion on Friday after the bank’s leadership had admitted that one of its former branch executives is on the run overseas after having appropriated over VND245 billion in savings of a VIP client.

Energy stocks, including GAS, PLX and PVD, also pushed the index higher, recovering from the selloff of stocks in the sector last Thursday.

The Ministry of Finance recently proposed raising the environment protection tax on fuels by roughly VND1,000 per liter for gasoline and VND500-1,100 a liter for other fuels.

If approved, the new tax would go into force from July 1, 2018. The environment tax hike is designed to prop up State budget revenue since import tax collections have fallen due to the fuel import tax being down from 20% to 10% under free trade agreements.

Viet Capital Securities Company in a report estimated the import tax has dropped by VND700 per liter while the environment tax has increased by VND1,000 per liter in the fuel price formula. Therefore, the fuel price could be around VND300 higher.

“As the overall change in fuel price is small, we expect the impact on inflation might be insignificant. We think this tax hike will have no impact on PLX and PetroVietnam Oil Corporation as the environment and import taxes are passed on to end-users. Besides, there will be no impact on sales volumes of these distributors as fuels are an essential goods,” it said.

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