HCMC – The VN-Index, a benchmark for Vietnam’s stock market, is projected to rise to 1,460 points this year given a positive outlook for the market.
This forecast was shared during a webinar, titled “Seeking opportunities amid challenges” and organized today, January 5, by Phu Hung Securities Corporation (PHS).
PHS utilized the price-earnings (P/E) valuation method to make this projection, with an average P/E ratio of 14x. The positive outlook is based on expectations of a robust recovery, including a 15% rise in the average earnings of listed companies and a GDP growth rate of around 6.5%.
Nguyen Thi My Lien, head of Analysis at PHS and a panelist at the webinar, pointed out supportive macroeconomic factors in 2024. Vietnam’s GDP might expand by 6.2%, driven by factors such as low interest rates and an expected 30% spike in international tourism, leading to a projected 12% increase in retail goods and services.
The International Monetary Fund (IMF) has also forecast 5.8% GDP growth for Vietnam in 2024, surpassing regional levels. The Vietnamese Government has set a growth target range of 6% and 6.5% for the year. Optimistic global economic prospects and domestic investment support are expected to help Vietnam achieve its economic growth goal.
The private and public sectors are predicted to make significant recoveries, particularly in public investment, in line with the nearing completion of the mid-term public investment plan for 2021-2025, said Lien.
Le Anh Tri, branch director of PHS in District 3, HCMC, expressed optimism about the Vietnamese stock market’s recovery in 2024. “Investors need additional motivation not just from macroeconomic factors but also from market policies and products to be more active in their trading.”
The anticipated launch of the KRX system, Vietnam’s transition to secondary emerging market status, and economic recovery are expected to further boost the market’s upward momentum.
The KRX system is a technological platform designed to enhance the management and oversight of Vietnam’s securities trading. It will apply modern technology to enhance the management of stock trading in Vietnam, enabling same-day trading settlement (T+0), facilitating short selling, and streamlining payment processes.
When this system is in place, PHS predicted, an average trading value on the Hochiminh Stock Exchange and Hanoi Stock Exchange in 2024 could reach VND21.75 trillion.
However, risks to the market’s recovery and Vietnam’s economy, such as oil price volatility, hardships faced by the real estate market, and the impact of mounting corporate bond debts in 2024, may negatively affect market sentiment and valuation.
