Analysts on the investment company Dragon Capital expect that the Vietnam stock index (VN) will exceed 1,300 points next yr as a result of increasing profitability of enterprises.
Vietnam Stock Exchange-listed corporations are expected to record a 34% year-on-year increase in total profits within the second half of this yr, mainly as a result of a low starting base. The overall growth forecast for this yr is about 4%, said Le Anh Tuan, head of Dragon Capital’s equities department.
However, on one other occasion he said that growth could reach 25% by 2024. He added that because the economy regularly recovers, the stock exchange may even move on this direction.
It is subsequently likely that the VN Index will exceed many individuals’s expectations. While most expect the index to succeed in 1,300 points, the actual level could possibly be much higher.
For your information, the Vietnamese benchmark VN-Index reached an all-time high of around 1,500 points in April last yr, then dropped to around 900 points in November and is currently around 1,200 points.
Mr. Tuan also noted that among the aspects that can support the recovery of the VN-Index are lower rates of interest and exchange rate stability. Currently, the VN Index has broken out of its lows and entered a recovery phase as 4 of 5 aspects converge. The one factor that also requires attention is improved corporate profit margins.
However, there are particular risks that must be taken into consideration, and one in every of them is the withdrawal of foreign investors from the market. Currently, there are still many uncertainties out there, resembling the tendency to withdraw foreign capital and earnings results that won’t meet expectations. Therefore, it’s most significant for investors to find out their investment strategy.
Mr. Tuan revealed that it’s difficult to estimate an actual amount for the VN Index since the index includes corporations which have the potential to significantly increase the worth of their shares, but there are also corporations that will face a decline in the worth of their shares.
Investors must realize that the most effective time to take a position is when there may be potential risk because when market conditions are excellent, stock valuations are likely to be high. Currently, there are still many uncertainties out there, resembling the tendency to withdraw foreign capital and earnings results that won’t meet expectations. Therefore, it’s most significant for investors to find out their investment strategy.
For those willing to take risks, it is crucial to know the risks they might face when the market corrects or declines. Meanwhile, investors with a long-term strategy can discuss with the approach to periodic and regular investments.
