Sunday, November 25, 2007

World Bank says Vietnam's Stock Market Enters Stable Phase

The World Bank in its updated report on the economic development in the Asia-Pacific region has forecast Vietnam’s economy will grow at sustainable level of over 8 per cent this year and 2008 and its stock market has entered a stable period, state media reported recently.

As of September, the local market had 206 listed companies with the market capitalization of US$22 billion, or 32.4 per cent of the country’s GDP, much lower than India (45 per cent) and China 70 per cent. The listed companies recently released remarkably good earnings reports, which dissolved concerns over the collapse.

However, Vietnamese shares, which were much inflated by exaggerated earnings news, will likely deflate by listing of big names including Vietcombank, the report said. Local market watchdogs must ensure transparency in providing news to protect investors, the press said.

With sustainable economic growth fuelled by industrial production and exports and lower-risk foreign debts accounting for 31 per cent of GDP, a growing indirect foreign investment inflow will pour into Vietnam, particularly in the stock market, it noted.

Vietnam’s leading securities broker, Saigon Securities Incorporation forecast that VN-Index will likely to remain flat in November and to be bullish in December.

“The market will likely be bullish thanks to market-boosted news as listed companies will release full-year earning report and plans for 2008,” a SSI expert said.

In October, VN-Index remained flat, up only 2 per cent over late September, and 17.6 per cent from early August, while HASTC Index strongly rose by 20 per cent and 46.5 per cent, respectively.

Vu Bang, Chairman of State Securities Commission said the local stock market now has 210 listed companies with the market capitalization accounting for 40 per cent of the country’s GDP [50 per cent if government bonds included]

So far listed companies have raised VND60 trillion (US$3.75 billion), tripling last year, and 300,000 accounts opened, tripling 2005, Band said.

At least 50 new stocks will debut on both two bourses by the end of 2007, including shares of big groups in transport, aquiculture, oil and gas, construction materials and chemicals sectors. (Dau Tu Chung Khoan)