Official predicts rally in Q4

A recovery in the Vietnamese stock market in the fourth quarter of this year and a strong rebound in July next year has been predicted by vice chairman of the National Financial Supervisory Commission Le Xuan Nghia.
He told a conference in the capital yesterday the domestic market had recently been affected by negative information from the global market.

“However, the European market will not collapse and a double crisis will not happen,” Nghia said.

Meanwhile, the Asian market would continue to be the economic centre of the world in the next 5-10 years, Nghia said.

“The toughest period has passed, with inflation and interest rate having declined,” he said, estimating inflation in October would increase by only 0.5-0.6 per cent against last month.

Interest rates might also be reduced to 14-15 per cent next year, he said.

Nghia noted that many potential foreign investors showed interest in the Vietnamese stock market but low corporate value and a weak payment system was stopping them from investing.

In addition, bad debts in commercial banks kept increasing, he said. The bad debt ratio jumped from 2.16 per cent last year to 3.13 per cent as of June.

“In the context of tightened monetary policies, the situation will get worse,” Nghia said.

It would take time and a lot of money to clear bad debts, but the Government should focus on restructuring the banking system by applying a new financial supervising scheme and pushing mergers and acquisitions, he said.

At the same time, the exchange rate would put the greatest pressure on the stock market. The gap between loans and deposits in foreign currencies remained large, around US$7.5 billion.

“Demand for foreign currencies will become greater without flexible measures. The State Bank will only be able to intervene in exchange rate until the end of this year,” Nghia said.

In the securities market, some emerging stocks could generate fresh profits for investors, such as Becamex Infrastructure Co (IJC), Phu Nhuan Jewelry (PNJ), PetroVietnam Southern Gas Co (PGS) and PetroVietnam Drilling Corp (PVC), Vietcombank Securities Co analyst Tran Minh Hoang told the conference.
Vietnam News

Tags: vietnam stock, Vietnam stock market, VNindex