Securities in 2019: Large scale, strong fluctuation

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Vietcombank Securities expects that the big money source will return to the market in 2019. Photo: N. Hien

The above assessment was given on the Outlook report 2019 which has just announced by the Vietcombank Securities Company Limited (VCBS).

According to VCBS, the macroeconomic context still remains with some bright points, despite fluctuations of the world’s economy and politics.

VCBS said that in 2019, the investment flows into Vietnam Securities market, both in direct or indirect manner, will be at high rate; exchange rates will not reduce more than 3% in 2019; the mobilizing interest rate will not fluctuate over 50 core points.

Meanwhile, the Securities market will clearly express the function of long-term capital mobilization for Vietnam’s economy, but it will come into depth and reality.

The raising of interest rates by the FED, together with the prospect for increase in the mobilizing interest rate in next year will put pressure on money flows in the market as well as investors’ expectations, but it will promote the differentiation among securities on the market in the completion to attract money flows based on the growth potential and valuation rate according to basic elements.

In addition, it is likely that there will be a wave of enterprises listing for the first time on two stock exchanges with diversified capitalization scale in the coming period, in which focusing on real estate sector and construction materials sector.

Regarding policy changes, VCBS said that the focus in 2019 would be in the directions of reducing and simplifying Government’s business conditions, thereby opening up a more realistic growth prospect on the entire economy.

In the draft Law on Securities (revised) which has been presented by the Ministry of Finance and the State Securities Commission for public comments and expected to be submited to the National Assembly in October 2019, the separation between business registration procedures and licensing of conditional business activities will likely help dissolution and merger and consolidation among securities companies to be more exciting, thereby indirectly promoting the general development of units providing investment support services in the market.

After experiencing 2018, a year with many changes, VCBS expects that in 2019, the market size will have more positive changes. With large corporations in the country implementing capital divestment in the coming time, such as VEA, Lilama, Viglacera ..., investors expect that big money source will return completely to the market in 2019.

Previously, this process was quite boring in 2018. In addition, the successful signing of the CPTPP agreement will help some sectors have more competitive advantages in export activities, such as seafood and textile and garment. However, there are still many challenges such as pressure for curbing inflation and unpredictable fluctuations from the US, China or Europe.

From the above factors, although we expect a positive scenario for the securities market in 2019, VCBS believes that the main indices will fluctuate over quite a large range, about 300-350 points above the Department’s three assumptions.

The first is that FED's interest rate hike is likely to continue in 2019.

The second is that it will be difficult for the US and China to reach a comprehensive trade agreement next year.

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The third is that Vietnam's economy will continue to maintain its growth momentum along with good control of inflation and exchange rate despite being under more pressure.