The index hits a historical peak of 1,500.81 points on November 25. (Photo: VNA)
Hanoi (VNA) – The COVID-19 pandemic ensured that 2021 was a chaotic year for the economy in Vietnam, but there was an area that withstood the storm: the stock market. The market rose strongly to reach an all-time peak despite many downward movements.
The VN-Index repeatedly set new records in 2021, with market capitalisation rising sharply, liquidity continuing to explode, and the number of investors increasing significantly.
The VN-Index repeatedly set new records in 2021 and hit a historical peak at 1,500.81 points on November 25. VN-Index rose more than 35% in the year while HNX-Index surged 125% against 2020.
The market capitalisation grew strong, reaching 7.7 million USD, which is relevant to the increase of 46% last year and close to 123% GDP in 2020. Notably, 1.5 million new securities accounts were opened in 2021, bringing the total number to 4.3 million.
Tran Hai Ha, General Director of MBS Securities Company, forecast that the number of new investors joining the stock market will continue in 2022, and the figure may reach 10 million accounts in total.
He said that with the participation of investors and the transfer of cash flow from bank accounts to securities accounts, the market is likely to witness record-setting trading sessions of over 3 billion USD.
“It is forecast that in the first quarter of 2022, the VN-Index will witness a new peak of the Vietnamese stock market and many stocks will surpass the historic peak since their listing,” Ha added.
Stock market will continue to prosper
Minister of Finance Ho Duc Phoc sounds the opening gong at first trading session of the Vietnamese stock market at the Hanoi Stock Exchange on January 1. (Photo: VNA)
Vu Bang, former Chairman of the State Securities Commission, said that the above-mentioned forecast is reasonable and he believes that the stock market this year will improve on 2021 in both supply and demand. Bang added that this is very important for the domestic economy.
He contributed positive results to the implementation of vaccine strategy and the adoption of flexible adaptation and effective control of the COVID-19 pandemic approach of the Government to the recovery of the stock market.
According to Bang, the health and recovery momentum of the economy are reflected in the growth rate improvement. He predicted that the interest rates at banks will not decrease much, but the money supply from credit disbursement and liquidity in the economy will improve. Foreign direct investment and registered capital were better than in 2020, and Vietnam's credit rating is still at the BB level.
He also praised the Government's supporting package policies in the past year. These support packages will boost growth and have long-term impacts on the economy as well as the stock market in 2022, he said.
Hoang Viet Phuong, head of the Research & Advisory Centre at SSI Securities Company said that the 6-6.5 % gross domestic product growth and 4% increase of CPI target for this year is feasible provided that the economic stimulus package is effectively disbursed. Vietnam's GDP growth may surpass 7% in a best-case scenario.
“Based on the rosy prospect of Vietnam's economic recovery, we have a positive view of the stock market in 2022. However, the market may be cautiously in the first half of the year, due to concerns about high inflation, rising interest rates, weak domestic consumption and low corporate profit growth,” she said.
Illustrative image. (Photo: VNA)
Tran Van Dung, chairman of the State Securities Commission (SSC), said that the COVID-19 pandemic is still very complicated and unpredictable. The emergence of new strains may affect the supply chain, causing the price of input materials to increase, affecting the profit of listed companies.
Therefore, it will be necessary to closely monitor these signals when assessing the stock market this year, he said.
To develop the stock market sustainably, the SSC has submitted to the Ministry of Finance an outline of the market development strategy for the next 10 years, Dung said. It will pay attention to quality and sustainability while promoting orientation in both bond and stock markets, as well as corporate governance./.
