 SSI forecasts 2010 stock market potential
Intellasia - 3/10/2010 1:30:44 PM
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Saigon Securities Inc (SSI ) on Monday
announced a report on potential of Vietnam’s stock market in 2010. SSI
analysts are however cautious while forecasting the post-crisis economy
in 2010 as the macro-economic policies can be changed to reach the 2010
GDP growth target of 6.5% and curb inflation at 7%.
As per the report, the credit market will become sustainable in Q2 and
Q3 and return to the tense status when the big-sized bond issues breaks
out, which will reduce the liquidity of banking system. By that time,
basic rate could be raised to the highest level of 10% by late 2010.
Meanwhile, the stock market could start a sustainable growth period and
inflation will show sustainability signals.
In the list of shares subject to SSI's research, 2010 Price to Earnings
(P/E) ratio of the stock market will average at 11 times while the EPS
growth in 2010 will be -7%. Stock players should consider investment in
such fields of banking, basic consumer goods, seafood, natural rubber,
information technology, and real estate.
* Banking sector: State Bank of Vietnam recently approved commercial
banks to apply interest rates based on negotiations on medium and
long-term loans, so the banks’ revenue from loan rates can increase
thanks to sustainable credit growth and surges in marginal profit. But a
rise in lending rates could make lower the borrowing demand and the
government could issue the credit tightening up policies towards the
goal of curbing 2010 credit growth at 25% and inflation at 7%. Bank
shares are good option for long-term investment, typically STB of
Sacombank and VCB of Vietcombank.
* Construction material production: the government has given priorities
to develop infrastructure to attract long-term foreign investment so the
demand for construction materials in this year is expected to be very
high. However, enterprises will have to make big efforts to join the
tenser competition and spend much on fixed cost.
* Roof tile: the government is step by step deleting backward production
facilities, leading to the potential shortage of granite in domestic
and global market. However, these producers will have to suffer from
high loan rates and limits in the government’s investment in this
sector. SSI proposed investors to pump capital in the codes of VHL, DTC
and VIT.
* Food and brewery industry: the dairy industry could grow by 15-20%,
confectionery 10-15%, vegetable oil up at least 10% thanks to increasing
retail prices and a surge in consumption demand. The imported milk
products continue losing position against domestic brand names in
Vietnamese market.
In addition, according SSI’s proposal, investors should pour capital
into VSH (electricity sector), HVG, MPC and ABT (seafood processing),
DMC and IMP (pharmaceutical sector), SJS, DIG, BCI and ITC (property
sector), GMD and VSC (port logistic), FPT (technology).
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