The Vietnamese stock market is expected to make a remarkably strong recovery in 2022, fueled by expectations of a period of strong growth after vaccines are widely distributed and the economy fully reopens. 

 

However, the market may be "more sensitive" to negative information, especially as stocks have been priced much higher than before the COVID-19 pandemic.

 

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.

 

On the last day of trading in 2021, the benchmark VN-Index on the Hồ Chí Minh Stock Exchange (HoSE) climbed 12.31 points, or 0.83 per cent, to end at 1,498.28 points.

 

The index rose nearly 35.74 per cent in 2021, opening the year at 1,113.77 points and hitting the historical peak at 1,511.68 points in November.

 

With these results, according to data from StockQ, the Vietnamese stock market was ranked in the top seven markets with the strongest increase in 2021. The six other best performers were Abu Dhabi, Argentina, Iceland, Austria and the Czech Republic.

 

In Asia alone, the Vietnamese stock market ranked highest in growth with a rise of 36 per cent, followed by Taiwan at 29 per cent and India at 23 per cent.

 

In developed markets, the growth was more modest. South Korea rose 3.6 per cent, Japan 4.9 per cent and Singapore 9 per cent. Notably, stock indexes in Hong Kong, Malaysia and the Philippines recorded negative growth.

 

In its investment strategy report for 2022, Việt Dragon Securities Co (VDSC) forecast that the VN-Index will range from 1,340-1.730 points this year, based on the 17-per cent earning-per-share (EPS) growth scenario.

 

According to VDSC, the high profitability of the securities investment channels in 2021 attracted a large amount of local individual investors. VDSC said that this will continue in 2022, with monthly average new accounts of about 150,000. The average liquidity is forecast to range from VNĐ30 trillion to VNĐ35 trillion per session (US$1.3 million to 1.5 million), up 36 per cent compared to the previous year.

 

The company forecast that the market may become “more sensitive" with negative information such as inflation, complicated COVID-19 developments and global geopolitical fluctuation.

 

“In Việt Nam, we expect average inflation of 3.8 per cent in 2022, due to the increase in the prices of food and housing. Deposit interest rates can gain slightly, but we believe that the increase is insignificant,” VDSC said.

 

“The COVID-19 pandemic is progressing unpredictably with the appearance of new strains. However, most countries are choosing a herd immunity approach to recover and resume economic activities. Omicron, the latest variant, although spreading rapidly, is showing a less serious influence on human health,” it said.

 

“VDSC expects COVID-19 may go from being a pandemic to becoming an endemic disease,” it said

 

Securities companies are strengthening capital mobilisation to increase margin lending activities, which means that there will be additional new money to flow into the market. Outstanding margin loans in 2021 reached VNĐ144.4 trillion, the highest level so far, it said.

 

Trần Văn Dũng, chairman of the State Securities Commission, said the development potential of the market remained large as the Government continued to promote an equitisation process of State-owned enterprises and the development of corporate bond markets.

 

“The government has been speeding up the COVID-19 vaccination rollout and relaxing disease control measures to resume economic activities,” he said.

 

“Although there are many positive signals for the stock market this year, there are still some risks abound. Specifically, the growth rates of profits and revenues of enterprises are showing signs of slowing down. The interrupted global supply chain, as a result of COVID-19, continues to restrain trading activities,” he said.

 

As of December 28, 2021, market capitalisation of the stock market reached VNĐ7.73 trillion, up 46 per cent compared to the end of 2020, equivalent to 122.8 per cent of GDP in 2020 and 92 per cent of GDP in 2021.

 

Last year also witnessed an exposing number of investment accounts. In 11 months of 2021, there were 1.3 million domestic investors accounts and 4,133 foreign investor accounts opened, bringing the total number of securities accounts in Việt Nam to 4.08 million, up 47.3 per cent compared to the end of 2020. In particular, the number of domestic investors accounts for 99 per cent of the total amount of accounts.

 

Regarding capital mobilisation, in 11 months of 2021, the total capital mobilisation value in the stock market was estimated at VNĐ444.94 trillion, an increase of 23 per cent compared to the same period last year. — VNS