Vietnam stock market posts world’s highest gains
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Vietnam’s benchmark VN-Index has surged 34.51 percent in the first half of this year, marking the highest increase in the world.
Abu Dhabi was second with its stock market rising 33.06 percent, followed by Austria with 32.65 percent, according to China-based stock database StockQ.
With an increase in five consecutive sessions in the past week, VN-Index reached 1,374.05 points last Friday, up 4.06 percent from a week earlier. Vietnam ranked third among the most active markets in the past week after Argentina and Hungary, according to the Chinese stock database.
Abundant cash flow, constantly increasing number of new investors, and immediate measures to reduce congestion has propelled the stock market.
The number of new investors entering the stock market in May scaled a new monthly record, with over 113,000 new trading accounts opened.
The VN-Index’s continuous growth has broken most forecasts made by domestic securities companies.
Citing geopolitical risks and complicated developments of the Covid-19 pandemic, the Viet Dragon Securities Company (VDSC) had forecast that the VN-Index could reach a high of 1,272 points, equivalent to a year-on-year increase of about 15 percent.
Other securities firms like Ho Chi Minh Securities Corporation (HSC), Vietcombank Securities (VCBS) and Viet Capital Securities (VCSC) made similar forecasts of the index reaching 1,250-1,280 points.
The index has surged rapidly, pushing the price-earnings (P/E) ratio to 18.8. While this figure is still much lower than other Southeast Asian countries, including the Philippines, Indonesia and Thailand, it shows Vietnam’s stock market is coming of age.
In a newly released strategy report, VNDirect Securities said: “The market is no longer undervalued but also not too high, meaning that businesses need more time to improve their results and pull the valuation ground to a more attractive level.”
Questions & Answers
Q.What factors have driven the significant growth in Vietnam's stock market this year?
What factors have driven the significant growth in Vietnam's stock market this year?
Abundant cash flow, a consistently increasing number of new investors, and immediate measures to reduce congestion have all propelled the stock market. These factors contributed to the VN-Index's surge.
Q.How did the actual performance of the VN-Index compare to the forecasts made by domestic securities companies?
How did the actual performance of the VN-Index compare to the forecasts made by domestic securities companies?
The VN-Index's continuous growth significantly exceeded most forecasts. Companies like VDSC and HSC had predicted much lower highs, such as 1,272 points or 1,250-1,280 points respectively.
Q.What is the current P/E ratio for the Vietnamese stock market, and how does it compare to other regional markets?
What is the current P/E ratio for the Vietnamese stock market, and how does it compare to other regional markets?
The market's P/E ratio has reached 18.8 due to rapid surges. While this indicates the market is maturing, it remains much lower than that of other Southeast Asian countries, such as the Philippines and Indonesia.
Q.What was the highest monthly record for new investor accounts opened recently?
What was the highest monthly record for new investor accounts opened recently?
May saw a new monthly record for new investor accounts opened in the stock market. During that month, over 113,000 new trading accounts were created.
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