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Vietnam’s stock market: Prospect for 2022

Vietnam’s stock market: Prospect for 2022

Wednesday 09, 02 2022
In 2021, Vietnam’s stock market achieved notable results despite the impact of COVID-19. The prospect for 2022, in the long-term, is bright for the stock market, with the support that comes from macro factors.

Vietnam’s stock market in 2021

Despite the impact of COVID-19 in 2021, Vietnam’s stock market achieved certain positive results, attracting investors internationally and domestically.

Stock indexes continuously hit peaks

VN-Index and major stock indexes on HOSE continuously conquered new peaks. VN-Index reached 1,500.81 points on November 25, 2021, the highest in 21 years of operation.

Stock indexes continuously hit peaks

Market liquidity increased sharply

In 2021, the market's liquidity continuously reached new records, the average trading value and volume reached over 21,593 billion VND and 737.29 million shares, up 247.27% in value and 120.43% in average volume compared to 2020.

Foreign stock transactions accounted for 7.39% of the total market's transactions. The total transaction value of foreign investors reached 798,821 billion VND, accounting for 7.39% of the total trading value of both buying and selling directions of the whole market.

Listed capitalization increased by 43.06% compared to the end of 2020

The listed market capitalization reached more than 5.8 million billion VND, equivalent to 92.77% of GDP in 2020, increased by 43.06% compared to the end of 2020.

There were 46 enterprises with a market capitalization of billion USD on HOSE

As of December 31, 2021, there had been 46 enterprises with market capitalizations of more than 1 billion USD on HOSE. Among these, there are three enterprises with a capitalization of over 10 billion USD, including Vingroup Corporation (VIC), Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB), Vinhomes Joint Stock Company(VHM).

market capitalization

Capital mobilization through the stock market increased more than 5 times compared to 2020

The total value of capital mobilized through additional issuance on the stock market of HOSE is estimated at more than 49,605 billion VND with 72 cash-invoice issuances, equivalent to an increase of more than 5 times in value compared to 2020.

The number of F0 investors increased sharply

The number of F0 investors entering the market in 2021 constantly increased. The total number of domestic investors trading accounts has exceeded 4 million, equivalent to about 4% of the population.

Prospect for 2022

In 2022, Vietnam's stock market is forecasted to be positive, thanks to the recovery of the macroeconomy and the health of businesses.

With the global demand recovering, Vietnam's exports will maintain positive momentum. FDI inflows will recover in 2022, while the State Bank will continue to ease monetary policy. In particular, the forecasts expect that the motivation from the Government's support policies in 2022 will be stronger and more effective than in 2021.

In 2022, cash flow will probably return to groups of stocks with good fundamentals such as banks, logistics, seaports, etc. Cash flow will also go to industry groups with good business results, but inflows have not been strong during the past six months.

Banking stocks are having an optimistic outlook for 2022. Currently, compared to the market average, this group still recorded good growth. Although the third quarter of 2021 was heavily affected by the COVID-19 pandemic, overall, the banking stocks group still recorded a high growth rate. Besides, credit is forecasted to grow strongly in 2022.

Banking stocks

Next is the group of personal consumption. After the economy opens and recover, people's income level will be stable, helping to improve consumption demand.

As for the real estate group, real estate has a large division, businesses with large capital scales will benefit. 2022 is also an opportunity for large-scale enterprises to acquire projects in the context of the COVID-19 pandemic, many businesses lack capital and lack cash flow. In addition, many real estate businesses will also benefit from public investment in 2022.

Aside from the positive factors, the market also faces risks. The biggest risk is still the pandemic because of the concern about the COVID-19 variants. Besides, the market is also faced with countries simultaneously tightening monetary. In case the monetary tightening policy is too rapid and strict, like in 2018 and 2019, the cash flow will likely rush out of the market and into other investment channels.

Another risk comes from foreign investors. Foreign investors continuously withdraw their net and reduce the ownership rate to 17%. If foreign investors do not return to the market, the divestments and equitization will be more difficult to succeed.

In addition, the financial leverage ratio and the proportion of individual investors make up the majority of the market risk. The market will depend on individual investors and will have stronger fluctuations.

 

Source: The Ministry of Industry and Trade

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