Finance and securities analysts are not overly concerned about stock market prospects in 2019, despite the recent downward trend.
2018 was a tough year for securities investors, though many of them made a profit. Vietnam, which was the fastest growing market in the first months of 2018, turned bearish on the last days of the year.
Analysts say that short-term factors are not promising for the stock market.
HSBC Private Banking (HPB) predicted that global GDP will slightly decrease to 2.6 percent in 2019 and 2.4 percent in 2020. China’s policy on continuing the fiscal policy acceleration and the US’s continued growth are expected to help prolong the growth cycle of the global economy.
Fan Cheuk Wan from HPB commented that that investors feel overly pessimistic about an economic recession. She predicted that the global stock market would maintain a 10 percent growth rate.
Vietnamese analysts think that the world’s economy is entering the final stage of the growth cycle, so 2019 won’t be an easy year for the global stock market. Vietnam’s economy needs to be cautious with their investments in 2019.
The interest rate increases and credit tightening can be seen in many countries and Vietnam as well.
As interest rates are on the rise in developed economies, the year 2018 witnessed the biggest wave of foreign investors withdrawing their capital from Vietnam.
Rong Viet Securities, after analyzing the US FED’s moves, believes that the interest rate is not likely to rise sharply. The capital flow may come back to Vietnam, but it will take time because investors need to recover.
In such conditions, according to Rong Viet Securities, the key to success will be choosing the right securities to invest in.
“There will still be specific opportunities in a lackluster market. Thus, choosing good stocks to invest in will be the most important factor for investors in 2019,” the company said in a report.
Rong Viet predicted that the total revenue and profit of 61 listed firms, which make up 61 percent of total capitalization value of the HCMC and Hanoi Stock Exchanges, would increase by 14 percent and 21 percent, respectively, in 2019.
Asked about the securities to buy in 2019, a broker mentioned two groups of shares. First, shares of companies with good production and business base, with a high liquidity level and low leverage rate. The second includes shares of companies which enjoy benefits from FTAs (free trade agreements) and trade disputes.