Expert predicts bullish market after Tet

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Vietnam’s two stock exchanges will continue their recovery and trading volumes will increase after Tet (Lunar New Year) festival, says one expert.

“Typically, there are a lot of savings after Tet.  So, it is likely that they will be pumped into the stock market,” said Tran Thien Ha, general director of An Phat Securities.

“Moreover, what has happened on the market recently shows that the market is reacting to macroeconomic news more precisely. Meanwhile, the economy here and overseas are expected to remain optimistic,” he said.

Ha also said listed companies’ business plans for this year, which will be announced from March through shareholders’ meetings, will support post-Tet transactions.

Ho Chi Minh City and Hanoi stock markets will re-open on February 22.

The VN-Index on the Ho Chi Minh Stock Exchange increased 1.4 percent to close at 507 on February 12, the final trading day before Tet. In Hanoi, the HNX-Index ended the lunar year at 164.66, up 0.86 percent.

But Ha predicted the market would not jump too high

“The VN-Index will experience a new ‘wave’ after Tet, but ‘the wave’ won’t be so big.”

Ha expects the index to reach 650 points by the end of 2010, a 30-percent year-on-year increase.

While some listed firms which make products for Tet will outpace others in terms of January-February earnings, Ha advised investors to carefully look into corporate capacity that brings in sustainable profits.

“In the first two months of the year, many listed companies’ earning results are typically ‘modest’ as they don’t benefit from the festival.

“This is a seasonal factor, and it does not mean that their capacities are worsened. So, investors should research companies’ ‘real health’ and not miss out on attractive options,” he said.

Though some investors are concerned that high inflation may return, Ha felt it would not be a problem.

“The government has shown its determination to stabilize the macro-economy and control inflation this year. Besides, the basket of goods used to calculate the consumer price index (CPI) has increased from 78 to 572, reflecting goods prices more closely. This would make investor sentiment more stable,” he said.

Source: Dau Tu Chung Khoan

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