Cash flow strong this year: analysts

The Party Central Committee’s Inspection Commission’s decision to take disciplinary actions against Dinh La Thang, who is now Politburo member and Secretary of the HCMC Party Committee, and other former executives of the National Oil and Gas Group (PetroVietanm), will not have any negative impact on the stock market, analysts say.



The stock market in the last two years has been affected by many negative factors, including Brexit, the US presidency and the FED’s decision on raising prime interest rate.

However, the impact on the market was insignificant, according to Nguyen The Minh, a senior executive of the Saigon Securities Incorporated (SSI).

Some bad news about the oil & gas and banking sectors has been released this year, but there is not the slightest hint of the news on the market.

Meanwhile, the recent government decisions show the increasing high transparency of the government. That is good for foreign investors, and it is the goal that the government is striving for. The banking sector is now also appreciated for its transparency.

Minh believes that the decision by the Party Central Committee’s Inspection Commission will have a short-term impact only. In April, the market reflected some negative impacts with the VN Index decreasing from 730-735 points to 717 points now.

The stock market in the last two years has been affected by many negative factors, including Brexit, the US presidency and the FED’s decision on raising prime interest rate.

The margin has returned to a safe level, so heavy damages to the market and sharp falls will not occur.

Regarding the ‘sell in May’ concern, what happened in April in recent years showed that the ‘sell in May’ principle is no longer true. The cash flow is especially strong this year and the average liquidity this year is higher than in previous years. Therefore, ‘sell in May’ is not likely to happen.

In general, Minh believes that the foreign cash flow to the Vietnamese stock market will be strong in May. The upcoming National Assembly’s session is believed to put forward policies to support the plan to upgrade the market status. Therefore, Minh cannot see any negative factors in May.

Vietnam stock market has experienced the first third of 2017 with the most positive happenings in recent years. By the end of April 25, VN Index had increased by 5.3 percent, while the HNX Index by 7.9 percent compared with the beginning of the year. The VN Index once successfully exceeded the threshold of 730 points, the highest peak since 2009.

Foreign investors had purchased 880.9 million shares by the end of April 25 on both the Hanoi and HCMC bourses, worth VND36.867 trillion, while they had sold 914.2 million, worth VND31.273 trillion.

Kim Chi / vietnamnet