Hanoi (VNA) –Although May featured a downtrend for Vietnam’s stock market, market capitalisationstill rose sharply and the market still has a good outlook in the long term,according to Chairman of the State Securities Commission of Vietnam Tran VanDung.

He said the stock market grew strongly in thefirst quarter of 2018 when the benchmark VN-Index on the HCM Stock Exchangebroke the record set in 2007 to hit 1,204.33 points on April 9, up 22.4 percentfrom the end of 2017. However, from mid-May to May 23, the market recordedtrading sessions mixed with strong increases and decreases.

VN-Index dropped by 18 percent from the recordon April 9 to 985.92 points on May 24.

Dung attributed the nosedive in May partly to afall in the global stock market due to the world economic and politicalsituation. Though trade tension between the US and China eased, investors stillfeared a trade war between these two biggest economies of the world. Anothernegative impact is the possibility of the US Federal Reserve and the EuropeanCentral Bank’s hiking of interest rates.

Foreign investors began to withdraw money fromemerging markets, including those in Southeast Asia. Stock markets around theworld, from the US, Europe to Asia, have posted declines since January 2018,mostly down between 7 and 10 percent. 

Meanwhile, the Vietnamese stock market grewstrongly for a long period of time and has entered a fluctuation period, hesaid, elaborating that the VN-Index surged 48 percent in 2017 and continued torise by 17 percent in Q1, so investors tended to sell shares to gain profitsand wait for suitable opportunities to continue investing. 

That trend coincided with the decrease of theglobal market, thus leading to a bigger impact on the domestic market, henoted.

“Although the VN-Index dropped, market cap stillsoared dramatically because in the first half of 2018, many big businesses werelisted in the market, especially Vinhomes JSC,” Dung said.

He added total market cap reached 3.846quadrillion VND (more than 168 billion USD), up 9.4 percent from the end of2017 and equivalent to 76.8 percent of the country’s GDP.

As of May 23, foreign investors sold 4.229trillion VND worth of shares on both HCM Stock Exchange and the Hanoi StockExchange. However, they still poured 615 million USD and 450 million USD intothe market in April and the first half of May, respectively.

This shows foreign investors still have highhopes for the market and are ready to disburse money when appropriate, Dungsaid.

He added with good macro-economic growth, stablefinancial-monetary and foreign reserve markets, decreasing lending interestrates, positive performance of listed companies and no signs of foreigninvestors’ withdrawal, the stock market of Vietnam can still expand in the future.-VNA