CATEGORIES

© Copyright 2004; Hanoitimes - Economic and Urban Newspaper;

The tribune of Hanoi People’s Committee

Publication Permit: 29/GP-CBC

Editor - in - Chief: Nguyen Thanh Loi

Managing Editor: Ta Thu Giang

Email : thugiang@hanoitimes.vn

Head Office: 21 Huynh Thuc Khang Street, Dong Da District, Hanoi

Branch Office: 221 Tran Phu Street, Ha Dong District, Hanoi

WORDS ON THE STREET 70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Brokerage warns investors of banking stocks
Ngoc Thuy 07:27, 2018/08/05
"It is not a bad idea to be conservative and cautious and retain some cash," said the Viet Dragon Securities Company (VDSC) in its latest investment strategy report.
Assuming that the business environment of the banking industry will be less favorable from the second half of 2018 onwards, it is less likely that banking stock prices can perform as well as in the first part of the year, warned VDSC.  
 
Illustrative photo.
Illustrative photo.
Conservative and cautious

Monetary policies have been changing in order to tackle rising inflationary pressures worldwide, stated VDSC in its latest investment strategy report .

The US, the EU and the latest, Japan, are attempting to end their quantitative easing programs. "This is not supportive for equity markets," the brokerage said.

Moreover, as the US Federal Reserve (Fed) has increased rates, emerging market currencies have depreciated in part due to rising US bond yields.

"Accordingly, large outflow of money out of emerging and frontier markets has been evident. Vietnam is no exception. For markets with positive dynamics, capital may eventually return. However, considering the uncertainty surrounding the US President Donald Trump and the trade war tensions, we believe the process will take time," assessed VDSC.

"Overall, we are seeing less liquidity in the market, and a certain diversion in corporate earnings results. Therefore, we think that we are in an environment where stock picking is what matters," the report continued.

"It is not a bad idea to be conservative and cautious and retain some cash," said the report. 

"There is no need to rush in to buy because it will probably take time for stock markets to digest the headwinds that we are now faced with," VDSC added.

Cautious about banking stocks

Banking stocks recorded a 38% after-tax profit growth in the second quarter. However it appears that the results were not as good as they were in the first quarter.

Assuming that the business environment of the industry will be less favorable from the second half of 2018 on, it is less likely that banking stock prices can perform as well as in the first part of the year. Therefore, investors should be cautious about banking stocks, VDSC analysts said.

According to VDSC, the banking sector is the largest component of Vietnam's various stock indices. Therefore, banking stocks have a huge impact on the direction of the market given the fact that they can draw large inflows or outflows of money. 

Among sectors which poorly performed in the first half of 2018 was oil and gas. Results were the worst with more than a 91% year-on-year decrease in after-tax profit. VDSC expected that 2018 will be a bad year for oil and gas companies. However, given that there are some new big projects that will go into construction in 2019, oil and gas stocks could be worth looking at. 
Comments
Other news
17:51, 2025/01/07
Vietnam prioritizes agriculture and renewable energy for access to green loans
The move is part of the government’s effort to accelerate economic restructuring and build resilience to climate change while protecting the environment.
16:49, 2025/01/06
Vietnam GDP expands by 7.09% in 2024
The 2024 growth rate is considered positive amidst global uncertainties and domestic challenges such as natural disasters.
14:39, 2025/01/04
Vietnam stock market set to accelerate in 2025: Experts
Stable macroeconomic fundamentals, ongoing institutional reforms, and favorable monetary policies will be positive for corporate earnings.
16:31, 2025/01/02
Vietnam stock market aims for emerging status by 2025: Finance minister
By the end of 2024, the benchmark VN-Index reached 1,266.78 points, up 12.11% from 2023.
15:33, 2025/01/02
Vietnam set to extend VAT cut for six months
This measure is expected to accelerate the recovery of production and business activities, which will ultimately benefit the state budget and the economy as a whole.
21:29, 2024/12/31
Vietnam’s credit growth projected to expand by 16% in 2025
Growth must put operational safety first, and channel credit to productive business sectors, priority areas, and growth-driving industries.