The VN-Index target announced by Vietnamese securities companies is lower than that of the fund, at 1,400-1,500 points, but the fund sees that 1,700 points can also be achieved by the end of the year...
“Shark” Pyn Elite Fund has just made important comments about the Vietnamese stock market. Accordingly, the Vietnamese stock market index has been increasing steadily and slowly since the bottom of autumn 2022.
The fund expects better results from listed companies this year and predicts that the country's interest rates will remain moderate. Towards the end of the year, it can be assumed that the US Dollar will start to weaken, in which case the Vietnamese Dong could appreciate and positively affect stock market sentiment.
The stock market “hard factors” also include the introduction of the exchange’s new KRX trading system and the removal of the prepayment rule. The VN-Index target announced by Vietnamese securities companies is lower than the fund’s, at 1,400-1,500 points, but the fund sees 1,700 points as achievable by year-end.
Pyn Elite Fund reported a negative performance last month, while nearly half of its portfolio was in banking stocks. According to the fund, the VN-Index fell 8.5% in the first half of April, but then recovered and fell 5.8%. PYN Elite fell 8.2% as the Vietnamese dong weakened and investors took profits from banking stocks.
The VND’s 2.1% depreciation against the US dollar has reinforced fears of interest rates. However, the weakening of the VND, as well as other currencies in the region, reflects the recent strength of the US dollar. At the end of the month, deposit interest rates increased by 10-50 basis points, but interest rates remained low. The top 10 stocks with the largest proportion in the fund’s portfolio include SCB; HDB; CTG; ACV; MBB; TPB; DNSE; SHS; VHC; FPT, of which half are banking stocks, accounting for 47.4%.
The fund stock of the month is PLX, a 68-year-old company that is a leader in fuel distribution. The company owns just 28% of gas stations nationwide but has 50% of market share. Many of PLX’s 4,790 gas stations are located in urban centers. Electric vehicles are dominating the global market, but in Vietnam, their market share is still less than one percent, which enhances PLX’s growth prospects. Just under 5% of the population owns cars, but that number is growing rapidly, along with fuel demand.
PLX's profit increased by 73% year-on-year in Q1, and full-year profit is expected to increase by 36%. The government is planning to change fuel prices, which will be an important driver for PLX's growth in the coming years.
Earlier, the fund manager also said that the appreciation of the US dollar had a negative impact on other currencies of developing countries in Asia, and the euro had weakened. The Vietnamese dong also lost value and political speculation in Vietnam had triggered a strong sell-off in the stock market in the first trading sessions of the week.
“However, the outlook for economic growth and earnings growth of listed companies this year is excellent. The stock market is very attractively priced relative to earnings growth. Vietnam’s interest rates have fallen and the banking liquidity situation is favorable. The large fluctuations in the stock market are undesirable, but do not change our expectations for the positive development of the Vietnam Index,” said the head of Pyn Elite Fund.
Source: VnEconomy
