SSI Research: Stock market still most attractive in region

Despite being affected by recent events, Vietnam’s stock market is still considered the most attractive in the region, according to SSI Research.

The P/E ratio of the VN-Index is currently 14.2, making it more attractive than most markets in the region. Profit growth in the fourth quarter of 2021 on the VNMidcap and VNSmallcap indexes was 24.25 per cent and 20.53 per cent, respectively, which is above average and has driven the two indexes further upwards this year.

The VN-Index is currently at 1,512 points, and if it holds steady along with improving liquidity should reach 1,537 points in the near future. SSI Research also expects previous developments to continue in the first quarter, when the market has certain expectations regarding recovery in consumer demand.

With the stock market’s movements in recent times, the US Fed raising interest rates in March could have impacted Vietnam’s stock market. Moreover, the effects of movements in other indexes on Vietnam’s stock market and the effect of Standard & Poor’s 500 Stock Index (S&P 500) on the US stock market shows a rather low degree of correlation.

The biggest risk for Vietnam’s stock market is the conflict between Russia and Ukraine lasting and creating inflationary pressure. Rises in commodity prices may also cause concerns about inflation, but Vietnam still holds certain advantages in controlling inflation in general.