Stocks tipped to remain hot in 2008

Stocks tipped to remain hot in 2008
Source:thanhniennews

Tran Hoai Phuong (L), acting chief executive of Empower Securities Corp., and Dinh The Hien (1st, R), director of the Institute of Information and Business Research
Dinh The Hien, director of the Institute of Information and Business Research, and Tran Hoai Phuong, the acting chief executive of Empower Security Corporation, had an online chat with Thanh Nien readers this week.


Tran Hoai Phuong (L), acting chief executive of Empower Securities Corp., and Dinh The Hien (1st, R), director of the Institute of Information and Business Research

Tran Manh Trung, HCMC: Some people forecast Vietnam’s stock market will only make minor gains as the share prices of many listed stocks were overvalued in 2007. What’s your opinion?

Dinh The Hien: Vietnam’s economy is growing rapidly so the stock market will certainly increase sharply.

The VN-Index’s moves in 2008 will be reliant on the value of new stocks and the capital-raising plans of listed companies.

Many people are wrong when trying to link the return from individual stocks with the overall moves of the VN-Index.

For example, consider a hypothetical newly-listed company whose shares begin trading at VND500 on the Ho Chi Minh Stock Exchange.

The company has a good business with lots of growth potential.

When the company joins the market, the VN-Index will be diluted because of the company’s low share price.

However, shareholders may be able to make substantial profits in the long-term as the company’s share price rises and it issues dividends.

So investors shouldn’t expect a company’s shares to trade at a high price after it lists on the market.

They should expect the company to set a price that matches its rate of return and its growth potential.

Diep, HCMC: What is the stock market’s prospects in 2008’s first quarter? Will there be any factors that help lift the market?

Dinh The Hien: In the first quarter most listed companies will release their manufacturing output data for last year.

These figures are expected to be very good.

Vietnam’s rapidly growing economy, in addition, is luring many foreign investors.

And finally, investors who are investing in real estate will return to the stock market as they discover real estate hasn’t been as attractive as they expected.

Considering the three facts above, I think the stock market in the first three months of this year will either increase gradually and then surge up to 1,200 points or rise steadily to 1,000-1,100 points.

Vo Hoai Nam, HCMC: Is there any possibility of a “Black Monday” on Vietnam’s stock market when there are too many listed companies?

Dinh The Hien: Vietnam’s stock market remains fairly small.

At pre-sent there are 141 listed stocks on the Ho Chi Minh Stock Exchange, accounting for less than 20 percent of the country’s 500 biggest companies.

Meanwhile, a mere 0.26 percent of the population is participating in the market.

So it is impossible for a “Black Monday” to happen.

Pham Duong Chau, Hanoi: Will the large number of state-run giants’ initial public offering in 2008 make the market fall?

Tran Hoai Phuong: Every market is affected by the laws of supply and demand.

I believe those state-owned firms will have to work out the most suitable time for their initial public offerings (IPOs).

Le Kim Ngan, HCMC: Is this year a good time to take part in the stock market?

Dinh The Hien: Over the last seven years, the rate of return on stock investment reached 950 percent, real estate investment 500 percent, gold investment and savings 300 percent.

So investing in stocks is the best choice.

But those who want to earn fourfold profit from trading stock like some investors did in 2006 will certainly not find the stock market attractive.