VietNam: Security Market have always been an effective investment chanel.

Security Market have always been an effective investment chanel.
Enterpreted by vietnamfinance.blogspot.com
Source: Thanhnien


Thanh Nien had a talk with Mr. Lam Minh Chanh, a financial researcher and also Director General of Dai Viet securities Company (DVSC). We discuss the securities market.

In 2007, especially the fouth quarter, VNIndex development has been difficult to predict, what is your opinion about this?

Generally, The Securities Market is developing and profitable. If we started at the beginning of the year (VNIndex=741.27) and sold at the end of the year (VNIndex=727.02), we would get the profit of 25% per year.


Unpredictably, VNIndex, however, did not surge up but stayed abnormally in downtrend. It is because of CT03, of a large number of additional issuances, of the development of real estate, of the hesitation due to the personal income tax on securities trading, of the world markets. Besides, it is said that some organization and “big boy” force the market value to deteriorate for the purpose of buying at cheap prices.

In my opinion, the problem is that we try not to find out all the reasons but accept that. The value has been adjusted, which is normal. It is sooner or later. Anyway, it nearly got 1200 points on its way from 400 points in a quite short time. It is unreasonable to get higher points. It may be a crazy respectation. If it had happened, the market would have been in downward spiral for an extremely long time.

Studying on the Indicator of other markets at other countries, I have found that for the duration of 10-15 years, all the markets’s index got the growth which are in the range of 1.5-3 times compared to the average rates of the development of their economy. When an indicator’s development is about 50-300%/year (Thai Lan in 1990s as such), it will be controlled to return to the normal development rate for a long term. VNIndex was sharply surge, it must be controllable as we know.

So, how to avoid such a long term of downward spiral?

The state organizations are supposed to have a long-term prediction and view in market administration. The state administrators should have statutes to balance of the listed firms’ issuances between capital and debt, supervise trading of major shareholders, administrate the liquidity of OTC market, enact the statute of short sale for the purpose of valorization of the market. And one most importance is that the state should have plan on gaining knowledge of security investment of the citizens. Individual people must be aware of the market, of the investment strategies and of reasonable profit expectations

Can you tell clearlier about reasonable expectations?

Based on my research, most of individual investors were successful in using information and anticipating the right time to participate trading. In order to further succeed, they either prepare good knowledge or get a good consultant.


The fact is that most of the securities company have not paid much attention on counseling their customers while there are a great number of individual investors neither knowing suitable strategy of investment nor analizing the market.

-Absolutely. There are, however, some company doing well in this field, on the whole, many of them should support more to their customers.

How about VNIndex in short term and long term?

Based on the research result of our TA room, VNIndex is coming nearer 900 which is a technical support and an important psychological threshold. In next week, it wil be around the support 900, 875.46 and the resistances are 927 and 952.88. In order to have an short term of uptrend, it will have to exceed 927,00.

Basing on FA, the market value is at a reasonable point for medium and long term of investment. Finance, service, consumer goods… are good to invest into because their P/E is in the range of 24-27% which is much lower than it was before. They will give good profit for medium and long term of investment.

With the profit ratio 15-25%/year, the high liquidity, Vietnam Market have been a good chanel to invest, it will develope in the line with the progress of the Vietnam economy.