The stock market is expected to continue growing this year but experts have said that the market's hot streak is coming to an end and stability is on the way.
Director of the French Jaccar Investment Fund Khong Van Minh said that the VN-Index, currently at 1,050 points, might climb as high as 1,400-1,500 points.
"The speculation period has passed," he said. "Now, investors can calm down and think carefully about their investment."
The stock market bloomed this year but capital earnings have not been invested into the economy. Profits have consistently returned to market, causing the current swell.
Many large State companies plan to capitalise this year, which will bring an influx of commodities to the market and trigger price reductions on a variety of goods currently on the market.
Economic expert Huynh Buu Son believes these reductions will bring stability to prices. "I am sure there won't be any hot pricing anymore," he said.
Nguyen Tien Dung from HCM City's Economics University said these new market sensibilities will force investors be more careful.
"If private investors don't educate themselves, they will be lost," Dung added. "The market is different and much tougher now."
He also recorgnised that more foreign investors will enter the Vietnamese market attracted by the equitisation of large companies.
"But foreign investors won't just pay any price to own shares," Dung warned.
Shares prices will increase thanks to the quality of shares and increasing number of both foreign and local investors, said Bui Viet, general director of the Eastern Asia Commercial Bank's Securities Company.
He also pointed out that other investment channels like gold, the US dollar and real estate have been cooling. Investors in these avenues are now looking for profits on stock markets. Many investors have decided to try long-term investment on the stock market rather than buy and sell for profit.
Amidst market growth, director of HCM City Securities Trading Centre Tran Dac Sinh stressed that the service quality of listed companies must be improved to develop the stock market.
He also said that policies must be clearly defined to create a clear financial system that will attract long-term capital from outside Viet Nam. "We should reduce short-term capital in the market," he said.
The Republic of Korea's LG Economics Research Institute has recently released a report about Viet Nam's investment potential for foreign investors.
Experts from the institute believe that the Vietnamese economy will develop significantly over the next 5-10 years.
The report confirms that Viet Nam is a good destination for long-term business and investment.
At present, the Republic of Korea has passed Hong Kong and the US as the top investor in Viet Nam with 2.7 billion US$.
In 2006, Viet Nam attracted 9 billion US$ in FDI, an impressive number for future development.
Source: VNA
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