Domestic-made market surveys booming

A lot of market surveys conducted by domestic financial institutions have been released in the last one month.

Investors now have a lot of choices when they want reliable reports and market surveys to refer to before making investment decisions. Besides the reports released by foreign HSBC or Merrill Lynch, they can also seek information and advice in domestic-made reports by SSI, VDSC or BVSC.

SSI’s report hit the market first, called “Vietnam’s stock market: the story about development”. After that, a lot of other reports conducted by other securities firms appeared on the market with different styles and diversified analyses.

In its report, Rong Viet (Viet Dragon VDSC) provides figures showing the overall picture of the economy: GDP growth rate 7.87% in first half of 2007, FDI $5.2bil, up by 8% over the same period of the last year, committed ODA $4.4bil, and export turnover $22.4bil.

The report mentions challenges Vietnam’s economy is facing such as high inflation, low disbursement of ODA, export growth slowdown. In the report, investors can also find general analyses about the financial situations of enterprises, both listed and unlisted, which are classified by business fields.

Bao Viet Securities (BVSC) on August 8 released a report with the prediction that the VN Index will hover at the 1,000 point level at the year’s end. The report also gives reasons for the fall of the market in the second quarter of the year 1. the market did not have strong impetuses, the P/E index was high 2. the ‘room’ for foreign investors had run out in many local companies 3. the central bank issued the decision to limit loans for securities investments.

Moreover, the report also identifies another reason, which is that 90% of companies listing on HOSE issued more shares in order to raise funds to inject in real estate projects, while real estate is not their main business field.

BVSC gives an optimistic view about the business operations of several big companies and big business fields. “The VN Index is believed to be on the upturn, and possibly will return to around the 1,000 point level; by that time, the P/E will be 26-27,” the report reads.

Meanwhile, Thang Long Securities Company writes in its report that the market’s performance will be very satisfactory in the future, but will not boom.

CBV’s (Bien Viet Securities Company) report provides a review of the market in the first seven months of the year based on CBV set of indexes: CBV Index (based on the 50 listing companies which have the biggest transaction volumes and market values) reached 133.04 points in the time period, and the market capitalisation volume had reached VND315,272bil ($19,704mil) by the end of July. The profitability level of the companies in these fields, according to CBV’s method of calculation, is very satisfactory, and even though the market fell down in July, the companies still maintained profitability.

CBV advises investors to make investment in MidCap group (companies with medium scale) instead of LargeCap (big-size companies) or SmallCap. The suggested investment addresses are companies in the fields of oil and gas, consumer goods and health care.

Big companies have good positions in the market, good trademarks, but now they are absorbed in expanding their businesses into other fields, which is not necessarily to their advantage. “This is a bad thing, which may lead to the price decrease of big groups and corporations,” the report concludes.

History shows that big groups and corporations can dominate smaller ones only when they focus on their main business fields.

Analysts have said that securities firms were trying to release market reports in the last time in order to polish their names, thus attracting more clients. In general, the reports bring more advice to investors, helping them make timely and suitable decisions.

Source: VNE