DNSE Chairman Decode the Story of 'Unexpectedly' High GDP but VN-Index Still Difficult to Surpass 1,300

At technology securities companies like DNSE, consulting is mainly done by AI chat - Photo: THUY KIM

Mr. Nguyen Hoang Giang - who used to be "Vietnam's youngest trillion-dollar securities CEO" when he became the general director of VNDirect at the age of 24, is now the chairman of DNSE Securities - the first listed technology securities company.

Why haven't stocks peaked despite GDP soaring?

* Vietnam has just announced surprisingly high GDP growth in the third quarter. However, the stock market is still having trouble trying to surpass the old peak. After 20 years, the VN-Index has been hovering around the 1,200 mark. What do you think?

- In the capitalization structure of VN-Index, the banking and finance and real estate groups alone account for about 60%, and at times it was up to 70-80%.

Many people find it "strange", but I see that the index is showing quite close to the valuation and expectations of the market for this large-cap group.

Mr. Nguyen Hoang Giang

Economic growth was very high in the third quarter and the first nine months of this year, largely thanks to exports and FDI.

Some export stocks have good valuations. If the basket of goods had more stocks from FDI enterprises, I think the recent score could be different.

Looking at the US, the market has many technology stocks, contributing to pushing the US stock index to one peak after another.

However, from our perspective, the valuation of the Vietnamese stock market is still fundamentally low.

On a more positive note, if the VN-Index has not increased much, it is also an opportunity for investors to disburse new funds.

* VN-Index has not increased as expected, market liquidity has continuously decreased in the past few months, are those working in the securities industry "concerned"?

- 2024 is a year of surprisingly high GDP growth. This growth comes from the recovery of the world economy and Vietnam benefits directly from policies to attract FDI and promote public investment.

But for the securities industry in general, 2024 may not be a year of strong growth due to low liquidity.

Reasons why businesses are afraid to list

* But the market has just missed the upgrade "train", looking back internally, we are also worried that "poor" goods will have difficulty catching the wave of foreign capital?

- Basically, the upgrade will be positive with expectations of improved liquidity, more vibrant market, higher valuation.

But upgrading is like having a "ticket" to enter the door. Whether the inside is rosy or not depends on the fundamental factors of the business and the internal strength of the economy.

We need to improve the quantity and quality of goods and new products on the market soon. Currently, we have few new goods and a lack of good goods. For several years now, we have counted on one hand the number of listed businesses.

It is time to seriously consider why businesses are hesitant to IPO and list. If the criteria are becoming more and more stringent, then we should consider a more open mechanism.

Vietnam promotes digital economy and creative economy, so we must accept that creative businesses are often "different", and there needs to be criteria to encourage this group to go public.

Many start-ups still have to be established abroad.

* On the occasion of Entrepreneurs' Day, can you share your perspective on the current difficulties of businesses?

- The biggest difficulty for businesses is probably the lack of consistency in policies. The success rate of new businesses entering the market is very low.

In Vietnam, registering and raising foreign capital still has many difficult procedures. Many start-up businesses are forced to establish abroad.

I always hope that Vietnam can open up its policies to be a place where investors and businesses, whether small or large, are ready to open and operate. Only then will Vietnam have the opportunity to grow and develop a creative economy.

* Thank you!

Source: https://tuoitre.vn/chu-tich-dnse-giai-ma-chuyen-gdp-cao-bat-ngo-nhung-vn-index-van-kho-vuot-1-300-20241012174418202.htm