Profit-taking was exaggerated

— 26.01.2021

The Vietnamese Stock market has started the year 2021 with bullish expectations. Companies’ earnings previews from the last quarter of 2020 have been strong, and the local analysts have confirmed the robust growth estimates for the year 2021. The forecast for Vietnam’s economy is very positive and the GDP could reach up to 8% growth this year.

The daily turnover in the stock market has been on an exceptionally high level, thanks to the local retail investors. VN-index is now +6,3% YTD, even though we saw a quick profit-taking dip a week ago. A sudden dive was of course natural but this time the correction went over the board for a day drop. The day started with a 6% percent dive and some blue chips were even sold at limit down (-7%) prices. At the end of the day, VN-Index closed down -5,11%.

Last week’s sell-off serves as a warning of the Stock market’s jitters. However, in Vietnam the industry certainly shares the view that at the end of the year 2021 the index will be above the current levels (1166). We at PYN Elite trust that the current valuations and the earnings growth in 2021 and in the next few years will take the index even above the local broker’s current index targets -when the sentiment is right and the foreign investors get back to the market to discount the excellent prospects of Vietnam.