Dự báo của BMI cho VNidex - 575

Dự báo của BMI cho VNidex - 575

Market Alert - Decisive Break Of 400 To Bring Further Gains

Vietnam - Equities - 10 June 2009
BMI View: Despite previous warnings about Vietnamese equities being overdone, the Viet Nam Index (VNI) has made a tentative push through resistance at 400. While we are not convinced that this break can be sustained, further gains beyond this level could herald a move towards 575.
While the signs a strong fundamental rebound have yet to be seen on the economic front, the benchmark Viet Nam Index (VNI) has continued to surge in recent days, breaking through resistance at 400. While we caution that Vietnamese equities are prone to speculative bubbles, and as such that recent gains could be quickly reversed, we believe that current level of optimism could see a decisive break of the 400 level. If the index hold this level, we would highlight 575 as the next area to watch for.
The strong technical outlook for the VNI is being complemented by a growing sense among local investors that the economy has bottomed out. Indeed, according to Finance Minister Vu Van Ninh, the conditions for a stock market rally are in place now that the economy is seeing ''signs of improvement.''
Can It Hold 400?
Vietnam - Viet Nam Index


Source: BMI
A second factor that could feed into a short-term rally is the re-entry of foreign funds into the Vietnamese market. Although their presence is still somewhat limited, with a trading volume of US$4.2mn on May 22 compared to the total figure of US$106.7mn, there is a growing body of anecdotal evidence to suggest that foreign investors are seeking opportunities in Vietnam. The impression is reinforced by data showing that total foreign investment in Vietnamese equities in May amounted to US$53.2mn.
Thus, while we remain cautious about the economy''s prospects for a strong recovery (see May 20 2009, Growth Bottoming Out, But Risks To Recovery Remain), we are not convinced this will stop the stock market from making further gains in the short term. Hence, a decisive breach of resistance at around 400 would prompt us to raise our short-term target for the VNI to 575.