High-growth sectors identified for future stock market investment

Upon addressing the event, Dr. Le Anh Tu, senior advisor at PwC and deputy chairman of the Economists Club, said the tech sector continues to draw interest and achieved a CAGR of 26.1% throughout the 2015 to 2019 period. He therefore anticipates that this figure will be even higher over the coming years.

Most notably, the local education sector is poised to attract an increasing number of financiers due to spending on education continuing to increase, especially among the middle class, he added.

Furthermore, investment in the sector is also set to increase due to the Government’s policy of encouraging 100% investment by individuals, including foreign nationals.

The healthcare sector is poised to remain attractive as per capita healthcare spending is anticipated to grow from US$194 in 2019 to US$309 in 2024, whilst the ageing population is rapidly increasing, he noted.

According to experts participating in the seminar, there are several fundamental factors which support the development of the Vietnamese stock market.

Moreover, the Vietnamese economy is set to grow by between 6.8% and 7% in 2021. This comes as FDI investment boosts the service sector, coupled with the competent curtailment of the novel coronavirus (COVID-19) epidemic creating momentum for many sectors looking to boost exports, according to Dr. Nguyen Son, chairman of the Vietnam Securities Depository.

“The price to earnings (P/E) ratio is still low compared to other countries in the region, meaning there is still much potential for it to increase further.”

There remains a possibility that foreign capital flows will shift from other markets to the country when its stock market is upgraded to the status of an emerging market, Dr. Son said. It therefore meets seven out of nine requirements set by FTSE Russell for an upgrade. The new securities law also helps to promote the stock market, he said.
As a means of further boosting its development, there should be a focus on strengthening regulations and the IT systems of stock exchanges, thereby improving the capacity of financial intermediaries. This can be done whilst developing fresh products, including pension funds, non-voting depositary receipts and depositary receipts, along with creating a market for the products created by start-ups, he said.

During the course of the seminar, held by the Economists Club, the Ho Chi Minh Securities Corporation, and the Green Plus Joint Stock Corporation, experts also touched upon methods aimed at classifying and selecting stocks for investment.

Also present at the event was Nguyen Truc Son, vice chairman of the Ben Tre Provincial People’s Committee, who granted an investment registration certificate to Green Plus in order to develop a US$1 million functional food plant in the province’s Giao Long Industrial Park.