In the first half of this year, the index increased 14.6 per cent while the HNX-Index rose 14.9 per cent.— Photo baomoi.com

HA NOI (Biz Hub) — Viet Nam's stock market is expected to grow further towards the end of 2014, with the VN-Index possibly hitting 650 points, experts said at a meeting held here yesterday.

In the first half of this year, the index increased 14.6 per cent while the HNX-Index rose 14.9 per cent. "They will continue to be boosted by positive support from the economy," said Yun Hang Jin, Korea Investment&Securities Company's Senior Emerging Market Analyst.

In the last three years, the Vietnamese stock market had developed better than other markets, Yun added.

"Financial policies will continue to be effective in the second half of the year with a faster pace of execution," Yun said. According to the South Korean investor, money supply will be reinforced to enable the country to hit its credit growth target.

He noted that the anticipated restructuring of the Viet Nam Asset Management Company did not push through in the first half and must take place in the second half. As a result of this, non-performing loans will be reduced during the remainder of the year.

"In the near future, as the Trans-Pacific Partnership agreement is reached, investors to the Vietnamese market will increase, contributing significantly to the economy," Yun said, adding that foreign direct investment has been flowing into Viet Nam and the stock market was still benefiting from it.

Worries about US tapering and foreign investors' exit are not expected to adversely affect buying trends in the second half of the year. Meanwhile, the scheduled widening of the field for foreign ownership, coupled with the initial public offerings (IPOs) of large state corporations, are seen as supportive factors, with the scale of IPOs in the second half expected to double that of the first half.

"There is little chance that foreign investors will offload in the second half," Yun said. However, their buying power will be limited if ownership limits are not lifted.

History has shown that the VN-Index often declined one to three months before large IPOs and would bounce back as the IPOs ended, according to Le Dinh Minh Phuong, KIS Viet Nam Corporation Head of Analysis.

Phuong also suggested some sectors that might generate profits for investors, including pharmacy, steel production, information technology and oil and gas. — VNS