Stock market boost expected from TPP
Stock market boost expected from TPP
The Trans-Pacific Partnership Agreement (TPP) was expected to have a great influence on the Vietnamese economy in general and the stock market in particular.
Its impacts might be stronger than those when Viet Nam joined the World Trade Organisation in 2007, heard the "TPP and opportunities for the stock market" seminar held by BIDV Securities Company on Thursday.
Some experts said that Viet Nam would be the country that benefited the most from joining the TPP.
There are currently 12 countries participating in the TPP negotiations, including Japan and the US, which have the largest trade turnover with Viet Nam.
In the first eight months of this year, Viet Nam's trade surplus with the US reached US$11.68 billion.
Among export sectors to the US, textile would enjoy significant advantages when Viet Nam signed the TPP, said BIDV Securities, noting two listed textile firms with high liquidity – Thanh Cong Textile and Garment Investment (TCM) and TNG Investment and Trading (TNG).
Domestic textile and garment businesses had rapid revenue growth, but profitability was not as high as expected.
"Therefore, small changes in tax rates, exchange and interest rates as Viet Nam joined the TPP will also strongly impact the profitability of these enterprises," BIDV Securities commented.
In addition, one of the most notable in the TPP negotiations was that Viet Nam committed not to interfere in the operation of State-owned enterprises (SOEs) and promised to lift foreign holdingship in the market.
Recently, the Government has urged SOEs to divest from their non-core industries.
"It is a big opportunity for Viet Nam's stock market," said BIDV Securities' head of consultancy Nguyen Xuan Thong.
Foreign institutions had expected the divestment of SOEs for long, he added. "It's their chance to buy cheap assets in a potential market like Viet Nam."
Thong revealed that there were over 40 SOEs forced to divest and make their financial conditions transparent.
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