The firm has grown to some 14 analysts and is based in Hanoi and Ho Chi Minh, with a coverage of 90% of market cap across some 70 listed companies.
The firm expects that number to grow.
“It has been rather stable in the past three years, we increased from 11 to 14 analysts,” says Hoang Viet Phuong, head of institutional research and investment advisory at SSI. “But we will continue to expand; we expect many more listings in the coming years.”
Business has benefitted from a 25% growth in the VNIndex this year, with market cap hitting $120 billion, up by over $40 billion in the year, amid greatly improved liquidity, which has gone up nearly 50% in the year.
Hoang Viet Phuong, Saigon Securities Inc
"The stock market is seeing a structural change,” says Phuong. “This year, roughly 50% of top market caps are new names. Previously, the biggest obstacle for foreign investors coming to Vietnam was that investability was so low, with many large caps having foreign ownership capped at 49%.”
That has changed; new and larger listings have come from industry leaders and firms with good-quality corporate governance, she adds.
The firm distinguished itself on a few stock calls. One was on Hoa Phat Steel, up 37% in the year on plans to further increase production capacity. A second call was on Airport Corporation of Vietnam, which holds the operating monopoly in the country and owns 22 airports.
“The growth prospect is very strong, since tourism arrivals are increasing 30% per year,” says Phuong.
More broadly, the country will make a leap once it is included in MSCI’s Emerging Markets index. But the firm says the feedback from the index provider points to the inclusion happening no earlier than 2019.
For the year ahead, while the macro picture remains positive for Vietnam, Phuong notes the build-up of retail loans in the banks’ balance sheets has been quite aggressive, which could become a problem for the sector.
As for the firm itself, SSI is expecting to push its investment banking franchise to take advantage of growing domestic capital markets.
“We see a lot more new IPOs and SOE (state-owned enterprise) divestments coming to the market in the next two or three years,” says Phuong.