From the changes in the macroeconomic situation…
According to the report by S&P Global, Vietnam’s Purchasing Managers’ Index (PMI) for the manufacturing sector reached 50.4 in February, slightly higher than January’s 50.3 and above the 50-point threshold for the second consecutive month. Both production output and the number of new orders increased for the second consecutive month.
A report by UOB Bank evaluated that these data indicate a general momentum in the manufacturing and external trade sectors is showing positive signs. UOB also expects this pace to be maintained, especially in the second half of 2024 when the recovery in the semiconductor sector becomes more solid and global central banks begin to implement more appropriate interest rate policies.
UOB has forecasted Vietnam’s growth at 6% for 2024, within the official target of 6-6.5%. In the first quarter of 2024, UOB expects GDP growth to be at 5.5% compared to the same period last year due to the impact of the Lunar New Year holiday. UOB also forecasted that inflationary pressures will continue to rise, with the full year CPI forecasted to increase to 3.8% in 2024 from 3.25% in 2023.
In addition, UOB also forecasts a slight recovery in VND. The USD/VND exchange rate reached a new high of 24,700 at the end of February, along with the strengthening of USD against Asian currencies. Despite the short-term weakness of VND, expectations of stronger GDP growth in Vietnam and recovery in the manufacturing and external trade sectors are positive factors that could help stabilize VND. Additionally, the next recovery of CNY— which VND usually follows the trend of—along with the weakness of the USD prior to the Fed’s interest rate cut in June, will contribute to a slight recovery for VND.
… Creating opportunities for businesses in 2024
Regarding different sectors, according to Vndirect Research, for exporting firms, the business results of these companies may recover in the coming quarters. The decrease in inventories of furniture, clothing, and food will create conditions to stimulate imports in major markets during the festival season, which will promote new orders in the second half of 2024.
Consumer confidence indices in the US and EU have rebounded in December 2023 from a decline in November 2023, indicating increased optimism about the financial situation in the near future, which can stimulate consumption in 2024.
For the port and maritime transport sector, recovering trade activities may support the recovery of the industry. On December 25th, the Ministry of Transport issued Circular No. 39/2023/TT-BGTVT regarding the increase in container handling fees. According to Vndirect Research, this circular will contribute to improving the gross profit margin of container port companies. In addition, the disruption in the Red Sea has led to increased short-term freight rates.
For residential real estate businesses, the most difficult period has passed and will gradually improve from the second half of 2024. According to Vndirect, tightening of real estate knots is gradually being loosened, and certain positive results have emerged.
Reduced borrowing interest rates have become more accessible for developers, and are expected to support positive homebuying demand in the near future. Companies have restructured their debt to improve their financial situation. Challenges regarding capital sources have eased.
For industrial park real estate, the Northern industrial park market is expected to be more vibrant, with the forecast that the 2024-2027 period will continue to see an explosion of new supply. Many large technology corporations have specific plans to relocate production lines from China to Vietnam. With its proximity to China, the Northern market will become a suitable destination, capturing this trend of electronic transfer.
For the steel industry, steel demand will grow again thanks to the domestic real estate market, which is expected to continue warming up in the 2024-2025 period. Steel prices will have a more positive trend in 2024, as inventory levels have declined to record lows and the Chinese real estate market is forecasted to gradually recover from its low in 2023 with support policies from the Chinese government. Input prices will be more stable.
For the consumer goods industry, consumer confidence indices show signs of recovery. The return of tourist numbers will boost accommodation, food, and entertainment activities, significantly improving consumer demand in 2024. Essential consumer goods will be the first to benefit as clear signs of recovery in demand lead consumers to prioritize fast-moving consumer goods.
For oil and gas companies, Vndirect Research expects that tightened supply will support oil prices, with Brent oil prices forecasted to average $85 per barrel in 2024. Investments in upstream activities are expected to continue to increase in the coming years, which is a positive signal for upstream Oil and Gas service providers. The outlook for the Oil and Gas transportation market is expected to remain stable, creating favorable conditions for transportation companies in the next few years.
The seminar “Identifying business and investment highlights in 2024” organized by CafeF, belonging to VCCORP Joint Stock Company, with the participation of leading economic experts and businesses in technology, finance, securities, real estate, manufacturing, consumption, energy, and import-export markets such as Techcombank, ACB, HSBC, PineTree, T&T Group, Dragon Capital, Rapido, AIG Group, Viettel Post, Du Long Industrial Park, etc.
– Schedule: 8:00 am – 11:30 am on March 26, 2024.
– Venue: Sheraton Hotel, 11 Xuan Dieu, Tay Ho, Hanoi.
– Seminar Director: Prof. Vo Tri Thanh – Director of the Institute for Brand Strategy and Competition Research (formerly Deputy Director of CIEM).
For any information related to the seminar, please contact email: [email protected] or register information at this link: https://forms.gle/B7JRM6LevZzCrnmp8
