“The second half of 2024 is a golden opportunity for domestic enterprises to showcase their breakthrough performance, as economic conditions improve and central banks globally return to a cycle of cheap money”, shared Ms. Bui Thi Quynh Nga, Senior Macro and Securities Investment Strategy Analyst at Phu Hung Securities (PHS), at a recent investment workshop.
With the prospect of an improving global economy, the Vietnamese government continues to maintain a low-interest-rate environment, attract FDI capital… PHS forecasts that the market’s profit growth will reach 18% in 2024, corresponding to an expected P/E of 12.2. This is quite an attractive level in the current context.
The experts emphasized the prospects for the export and real estate sectors. Specifically:
First, in the real estate sector: The application of four new laws will help cleanse the market in the second half of 2024.
According to PHS, the real estate market has begun to show signs of recovery. Through expectations of lower mortgage rates, improved legal framework for more transparency, rebuilding trust among home buyers, and real estate brokerage activities, support is provided for a strong recovery in sales performance in the second half of 2024.
On the other hand, PHS believes that the potential risks in the market have mostly been reflected in the sharp decline at the end of 2022. In 2023, the story of the market mainly revolved around supportive policies, creating liquidity, as well as debt rescheduling/conversion with the aim of preventing a chain collapse in the real estate market.
However, not all enterprises in the industry will recover, only those with sufficient capabilities will be able to survive and develop during this period. Because in 2024, it will continue to be a “climax” period for the maturity of real estate corporate bonds, with a total value of up to VND 144,000 billion. This will put pressure on the cash flow of enterprises in the context of the psychology of home buyers having just recovered.
In another development, the relaxation of restrictions on foreign investment and ownership of real estate in Vietnam is also expected to be a driving force for the new growth cycle of this industry. Based on their data and observations, PHS experts expressed optimism about companies such as Vinhomes (VHM), Nam Long (NLG), and Khang Dien House (KDH), based on three factors: potential land fund, healthy financial position, and attractive valuation.
Second, the export sector: According to PHS, exports have maintained growth for four consecutive quarters, with an average growth rate of nearly 15% in the first six months. Among them, products with advantages such as textiles and garments are recovering quite strongly, and demand is expected to continue to increase in the second half.
On the other hand, the tensions between the US and China have brought advantages to Vietnam as Chinese products are always subject to high taxes, and the US is gradually considering Vietnam as a “market economy” in its true sense.
Photo: Ms. Bui Thi Quynh Nga, Senior Macro and Securities Investment Strategy Analyst, Phu Hung Securities (PHS)
In summary, the internal strength of enterprises will contribute to a more vibrant stock market in 2024, and PHS expects the stock market to be an attractive investment channel in the coming time.
Moreover, the government has also shown close supervision and determination to upgrade the market. This is the basis for the long-term development of the stock market along with the growth of the economy.
Regarding exchange rates, it is forecasted that in the coming time, it may stagnate or decrease. Because if the US Federal Reserve (Fed) cuts interest rates, the value of the US dollar will decrease, thereby pulling down the exchange rate. Therefore, in the last six months of the year, the exchange rate may cool down and be at an average level compared to the current strong increase in the exchange rate. The economy is entering a cycle of monetary easing, and thanks to this, the stock market will have many opportunities.
Finally, the promotion of the KRX trading system is also expected to be a catalyst that will bring many benefits to the Vietnamese stock market, such as increased liquidity, improved operating efficiency, and attraction of foreign investors.
In a positive scenario, this securities company expects the VN-Index to reach 1,452 points.
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