STOCK MARKET HOLDS INVESTMENT POTENTIAL FROM NOW UNTIL YEAR END

The stock market holds potential for investment this year in the context of the macroeconomic recovery and a rebound in manufacturing and business activities across most sectors.

Economic experts and business representatives shared this opinion at the Vietnam Wealth Advisor Summit (VWAS) 2024 "Adapting to Uncertainties", which took place on June 6 at the Pullman Hanoi Hotel.

Nguyen Ba Huy, portfolio manager at SSI Asset Management, said, “We are seeing the recovery of production activities. Orders have increased again, and several companies are operating at full capacity. We also expect domestic demand to recover soon.”

“This situation is a favourable for stock investments because of the low lending rate environment, stable macroeconomy, and strong business growth. The stock market will be the leading investment channel after the recovery period. This sector is forecast to recover quickly, even more quickly than the real estate sector,” Huy said.

Nguyen Sang Loc, portfolio manager at Dragon Capital Vietnam, said, “The stock investment market from now until the end of 2024 will prosper. Central banks around the world are entering the final phase of rate hikes, and the Bank of Canada and the European Union Bank are set to cut rates by 25 points.”

To draw conclusions about the stock market's potential, Dragon Capital Vietnam has deployed different methods than usual to assess the economic and business recovery. The fund has been measuring electricity consumption to assess the recovery of businesses and production, and freight traffic and the entry and exit of containers at ports to gauge the industry’s growth. In addition, Dragon Capital Vietnam has been monitoring spending and shopping bills at retail chains, where it has seen growth in both value and volume.

The results show the recovery has been slow since the end of March last year, and most experts agreed that Vietnam is in the early stages of recovery. The question is how to sustain the recovery going forward.

“The recovery is also shown in the increase in after-tax profits of businesses in the first quarter. Among the 80 leading Vietnamese enterprises that we selected, we found that their after-tax profit growth was at an average of 15 per cent year-on-year. This growth was seen across all industries, such as banking, retail, manufacturing, and materials, and among businesses of different sizes,” said Loc.

“We hope that this growth momentum will continue until the end of the year, and at that time, the pressure on exchange rates will also ease. If so, we will see the growth of listed companies. This shows that from now until the end of the year is the right time to invest in the stock market,” he added.

Source: VIR