GDP growth boosting stock market in second half

At a conference hosted by VIR last week on the issue, Citibank Vietnam shared GDP growth figures of Vietnam in the second quarter, which increased to 6.93 per cent on-year, from 5.7 per cent in the first quarter. Looking ahead, Citibank has raised its forecast for Vietnam’s GDP growth in 2024 from 6 to 6.4 per cent.

GDP growth boosting stock market in second half, illustration photo/ Source: freepik.com

“Vietnam economy is witnessing stable GDP growth recovery. Ongoing structural reforms are contributing to the strengthening of the banking sector and the activation of the real estate market’s recovery. Additionally, Vietnam’s proactive approach in expanding free trade agreements with potential markets has played a crucial role in attracting foreign investment to the country,” said Hoang Xuan Trung, head of Corporate Sales and Solutions at Citibank Vietnam.

Supporting the stock market’s rise are the bright GDP growth prospects, with first and second quarter figures reaching breakthrough levels, said Le Duc Khanh, director of Analysis at VPS Securities.

“Additionally, foreign investment and the outstanding business results of some leading companies in specialised fields such as technology, telecommunications, chemicals, industrial real estate, textiles, and seafood are expected to drive strong stock market growth,” said Khanh.

“I expect the stock market from now until the end of the year to return to the range of 1,300-1,350 points, as the market is still in an uptrend this year. Recently, we witnessed an adjustment phase in July, with the market bottoming around 1,200-1,220. The market will establish a bottom in this area and then gradually increase from now until the end of the year,” he added.

Leading stocks, those with competitive advantages within their industries, attractive valuations, strong fundamental sector-specific factors, and good growth potential are the ones to choose. However, in the short term, developments may not be immediately favourable, so investors should pay attention to their approach, possibly buying to hold, Khanh explained.

The stock market is considered a good investment channel currently, but investors should be cautious in selecting stocks and appropriate approaches, the conference’s panellists said.

“The task for investors globally in the second half of the year is to diversify and shift portfolios, particularly moving from the largest-cap group of stocks to those with lower capitalisation but still attractive valuations, especially in manufacturing, finance, and transportation sectors to anticipate the wave of interest rate cuts,” said Dat Tong, manager of Senior Market Strategy at Exness Investment Bank.

“Additionally, selecting key markets is crucial, with the European and Canadian markets still offering good earnings per share growth and valuations, alongside emerging markets like Brazil, which are also full of potential,” he added.

In the second half of 2024, the stock market is expected to stabilise and perform better than in the first half, as it acts as a barometer of the economy and GDP growth.

“If the economy recovers strongly in the latter half, the stock market will reflect this robust recovery. Specifically, stocks related to industrial zones, renewable energy, transportation, and particularly the banking sector, will exhibit sustainability and attractiveness compared to other stocks,” said Dr. Nguyen Tri Hieu, director of the Institute of Research and Development of Global Financial and Real Estate Markets.

GDP growth reaches 6.42 pc in first half Vietnam's economy grew by 6.42 pc in the first six months of 2024, slightly lower than the figure of 6.58 pc in the same time of 2022 within the 2020-2024 period.

Vietnam’s growth recovery exceeds expectations Vietnam’s GDP growth in the second quarter of 2024 rose to 6.9 per cent on-year, up from 5.7 per cent in the first quarter. The acceleration was driven by both the manufacturing and services sectors, highlighting economic resilience.

HSBC raises Vietnam's 2024 GDP growth forecast to 6.5 per cent HSBC has raised its 2024 GDP growth forecast for Vietnam to 6.5 per cent (from 6.0 per cent) and maintained its 2025 GDP estimate at 6.5 per cent.