Industrial real estate stocks benefit from US election results

After an election dominated by a red wave, in the early hours of November 6, Fox News declared that Republican candidate Donald J. Trump had won the election over his opponent Kamala Harris.

In the stock market, the opening of the November 6 trading session was notably positive. Numerous industrial real estate and export stocks surged as the US election results drew closer. By the announcement time, the VN-Index had jumped nearly 16 points, with over 500 stocks in the green.

Noteworthy gains were seen in industrial real estate stocks like Becamex IDC Corp, which rose 2.43 per cent, and stocks hitting the ceiling, such as SONADEZI Chau Duc, Sai Gon VRG Investment Corporation, and Kinh Bac City Development Holding Corporation, with increases of 6.99 per cent, 6.89 per cent, and 6.85 per cent, respectively.

A strong influx of capital pushed KBC shares of Kinh Bac City Development Holding Corporation to the daily trading limit with nearly 20.3 million units, ranking second in market liquidity.

This surge is unsurprising, as earlier in August, The Trump Organisation, led by the newly elected president, and Kinh Bac City, announced a project to develop a hotel, golf course, and residential area in the northern province of Hung Yen, with a total investment of approximately $1.5 billion.

“In the short term, market sentiment leans towards a Trump victory, implying continued production shifts out of China, especially as Vietnam has signed several high-level trade agreements with the US. This trend is likely to benefit these stocks in the near term,” said Nguyen Thanh Lam, director of research and analysis for retail clients at Maybank Securities.

The Agriseco Insight Report on the Vietnamese stock market and the US election suggests investors consider sectors such as industrial real estate, textiles, and wood products, which are impacted by Trump's policies.

“The industrial real estate sector may benefit from the continued surge in factory relocations driven by FDI inflows. However, China is expected to redirect its exports to markets with lower or zero import tariffs, such as East Asian or Southeast Asian countries, to manage inventory. This move will place significant competitive pressure on domestic manufacturers,” stated the Agriseco Insight Report.

“Donald Trump emphasises fossil fuel use, particularly oil and gas. In this case, sectors like oil and gas services would benefit. Since late 2023, oil prices have been low due to global support for electric vehicles. Despite tensions in the Middle East, the high demand for EVs has weakened oil consumption, preventing a sharp increase in oil prices. However, this doesn’t mean Trump disregards clean energy, but rather that he might prioritise fossil fuels,” said Nguyen The Minh, head of R&D for Retail Clients at Yuanta Securities Vietnam.

For a safe and risk-averse approach, Shinhan Securities recommended that investors, instead of focusing on stocks that may benefit from new US presidential policy impacts, could prioritise safer options.

“Stock selections should focus on companies with core business operations in the domestic Vietnamese market, limited foreign debt exposure, and those listed on the Unlisted Public Company Market or the Hanoi Stock Exchange, as these stocks are less targeted by passive ETFs and exhibit lower stock volatility,” Shinhan Securities said.

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