Promising investment sectors for second half

At the conference on H2 investment opportunities “Scrutinising upcoming investment opportunities” hosted by VIR last week, Dr. Nguyen Tri Hieu, general director of the Toan Cau Institute, provided forecasts on investment opportunities in the second half and beyond, aiming to help investors better understand market concerns and make informed asset choices.

Dr. Nguyen Tri Hieu, general director of the Toan Cau Institute

The VN-Index has been on a recovery trend in the final trading sessions of July, testing the resistance zone around 1,255 points, which corresponds to the highest price in 2023 as well as the current 120-session moving average.

“I believe that in the last six months, the stock market will be more stable and perform better compared to the first half, as it is the thermometer of the economy. If the economy recovers strongly in the latter half of 2024, the stock market will reflect that robust recovery,” said Dr. Hieu. “Specifically, stocks related to industrial parks, renewable energy, transportation, and particularly the banking sector, will be more sustainable and attractive compared to other stocks.”

Real estate sectors such as agriculture, land plots, commercial, resort, and tourism have yet to show significant improvement. However, urban and industrial real estate have been the best performers since the beginning of 2024 and are expected to continue their potential until the end of the year.

“The reason is that the industrial sector is thriving due to the strong growth of foreign investment in Vietnam. Moreover, real estate and housing in major cities, despite high prices, still have substantial demand, making them highly effective investment channels,” Hieu said.

Notably, this is the year in which the government pays significant attention to the gold market, with strong adjustments such as gold bar auctions and the State Bank of Vietnam (SBV) directly selling gold to four state-owned commercial banks.

“Gold investment should be approached with utmost caution as it is influenced not only by market factors but also by policy factors. The gold bar market is tightly controlled under the price stabilisation programme, but the price of gold rings has surged and surpassed gold bars, an unusual phenomenon that could signal new volatility,” Hieu said.

Regarding the forex market, the exchange rate has increased by nearly 5 per cent since the beginning of the year, currently around 1.055 USD/VND.

Dr. Hieu said, “Looking ahead to the second half of 2024, with global financial market fluctuations, especially if the US reduces interest rates, exchange rate pressure may decrease. However, many surprises could arise from the US presidential election and the Federal Reserve's monetary policy. Therefore, the forex market is no longer an attractive investment channel as in previous years.”

Concerning cryptocurrency, regulatory bodies still view it with caution, although there has been no outright ban beyond the existing prohibition on using cryptocurrencies for payments.

“However, in the event of significant geopolitical and global economic upheavals, I believe the role of cryptocurrency will rise, creating significant pressure on the SBV," said Hieu.

He added that the central bank could not stand idly by if cryptocurrencies played an increasingly important role in the global and Vietnamese financial markets.

"It is likely that regulatory authorities need to promptly implement a regulatory sandbox. Therefore, I believe the government should soon approve and issue regulations for the regulatory sandbox to experiment with operations, drawing lessons and experiences for official implementation in the economy," he said.

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