With expectations that the VN-Index will return near its previous peak, real estate remains a good investment channel.

At the "Identifying Business and Investment Highlights in 2024" seminar organized by CafeF, Mr. La Giang Trung, CEO of Passion Investment, stated: The stock market is in a good phase despite many macroeconomic difficulties, and banking and retail are expected to be two sectors that will recover well in 2024.

There will be about 5 - 6 major adjustments

According to Mr. La Giang Trung, the Vietnamese stock market operates according to macroeconomic policies. Monetary and fiscal policies are strongly stimulating, creating favorable conditions to support the development of stocks. In addition, the growth momentum of major economies in the world is recovering.

In addition, the VN-Index is currently in a fairly low valuation zone; the price-to-earnings ratio (P/E) is below 15 times, while previously this index was mostly above 20 times. Not only that, interest rates are at an all-time low and will continue to fall; global stock markets have all surpassed their peaks.

“With low interest rates and strong business recovery, the Vietnamese stock market has the potential to return to its peak of 1,500 this year, setting the stage for surpassing that peak early next year. On January 6, 2022, the VN-Index set a historical peak at 1,528 points. The main trend of the market this year will be upward, but corrections are unavoidable during the process of moving from the bottom. The market will experience about 5-6 major corrections in 2024," the CEO of Passion Investment commented.

Many people are wondering that, in the context of Vietnam attracting the leading foreign direct investment (FDI) capital in the region, FDI capital flow into the stock market has decreased in recent years. What is causing foreign capital not to flow into the Vietnamese stock market?

Responding to this issue, Mr. Le Anh Tuan, Investment Director of Dragon Capital Fund Management Company, said: Since the beginning of the year, foreign investors have net sold more than 10,000 billion VND. If calculated from March 2023, they have net sold more than 38,000 billion VND. “This net selling momentum comes from several reasons such as: Foreign investors have many choices. With an appetite for investing in new technologies, Vietnam has almost none. Large capital sources of foreign investors flow from China to India and Japan; foreign investors are concerned that some of Vietnam's problems are not as expected. In the past 2 months, there has clearly been interest from foreign investors in the Vietnamese market,” said Mr. Le Anh Tuan.

According to a representative from Dragon Capital, Vietnam remains among the countries of great interest to foreign investors. If officially upgraded by MSCI (an investment research company providing stock indices, portfolio risk, performance analysis, and management tools for institutional investors and hedge funds), there is a very high probability that foreign capital will return strongly.

Confidence in the new economic cycle

Regarding the real estate market in 2024, Mr. Bui Quang Anh Vu, General Director of Phat Dat Real Estate Development Joint Stock Company, said: “During our operations, quite a few companies have approached Phat Dat. However, the question is, what do we do to attract them in the future? We need their capital and their development mindset.”

According to Mr. Bui Quang Anh Vu, before COVID-19, most real estate investors were professional real estate investors who bought to rent. During that period, banks supported loans, and when real estate was profitable, transactions were bustling, causing real estate prices to increase "dizzily". However, when COVID-19 broke out, banks tightened real estate loans, causing the market to decline. Many investors began to lose confidence.

“The solution to connect 3 markets: Securities - Currency - Real Estate, in which social housing is emphasized. With the question, what to invest in? I have faith in the new cycle of the economy, the real estate market is still a good investment channel. We must have management, orientation, sustainability, bringing benefits to many people”, Mr. Bui Quang Anh Vu commented.

Speaking at the workshop "Identifying bright spots in business and investment in 2024", CEO of CBRE Vietnam Duong Thuy Dung said: "In a series of investment channels, we summarized that stocks on the afternoon of March 25 increased by about 22%; gold increased by about 7%, while investing in an entire apartment, simply looking at rental profits, only increased by 5%".

According to Ms. Duong Thuy Dung, the role of foreign direct investment (FDI) is very important. In reality, with many market challenges, domestic investors focus on the most traditional method: mergers and acquisitions (M&A). Currently, regarding the purchase of land for projects, whether residential, industrial, or commercial, investors are very keen on ready-made products, but this is difficult in the Vietnamese market due to legal obstacles, so they choose to buy land for projects.

“In addition, depending on the product, commercial real estate is a market that investors are interested in, but the success rate is only 5-10%, such as offices with a 95% occupancy rate in Ho Chi Minh City. Industrial real estate has more room, so the success rate is up to 50%. The reason for the failure of each product in the real estate market comes from differences in valuation, legality and ownership structure,” said Ms. Duong Thuy Dung.

Regarding the question "Which segment is the best to invest in in 2024?", Ms. Duong Thuy Dung said: This depends on the total investment amount because there are many products and segments in real estate. For institutional investors, commercial real estate and industrial parks are still their favorite. Housing is the product that individual investors are interested in.

According to the CEO of CBRE Vietnam, there are usually 4 segments: low-end, mid-range, high-end, luxury. We have 2 products: mid-range and high-end. Mid-range and near mid-high-end are the segments that most people are interested in and are the bright segments of the market this year and in the coming years.

"Investors have room to find reasonable prices. Compared to similar mid-range products with comparable quality, Ho Chi Minh City is about 30% more expensive than Hanoi. In 2018-2019, many traditional investors from the North invested in the South, but now they are returning to the Northern market and see more potential," Ms. Duong Thuy Dung commented.

According to Tin Tuc Newspaper

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