UOBAM Vietnam CEO: Many factors support the stock market
Ms. Thieu Thi Nhat Le, General Director of UOB Asset Management Vietnam, commented that the Vietnamese stock market will grow positively in the last months of 2024.
In fact, the State Bank's maintenance of loose monetary policy and signs of recovery in some industries are the main driving forces for market growth in the first months of 2024.
By the end of April 2024, the VN-Index reached 1,209.52 points, up 7.0% compared to the end of 2023; the total market capitalization is estimated at VND 6,455,851 billion, up 9.9% compared to the end of 2023. In addition, market liquidity reached an average of VND 24,020 billion/session, up 25.4% compared to the average in 2023.
According to Ms. Le, external risks such as the US Federal Reserve (Fed) being slower than expected to cut interest rates, the USD continuing to strengthen, and geopolitical conflicts escalating around the world... will impact Vietnam's economy and the stock market in the remaining months of 2024.
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| Ms. Thieu Thi Nhat Le, General Director of UOB Asset Management Vietnam (UOBAM Vietnam). |
However, the General Director of UOBAM Vietnam commented that the stock market outlook will continue to be positive thanks to supporting factors from the macro economy , such as the business results of enterprises are expected to continue to recover thanks to the global economic outlook and improved domestic consumption demand, especially export and consumer enterprises.
At the same time, the low interest rate environment continues to be maintained (although policy interest rates may increase slightly), to support economic growth; FDI capital continues to grow well, especially with the potential from Vietnam's semiconductor industry; the government 's policy of boosting public investment to promote economic growth; and the determination of the government and management agencies in upgrading the Vietnamese stock market from a frontier market to an emerging market.
Currently, the market expects and UOB maintains its forecast that the Fed will likely cut USD interest rates twice in September and December this year. However, this cannot be certain if US inflation has not decreased to the expected 2%.
Fed policymakers voted to keep interest rates at a 23-year high as they continue to struggle with persistent inflation above the bank’s long-term 2% target, according to minutes released on May 22 of their most recent meeting.
Minutes of the Federal Open Market Committee (FOMC) meeting showed that Fed officials generally felt that recent data were not enough to bolster confidence that inflation was rising sustainably to 2%.
According to Ms. Le, if the Fed does not cut interest rates this year, it will have a positive impact on the USD and once the USD increases, it will impact the exchange rate pressure. This will also make it more difficult for operators to manage the exchange rate. Because if the exchange rate increases, it will affect the psychology of investors as well as FDI capital flows.
However, Ms. Le believes that, given the current market context, the operator certainly has solutions to respond promptly and flexibly. The developments of the world market and the Fed's interest rate cut roadmap are expected to reduce expectations and impact the world's stock market as well as Vietnam's. However, the Vietnamese stock market will continue to be positive in the last months of 2024.
As the economy shows signs of recovery and the business results of listed companies increase in the first quarter of 2024. According to statistics from the companies in our monitoring portfolio, net profit increased by an average of 14.3% year-on-year and 24.4% quarter-on-quarter.
Exports recorded growth amid improving demand from Vietnam’s major export markets. Domestic consumption also showed signs of strong growth again with the acceleration of the tourism industry. Capital flows from FDI continued to grow well.
The next factor is that the base is being maintained at a low level to support growth, although savings interest rates and OMO interest rates have increased slightly recently, they are still quite low compared to before. This will also positively support the stock market.
In addition, exports are positive, attracting increased FDI capital, and at the same time, Vietnam is gradually upgrading its stock market from a frontier market to an emerging market... Investors who have long been interested in investing in stocks are considered to have the ability to withstand risks, so once the interest rate on savings deposits drops, investors will switch to other investment channels, including stocks.
However, unlike before, many people think and in fact many investors come to the stock market with the intention of just surfing, but now the investment strategy of many investors has a more long-term view, instead of just short-term. This is also a positive thing for the Vietnamese stock market.
Source: https://baodautu.vn/tong-giam-doc-uobam-viet-nam-nhieu-yeu-to-ho-tro-cho-thi-truong-chung-khoan-d215875.html
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