Although global financial markets have fluctuated recently, the impacts on Vietnamese stocks will not be large and will only be temporary.
Comments on macroeconomic outlook and stock market
Dragon Capital believes that although the global financial market has fluctuated recently, the impacts on Vietnam will not be large and will only be temporary...
Specifically, according to Dragon Capital, the growth momentum from the supply side of the economy continues to improve positively. Agricultural production and services maintained good growth momentum with an increase of 11% over the same period in July. In the first 7 months of the year, the increase reached 8.5%.
Manufacturing and processing industry increased by 9.5%. The PMI index in July reached 54.7 points, marking the fourth consecutive month above the 50-point mark, indicating continued improvement in manufacturing activities. In addition, growth momentum on the demand side also recovered positively.
Total registered FDI capital in the first 7 months of the year exceeded 18 billion USD, while disbursed FDI reached approximately 12.6 billion USD. Total retail sales of goods and consumer service revenue increased by 91.3% in July compared to the same period last year and increased by nearly 91.3% in the 7 months.
The CPI in July increased by 0.51% compared to the previous month, equivalent to an increase of 4.41% compared to the same period last year, due to the low comparison base of the previous year, the increase in basic salary and the adjustment of prices of some goods and services; especially health insurance costs.
Inflation is expected to slightly decrease due to the absence of the low base effect of the previous year. The average inflation for the whole year is expected to reach about 4.0% and remain within control.
Situation for the remaining months of 2024
Since the beginning of 2023, Vietnam has maintained a loose monetary policy to support and promote economic recovery. In addition, there have been a number of mid-cycle interest rate adjustments to ease exchange rate and inflation pressures.
In the context of the cooling of the USD, reflecting the expectation that the Fed will cut interest rates in the upcoming meetings, along with domestic inflation being controlled, the State Bank is expected to continue to maintain a loose monetary policy in the coming time if the exchange rate pressure cools down and inflation is controlled.
The State Bank's reduction of OMO interest rates and treasury bill interest rates clearly demonstrates the State Bank's commitment to stabilizing interest rates to support the economy.
Regarding the stock market, although the global financial market has fluctuated recently, the impacts on Vietnam will not be large and will only be temporary.
VN-Index's forward P/E and P/B are one standard deviation below the five-year average, indicating attractive valuation.
With the global trend of interest rate cuts, Vietnam has many opportunities to maintain supportive policies and focus on growth. Forecasted profit growth after tax for the whole year of 2024 is at 16-18%.
Previously, external risk factors such as concerns about the US economic recession, the appreciation of the Japanese Yen, and conflicts in the Middle East put pressure on the domestic stock market. The VN-Index had a session that flew nearly 50 points in early August, breaking the 1,200 mark.
All these risks are difficult to quantify, so the impact is still mainly at the psychological level. The US economic recession even has a positive impact on the Vietnamese stock market in terms of exchange rates and State Bank policy management.
Source: VnEconomy
