Multiple potential sectors for investors to inject capital

April 12, 2023 - 12:20
Experts recommend investors to monitor and disburse into the industries of consumption, retail, banking, aviation, telecommunications - information technology, oil and gas.
Customers at FPT Telecom. The software export segment will have positive medium and long term prospects thanks to digital transformation. Photo

HÀ NỘI - The stock market is in a favourable situation with many supporting factors such as the State Bank lowering interest rates, positive short-term sentiment and the return of cashflow.

Experts recommend investors monitor and disburse into the industries of consumption, retail, banking, aviation, telecommunications - information technology, oil and gas.

In less than a month, the State Bank has reduced some policy interest rates twice. At the same time, the State Bank is also actively developing and implementing specific policies to guide credit institutions to disburse a package of VNĐ120 trillion for social housing.

Thanks to those policies of the State Bank, interest-sensitive industries grow quite strongly, leading the VN-Index's recovery in March such as financial services (+17.2 per cent), real estate (+10.6 per cent), construction materials (+4.5 per cent) and banking (+4.4 per cent). In addition, the transportation industry also increased by 4.5 per cent thanks to the recovery of the tourism industry and China's reopening policy.

However, the positive movement of interest rates has not been able to create a strong enough push for the market to prolong the uptrend. Securities experts said that the VN-Index could not return to the uptrend in the context of gloomy first quarter economic situation. GDP in the first quarter of this year increased by only 3.32 per cent over the same period last year, only higher than the growth rate of the first quarter of 2020 in the period 2011-2023.

VNDIRECT expects the VN-Index to maintain a gradual uptrend in April with a fluctuation range of 1,030-1,110 points. This company said long-term investors might consider buying part of their portfolio as soon as interest rates drop, while short-term investors should wait patiently until the market forms a clear trend.

VNDIRECT recommended investors monitor and disburse capital into consumption, retail, banking, aviation, telecommunications - information technology, oil and gas. VNDIRECT forecasts that the consumer and retail industries will have a high profit growth. According to VNDIRECT, the banking sector's liquidity problems have been resolved, reducing the pressure on capital costs and boosting credit growth. In addition, the draft amendment to Circular 16 is expected to solve the bottlenecks of corporate bonds, reduce the risk of increasing bad debts and credit costs of commercial banks in 2023.

The aviation industry is expected to turn positive thanks to the number of international visitors from China returning to Việt Nam. Some other industries could shift to positive profit growth in 2023 from the low base in 2022, including agriculture (+18.9 per cent), electricity (+18.7 per cent), construction materials ( +16.7 per cent).

KB Vietnam Securities Co (KBSV) gave a positive forecast for some high-tech industry groups. Specifically, the software export segment will have positive prospect in the medium and long term thanks to digital transformation and the continuous appearance of new platforms and applications; Việt Nam's labour costs are relatively low compared to other software exporting countries.

The telecommunications segment grew steadily thanks to an increase in broadband internet subscribers by 8-10 per cent. The development of mobile broadband internet including 4G-5G is a breakthrough step for telecommunications businesses. Chip production is also expected to see double-digit growth in 2023 with some stocks having strong software export and digital transformation activities.

KBSV also made investment recommendations in a number of energy groups, such as oil and gas stocks, based on the expectation that oil prices will stay high and new projects will be implemented in the near future. The thermal power segment is also expected to benefit when the La Nina cycle ends, thereby opening up the mobilising space for thermal power plants. Besides, coal prices and input gas prices tend to cool down which is also a positive factor, improving the gross profit margin of this group. VNS