(HSV VIETNAM GROUP) – Through 2024, experts forecast that total corporate profits will increase by 17% compared to a decrease of 3% in 2023, and growth will come from more industry groups.
2022 is a quite successful year for Vietnam's economy, with growth in export, consumption, and production all impressive. By 2023, Vietnam targets economic growth at 6.5%. However, by the end of the first quarter, the economy encountered more difficulties than expected. Especially after last year's boom, this year's exports dropped sharply, more negative than the COVID-19 period. "It can be said that in more than ten years, exports have never been so severely affected. Exports have declined, domestic consumption has not really recovered well. After the real estate and bond incidents, domestic consumption was affected. Total consumption in the economy slowed down, leading to slow growth in the manufacturing sector," said Mr. Tran Ngoc Bau, General Director. WiGroup Financial Technology and Data Joint Stock Company, shared at an online discussion with the topic 'Macro focus & stock market in the fourth quarter of 2023' recently.
Expecting the last quarter of the year, experts say the economy in general in the short term will still be difficult, affecting the business results of enterprises. Therefore, not many industry groups are likely to have positive profit growth this year.
Industry groups expected to grow profits include:
First, the securities group. This year, market liquidity in the third quarter increased by 50% compared to last year's average, helping securities companies increase business results from segments such as brokerage and lending.
Second is the steel group. Steel businesses almost all recorded record losses in 2022. In the second half of this year, it is forecast that steel businesses have not returned to the average level but have also improved compared to last year's results. Companies no longer record large inventory deductions like in 2022. Currently, steel prices are flat and have not increased again.
Third, oil and gas group. Oil prices have recovered quite well in the second half of this year. In the near future, major forecasting organizations all predict that oil prices may adjust to around 90 USD/barrel due to demand recovery and the reduction policy of Russia and OPEC+ still remaining. In addition, recent conflicts will be factors that can support oil prices in the short term.
As for oil prices, the conflicts over the past weekend have greatly affected the global commodity market in general and Vietnam in particular. On Monday at the beginning of the week, oil prices increased more than 4%, returning to their original peak.
"In my opinion, in the short and medium term, oil prices will tend to go up. However, in the long term, I still expect oil prices to cool down again soon because we currently see that in 2022, the factor helping oil prices grow comes from the supply reduction of major countries, for example, Saudi Arabia and Russia are limiting global supply. This factor has helped oil prices increase very strongly in 2022," Mr. Nguyen The Minh, Director of Analysis of Yuanta Vietnam Securities Company, commented.
Mr. Minh said that recent tensions over the geopolitical situation will be a factor affecting the short-term development of oil prices. Therefore, inflation will more or less be a burden on the market and the economy in the coming period.
However, the longer-term story is that the supply situation and signs of major countries are also starting to reach the final stages of the cycle, meaning they are easing supply and exporting again, with the expectation that this is a factor that can soon restrain the upward trend of oil prices.
Through 2024, experts forecast that total corporate profits will increase by 17% compared to a decrease of 3% in 2023, and growth will come from more industry groups. Corporate profits are expected to improve sharply in 2024 in many industry groups such as retail, steel, fertilizer, and seafood. However, the current valuation level partly reflects the prospect of profit recovery.
Observe, currently stocks, real estate, and steel are three groups with high liquidity outside of banks. Stocks are a group that fluctuates closely with the index. This year, stocks are the group with the most obvious improvement in fundamental factors thanks to increased market liquidity. Steel stock prices have also increased ahead of expectations about steel prices or corporate profits.
With real estate, this group still faces challenges until at least mid-2024. The amount of real estate bonds maturing is still large (about 200,000 - 300,000 billion VND in the next few years). Experts say that if there are any waves, they will not be big waves, smaller opportunities may come to units with clean, newly granted land funds.
Finally, the industrial real estate group will grow better than residential real estate. In addition, as mentioned, some other industry groups also have a good growth period in 2024 such as fertilizer, retail or seafood.
Ha Diem HSV