Consumers buy goods at a supermarket in HCM City. Local consumption is predicted to regain the spotlight in 2024. (Photo: VNA)In a strategy report for 2024, Maybank Investment Bank forecasts steadyeconomic recovery throughout 2024 with consumption regaining the spotlightthanks to a re-strengthening of exports, healthier household balance sheets andgradual revival of the real estate sector.
"Unlike the bumpy road in 2023, we forecast steadier economic growth in2024. We forecast Vietnam’s GDP growth to accelerate to 5.8% year-on-year in2024 from 5.05% in 2023,” Maybank said.
For the stock market, Maybank laid out two scenarios for theVN-Index with 11% or 26% upside potential based on 19.8% year-on-year earningsgrowth and the potential upgrade of Vietnam to emerging market status as thekey transition to a bull scenario.
In both cases, the bank projects the market will see notablevolatility in the first half of 2024 amid mixed views in the market about thepace of recovery and worries about the banking and property sectors. The marketshould then speed up in the second half, fueled by higher confidence of arecovery.
“We like cyclical sectors, especially consumption related, andupgrade our real estate sector view from negative to neutral,” it said.
The bank’s stock picks for its base case in 2024 are MWG, PNJ,VEA, FPT, MBB, STB, PVD, VNM and NLG.
According to Maybank, a corporate earnings recovery will drivemarket returns with a potential liquidity boost from a market upgrade.
“We forecast corporate earnings to grow 19.8% year-on-year infiscal year 2024 from a 3.4% year-on-year drop in fiscal year 2023. Thanks to alow base and steadier economic recovery in 2024, we expect corporate earningsto grow smoothly throughout FY24E, driven by retail, steel, IT and banks,” saidMaybank.
The bank forecasts that market liquidity is likely to remain goodthanks to the accommodative stance of the central bank, while a potentialupgrade of Vietnam’s market status by FTSE would be a game changer thatsupports a significant re-rating.
Given recovery in the economy and the broader stock market,Maybank is bullish on cyclical sectors, especially consumption-related ones.
“Under our base-case scenario, we like companies that can deliversolid and/or outstanding earnings growth. We also select more defensive stocksthat have net cash positions and a track record of regular dividend payments.In the bull case, we like more large caps and high-beta stocks, especiallythose that still have room for foreigners,” it said./.
VNA
