The Vietnamese stock market is seeing hopeful gains as the world's monetary tightening cycle nears its end. 2024 is expected to be a better year as major economies such as the United States and Europe progressively recover, helping the development of Vietnam's economy and, particularly, its stock market. This year, Mr. Minh rates the prospective industrial groupings as follows:

First, credit growth in the banking industry unexpectedly increased in Q4/2023, owing to credit growth in banks such as VCB, BID, CTG, and banks with significant credit room such as MBB, HDB, and ACB. Credit growth in 2024 is predicted to be 14%, driven by higher credit demand as output and consumption recover.

However, real estate credit remains the primary driver of credit growth in the industry, due to a thriving secondary real estate market and ongoing high credit demand from developers. Deposit rates are likely to fall in 2024 before rising again near the end of the year as the system's liquidity excess shrinks.

Lending rates are likely to fall further in the first half of the year before stabilizing for the remainder. Net Interest Margin (NIM) will differ amongst banks depending on their lending structure. Banks with a large number of high-risk loans, such as TCB, VPB, and HDB, will continue to witness NIM pressure, whilst those with safer lending structures, such as VCB, MBB, and BID, may see NIMs remain flat or slightly higher.

The predicted post-tax profit for the listed banks in 2024 is expected to increase by 15% over the same period last year. In contrast, the risk for this industrial group is that the economic recovery does not reach expectations and that monetary policy reverses.

Second, the securities brokerage firm provides several triggers for stock market liquidity. In 2024, securities firms are predicted to sustain healthy profit growth due to factors including as For starters, the stock market remains an appealing investment channel since other investment channels (deposits, real estate, bonds, and gold) are less appealing or include short-term risks. Second, demand for margin loans rises due to favorable interest rates, with margin loan interest rates expected to fall by 50-100 basis points in early 2024 before increasing again at the end of the year.

Third, higher transaction values boost brokerage income. Fourth, income from brokerage services grows owing to the commencement of brokerage agreements that were stopped in 2022-2023. Fifth, the KRX system will be operational this year, and market upgrading possibilities are powerful catalysts.

The market anticipates FTSE Russell to add Vietnam in the secondary Emerging Markets (EMs) category in September 2024, which will go into effect in September 2025. Currently, the Vietnamese stock market meets 7 of 9 FTSE Russell requirements for an upgrade, with the most significant barrier being the introduction of pre-funding. The answer to this problem is to allow securities companies to provide pre-funding for overseas investors in the short term and to establish a Central Counterparty Clearing House (CCP) in the long run.

Yuanta supports equities with significant capital and a large market share of foreign investors, such as SSI, VCI, and HCM. However, there is a danger that the KRX system will not be operational by 2024, and there is no legal structure for implementing pre-funding.

Third, consider the industrial real estate industry. The motivating reason behind this industry organization is multinational firms following the "China 1" plan to lessen reliance on the "world's factory". At the same time, the government capitalizes on the potential to attract high-quality FDIs by regularly signing numerous FTAs and upgrading relations with the US, Japan, and South Korea to comprehensive strategic alliances. Along with this, infrastructure has been greatly improved in recent years.

Mr. Minh believes that FDI attraction and disbursement will continue to develop positively in 2024 due to several ongoing benefits. Rental price increase is predicted to decelerate in 2024 due to the large base of 2023. Prospective equities include IDC and NTC, which will have substantial revenue growth in 2024 due to considerable pre-sales in 2023.

In contrast, KBC may struggle to achieve substantial growth in 2024 due to the large base of 2023. The Global Minimum Tax, which will go into effect at the beginning of 2024, poses a risk to VGC, IDC, and KBC because they have big FDI tenant firms.

Furthermore, there is a chance of power outages in the North during the dry season of 2024, since the El Nino phenomena may be more severe than the previous year. At the same time, EVN's financial status is unlikely to improve in the near future, hurting payments to power generation firms.

Fourth, the residential real estate industry. Yuanta forecasts the residential real estate market to warm up in 2024, with mortgage interest rates projected to stay low in 2023 (around 11%). Mortgage interest rates at state-owned commercial banks have gone below 11%, and rates at private commercial banks may fall below or approach this level depending on each bank's balance sheet.

Along with this, consumer confidence rises as the economy recovers. Thus, the industry's overall profit will rise in 2024 as demand rises, interest rates fall to support financial costs, and the product handover process is accelerated by speeding up legal completion and the anticipated resolution of market bottlenecks, as well as market regularization in the coming years.

However, the supply-demand mismatch in the real estate market may remain in 2024. The market continues to experience a scarcity of mid-range, cheap items while oversupplying higher-end ones. The cause is a dearth of social housing supply, which will not increase in the next 2-3 years; a land fund deficit; and excessive financial expenses. Experts predict the real estate market in 2024 will be better than in 2023, although residential real estate stocks will remain cautious this year. KDH and TCH are two equities that are thought to have promising potential in this industrial category.

Fifth, the oil and gas services industry. Currently, the oil supply-demand balance is a surplus of 1.27 million barrels as of December 2023, down from 1.7 million barrels in October 2023. As a result of the surplus supply, Mr. Minh believes oil prices will remain stable in the foreseeable future.

However, the possibility of a large reduction is low due to the limit ed oversupply. Oil inventories in the OECD and the US are expected to stay stable until the first half of 2024, but may fall in the second half of 2024. As a result, oil prices are expected to remain stable in the first half of 2024 at their present high levels, before rising in the second half. Major institutes predict that oil prices will average 83 USD/barrel in 2024.

2024 suggests that oil prices may continue as high as they are now. In Vietnam, the massive Lot B project is experiencing price challenges with gas purchases from Lot B and energy sales to EVN.

However, the project is still making good progress and has numerous benefits for resolving concerns and approving the FID in the first part of the year. The new Petroleum Law, starting July 2023, offers a clearer legal framework to expedite the progress of oil and gas projects, including Lot B Ô Môn and White Lion phase 2B (continuing from phase 2A expiring in 2025). PVS, PVD, and PVB are examples of significant equities that may profit from this industry group.

Sixth, the steel industry is rebounding due to the predicted favorable outlook for the real estate sector. Domestic steel prices are also recovering in line with Chinese steel prices. Similar to the Chinese market, the government's acceleration of public investment disbursement would boost steel demand, offsetting the deficiency in the residential real development industry.

In truth, substantial FDI capital inflows help to increase steel demand in industrial parks. Steel exports are expected to be a highlight in 2024. According to the World Steel Association, global steel demand is predicted to climb by 1.9% in 2024 compared to the same period last year, reaching 1.84 billion tons, driven by growth in key markets such as the EU (up 5.8%), India (up 7.7%), and the ASEAN area (up 5.2%).

Steel and coated metal industries are also actively looking for new export markets. Although stock prices have risen in 2023, the present P/B valuation of steel industry equities remains at 1.4 times, which is not too high compared to the Covid-19 era and lower than most periods in the previous decade. Notable equities that may gain from this industry group include HPG, HSG, and NKG.

Businesses will be more confident in making plans in 2024, and growth might reach double digits because the base for 2023 is fairly low. This will have a favorable influence on market trends. As business development improves, stock market returns will become more appealing when compared to alternative investment avenues.