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Vietnam’s economy continues to grow, according to VinaCapital | Economy

Ho Chi Minh City (VNA) – VinaCapital recently hosted a webinar which reviewed Vietnam’s economy and stock market in the first half of 2022, noting that the country’s economy continues to build on its strong performance of the first half of the year.

In the first six months of this year, Vietnam’s actual retail sales grew 7.9 percent year-on-year. Photo: VNA


“We discussed our expectation of 7.5% GDP growth in 2022 in the webinar,” said VinaCapital chief economist Michael Kokalari.

“The release of Vietnam’s economic statistics in July not only bolstered this forecast, but also showed that the country’s economy is expected to grow by an astonishing 10 percent year-on-year in the current quarter,” he said. he planned.

“Our forecast for Vietnam’s economy to grow at least 7.5% this year (and at least 10% in the third quarter) leads us to believe that the consensus forecast for revenue growth of 16 % this year in Vietnam is too cautious,” he explained.

VinaCapital expected revenue growth to be over 20% this year, supported by Vietnam’s strong economic performance – in stark contrast to the US stock market, where revenue growth expectations seem too high, especially given the deteriorating economic outlook for that country.

In the first six months of this year, Vietnam’s real retail sales (i.e. excluding the impact of inflation) rose 7.9% year-on-year; this figure jumped to 11.9% in the first seven months of the year, well above the 7% year-on-year growth we had previously forecast for 2022.

“This is important because we are often asked now whether the current slowdown in the US economy – which is Vietnam’s biggest export market – will weigh on Vietnam’s economic growth. In other words, if the United States sneezes, will Vietnam catch a cold?” said Michael Kokalari.

“The short answer to this question is that while a slowdown in the U.S. economy is likely to dampen Vietnam’s export growth and economic growth, the impact of that slowdown will be more than offset by the strength of the domestic economy. Vietnam,” he said.

“Finally, the revenues and profits of companies listed on the Vietnamese Stock Exchange are mainly driven by the domestic economy, which is why we would have expected the stock exchange to benefit from the surprisingly strong domestic growth,” he said. he adds.

Vietnamese economy continues its growth dynamic, according to VinaCapital hinh anh 2VinaCapital has 19 years of experience in Vietnam. Photo: vietstock.vn

Vietnam’s stock market rose 37% in 2021, driven by a 36% increase in profits. Consensus forecasts earnings growth of 16% in 2022, and VinaCapital expects earnings growth of more than 20% this year, supported by strong economic growth in Vietnam.

Aggressive rate hikes from the US Federal Reserve (FED) have showered global equity investors (the S&P500 is down 14% year-to-date), but VinaCapital expected the strength of the Vietnam’s domestic economy is more than offsetting weak stock sentiment in the United States and other markets.

“We expect another decline in the US stock market, which in turn could push down the Vietnamese stock market. However, at some point, we expect the FED to back away from its aggressive plans to rise rates,” he said.

VinaCapital estimated that the Vietnamese stock market should be one of the biggest beneficiaries of a FED pivot, as Vietnam has the most attractive valuation in the region and the second highest expected earnings growth after Indonesia. . Moreover, the earnings quality/visibility of Vietnamese companies is much better than that of Indonesia and other regional peers.

“Vietnam’s economy is still stronger than expected at the start of the year, but this strength is not translating into higher stock prices due to the FED’s aggressive rate hikes and tighter regulatory measures in Vietnam. That said, we expect net earnings per share growth of more than 20% in 2022, which should support a recovery in the VN-Index by the end of 2022,” he concluded. – VNA

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