BSC_Vietnam Sector Outlook_2019_EN

The global economy in 2019 is expected to slow down with the slower growth rate due to the effects of the US-China trade war and signs of tightening monetary policy of the EU and the US. Goldman Sachs forecasts that global growth rate in 2019 will only reach 3.5%, lower than 3.8% compared to 2018. This war not only has a negative impact on world growth from the instability of key regions and economies, but also creates unpredictable fluctuations in the financial, monetary, and commodity markets. Thereby, this will hinder the flow of global investment and create a deep gap between economies. In the US, policy will continue to tighten, which is expected to two-time increase by 0.25% in interest rates in 2019. About Eurozone, ECB has started to narrow its balance sheet at the end of the year and would raise interest rates in the second half of 2019. China is also facing difficulties in operating economic policies in the context of trade war.
Investment Themes for 2019
•    First, the story of attracting foreign capital welcomes expectation of upgrade.
•    Secondly, the change in the order of stocks in VN30 basket is expected to have a big impact on the Vn-Index in 2019 because stocks with large market capitalization are expected to be included in the basket in Q1/2019.
•    Thirdly, the listing/equitization plan and floor transfer plan are expected to be promoted faster due to the failure of 2018 progress.
•    Fourth, the opportunity from divestment of the State in leading enterprises.
•    Fifth, Mid-cap stocks with different stories will get more attention in 2019.
•    Sixth, a group of stocks with defensive characteristics and high profitability, belonging to sectors with stable growth potential (retail, consumer, drinks) will be safer choices than the market in the high risk segment.
•    Seventh, public investment is also one of the government's key plans to be promoted in 2019.