BSC_Vietnam Marco Market Outlook_EN_2021_20210114

Regarding macroeconomics in 2021, BSC forecasts that GDP growth in 2021 will reach 6.3%. The macro was stable with inflation around 3%, the USD/VND exchange rate declined from 2%-3.5% and the 12-month term deposit interest rate flat at 5.5%.  

- Fiscal policy: Public investment remain the key focus in fiscal policy, along with tax exemption, reduction and extension measures implemented in 2020. Value of public investment is forecasted  to reach 462 trillion VND in 2021 (accounting for 96,86% of the 2021 budget estimate). 

- Monetary policy: The State Bank maintains an active, flexible and prudent monetary policy, closely coordinating with the fiscal policy in order to control inflation, stabilize macro, monetary and support growth. The current inflation is still allowing the State Bank to continue to support the current system liquidity for at least the first half of 2021 to reduce costs for the economy through corporate lending and issue Government bonds. 

 

- The recovery of the world economy and the ability to deploy the Covid 19 vaccine,

- The US-China trade war,

- The view of currency manipulation from the United States,

- Amended Securities Law and possibility of upgrading.

 

Regarding the market in 2021, VN-index is in favorable conditions to increase prices thanks to (1) Improved business results and (2) Increasing P/E ratio thanks to new cash flow of investors. VN-Index is forecasted to have a key price scenario at 1,261 points by the end of 2021, two scenarios include:

- Scenario 1_VN-Index is forecasted to reach 1,258 points: EPS growth is 22%, P/E ratio is 17.2 times.

- Scnario 2_VN-Index is forecasted to reach 1,154 points: EPS growth is 22%, P/E ratio is 15.8 times.

 

Positive developments are forecasted to take place in the first months of the year due to factors of expectation, cash flow and supporting information. Market capitalization reached $ 266.2 billion thanks to rising stocks and new listing. Average market liquidity reached 320 million USD / session 

 

Regarding stocks investing in the stock market in 2021, (1) Economic recovery: Banking (VCB, TCB, CTG, VPB), Consumption and Retail (MWG, PNJ, VNM), Petroleum and utilities (GAS, POW, PLX, PVT, REE), Other Group (VHC, MSH, DGC); Public investment beneficiaries: Materials (HPG, HT1, PLC), Construction (LCG, PC1), Aviation and transportation (ACV, VTP); Real estate (VHM, NLG, DXG, KDH, VRE); (3) Movement of production: Industrial zones (PHR, GVR, IDC, KBC), Port (GMD); (4) Market upgrade: VNM, VHM, HPG, VCB, VRE, PLX.