BSC Vietnam Sector Outlook 2021_EN

Over the years, BSC often offers investment topics, general assessments of possible opportunities, providing investors with more options throughout the year. 2021 is a relatively special year compared to any other year, after experiencing the black swan event "Covid-19" that caused the economy to experience the sharpest recession since the 2008 recession. (1) Production chain disruption, (2) Stagnation of trade activities, (3) Wave of dissolution from SM&E enterprises and high unemployment, (4) Expected negative global GDP growth are the negative impacts  on the world economy in 2020. In that context, what has Vietnam done and how to overcome the above influences?

• Firstly, mobilize global financial investment capital flows to emerging markets through ETFs and market upgrade opportunities.
• Secondly, the dual motivation from domestic private capital flows and low-interest rate environment.
• Thirdly, the market in Vietnam and emerging regions will be priced at a higher level in the context that central banks will maintain low-interest rates in the next 1-2 years. 
• Fourthly, the development of vaccine production has made great strides in 2020, the introduction of widespread use will strengthen the recovery of consumption demand.
• Fifthly, the recovery of strong profit growth across industries in 2021 (EPS growth in 2021 is forecasted at 22%) is a factor that increases the valuation of Vietnam's stock market.
• Sixthly, the disbursement of public investment will be  the "wings" to support Vietnam's economic growth to recover in 2021. 
• Seventhly, the process of listing/equitization and divestment of state capital in 2020 is still slow, there is no sign of a positive reversal in 2021, however, the possibility of a boom is left open from 2022. 

We assess that 2021 will be a year with many opportunities for Vietnam to become a leader in post-Covid-19 economic growth in the region. Industries are expected to record a positive recovery in terms of business activities. However, the recovery speed of each industry and business will be relatively different depending on (1) Operating policy, government focus, (2) Internal strength and financial health of each enterprise, (3) Strategic orientation of the leadership of each company. Based on some of the key topics that we have mentioned, BSC gives 3 core and focused factors and the extent to which they affect sectors: 

• Covid-19 Vaccine begins to be widely distributed and the economy gradually recovers. 
• Oil price recovery is accompanied by high demand for gas, however, the growth potential of the oil and gas and electricity sectors will be limited due to
• In spite of high and continuously growing gas demand, the gas supply is still in short supply, which limits growth in both oil and electricity (produced from gas) sectors. LNG is the future of the gas/electricity industry.