2024 Stock market outlook: corporate profits recover, banking stocks lead the way
The stock market in 2024 is anticipated to experience significant growth, primarily driven by the recovery of corporate profits, particularly in high-growth companies.
The stock market in 2024 is anticipated to experience significant growth, primarily driven by the recovery of corporate profits, particularly in high-growth companies.
At a recent conference organised by Nhất Việt Securities Joint Stock Company (VFS), industry experts emphasised the pivotal role of banks in shaping market dynamics.
Supporting factors
Multiple factors are expected to contribute to the upward trajectory, said Cấn Văn Lực, chief economist at BIDV and member of the National Financial and Monetary Policy Advisory Council.
It is projected that Việt Nam's GDP will grow between 6 per cent to 6.5 per cent in 2024, surpassing global and regional figures. Key sectors such as the service industry, exports, consumption and public and private investments are predicted to exhibit positive trends.
The country's advantageous position in supply chain shifts, increased global investment inflows and strengthened strategic partnerships would further bolster the market's prospects. Stable macroeconomic indicators, including controlled consumer price index (CPI) and exchange rates, along with supportive policies, would contribute to a favourable environment, Lực said.
To support the overall economy, the Vietnamese government has implemented consistent fiscal policies which are expected to continue in 2024. These policies aim to address challenges in sectors such as healthcare, real estate, capital markets, tourism and public investments. The government is actively seeking to attract foreign investors, improve the business environment, diversify export markets, promote digital transformation and maintain macroeconomic stability.
The stock market has already displayed robust growth, with an impressive 11 per cent increase in the first two months of 2024, surpassing the growth achieved throughout the entire previous year, he said.
Nguyễn Minh Hoàng, Head of Analysis at Nhất Việt Securities, believes the market is entering a new phase of growth, characterised by an investment wave expected in 2024.
Leading the market, banking stocks are anticipated to play a pivotal role. They have historically influenced the movement of the VN-Index, and their performance continues to have a significant impact. Banks, such as Military Bank (MBB), Techcombank (TCB), and Vietinbank (CTG), have demonstrated strong and rapid growth, contributing to the recent market rally. The banking sector's upward momentum has been sustained since late 2023 and has exerted a positive pull effect on the market, Hoàng said.
Similarly, Đỗ Hồng Vân, Head of Data Analysis at FiinGroup Việt Nam's Financial Information Services, predicts a 12-15 percent increase in banking sector net profits in 2024. The main driving factors include the recovery of credit growth as business activities gradually rebound and the ongoing improvement of net interest margins due to lower funding costs and stable non-interest income.
Vân said that most banking stocks have increased in price due to rising valuations. Investors should closely monitor developments such as shareholder meetings, business plans, dividend payment plans, and capital increases, as these factors can significantly impact the performance of banking stocks and the overall market, she said. — VNS
