HSBC: Vietnam will grow strongly in the second half of the year

This is the assessment in the investment outlook report for the second half of the year just released by HSBC Global Private Banking Services Division. According to the research team, Vietnam continues its recovery path driven by the global electronics cycle.

The latest purchasing managers index (PMI) continues to show expanding production. Among them, it is worth noting that electronics exports are doing very well. Last month, consumer electronics led the way, contributing 60% of export growth. According to this bank, the encouraging business results and prospects of Samsung’s Galaxy S24 phone line will likely help further improvement.

“In ASEAN, Singapore, Malaysia and Vietnam are consolidating their leading positions in the electronics industry,” said James Cheo, Chief Investment Officer for Southeast Asia and India of the Banking Services and Wealth Management Division. HSBC Global Special said.

At the same time, the prospect of foreign direct investment is also stable thanks to Vietnam’s attractiveness as an investment destination. FDI attraction in the past 5 months has increased in both number of projects and capital. This period had 1,227 new projects, registered capital of 7.94 billion USD, an increase of 27.5% and 50.8% respectively. Implemented capital reached 8.25 billion USD, the highest level in the past 5 years, according to the General Statistics Office.

In addition to being a research and development center and a large production base for Samsung, Vietnam has recently been one of the top choices in Southeast Asia for the “China + 1” strategy of corporations. group. MacBooks, iPads and Apple Watches have also been produced in Vietnam.

Above CNBC Recently, Yinglan Tan – CEO of Insignia Ventures Partners (Singapore) – said that its geographical location near China makes Vietnam a favorite destination for supply chains, helping to significantly reduce production costs.

Kai Wei Ang, ASEAN economist at BofA Securities, appreciates Vietnam’s other advantages. “Competitive labor costs, access to markets – where there are many free trade agreements – make exporting to other markets, such as the EU, much easier,” he said.

HSBC report is also optimistic about Vietnam’s capital market. The stock market is one of the better performers in Asia so far this year. “Stock valuations are still low compared to demand. Corporate profits continue to recover steadily from the bottom in 2023. If profits continue to be strong, the stock market can maintain its upward momentum” , Cheo said.

In late April, HSBC raised its GDP growth forecast for the last two quarters of the year to 6.2% each quarter. For the whole of 2024, the bank believes that Vietnam’s economy will expand by 6%, the same level as the IMF and OUB.

Besides the bright spots, inflation is still persistent and approaching the State Bank’s ceiling of 4.5%. The Fed’s delay in cutting interest rates has made the USD strengthen in the short term and created volatility for VND. According to HSBC, depending on the direction of central banks around the world, the State Bank can remain cautious with its interest rate policy.