Stock market to retain bright outlook: analysts

Experts are optimistic about the market outlook in the second half of 2022 following strong corrections in the last few months driven by international macroeconomic factors like soaring global inflation and U.S. Federal Reverse rate hikes.

After recovering quickly in 2021 with an average growth of 5.7%, global economies are facing uncertainties due to the ongoing complexity of the Covid-19 pandemic, geopolitical risks, especially the Russia-Ukraine conflict, the slowdown of the Chinese economy affected by its zero-Covid policy, and rising oil prices resulting in record high inflation in many countries.

Inflation, debt and energy are three hot issues, BIDV chief economist Can Van Luc told a conference on “Inflation, Interest rates and Securities” last Friday.

Statistics showed that the country’s stock market has tumbled sharply to hit the bottom for four periods in its history, including 2007-2008, 2011-2012, 2018-2019, and this year.

In the three previous periods, the Fed rate hikes, high U.S. inflation and high international oil prices caused market turbulence. And this time is no different, said Nguyen Minh Hoang, chief analyst at VietFirst Securities.

For the first half of 2022, the market benchmark VN-Index fell more than 20% and lost 25% from the peak of 1,500 points. The market began its downtrend after the Fed raised interest rates for the first time in June.

However, experts are still optimistic about the market as the country’s economy sees positive signals. “Our macroeconomy is stable with growth in GDP and consumer price index within control,” Hoang said.

Rallies of commodities prices are also expected to stop, helping to contain inflation, he added.

Luc added that the quick recovery of listed enterprises is a bright spot for the market. “We believe that our listed companies can still post growth of 21-25% this year,” he said.

Vietnam's economic expansion in the first half of the year was 6.42%, higher than the 5.1-5.7% target, official data shows.

Standard Chartered Bank in mid July put its GDP growth forecast for Vietnam this year at 6.7% and 7.0% for 2023. The country’s inflation in 2022 and 2023 is predicted at 4.2% and 5.5% respectively.