Vietnam’s stock market index is still struggling around the thousand points level. Daily events take the index up and down in very short cycles. In Vietnam, the slowdown in economic growth is over and the acceleration is gradually gaining a foothold, but local investors are still cautious and have not turned bullish yet on the stock market.
Vietnam’s exports will record a -5% contraction for 2023, even though the autumn months have turned for positive growth. We hear from the banks that the financing demand of manufacturing companies has been picking up, which indicates increasing order books. Retail and services will record very sluggish readings for 2023, but the already sharply lower interest rates and the good liquidity of the banks will certainly start to reflect in the growth of consumption from the end of the year and especially in 2024.
While the VN-Index struggles, we have tried to reallocate our portfolio, so we could take full advantage when the stock market picks up later. Banks’ NPL provisions will increase during 2023, but the level of non-performing loans in Vietnam remains very low. The banks’ results remain good, and the short-term economic downturn does not threaten their outlook or solvency.
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