Public investment to be the foundation for the development of the stock market

VCN - Effectively implementing public investment is considered one of the most feasible solutions at the moment to support economic recovery and development in 2023, thereby helping to create a foundation for the development of Vietnam's stock market in the long run.
Creating a breakthrough in disbursement of public investment capital Creating a breakthrough in disbursement of public investment capital
Focal public investment key to effective disbursement: official Focal public investment key to effective disbursement: official
Localities propose to remove bottlenecks in disbursement of public investment Localities propose to remove bottlenecks in disbursement of public investment
Large public investment projects are opportunities for the growth of many industries. Photo: Source: internet
Large public investment projects are opportunities for the growth of many industries. Photo: Source: internet

Positive impact on stock market

According to experts, in the context that some key drivers of the economy seem to be slowing down, the stock market will benefit from the efforts of ministries and sectors in the disbursement of public investment in 2023. If the acceleration of public investment helps the economy maintain a good growth momentum this year, it will also have a positive impact on the stock market.

Sharing at the Financial Street program, Mr. Nguyen Hoang Linh, Research Director, Vietcombank Fund Management Company (VCBF), said that the stock market has grown in the past two months with expectations for effective public investment.

However, Mr. Nguyen Hoang Linh also emphasized that it is a medium and long-term vision. In the short term, specifically this year, the stock market still faces many challenges, especially in the context that monetary policy is still tight and the profits of many listed companies are likely to decline at least in the first half of this year.

“However, if we look at the positive side, central banks around the world are likely to end their rate hike cycle in the first half of this year and may start cutting rates later in the year, especially the FED. This will create positive sentiment and help the State Bank be more flexible in operating monetary policy to support the economy. Furthermore, if the problems of the corporate bond market are resolved well, we can expect a strong return of cash flow into the stock market, especially from individual investors," said Mr. Nguyen Hoang Linh.

According to experts, the stock market often reflects investors' expectations for economic growth six months to a year away. This may partly explain the fact that our stock market has unexpected performance in the second half of 2022 when, besides factors such as liquidity and interest rates, investors are also concerned about external challenges for the economy in 2023.

“I think in the first half of 2023, the market may not record a solid increase. Cheap assets at this time still have no stable growth when interest rates are still high, as well as the real estate market or problems related to the corporate bond market that have not yet been resolved. I expect the picture of the market to be brighter when entering the second half of 2023 when we will receive better information from the world market as well as the country’s market and public investment disbursement,” said Ms. Tran Thi Khanh Hien, Head of Analysis Division of VNDIRECT Securities Company.

Many industries benefit

With a large amount of public investment (more than VND700 trillion) in the plan for 2023, experts say that many industries will benefit when public investment is accelerated.

Affirming that public investment is a very bright topic in 2023, Ms. Tran Thi Khanh Hien said that the industries that will benefit include contractors, infrastructure construction companies, and construction materials companies such as asphalt or companies related to construction stone.

However, the level of benefit will depend on the projects as well as the time of implementation. “For example, in 2023, public investment will focus on major projects such as the second phase of the North-South expressway project, the Long Thanh airport project, Ring Road No. 3 project in HCMC and Ring Road No. 4 project in Hanoi. These are the four key projects that will be deployed this year, the contractors who are appointed to participate in these projects will be the first beneficiaries. In addition, enterprises with top capacity, large scale, and past achievements are also the ones that will benefit the most, because these will be the first enterprises selected to participate in these projects,” a representative of VNDIRECT said.

According to experts, public investment is not only limited to transport infrastructure but also involves many other areas such as energy infrastructure, which is also very large and will attract both public and private investment in the near future.

Sharing the same view, Mr. Nguyen Hoang Linh said that in the short run, the group of direct beneficiaries will include construction consulting companies, construction contractors and construction materials providers to serve the traffic infrastructure works and even electricity and water works.

Low disbursement of public investment sourced from foreign borrowing Low disbursement of public investment sourced from foreign borrowing

Notably, the Government is also accelerating the implementation of digital transformation following the world's trend, which is also part of public investment and it will create opportunities for businesses in the information and technology sector. “It is clear that if infrastructure works are gradually put into practice, it will create a big kick for the economy, in the immediate future, it will help the trade flow become more convenient and smooth, contributing to reducing logistics costs. Thus, logistics companies definitely benefit. Besides, retail and service businesses will also benefit, as logistics costs now account for a relatively large proportion of their cost structure. In the long term, if the public investment is implemented effectively, it will bring a very positive and far-reaching spillover effect to the economy, accordingly, all industries will benefit," said Nguyen Hoang Linh said.

By Hoai An/ Huyen Trang

Related News

Effective inspection and supervision - a key factor for a transparent stock market

Effective inspection and supervision - a key factor for a transparent stock market

VCN - Since 2019, Securities Law officially took effect, the average annual number of penalty decisions has more than doubled compared to the period 2015-2020. This shows that the strictness of the law is being enforced effectively.
Many positive signals from stock market upgrade

Many positive signals from stock market upgrade

VCN - Many crucial knots in the process of upgrading the stock market are being untangled by the Government and relevant agencies. Thanks to proactive moves from the management agencies, experts assessed that the stock market was likely to be upgraded according to the set objectives.
Vietnamese stocks on FTSE Russell waiting list for upgrading

Vietnamese stocks on FTSE Russell waiting list for upgrading

VCN - Vietnam remains on the watch list for a possible reclassification from frontier to secondary emerging market and will be updated to Waiting List status for upgrading in September 2024, according to the FTSE ‘s Country Classification review in March.
Digitalizing procedure for social welfare payment at State Treasury

Digitalizing procedure for social welfare payment at State Treasury

VCN - The Government has given directives to promote digital transformation in social welfare payments. Therefore, promoting the digitalization and electronicization of revenue and expenditure transactions at the State Treasury has been identified as one of the most important tasks.

Latest News

Vietnam National Brand Week to be held in mid-April

Vietnam National Brand Week to be held in mid-April

The Vietnam National Brand Week 2024 will be held nationwide from April 15-21 to raise public awareness of Vietnam national brand and promote products recognised as national brands to domestic and international communities.
Textile industry in sustainability push to meet stringent requirements

Textile industry in sustainability push to meet stringent requirements

Textile and garment businesses are making a green push with development of eco-friendly products adapted to global fashion trends and by meeting the stringent requirements under free trade agreements the country has signed, according to industry insiders.
Loosening the belt buckle for sustainable development of the maritime industry

Loosening the belt buckle for sustainable development of the maritime industry

VCN - Recently, the growth of maritime and waterway transportation has been impressive, with a double-digit rate of about 10-12% per year. However, despite many advantages, the waterway system has not been efficiently utilized, commensurate with its potential. The Customs News had a discussion with Pham Quoc Long, Vice Chairman of the Vietnam Shipowners' Association, on this issue.
Vietnam ready to ride US investment wave

Vietnam ready to ride US investment wave

Vietnam is on the verge of seeing a massive influx of investments from the US, and stands ready to welcome the wave.

More News

Investing in wages is investing in development

Investing in wages is investing in development

VCN - According to Dr. Bui Sy Loi (photo), senior expert of the Ministry of Labor, War Invalids and Social Affairs, former Deputy Chairman of the National Assembly's Committee on Social Affairs, the National Assembly's adoption of the reform policy salaries, resource decisions and salary reform policies on July 1, 2024 is a suitable time, both historical and topical, contributing to ensuring life, creating peace of mind for staff, civil servants, public employees and workers.
Import and export in the first quarter: clearer and clearer bounce- back trend

Import and export in the first quarter: clearer and clearer bounce- back trend

VCN - As calculated, total import-export turnover of goods in the first quarter of the year reached over 178 billion USD, up 15.5% year on year. Both exports and imports achieved high growth rates, clearly showing a recovery trend.
Measures sought for coffee firms to adapt to EU Deforestation Regulations

Measures sought for coffee firms to adapt to EU Deforestation Regulations

Experts gathered in the Central Highlands province of Gia Lai on April 9 to seek measures to help local coffee businesses to adapt to the EU Deforestation Regulations (EUDR) and promote exports to the EU market in particular and the world in general.
Vietnam’s export to India maintains growth momentum

Vietnam’s export to India maintains growth momentum

Vietnam kept its export growth momentum in the Indian market in 2023 after two-way trade hit a record high of 15 billion USD in 2022, Vietnamese trade counsellor in India Bui Trung Thuong told the Vietnam News Agency.
Ample room remains for Vietnam"s exports to China

Ample room remains for Vietnam"s exports to China

There remains ample room for Vietnam's exports to China and the growth will be directly proportional to the quality improvement of products by domestic enterprises, according to Dau tu (Investment) Newspaper.
Negotiating actively FTAs, increasing benefits for businesses

Negotiating actively FTAs, increasing benefits for businesses

VCN - Facing the improvement of exports in the first quarter, sharing with the press, Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade) said that many solutions will continue to be implemented to achieve the goal export growth 2024.
Take advantage to increase fruit and vegetable exports to nearby markets

Take advantage to increase fruit and vegetable exports to nearby markets

VCN - With close geographical distance, low cost and transportation time, and preferential tariffs... are great advantages that Vietnam's fruit and vegetable industry needs to take advantage of to increase exports to other Asian markets such as China, ASEAN, Middle East...
Vietnam-China trade reaches over US$ 27 billion

Vietnam-China trade reaches over US$ 27 billion

VCN – China continues to be the Vietnam's largest trading partner.
Exports of goods to key markets rocket

Exports of goods to key markets rocket

VCN- Vietnam's key export markets and industries are launching impressively in 2024.
Read More

Your care

Latest Most read
Vietnam National Brand Week to be held in mid-April

Vietnam National Brand Week to be held in mid-April

The Vietnam National Brand Week 2024 will be held nationwide from April 15-21 to raise public awareness of Vietnam national brand and promote products recognised as national brands to domestic and international communities.
Textile industry in sustainability push to meet stringent requirements

Textile industry in sustainability push to meet stringent requirements

Textile and garment businesses are making a green push with development of eco-friendly products adapted to global fashion trends and by meeting the stringent requirements under free trade agreements the country has signed, according to industry insiders.
Loosening the belt buckle for sustainable development of the maritime industry

Loosening the belt buckle for sustainable development of the maritime industry

VCN - Recently, the growth of maritime and waterway transportation has been impressive, with a double-digit rate of about 10-12% per year. However, despite many advantages, the waterway system has not been efficiently utilized, commensurate with its poten
Vietnam ready to ride US investment wave

Vietnam ready to ride US investment wave

Vietnam is on the verge of seeing a massive influx of investments from the US, and stands ready to welcome the wave.
Investing in wages is investing in development

Investing in wages is investing in development

VCN - According to Dr. Bui Sy Loi (photo), senior expert of the Ministry of Labor, War Invalids and Social Affairs, former Deputy Chairman of the National Assembly's Committee on Social Affairs, the National Assembly's adoption of the reform policy salari
Mobile Version