Hanoi (VNS/VNA) - The profit growthof listed companies is forecast to cool down in 2023 but experts said there arestill many positive factors to support the market in the near future.

Vietnam's economy in 2023 still faces manychallenges, affected by slowing exports and increased unemployment, Nguyen HoaiPhuong, Investment Director of VinaCapital, said at a Talkshow organised by Dautu (Investment) newspaper last week.

Retail growth will slow down from the recoveryin 2022, she said.

“Another risk to watch out for is the maturityof real estate corporate bonds, up to 7.2 billion USD. This partly affects theprofit picture of two big sectors of the stock market, namely real estate andbanking.”

Currently, many organisations forecast that theprofit growth of listed companies will cool down in 2023. However, experts saidthat this is not the focus of the stock market this year. Instead, investorsare paying attention to a number of supporting factors.

First is the disbursement of public investment.Along with the Government's determination and progress for key projects, thedisbursement rate of public investment in 2023 is forecast to increase comparedto 2022, thereby also promoting economic growth, and at the same time pressurefrom construction costs will be significantly reduced.

Second, China will open its economy. Currently,there is no specific time for China to officially open its economy. However,the move to relax social distancing regulations also showed a change in thestrategy of this country. Reopening China's economy will have a positive impacton many fields of Vietnam’s economy such as import and export, tourism, and rawmaterials.

Third, the exchange rate and interest rate cooleddown. This will help some businesses to access capital flow and liquidity willbe under less pressure than in 2022.

Fourth, exports to the US or EU may recover inthe second half of 2023. Profits are growing against a low base in 2022 asexports have slowed. In addition, a number of factors such as fallingtransportation costs, falling petrol prices and declining commodity prices,also contribute to the profit growth of enterprises.

Better 2023

Nguyen Hoai Phuong said that the market is nolonger at risk of a sharp drop. Recently, the stock market still fluctuated ina narrow range and amid weak sentiment. Therefore, there will be room for themarket to recover when the supporting factors of the economy and the market aremore obvious in the coming months, respectively.

According to Hoang Viet Phuong, Director of SSIResearch, the internal factors of the stock market recently stem from theinadequacies of the corporate bond market and the real estate market. These twomarkets are closely related to the banking system, so it has had a large impacton the economy.

In 2023, SSI Research forecasts that interestrates are likely to cool down, but we need to wait until that interest ratebecomes lower and attractive enough to stimulate demand in the real estatemarket, she said.

“Bond maturity creates pressure in 2023, so weneed to wait for the draft amendment to Decree 65 to be approved to helpalleviate these pressures,” she added.

For example, the amendment of Decree 65 will bepassed, interest rates’ upward momentum will slow down and reverse to decrease,the exchange rate will be stable and public investment disbursement will becomestronger. Those are the factors that support the market. In the positive scenario,the market is still likely to grow by 5-10% in 2023./.