Hanoi (VNS/VNA) - The stock market is expected to see moreinvestment opportunities for the medium and long term in the second quarter of2023, according to analysts.

In its latest report, BSC Securities Company said that the market witnessedstrong divergence among industry groups in the first quarter of the year.Particularly, the financial, material, and energy sectors all posted betterperformances than the benchmark VN-Index.

The securities firm also lowers its GDP growth forecast to 5.8% in the positivescenario, compared to 6.7% in early 2023, and to 5.3% in the negative scenario,the report said.

Many signs show that production activity is weakening while the real estateindustry is still facing many challenges. In the first four months of the year,import and export value growth also declined.

However, the macro situation has shown some positive signs, asinflation was controlled stably with the CPI data in April up only 2.84%, thebenchmark exchange rate was under control, and FDI capital inflows improved.

The macro factors will create favourable conditions for thecentral bank to continue lowering the policy rates to support the economy.

The State Bank of Vietnam on May 23 announced another rate cut of halfa percentage point. And the decision is expected to have a positive impact onthe stock market in the long term, said Nguyen Minh Hoang, director of theAnalysis Department at VietFirst Securities.

"As the central bank cut interest rates as expected for the third time, itis already priced in. So in the near term, the market will not show a strongresponse," Hoang said.

"However, the move helps reduce the borrowing cost for businesses,increasing the credit cycle and supporting the economy. So it will have a longterm impact on the market."

The expert also said that given the lower interest rate environment, flows ofcash running to savings in 2022, when interest rates were high, are now likelyto find other investment channels, including the stock market.

"It will also create expectations even for industries which are now weakin the market. For example, the manufacturing, retail, import-export groups arethe groups seeing better prospects in the second half of 2023," Hoangadded.

Activities to boost disbursement of the State budget and acceleratedisbursement of public investment in the second half of 2023 will be thedriving force behind the economic recovery and growth plan in the period of2023-25, according to BSC Securities.

In the first four months, disbursement of budget capital is estimated at 131.2trillion VND (5.59 billion USD), up 18% over last year and equal to 19% of theyear plan.

The Government is making considerable efforts to promote public investment. BSCexpects that directly affected industries such as infrastructure construction,building materials, and indirectly affected groups, including commercial realestate, industrial parks, and seaports, will benefit.

BSC also expects foreign investors to maintain their net buying position in thesecond half of 2023 when corporate profits will gradually improve compared tothe first quarter and monetary and fiscal policies help the economy grow.

Meanwhile, the issues related to bonds and the real estate market have beengradually resolved.

In the long term, foreign investors still show considerable interest in theVietnamese market as it continues to receive some additional capital flows fromthe Fubon ETF and the China Trust Vietnam Opportunity Fund from Taiwan.

In terms of industry valuation, some groups show more attractive valuationsthan in the past, such as banking, real estate, industry, fisheries, oil andgas, and retail.

On the contrary, some industry groups with higher valuations than in the past,such as textiles and garments, basic resources, seaports, and aviationservices, will be strongly affected by profit prospects this year./.