What should be invested in 2018?

Looking back on Vietnam's economy in 2017, forecasting the factors affecting the economy in 2018, from which we can point out the investment opportunities this year, TheLEADER has an interview with Assoc. Prof. Dr. Bui Tat Thang, Director of Vietnam Institute for Development Strategies, Ministry of Planning and Investment.

How do you assess the growth of Vietnam's economy in 2017?

Mr. Bui Tat Thang: In a general view, 2017 is one year that the economy has achieved better-than-expected results, exceeding initial expectations. First of all, the economic growth has been markedly improved. The first time in many years, all indicators of economic growth were achieved, many targets exceeded the plan.

However, if carrying the deep analysis of each field of ​​economic growth, there are many points to discuss. GDP growth of 6.81% is higher than expected 6.7%, the sectors has relatively equal growth, but the contribution of foreign investment to the economy is very prominent.

Export was high but the share of FDI in investment was very high. Agriculture increases highly but partly due to appearance of many natural calamities, environmental disasters in the previous year.

The second achievement of the 2017 economic picture is a great advance in institutional reform. 30 years ago, this issue were set up but it seems to be only vibrant in the first 10 years of the last 20 years, the pace of reforms is very small each year.

Particularly in 2016, especially from the 12th Congress up to now, the way of addressing the new way has taken a new, more realistic, vibrant and drastic step with a series of private economic decisions. State-owned enterprises, institutional reforms, and more clearly market economy.

These have created a great belief in the whole society, promoting the business development of the business better than in previous years.

On that basis, what do you think about the Vietnamese economy in 2018?

Mr. Bui Tat Thang: With the foundation of a record-breaking 2017 record, the economy in 2018 will be under a lot of pressure. The government should soon have a plan to keep the “fire” spirit for growth by continuing to accelerate administrative reform, cut back on licensing and create incentives for businesses and the economy.

In addition, the world economy in 2018 is considered positive more than 2017, the strategic partnership of Vietnam has maintained a stable growth rate, showing signs of growth. Therefore, there is a duty to believe that 2018 has many advantages that can be exploited to serve economic growth.

What do you feel about the operation of private sector enterprises in the past year?

Mr. Bui Tat Thang: With the current economic situation, it is easy to realize that the business enterprises have not had the same enthusiasm as in the previous period. In the past year, though, new businesses were born, but the general atmosphere was that they were calmer, researching policies more thoroughly when they started business.

This is because the business environment is different from before. Businesses are facing a fierce market competition, the market is decided by the buyer, not their product was born customers are well received.

I think this is a good thing because it reflects a real market situation that is developing in the right direction. If the Government has a transparent and transparent management mechanism, unnecessary administrative procedures and unnecessary licensing that make it difficult for businesses, the business environment in Vietnam will be better than before.

Business establishment and development is now largely dependent on adaptability and ability to meet customer needs. A truly talented enterprises will exist. This is what Vietnam's market economy is expecting.

In your opinion, which business sectors will have strong growth opportunities next year?

Mr. Bui Tat Thang: I think that in the future, some industries associated with science and technology will have good land development. 2018 is the year of development in such areas as high technology agriculture, clean agriculture, energy production, cheap energy equipment, solar energy, and environmental pollution treatment technology.

In addition, the technology supports learning, health care, energy saving devices, light bulbs, batteries for engines. The shipping sector is also promising a lot of changes in 2018. In particular, cars will begin to shift to producing and selling electric cars.

In general, industries that have the opportunity to grow in the future are those associated with 4.0 technology and green growth that help improve the environment and serve people's lives.

What about traditional investment sectors such as real estate, securities?

Mr. Bui Tat Thang: I’m not really optimistic about these sectors in 2018.

As for real estate, to date there have been no bubbles, I think it is possible, because there is no time when the market is as loud as it is now. Therefore, to continue to "blow" up again is very difficult.

Of course, the demand for housing remains high but not as severe as in the previous period. In addition, the supply is currently very large, while the lack of affordable housing projects, meeting the demand for housing of the majority of people.

As for stocks, the market is showing signs of recovery, to the peak. However, like before, I think there is no real basis for development because the stock market of Vietnam is in the stage of development, not reflecting the real market. The stock price fluctuates in the traders, rather than the factory.

The stock market is not currently associated with the real value market. Therefore, if considering securities as a long-term investment channel for the economy, Vietnam has not done yet, not highly appreciated.

How do you think about Vietnam's business environment in the coming year? In your opinion, What solutions should the Government have to continue to support the development of businesses, especially the private sector?

Mr. Bui Tat Thang: In 2018, the government pledged to cut further 50% of its licenses, and laws such as the Special Economic-Administrative Territory Law, the Planning Law, are likely to be passed. In addition, the amendment of some laws such as tax law will help create a good business environment, equal for investors and businesses.

However, in order for businesses to continue to grow, the government should aim to further reduce input costs for businesses, reduce transportation costs, logistics, adopt preferential policies, support private economy. development personnel. Improve information technology infrastructure as a tool for economic development based on modern science, keeping up with the world's 4.0 technology revolution.

At the same time, continue to reintegrate to reform the growth model, promote institutional reform, administrative procedures, renovate the apparatus, combat negative and corruption to create confidence in a business environment. convenient for business development.

Thank you very much!

Box 1:

Stable growth is an opportunity for business investment

Mr. Can Van Luc, Ph.D, Chief economist of Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)

In 2017, the Vietnamese economy has recorded a very positive growth rate, which is quite unexpected as GDP growth is impressive, inflation is low. A series of sectors such as agriculture, manufacturing, export reached the record.

Good macroeconomic growth, stability is the premise for many other areas of development, creating opportunities for business investment. In 2017, Vietnam stock market witnessed impressive growth of 50%, ranking second in the Asian region after the Mongolian stock market increased 80%. Capital flows into this market are quite a lot, foreign investment in the market is relatively good with 2.5 billion USD invested in both stocks and bonds.

Similarly, the real estate market in 2017, also recorded relatively stable development and positive in most segments. Somewhere in the market has started appearing surplus supply. With the strict control of the management agencies as well as the capacity of project investors, the demand of customers in the market is still pretty much, the real estate market will. will continue to maintain stable development in the coming time.

Box 2:

In 2018: Investment in agriculture promises to continue to grow

(Mr. Pham Anh Tuan, Chairman of the Cooperative Union of Agricultural Consumption)

2017 may be said to be a year for agricultural interest. The agricultural sector has shifted in terms of quantity, quality, thinking to achieve certain achievements such as export, production of clean and safe agricultural products. The agricultural sector in 2017 has recorded remarkable shifts, the five foundations for the development of a safe, sustainable agriculture in Vietnam.

The Government and the Ministry of Agriculture and Rural Development have also shown their role, orientation and interest in agriculture through a series of mechanisms and policies to support the development of agriculture. With favorable conditions, Vietnam's agriculture in 2018 promises to develop more, and continues to maintain two directions: Carry out organic, safe production and form the distribution chain from production to consumption in a sustainable way.

Therefore, I think that the business investment opportunities of businesses in the agricultural sector in the coming time is very large. However, along with that there are many risks associated with natural disasters, large investment costs, slow payback period.

Box 3:

2018 - The year of sublimation of real estate businesses

(Mr. Phung Chu Cuong, General Director of Phu Long Real Estates Corporation)

2018 will be the hinge year, opening the era of sustainable development for the real estate market with the appearance of many secondary investors, the supply in 2018 will be plentiful, more diversified than 2017.

With concerns about the real estate bubble coming back and speculation, I think the real estate bubble only occurs when supplies are scarce, selling prices are too high. with real value. However, pushing up real estate prices will be very difficult in 2018 because of the current supply of real estate in the market is plentiful, prices are also stable. The waves of coastal land in the past year only local and the State has also intervened very timely.

In addition, through the past crisis, customers and investors have learned the lesson so carefully in the process of choosing to buy real estate for living or investment. Developers, project developers are also professional, have more financial resources and have a thorough market research before putting products on the market. This is the basis to confirm that real estate will remain an attractive investment channel in the medium and long term.

Box 4: 

Factors promoting the growth of stock market

(Mr. Kang Moon Kyung, CEO Mirae Asset Vietnam)

2017 has shown good business results of many listed companies. Along with that, the confidence of the stock market is very optimistic. This is clearly demonstrated by the buying power is stronger than the selling power, the market liquidity always plentiful, regularly reached 10,000 billion VND per session. This liquidity is a big push for the market to rise and rise more strongly in the future.

The advantage of investing in stocks relative to other investment channels such as real estate is that investors with small capital can still participate in. This is the indispensable trend of the market. In the coming time, the stock market will have strong changes thanks to 5 positive factors:

First, the plan of divesting capital in large companies such as PVOil, BSR, PVPower ... and listing these stocks will increase the capitalization of the whole market. For the private equity enterprises, the successful listing of HDBank, Vincom Retail will push other large private firms to prepare for listing, contributing to the growth of the stock market.

Second, after the listing, all businesses must comply with regulations on disclosure of information in accordance with the updated regulations. This promotes the corporate governance of listed companies to be more efficient, transparent and efficient.

Third, the divestment of state-owned enterprises and the listing of good private equity firms will attract foreign investors' cash flow, contributing to a change in the perception of investors. both inside and outside the country for the Vietnamese stock market.

Fourth, with the rapidly growing young population and increasing average income levels, the middle class has grown a lot in recent years, the demand for investment profits to increase asset growth.

Fifth, new products such as derivatives and certificates will be the products that attract the interest of domestic and foreign investors, contributing to increasing the value of trading on the stock exchange and contributing to upgrading the Vietnam stock market.