Vietnam’s economy is projected to experience a substantial growth of 6% in 2024, surpassing the growth rate recorded in the previous year, according to experts at HSBC Vietnam. Chief Investment Officer, James Cheo, highlighted that this growth will be primarily driven by consumer and investment spending within the country.
Factors such as increased foreign direct investment inflows, which will bolster the manufacturing sector, coupled with a gradual recovery in the global trade cycle and a potential rise in international tourism, are expected to contribute to the positive economic outlook for Vietnam in 2024.
Despite the stability of inflation, potential risks from higher energy or food prices may arise. However, HSBC remains confident that Vietnam’s monetary authority will remain vigilant and keep policy rates steady throughout the year. The forecast for the Vietnamese dong against the US dollar predicts a movement towards 24,400 VND by the end of 2024.
Looking ahead, HSBC Global Private Banking anticipates the initiation of Fed rate cuts in June 2024, a soft landing for the US economy, recovery in corporate earnings, and robust growth across Asia to enhance the global risk appetite and investment landscape for equity and bond markets in the year ahead.
Highlighting a positive outlook for global financial markets, the institution recommends a mild risk-on investment strategy for the next six months. This strategy includes an underweight position on cash, a mild overweight stance on US Treasuries and global investment grade bonds, as well as a tactical overweight position on hedge funds.
With a favorable view on quality bonds as the most attractive asset class for the first half of 2024, HSBC emphasizes the importance of seizing opportunities in US and UK government bonds, as well as investment grade bonds globally. Additionally, the bank sees potential for upside in equity markets, particularly in the IT sectors, as the global AI investment trend continues to thrive.
Asia’s solid economic growth prospects, driven by private wealth accumulation, resilient middle-class consumers, and digital transformation, further support HSBC’s optimistic outlook. The bank forecasts a GDP growth rate of 4.5% for Asia excluding Japan in 2024, with notable contributions from India, Indonesia, and China.
In conclusion, HSBC experts advise focusing on four key investment priorities for the first half of 2024. These include extending bond duration ahead of anticipated policy easing, broadening exposure to US equities to benefit from the soft landing, hedging tail risks through alternative investments, and diversifying emerging market allocations into areas exhibiting structural growth potential.
