James Cheo, Chief Investment Officer, Southeast Asia and India, Global Private Banking and Wealth, HSBC, said that the strength of the Vietnam economy in 2024 would come from a combination of consumer and investment spending.
The strong inflows of foreign direct investment will likely continue in 2024, buttressing Vietnam’s manufacturing sector. The nascent recovery of the global trade cycle will boost Vietnam’s exports. Furthermore, Vietnam is likely to witness a gradual uptick in international tourism.
“Inflation is fairly stable but there could be an upside risk from higher-than-expected energy or food prices, we think that Vietnam’s monetary authority will stay vigilant and keep policy rates on hold for this year. We forecast the Vietnamese dong to move towards 24,400 VND against the US dollar by the end of 2024,” said Cheo.
HSBC Global Private Banking (HSBC GPB) expects the beginning of Fed rate cuts in June 2024, US soft landing, corporate earnings recovery, and solid Asia growth to improve global risk appetite and investment outlook of equity and bond markets in 2024.
For the next six months, HSBC GPB adopts a mild risk-on investment strategy with underweight on cash, mild overweight on US Treasuries and global investment grade bonds and tactical overweight on hedge funds.
“As we look ahead into 2024, we see two positive drivers supporting global financial markets. Major western central banks have done rate hikes amid continued disinflation and the US economy is heading for a soft landing. These two positive developments should support recovery of global risk appetite in 2024. Positioning for slower but positive global growth and Fed rate cuts starting in June 2024, putting cash to work in quality bonds, US and Asian equities and alternatives should deliver diverse sources of return and income to optimise portfolio performance and mitigate market volatility,” said Fan Cheuk Wan, Chief Investment Officer, Asia, Global Private Banking and Wealth, HSBC.
“We see quality bonds as the most attractive asset class for H1/2024 ahead of the first Fed rate cut. We focus on locking in still attractive yields via our overweight in US and UK government bonds and investment grade bonds across developed and emerging markets. Although global growth should remain below trend growth in 2024, the US growth engine continues to run, thanks to the resilient US consumer and government stimulus supporting investment and innovation in technology and healthcare. Equity valuations now see better fundamental support from earnings recovery that we anticipate in 2024, which provides a potential upside for stocks that can deliver on earnings expectations. We expect the global AI investment boom will extend into 2024, reinforcing our bullish view on the global, US and Asian IT sectors,” noted Fan.
“Going against the global headwinds, Asia’s robust private wealth accumulation, resilient middle-class consumers, digital transformation and green transition offer solid domestic drivers to support healthy economic growth. We forecasted that Asia ex-Japan GDP will grow 4.5% in 2024, close to double the average global growth of 2.4%, led by India’s 6.0%, Indonesia’s 5.2%, and China’s 4.9% growth this year.” added Fan
