DAY AND NIGHT "PICTURE" OF INDUSTRY GROUPS IN THE FIRST QUARTER OF 2023

In the medium and long term, policies to support dismantling and promoting the real estate market include: Decree 08 on privately issued bonds, Resolution 33 delaying loan interest payments, reducing loan interest rates, and land laws. Real estate, housing, and real estate business expected to be issued from 7/2024 will help the real estate market to warm up gradually from the second half of 2024", Agriseco analyzed.

DAY AND NIGHT "PICTURE" OF INDUSTRY GROUPS IN THE FIRST QUARTER OF 2023

Agriseco Research forecasts that the banking, real estate, steel, and retail industries will experience a decline in business results in the first quarter of 2023, in the opposite direction, the pharmaceutical industry will have a stable profit prospect.

In a recent analysis report, Agriseco Research said that in 2023, businesses still face many challenges such as the complicated movements of the domestic corporate bond market, the risk of economic recession and systemic risks for global financial system.

However, some positive information is gradually emerging that can support businesses such as Decree 08/2023 amending Decree 65/2022 on issuing private corporate bonds and domestic banks. The country adjusts to reduce operating interest rates to support the economy. The business picture of groups of industries in the first quarter therefore also had a divergent movement.

According to Agriseco Research, the profit in the first quarter of the real estate group may decline due to the high base level of the same period last year, the demand decline in the context of the economy still facing many difficulties and the tight capital mobilization in the period. high interest rate environment.

In the medium and long term, policies to support dismantling and promoting the real estate market include: Decree 08 on privately issued bonds, Resolution 33 delaying loan interest payments, reducing loan interest rates, and land laws. Real estate, housing, and real estate business expected to be issued from 7/2024 will help the real estate market to warm up gradually from the second half of 2024", Agriseco analyzed.

Meanwhile, the profit of industrial real estate group may slow down in the first quarter due to the high base level of the same period and slow FDI demand. However, businesses with large land banks available for lease and signing contracts in 2022 are likely to record revenue and profit in 2023.

For banks, profits may slow down compared to the high base of the same period last year when businesses have difficulty in accessing capital, and the demand to buy houses declines significantly in the high interest rate environment. In addition, the asset quality of banks is likely to decline when bad debts tend to increase in the context of tighter control of the real estate and corporate bond markets, and the ability of customers to repay loans affected.

The steel industry also faced many difficulties in the first quarter of 2023 because domestic demand continued to weaken due to the quiet real estate market; The export market is still not favorable due to the economic recession, not to mention the profit of the steel industry in 1Q2022 reached 9,856 billion VND, this is the high base level of the same period. However, there are some positive signals that have gradually appeared for the steel industry such as steel prices have recovered quite positively since the beginning of the year when China reopened and expected to accelerate disbursement of public investment capital in the future of year 2023.

For the retail industry, according to Agriseco, the environment of high inflation and interest rates for many quarters has affected people's consumption. In addition, people's disposable income is reduced because of policies to cut working hours or reduce personnel by businesses to optimize operating costs. Besides, the high interest rate environment also reduces the borrowing capacity of these businesses because retailers often borrow working capital to maintain store business. This is also the reason why retail businesses have recently had to adjust their stores to offer the most optimal model of profit.

In addition, the impact of inflation also causes the price of imported goods to increase in general, while it is difficult for retailers to pass on this increase to customers. Even the consumer demand stimulus programs are also promoted, which will increase operating costs and reduce profits.

Agriseco also predicts that the profit outlook for the first quarter of the wood industry will be less positive in the context that the demand for wooden furniture in major export markets such as the US or EU declines due to inflation and economic recession. The domestic market is also negatively affected because the real estate industry is facing many difficulties. In addition, the reopening of China will still make this country's wood and furniture products compete with Vietnam when exporting to the US market.

With the textile and garment industry, the profit of the whole industry may decline in the first quarter of the year due to weak demand in export markets while inventories in the US are still high. The signing of new orders of garment enterprises will face many difficulties during this period.

Similarly, the fertilizer industry's profit may decline due to the high level of business results in the same period last year; Fertilizer prices are cooling down sharply since mid-2022 until now; China's opening and loosening of fertilizer exports may increase competition in export markets and also in Vietnam, and fertilizer demand is already relatively saturated and unlikely to grow strongly.

Also according to Agriseco, the shipping industry's profit may decline compared to the high base level of the same period because of the cooling of sea freight rates.