Along with the boost in public investment, the groups of stocks that will benefit will include steel, cement, asphalt, infrastructure construction, logistics, civil real estate and industrial parks.
Real estate and construction stocks wait for public investment to "take off"
Along with the boost in public investment, the groups of stocks that will benefit will include steel, cement, asphalt, infrastructure construction, logistics, civil real estate and industrial parks.
In a recent analysis, experts from ACBS Securities Company assessed that there is still much room to boost public investment in the coming time.
Specifically, the picture of Vietnam's state budget and public debt is currently very positive, thereby creating a lot of room for increasing government debt and promoting public investment spending. The public debt/GDP ratio has been decreasing steadily over the past 10 years, currently at 36.6% at the end of 2023 and is estimated at 37% at the end of 2024. In addition, the budget deficit/GDP is maintaining stability around 4.0%.
In addition, the pressure to pay the principal/interest of government bonds in the period 2024-2027 is at an average of VND 113,000 billion/year. In the period 2028-2033, it is VND 211,000 billion/year. The interest rate of newly issued Vietnamese government bonds in the past has been maintained at a relatively low level.
After a period of positive growth in 2023, public investment in 2024 fell into a period of stagnation. State budget capital disbursement reached VND495,900 billion in 11 months of 2024, reaching 64.3% of the plan. Of which, transport sector projects disbursed VND62,700 billion, down 14.1%.
The reason for the slow disbursement of public investment capital is the implementation of the 2024 Land Law, which will take effect from August 1, 2024, increasing the cost of site clearance and suspending some projects for adjustment. In addition, the lack of materials and sand for filling also affects the disbursement progress.
ACBS expects public investment to be the main driver of Vietnam's economic growth in the coming time. In 2025, the final year of the 2021-2025 medium-term public investment plan, a record public investment of VND791,000 billion (equivalent to 6.4% of GDP) was approved by the National Assembly. This budget will help accelerate the construction of key projects such as the North-South Expressway Phase 2, Long Thanh International Airport, and the North-South high-speed railway.
To promote capital disbursement for key infrastructure projects, the Government has issued a series of measures to promote public investment disbursement. Notably, on November 29, 2024, the National Assembly passed the Law on Public Investment (amended) effective from January 1, 2025 and the Law amending and supplementing a number of articles of the Law on Investment under the Public-Private Partnership (PPP) method effective from January 15, 2025. This will be a bright spot to help resolve difficulties and speed up the progress of infrastructure construction.
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| Source: ACBS |
Along with the boost in public investment, the groups of stocks that will benefit will include steel, cement, asphalt, infrastructure construction, logistics, civil real estate and industrial parks.
For example, the North-South Eastern Expressway Project in the 2021-2025 period has a total investment of VND 146,990 billion, the total project length is 729km, divided into 12 component projects and has started construction in 2023, the basic progress is expected to be completed in 2025, put into operation from 2026. This is a project that the Ministry of Transport has assigned contractors for consulting, construction, technical infrastructure relocation, site clearance compensation and resettlement packages, thereby shortening the time, speeding up progress and ensuring construction quality. Construction and installation enterprises such as VCG, HHV, and C4G were assigned by the Ministry of Transport to bid for the North-South Expressway phase 2. The 2025-2026 period is considered the profit point of these enterprises.
Other key infrastructure projects such as Long Thanh Airport, Ho Chi Minh City Ring Road 3, and Hanoi Ring Road 4 are also being focused on site clearance and implementation, in order to closely follow the implementation schedule.
ACBS assessed that some monitored infrastructure construction enterprises have estimated backlogs (remaining orders) value as of the end of September 2024 to be 2-4 times higher than the average revenue value in the period 2021-2023, thereby creating a basis for these enterprises to record revenue growth in the next 2 years.
Source: https://baodautu.vn/co-phieu-bat-dong-san-xay-dung-cho-dau-tu-cong-cat-canh-d236285.html
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