Power and retail businesses would do well this year but not bank and securities stocks, a Ho Chi Minh City-based analyst has said.


“The power sector will keep growing rapidly since demand remains far in excess of supply and the government is likely to hike power tariffs,” Phan Duy Dat, chief of research at Vietstock.com, said.


“I expect the power sector to grow at around 13 percent this year since the government targets economic growth of 6.5 percent.”


The government is speeding up construction of power plants by providing financial support, he said.


The 30 percent jump in retail sales in the week before Tet has eased concerns about a recession.


“Retail stocks are the best defensive stocks when the economy is in a downturn,” Vietstock said in a report on January 29, pointing out that US retail giant Wal-Mart’s stock rose 19 percent last year despite a 35 percent and 40 percent slump respectively in the Dow Jones and the broader S&P 500 index.


But Dat is pessimistic about bank stocks which have been hit hard by last year’s economic slowdown.


Both listed lenders, Asia Commercial Bank (ACB) and Sacombank (STB), announced a fall in earnings in the last quarter of 2008.


Bloomberg quoted the central bank as saying it would “closely monitor the quality of credit and keep credit growth in line with inflation” this year.


But analysts said the central bank’s efforts to control credit quality could make it difficult for commercial banks to deal with the increasing amounts of cash set aside for lending.


Banks would also have difficulty attracting deposits after a series of cuts to official interest rates, which means deposit rates have also been reduced.


Trading has been pretty dull on the stock market this year with the average daily turnover at 7.85 million shares, compared with last year’s average of 11.8 million.


“The market’s plunge forced many brokerages to cut jobs or withdraw some of their services,” Dat said.