Office Space For Lease In District 7 Ho Chi Minh: [Research] The Impact of Covid-19 on Economic Sectors

1. Pharmaceutical products:
• Enterprises in the pharmaceutical industry are expected to benefit when the demand of the people increases.
• The industry’s raw material supply may be affected by 80-90% of raw materials must be imported, mainly from China and India.

2. Aviation:
• Enterprises in the aviation industry are negatively affected by the sharp decline in passengers.
• However, after the end of the epidemic, the aviation industry is expected to benefit from low oil prices, stimulus packages from the government and strong demand for travel.

3. Bank
In addition to reducing lending rates, service fee exemptions and low credit growth affecting short-term profits, banks will also face the risk of rising bad debts in the medium and long term. term.

4. Real Estate
• Real estate industry is negatively affected by declining demand for office space, resort real estate and condotel.
• In the medium and long term, an oversupply of real estate in many segments is likely to occur.

5. Electrification
• Electricity businesses benefit from falling oil prices.
• Prospects of the electricity industry are evaluated positively due to strong growth in demand.

6. Seaport
• Export activities to China are negatively affected by slowing consumption.
• Port industry prospect is assessed negatively due to oversupply and reduced demand for commercial activities worldwide.

7. Rubber
• The covid-19 epidemic negatively affected the demand for rubber import from China, the largest rubber import market of Vietnam, accounting for over 60% of the proportion.
• While export activities face difficulties, the prospect of rubber industry comes from liquidation of rubber trees and industrial park real estate development.

8. Consumption
• Sales at retail stores may be reduced due to people restricting access to public places to avoid the possibility of infection. However, online shopping, delivery, and delivery activities may increase.
• The medium and long-term prospect of the retail industry is forecasted to be positive, benefiting from the rise of the middle class and rising demand.

9. Seafood
• The Covid-19 epidemic caused disruption of seafood exports to China, one of Vietnam’s main seafood import markets.
• Positive prospects from new generation FTAs such as CPTPP and EVFTA.

10. Textile
• The industry’s raw material supply is affected by still having to import nearly 90% of fabrics from China, Taiwan, Korea and 80% of fibers from the US, West Africa, and India.
• Positive prospects from new generation FTAs such as CPTPP and EVFTA.

11. Steel
• The Covid-19 epidemic has an impact on the steel industry in both production and consumption. Regarding production, prices of some steelmaking materials have tended to increase due to limited supply from China, such as coke, iron ore, electrode coal, refractory bricks … Regarding consumption, many construction works. At home and abroad, the use of steel is stagnant, causing the demand for steel to decline.
• After the Covid-19 epidemic, steel enterprises will face high inventory levels, and the pressure to compete with cheap Chinese steel will flood the post-COVID-19 epidemic.

12. Petroleum
• The oil and gas industry has to cope with the dual effects of the Covid-19 epidemic and the decline in oil prices.
• Oil and gas industry prospect is assessed to be negative due to the impact of the world economic growth slowing down. However, we still leave the possibility of a sharp increase in oil prices thanks to OPEC reaching an agreement to cut production or occurrence of force majeure events such as the oil plant in Saudi Arabia was attacked, or impulsive. Suddenly the US-Iran escalates.

13. Securities
• The sharp drop in stock prices during the Covid-19 epidemic could cause securities companies to experience a decline in revenue and profits, as well as increase the risk of margin lending activities. However, after the epidemic is under control, stock prices are forecast to recover strongly.
• The prospect of the securities industry is assessed to be neutral in the medium and long term due to fierce competition between domestic securities companies and foreign securities companies, superior in size and financial potential, in The context of the stock market continues unpredictably.

14. Insurance

Insurance enterprises may have to increase their compensation costs if the Covid-19 epidemic is widespread. Meanwhile, low Government bond interest rates negatively impacted on the industry profit.

15. Cement
• Covid-19 epidemic caused cement consumption in the domestic market as well as export markets, especially the Chinese market, to plummet.
• Prospects for the cement industry are evaluated as neutral due to low demand for growth. In particular, the construction of infrastructure is slowly implemented, real estate shows signs of slowing down, and residential construction increases slightly.

16. Travel
• The tourism service industry is greatly affected by the declining number of tourists in two major markets, China and South Korea. Specifically, in February, the number of Chinese and Korean tourists to Vietnam decreased by 62% and 16% respectively.
• Tourism industry is expected to recover strongly after the virus is controlled.

17. Cars
Covid-19 epidemic not only reduced the number of customers coming to dealers, but also negatively affected the domestic automobile industry due to the shortage of spare parts. In 2019, Vietnam imported nearly US $ 4 billion of auto parts, of which nearly 18% from China and approximately 29% from South Korea. As for truck manufacture, more than 70% of spare parts are imported from China.

Source: Aseansc

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