In the current context, according to financial experts, saving is still a safe and lucrative investment channel. It is also the popular choice.
Deputy general director of Hochiminh Stock Exchange (HOSE), Tran Anh Dao said that in just over the first two months of this year, the VN Index had dropped by 22 percent (as of March 16). The volume of net selling on the stock exchange of foreign investors from the beginning of the year up to now was equivalent to about four trillion dong (over $160 million), this was the period of time when the investors net sold the most in recent years.
VN Index from over 900 points to the end of the week dropped to nearly 700 points after the panic of disease. This indicates that the disease has a strong impact on the stock market. In a recent meeting between HoSE and fund management companies and securities companies, all agreed that the capital raising channel in the stock market this year would face more difficulties than previous years.
Initial Public Offering (IPOs) and equitisation plans of State owned enterprises (SOEs) and credit institutions may fail in 2020 due to difficulties caused by the Covid-19 epidemic. Businesses in the construction and real estate industry listed on the HOSE said up to 50 percent of their construction activities had been delayed since the outbreak of the disease. While most of the assets of these companies were pledged at banks as collaterals, it would have a significant impact on the cash flow of banks. For credit institutions, they are directly affected when the disease reduces the demand for credit, thereby lowering revenue and profits. Moreover, banks are also trying to cut all operating costs to reduce interest rates, supporting businesses and the economy.
Not only the stock market, real estate market and other commodity markets are also affected by the disease. With the real estate market, recently it has been saturated in the high-end housing segments, office apartments for rent and sea services. Meanwhile, the land market is quiet, disbursed capital for this segment also plummeted. Business performance of the real estate industry will be clearer in the next few days when the listed companies announce their financial statements for the first quarter. However, the analysts do not expect much optimism because many segments of the real estate market have been frozen for years and construction works are stalling in a number of large cities across the country.
While the gold market has fluctuated continuously, the price of gold has moved up and down with great amplitude, not creating attractive for the majority of people and only a land of gold trading enterprises. Statistics of the State Bank of Vietnam (SBV), HCM City branch showed that, in the first two months of 2020, the total gold bar purchased in the area increased by 62.6 percent compared to the same period in 2019 while the total gold bar sales rose by 60.8%. Overall, the total amount of gold traded is quite balanced. About gold business, the current gold market is not a land for amateurs, but mainly belongs to the gold businesses.
As for the foreign exchange market, under the active and flexible regulation of SBV plus the strict management of the authorities, the situation of foreign currency hoarding of the people has been minimised. Moreover, the US dollar interest rate is still anchored at 0%, making holding the US dollar no longer attractive. Therefore, many people now sell US dollar to hold the dong for more benefits.
In the current context, according to financial experts, saving is still a safe and lucrative investment channel. It is also a popular choice at the moment. According to SBV, HCM City branch, the total mobilised capital of credit institutions in the first quarter was estimated to increase by 0.27 percent compared to the end of 2019, in which, savings in local currency rose by 2.31 percent and savings in foreign currencies are low due to 0 percent interest rate.
