In the monetary market and the stock market, there are recent new signs. From last weekend to the beginning of this week, Vietnam’s stock market immediately and clearly reflected the event of second wave Covid-19 outbreak. VN Index dropped, but the minus point of foreign capital flow during previous time reversed immediately. Right from the first session of the market, reflecting the incident of Covid-19, foreign investors returned to be net buyers.
Up to session of July 30, foreign investors had five consecutive sessions of net buying on Vietnam’s stock market, with a scale of one trillion dong. Although it is only short term, this is a new net buying chain, which is clearly changed from the previous net selling trend.
At the same time, in a channel attracting large amounts of money in the first half of this year, especially in May and June, the new spirit is also taking shape. That is the government bond bidding channel.
On July 29, the State Treasury held a bidding session for government bonds, the bidding volume was quite large with nin trillion dong. However, the call amount was only 116 billion dong, the winning rate was just over one percent. A phenomenon, because not long ago, the market witnessed a large investment flowing into the government bond channel, with bidding volume many times larger than the offering, as an expression of stagnant funds in cash flows and investment channels…
July 29 session’s results could be temporary. We have to wait until the next session on August 5 to confirm the continuity or not, when the next significant scale battle is held. However, the recent signs are not much surprise. In the third week of July, the winning ratio was recorded at only 66%, the lowest level since the beginning of June, while just the previous month also recorded very high with 80-90%.
There are various factors that shape the bidding results. But there is a new point, cash flow has no longer rushed into the government bond as just shown in the last two months.
Around the same time, the capital in the interbank market is no longer as cheap as a few months ago. Supply demand situation of capital in this channel is reflected in the sharp interest rate. Specifically, at the overnight interest rates of dong the largest scale of transaction in the interbank market the upward trend is clearly shown. If more than a month ago, the market recorded nearly zero levels, only 0.12 0.13 percent per year, from the beginning of this week, it has doubled, to around 0.25 percent per year.
At that time, state-owned commercial banks began to publish financial statements for the second quarter. As some institutional investors mentioned earlier, a large amount of money was withdrawn from the system. And as BizLIVE mentioned recently in the balance sheet of Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), the State Treasury’s term deposit has been absent, the amount of deposit payment is also very thin…
Also this week, the General Statistical Office updated regularly. The report shows that the speed of disbursement of public investment in July has been the highest in five years. Previously, the Governor of the State Bank of Vietnam (SBV) updated, the credit growth rate from May and especially in June showed signs of improvement compared to before.
Thus, all of the big flows are in the same direction: the funds are more lively and flexible, instead of stagnating and pressing interest rates on the interbank, or hiding with very low interest rates in government bond channel, or foreign capital also tends to be back in stock market.
In another channel, the USD price in the interbank market in recent sessions has officially reached the threshold of 23,175 dong the price listed by SBV. This opened up the possibility of SBV to net buy foreign currencies, providing a new fund to the market.
Of course, the above is still short-term, just emerging, as well as need more time to confirm some major changes, with the general point reflecting the more vibrant economy.
But then again, the second wave of Covid-19 pandemic approach to the community. This factor may change the above cashflow situation, or may hinder the re-excitement of the economy. This depends greatly on the ability to control the epidemic next time.
