The Vietnam stock market at the end of February 2024 is at 570 points. After transaction sessions with record liquidity, it appears unlikely demand will be pushed up more.
At the same time, the share price has been relatively high, which made investors more cautious when deciding to participate in the market.
Domestic investors tend to sell shares while foreign ones tend to buy
Differentiation is expressed quite clearly when domestic investors have a tendency to sell share while foreign investors tend to buy shares. During the week, foreign investors made net purchase of more than 19 million shares, equivalent to VND413 billion. According to statistics, 639 over 679 listed enterprises published financial report of the forth quarter of 2013. Particularly, 239 firms have annual profits exceeding the target, equivalent to a very high rate of 35 percent. This is a very impressive figure given the current circumstance that the economy is still riddled with many difficulties, the listed companies have made certain recovery in production and business activities and started to grow. The General Statistics Office announced that the Consumer Price Index (CPI) in February 2014 increased 0.55 percent compared to the previous month and 1.24 percent compared to last December. Accordingly, the CPI has the lowest growth rate of the same period in 10 years.
Cash flow
The prestigious Moody’s has just released a report on the health of the banking system in Vietnam. In particular, Moody’s still holds negative outlook when assuming that the capital of Vietnamese banks will not be improved deeply for the next 12 to 18 months. The report, on the other hand, acknowledges a number of signals of stability of the macro economy and legal provisions in an effort to increase transparency in the operations of the banks. The bad debt ratio that the central bank announced in December 2013 was 5.7 percent while that in the report is at least 15 percent. The difference comes from the evaluation and selection of criteria for the classification of debt which differ between the two sides.
However, the most noteworthy is that demand for loans with low interest which will make profits for banks will be reduced, at the same time it will not be enough to offset the cost of rising credit as well as able to improve internal capital. In fact, at the beginning of the new year, a series of banks lowered interest rates; some banks even cut the rate twice in just a few days due to excess capital. Specifically, the interest rate of terms under six months has decreased by 0.1 to 0.4 percent, averagely. As for the term of one month with interest being paid by the end of the month, interest rate fell to only 6.5 to 6.55 percent a year. In general, interest rates for loan under one year have experienced adjustment. In the coming time, the State bank of Vietnam will also implement a number of measures to remove difficulties for banks. Typically, Circular 02, which is going to be conducted, allows creditors to keep the groups with good loans. In addition, the debt warned to move to high-risk groups will be reviewed or temporarily stopped to avoid being listed as bad debt.
The alternating ups and downs around 570-575 points will continue to take place. The movement of cash flow in each subclass of shares will attract the attention of traders. Information about expanding room (ownership percentage for foreign investors) which will be passed by the end of the month can bring immediate effect to the stock market.
PV
Đăng ký: VietNam News