Banking & Finance

Credit increased in line with economic recovery in the opening months of 2022 and focused on production and business, ensuring capital for development, according to State Bank of Vietnam Governor Nguyen Thi Hong. However, it is necessary to be cautious over inflationary risks and bad debt risks. As of May 31, credit had increased 8.04 per cent since the end of 2021 and 16.94 per cent over the same period of 2021.

The Ministry of Finance (MoF) has proposed six solutions to develop the stock market in a transparent and sustainable manner, including reviewing and amending the legal framework to enhance information transparency; strictly managing the activities of securities companies; amending regulations on corporate bond issuance conditions; and promoting equitization of and divestment by State-owned enterprises associated with listing on the stock market.

According to SSI Research, although there is no new impetus for the stock market to rise strongly in the current period, strong volatility will present opportunities for stocks in sectors that are recovering from the pandemic and are not overly affected by high inflation, such as oil and gas, ports and shipping, chemicals, non-essential consumption products, and information technology.

According to SSI Research, Vietnam’s stock market has been impressive compared to others in Asia, with net capital inflows since the beginning of the year. A deep correction in the market made valuations more attractive for long-term investments, which triggered cash flows from foreign investors. The proportion of foreign investors has improved significantly in 2022, to 7 per cent from 5-6 per cent in 2021.

According to Vietnam Report, Vietnam’s stock market is facing risks from high inflation and the impact of the Russia - Ukraine conflict. However, Bloomberg has said that the country’s stock market is rare in Asia, as foreign investors have been net buyers since the beginning of the year. The market is therefore expected to develop strongly in 2022.

According to a report from the Ministry of Finance (MoF) sent to the Prime Minister, a number of real estate businesses have issued bonds in volumes many times higher than equity, creating risks not only for investors but also for the financial system. The ministry has adopted many solutions to correct the market in 2022, including submitting a proposal to the Prime Minister on amending the legal framework on certain matters.