Banking & Finance

With central banks around the world introducing policies to control inflation, the period of “cheap money” to support the world economy has officially ended, with pressure now on Vietnam’s operating interest rates. The continuous increase in government bond yields, meanwhile, has indirectly caused P/E in the stock market to be re-evaluated at a lower level.

According to Mr. Trinh Hoang Giang, CEO of HSC Securities, Vietnam’s stock market has fallen about 20 per cent and is likely to go down further, but the country’s economy is solid, with GDP growth forecast at 6-7 per cent this year. Now is therefore a good time to buy stocks, he believes.

A draft Circular on conditions for foreign loans to enterprises not guaranteed by the government, which the State Bank of Vietnam (SBV) consulted on, will introduce regulations to prevent such loans pouring into securities and real estate. Enterprises will also not be permitted to borrow foreign capital for repaying short-term debts.

Yuanta Securities has forecast that during the portfolio restructuring period in the second quarter, two foreign funds with a size of nearly $1 billion - the FTSE ETF (exchange-traded fund) and the V.N.M ETF - will strongly buy four stocks: FTS, SHB, NLG, and VCG.

In an update on Vietnam’s stock market outlook, the Pyn Elite Fund said global stocks may go down in the future but Vietnamese stocks, based on current valuations, are extremely cheap. The Finnish fund also expects that Vietnamese stocks will not be overly affected by the conflict in Ukraine or any collapse in the Nasdaq, and forecast income growth of 19-29 per cent this year.

With its plan to carry out term repurchase agreements of government bonds worth VND74.74 trillion ($3.18 billion) and to buy $200 million worth of foreign currencies, the State Treasury is expected to supply a total of VND78 trillion ($3.38 billion) to the market in the second quarter of this year, contributing to shoring up VND liquidity.