Banking & Finance

According to Ms. Ta Thanh Binh, Director of the Securities Market Development Department at the State Securities Commission of Vietnam (SSC), although the country’s stock market has been down slightly since March, it is still considered attractive and space remains for growth over the course of 2022. It also has many supporting factors, such as expectations of an upgrade to “Emerging Market” status and accelerated equitization and divestment by State-owned enterprises (SOEs).

Foreign investment funds continued to trade inefficiently and suffer losses in March. Their activities are expected to improve in the coming months, however, as the VN-Index is forecast to grow strongly throughout the year, driven by macroeconomic factors.

Bidding on government bonds is at a low level, although registrations are 1.8-times higher than bids. At the same time, interbank interest rates have remained high. This shows that the pressure to increase interest rates is becoming increasingly clear, especially as the speed of public investment disbursement will gradually rise.

Vietnam’s corporate bond market has grown strongly in recent times but been accompanied by risks regarding product quality. Management agencies must therefore warn investors and at the same time take drastic action to ensure the market reaches its potential to develop stably. The market now accounts for nearly 17 per cent of GDP and has become an important medium and long-term funding channel for businesses.

There was something of a contradiction in ETF (exchange-traded fund) capital flows to Southeast Asia in the first trading week of April, with flows pouring into Indonesia and Malaysia while nearly VND1 trillion ($43.67 million) was withdrawn from Vietnam. Foreign investors have net sold nearly VND8.2 trillion ($358.1 million) of Vietnamese securities so far this year.

Agreeing that the operation of the banking system is not perfect and that inadequacies in the economy hinder the release of all resources for growth, analysts have proposed six solutions to improve efficiency in the management, exploitation, use, and promotion of resources for socio-economic development.