Tag: Dragon Capital

Amid a plunging local stock market and a growing risk of global crisis, a number of foreign funds such as Dragon Capital, VinaCapital, and Dynam Capital have expressed a belief that Vietnam’s economy is superior to others around the world. The Economist magazine has listed countries most at risk from imported inflation and supply chain disruptions, and Vietnam is not among them.

In an updated report, Dragon Capital said that in an environment of rising interest rates, expected returns in the stock market are unlikely to be outstanding. In the short term, the market will see many fluctuations depending on developments around the world. However, the influence of external factors on Vietnam is much lower than in emerging countries and is not systematic.

Dragon Capital believes that Vietnam’s monetary policy is tending towards caution and becoming narrower. It has also assessed that an official increase in operating interest rates by the State Bank of Vietnam (SBV) may not be seen this year.

In its macroeconomic and stock market update, Dragon Capital said it believes that after the Covid wave passes Vietnam’s economy may post growth of 7.0 per cent this year. Moreover, it believes that if the economic recovery package is implemented early and effectively, growth could reach 8.6 per cent.

According to Dragon Capital, oil prices may exceed $150 a barrel this year due to the crisis between Russia and Ukraine. Stock market investors therefore need to prepare for a worst-case scenario of inflation reaching 4.18 per cent in 2022, exceeding the target set by the government of less than 4 per cent.

Under a worst-case scenario, Dragon Capital forecasts that the oil price will exceed 150 USD a barrel this year and that inflation in Vietnam will hit 4.18 per cent; higher than the government target of less than 4 per cent. Trade will be in surplus, by $13.2 billion, if the oil price is $85 a barrel, but may fall to $12 billion if it reaches $100 a barrel.