Risks for the economy when cash flow has not yet been put in to production and business

Dr. Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets

According to you, what is the current investment cash flow like?

Currently, there are five main investment channels that people can refer to, including: stocks, real estate, gold, foreign currency and bank deposits. Although in financial theory, bank deposits are not a real investment channel because investing means accepting risks, but in popular opinion, bank deposits are considered an investment channel because the bank has to pay both principal and interest after a period of time to the depositor. Recently, we also have a new investment channel, which is virtual currency, but it brings more risks and needs to be carefully considered before participating.

With such investment channels, investors need to aim for three goals. First is safety, protecting asset value is an important factor. Second is profit, Third is liquidity, which is the ability to quickly convert assets into cash. For example, if you deposit money in a bank, you can withdraw it at any time.

Of all investment channels, bank deposits are considered the safest, but this is the channel with the lowest level because it only relies on interest rates, although bank interest rates have increased in some places.

Regarding gold, gold liquidity used to be very high, but now it is quite low because buying and selling gold has become difficult, the price has also decreased from VND 92 million per tael to about VND 78-79 million per tael. Therefore, I do not recommend investing in gold at this time.

Regarding profits, the stock channel is the channel that brings the highest profits. Since the beginning of the year, stocks have increased. However, the global stock market is fluctuating strongly, leading to many unusual ups and downs in the domestic stock market, leading to quite low liquidity in stocks. The real estate investment channel has not yet flourished, so the profit level is not high.

However, investment strategy also depends on each individual, especially age and risk appetite. If you are adventurous, you can choose to invest in stocks, especially stocks with high profit potential but with high risks. On the contrary, if you like safety, you should choose to deposit money in the bank for a long term to ensure stability. Moreover, the amount of investment also affects the investment strategy, if you have tens of billions of dong, there will be many opportunities to diversify the investment portfolio.

In production and business, what problems are cash flows facing, sir?

Currently, investors' cash flows are circulating strongly in the financial market, but the cash flows used for production and business activities are very modest. This is a risk for the economy when money is not put into production and business to create real money in the economy.

More importantly, bank lending interest rates are low, but many businesses do not dare to borrow capital, because product output is still facing many difficulties. The number of businesses that have stopped operating, are waiting for dissolution procedures and are increasing, showing that businesses are still facing many obstacles. The Government has been looking for ways to support businesses, pushing cash flows into production and business, but the Government can only encourage cash flows and cannot use administrative measures because it must comply with the principles of the market economy. Therefore, many solutions are needed to support businesses to access and absorb capital flows effectively.

In your opinion, what is the solution to this problem?

Enterprises need support to access capital through credit guarantee funds. These funds will help banks lend without fear of risk, thereby increasing investment efficiency and boosting the economy. In addition, Vietnamese enterprises also need to change and improve production capacity to approach international standards, to both meet market requirements and ensure financial criteria for bank loans, and access diverse sources of capital in the capital market.

From now until the end of the year, it is expected that the macro economy in Vietnam will continue to remain stable, major balances will be secured, and the confidence of enterprises and people will be strengthened, so investors and enterprises are always in a position to find ways to adapt and develop, self-transform in governance, business methods, and profit potential will be revealed to investors who know how to seize the opportunity.

Thank you!