VN’s stock market sees volatility amid world’s less positive outlook

Việt Nam's stock market has seen strong volatility in recent years, stemming from investors' cautious sentiment in the face of uncertainties and less positive outlook on world economy and politics.
VN’s stock market sees volatility amid world’s less positive outlook
Investors look at stock indices on a computer screen. Domestically, cash flow on the stock market has been affected by changes in interest rates. Photo tinnhanhchungkhoan.vn

Việt Nam's stock market has seen strong volatility in recent years, stemming from investors' cautious sentiment in the face of uncertainties and a less positive outlook for the world economy and politics.

With the economic support measures after the COVID-19 pandemic, inflation has increased sharply in many parts of the world, prompting many economies to continue tightening monetary policy at a fast and strong pace to control inflation, said the State Securities Commission (SSC) at a meeting held in Hà Nội on Wednesday.

In 2022, the US Federal Reserve (FED) raised the operating interest rate by 3.75 percentage points through six consecutive adjustments; The Bank of England has adjusted interest rates up 7 times in a row since December 2021, to 2.25 per cent. The European Central Bank (ECB) has also adjusted interest rates three times already in 2022 in the context of inflation continuing to increase in this region. The move to tighten monetary policy in the world is raising concerns about the risk of recession and inflation in some countries.

The geopolitical situation will continue to be complicated and unpredictable. The Russia-Ukraine conflict, tensions between major countries and China's zero COVID strategy continue to aggravate disrupted global supply chains, and rising food and energy prices directly affect the costs of businesses and increase inflationary pressure, said SSC.

Domestically, cash flow on the stock market has been affected by changes in interest rates. After the Fed's continuous interest rate adjustments, the State Bank of Việt Nam has also increased the operating interest rate twice to cope with inflation and reduce external impacts, it said.

Deposit interest rates at commercial banks have also increased, attracting cash flow back to the banking system and reducing the attractiveness of short-term securities investment channels. In addition, investment capital flows on the stock market have also shifted to production and business activities as the pandemic is under control.

The stock market had grown strongly from 2021 to the first quarter of 2022. Therefore, when there are unfavourable factors, investors will tend to sell to take profits and avoid losses, creating selling pressure in the market. The investigation and prosecution of a number of large real estate enterprises in recent times related to violations in the issuance of corporate bonds have also affected the general sentiment on the stock market, creating cautious psychology, and affecting cash flow in the market.

The SSC said that it will continue to closely monitor developments in the economic-political situation around the world, and assess the impact and influence on Việt Nam's stock market in order to promptly take appropriate solutions to ensure the stable and transparent development of Việt Nam's stock market.

Recently on the stock market, there have been businesses increasing bond re-purchases, and individual investors selling bonds early due to concerns that businesses will not be able to repay their debts.

However, according to the Ministry of Finance, international practice and Vietnamese law both stipulate that corporate bonds are issued by enterprises on the principle of self-borrowing, self-paying and self-responsibility.

According to the Ministry of Finance, corporate bonds are not a bank savings deposit product but often have a higher risk when accompanied by high interest rates. With this feature, investors are responsible for self-assessing the level of risks when buying corporate bonds, and are responsible for their own investment decisions.

Therefore, when individual investors are invited to buy corporate bonds, they need to request the distributing organisation to provide complete and accurate information about the issuer and the bonds. Investors need to read carefully and understand provisions in bond documents and corporate information disclosures, said Deputy Minister of Finance Nguyễn Đức Chi.

When the issuer has payment difficulties, the investor can actively work with this business and the service provider to agree on a suitable settlement plan, ensuring the interests of both sides.

“Investors also need to pay close attention to the responsibilities and commitments of service providers. Commercial banks and securities companies distribute corporate bonds does not mean that these organisations guarantee the payment of debts. These organisations are only service providers, enjoying service fees from the issuer," said Chi.

However, the Ministry of Finance said the corporate bond market is still a potential market as enterprises are in need of capital for production and business development. Therefore, the Government's view is to continue to develop a safe, healthy and transparent bond market, said the Ministry of Finance.

Source: VNA

Related News

Vietnam is ready to welcome a new wave of investment in the semiconductor industry

Vietnam is ready to welcome a new wave of investment in the semiconductor industry

VCN - Deputy Minister of Planning and Investment Tran Duy Dong (Photo) gave an interview to Customs Magazine about Vietnam's preparations to attract FDI into the semiconductor industry.
Opportunities for Vietnam to participate in the global semiconductor industry value chain

Opportunities for Vietnam to participate in the global semiconductor industry value chain

VCN - The global chip race is heating up, and Vietnam has a unique opportunity to assert itself as one of the participants in the semiconductor industry value chain.
Ho Chi Minh City: Enterprises overcome difficulties, exports lead the country

Ho Chi Minh City: Enterprises overcome difficulties, exports lead the country

VCN - HCM City led the nation in exports. In order to get this result, in addition to the market's recovery signal, there are also the efforts of businesses to overcome difficulties.
What to do to develop Vietnam

What to do to develop Vietnam's creative economy?

VCN - According to MSc. Nguyen Anh Duong (photo), Director of the Department for General Economic Issues and Integration Studies under the Central Institute for Economic Management (CIEM), to develop the creative economy in Vietnam, it is necessary to first improve the institutional framework and policies to create a legal framework suitable for the development of the creative economy, creative industries and culture, and creative cultural markets.

Latest News

Improve Tax law compliance by enhancing information collection and analysis

Improve Tax law compliance by enhancing information collection and analysis

VCN – Determining information collection as key role, over the past time, the Tax industry has implemented many information collection solutions.
VND83,000 billion of State budget 2023 saved in 2023

VND83,000 billion of State budget 2023 saved in 2023

VCN - In 2023, the management of state budget expenditure was implemented proactively and strictly according to estimates, ensuring correct policies and regimes, thoroughly saving regular expenditures, and cutting down on unnecessary and slow spending tasks.
Banks promote online lending services

Banks promote online lending services

Banks are strongly stepping up online lending services via digital channels.
Complete tax compliance management for business households and individuals

Complete tax compliance management for business households and individuals

VCN - Facing with the situation where there are still businesses hiding in the shadow of business households or business households with revenue of hundreds of billions of dong using many invoices to increase input costs, the General Department of Taxation said it would strengthen management to reduce fraud and tax evasion for individuals and business households.

More News

Companies unveil M&A plans across multiple sectors at shareholders

Companies unveil M&A plans across multiple sectors at shareholders' meetings

The current General Meeting of Shareholders (AGM) season has revealed notable M&A plans by companies, encompassing various industries including agriculture, food, automobile design and real estate.
How did many banks

How did many banks' profits surge in Q1 2024?

VCN - The business results for Q1 2024 of commercial banks showed positive growth, with some banks experiencing up to 165% growth. Despite low credit growth, the banks' growth stemmed from other types of business and services.
New regulations in Circular 24/2024/TT-BTC aim to build streamlined and effective accounting apparatus

New regulations in Circular 24/2024/TT-BTC aim to build streamlined and effective accounting apparatus

VCN - Circular No. 24/2024/TT-BTC that provides guidelines for public sector accounting will take effect from January 1, 2025 and will be applied from fiscal year 2025, will have regulations to meet requirements of streamlined and effective accounting apparatus.
A series of solutions to improve administrative reform results in the Finance sector

A series of solutions to improve administrative reform results in the Finance sector

VCN - According to recently announced results, the Ministry of Finance is in the group of 3 leading ministries and ministerial-level agencies in the Administrative Reform Index 2023. However, some component criteria of the Ministry of Finance are still ranked at the lower level. To overcome this, the Finance sector proposed many synchronous and key solutions.
After six consecutive increase years, tax revenue from real estate transfer plunges

After six consecutive increase years, tax revenue from real estate transfer plunges

VCN – In 2023, real estate market was in extremely difficult time, purchasing power and liquidation had a sharp decline and there was a lack of cash flow, the amount of personal income tax (PIT) from real estate transfer activities plunged.
Improve processes and enhance experience to rebuild trust in life insurance

Improve processes and enhance experience to rebuild trust in life insurance

VCN - In Vietnam, the space and potential of the life insurance industry is still very large, so it is necessary to focus on implementing new solutions, improving product quality, and helping the market develop sustainably.
PM chairs meeting on fiscal, monetary policy management

PM chairs meeting on fiscal, monetary policy management

Prime Minister Pham Minh Chinh chaired a meeting in Hanoi on May 16 with ministries and agencies to discuss the coordination of fiscal and monetary policies aimed at maintaining macroeconomic stability, controlling inflation and promoting growth.
Many tax management solutions for e-commerce

Many tax management solutions for e-commerce

VCN - In Vietnam, the e-commerce market is increasingly growing and expanding with a diversity of operating models, many participants... posing great challenges for tax management.
Completely resolve problems and accelerate public investment disbursement

Completely resolve problems and accelerate public investment disbursement

VCN - In the first 4 months of 2024, the disbursement of public investment capital reached 17.46% of the plan assigned by the Prime Minister, higher than 15.65% in the same period last year. However, to further speed up this work, the Ministry of Finance believed that it needed to urgently overcome problems that have existed for a long time, especially in key projects.
Read More

Your care

Latest Most read
Improve Tax law compliance by enhancing information collection and analysis

Improve Tax law compliance by enhancing information collection and analysis

VCN - Over the past time, the General Department of Taxation has implemented many methods for information collection such as collecting information from tax management data of Tax authority; gathering information under coordination regulations between Tax
VND83,000 billion of State budget 2023 saved in 2023

VND83,000 billion of State budget 2023 saved in 2023

VCN - In 2023, the management of state budget expenditure was implemented proactively and strictly according to estimates, ensuring correct policies and regimes, thoroughly saving regular expenditures, and cutting down on unnecessary and slow spending tasks.
Banks promote online lending services

Banks promote online lending services

Banks are strongly stepping up online lending services via digital channels.
Complete tax compliance management for business households and individuals

Complete tax compliance management for business households and individuals

VCN - Facing with the situation where there are still businesses hiding in the shadow of business households or business households with revenue of hundreds of billions of dong using many invoices to increase input costs, the General Department of Taxation said it would strengthen management to reduce fraud and tax evasion for individuals and business households.
Companies unveil M&A plans across multiple sectors at shareholders

Companies unveil M&A plans across multiple sectors at shareholders' meetings

The current General Meeting of Shareholders (AGM) season has revealed notable M&A plans by companies, encompassing various industries including agriculture, food, automobile design and real estate.
Mobile Version