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Despite problems, VN’s economy remains on right track
The VN-Index saw a run-up for 10 straight days by last Friday, in the process going past the 400-point benchmark that had been breached during the 24 continuous losing sessions earlier.
Ha Noi’s HASTC-Index gained 11.42 percent, or 125.55 points, during the period.
Besides the stock market recovery other important economic indexes too have sent positive signals.
Exports in the first half were worth US$29.7 billion, 32.8 percent up year-on-year. Foreign direct investment committed in that period was US$31.6 billion, a new high and three times the amount committed in the same period last year.
The numbers are testimony to the fact that the government’s macroeconomic measures are on the right track.
Monetary policies are being tightly controlled. Prime Minister Nguyen Tan Dung has instructed agencies concerned to maintain close oversight of the stock market and slap harsh penalties on violators.
The State Bank of Vietnam has warned banks not to offer or charge higher interest rates than fixed on loans and deposits, and scrupulously follow foreign exchange regulations. Soon, it plans to undertake a comprehensive inspection of all credit institutions in the country.
With the financial and stock markets rules becoming stricter and being enforced better, and the Ministry of Finance and the central bank frequently holding meetings with foreign and domestic investors, the economy is becoming increasingly transparent.
At the meetings, the authorities have been willing to provide what was hitherto “confidential” information -- for instance, information on foreign reserves held by the State Bank. The US$20.7 billion reserve it holds is thought to be adequate to ensure import payments and a stable exchange rate.
Importantly, the increasing information flow is bolstering investors’ confidence in the Vietnamese economy.
Financial institutions like the World Bank, France’s Societe Generale, Standard & Poor’s, HSBC, and Standard Chartered Bank have hailed the government’s measures to curb inflation.
US-based consulting group Russel Investment has added nine companies listed on the Vietnamese stock market to its Russel Global Index that allows investors to globally track the performance of certain market segments and investment managers to measure their own performances.
This marks an important step forward for the Viet Nam stock market’s international integration.
Despite facing many challenges, the Vietnamese economy has still been among the best long- and medium-term performers in Asia.
Major business groups have pledged to stay in the country for a long time and continue to invest here.
VNN
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