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Lower interest rates ease access to credit
The central bank’s prime rate, cut to 11 per cent per year, has led to lower interest rates at commercial banks.
Banks cut their deposit interest rate from 18 per cent to 12 per cent, and lending interest rate from 21 per cent to 16.5 per cent.
The cuts have helped fund capital for cash-strapped companies.
Pham Van Minh, director of the Phu An Sinh Company in HCM City, said the company needed more capital to stock commodities for Tet.
"The lower lending rate has made it easier to get access to bank loans," Minh said.
Joint-stock companies have had more opportunities to improve their production and business efficiency through new loans.
Many individual investors are weighing several options to ensure the safety of their investments.
Two months ago, most investors’ first choice was usually bank deposits at high interest rates.
But now many individuals have begun to shift their attention to other investment areas, including shares and enterprise production and trading activities.
Many investors with little capital have been able to buy shares because of their low cost.
Joint-stock companies have also been handing out dividends to their shareholders so they will not have to pay income tax on profit earned from their securities.
However, next year, when the new Income Tax Law’ goes into effect, investors will have to pay personal income tax on securities.
High dividends have encouraged more investment in the securities market.
Nguyen Minh Duc, an investor at the ACB Securities Company’s (ACBS) trading floor, said: "Most shares are now priced low so investors’ risks are also at an acceptable level. Dividends of many companies are higher than profits created from deposit interest rates."
Huynh Tan Phong, an investor at SME Securities Joint-Stock Company’s (SMES) trading floor, said investors could receive dividends within only one month after buying shares.
When investors inject their capital into the securities market, more capital will be available for trading and production activities, including real estate, experts have said.
Some investors have also eyed the gold and foreign currency market but have been urged by experts to be cautious because of high risks.
VNS
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