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Capital still irresolute
Confused by the fluctuations of the commodity, gold, real estate, stock and foreign currency markets, a lot of investors think that it’s best to keep cash. Experts also say that it is now very difficult to predict the flow of capital.
Within just one month, the State Bank of Vietnam adjusted the basic interest rate four times, slashing the rate from 14% to 10% per annum, thus lowering the ceiling lending interest rate from 21% to 15%.
However, the general director of a joint-stock bank said that though interest rates have been going down, the wariness of banks and enterprises has increased. This explains why it is now more difficult than ever to disburse loans.
Ly Xuan Hai, General Director of ACB, said that the bad debt of 3rd category (subprime debts) of the bank had reached 0.5% (it was 0.3% at this time last year), while the bad debt of the 2nd category has climbed to 2%, double last year.
Meanwhile, people aren’t injecting money in stocks anymore due to the market’s continued falls. Pham Do Chi, Deputy Managing Director of VinaCapital, said that despite the brightening of the national economy, the VN Index is still on the decrease.
However, Dr of Economics Nguyen Duc Thanh from the Economics University under Hanoi National University said that the interest rate cuts would help the stock market recover.
As the global economy has been slowing down, experts have advised investors to inject money in gold. However, others have warned that the gold price could decrease further before seeing a new price hike wave, as currencies are devaluating. Moreover, as many economies are facing the risk of deflation, the gold price is not likely to increase sharply. Investors, many of whom have suffered from gold price fluctuations, will remain cautious about investing in the precious metal.
It remains unclear when the real estate market will defrost, though the prices have decreased by 30-40%. Investors who injected too much money in the market now cannot get their money back while buyers are still waiting for prices to decrease further. Analysts believe that the market will warm up no sooner than the end of 2009.
Experts think that as no investment channel can bring fat profit at the moment, people will inject money in the safest channel, bank deposits. The question now is which currency will investors keep, VND or dollars? The gap between the interest rates for VND and US$ deposits has narrowed, while the dollar price is tending to increase.
VNE
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