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Rising borrowing costs may push stocks down, HSC says
Vietnam’s stocks, Asia’s best performers in the past three months, may fall next year on concern that borrowing costs will climb after a subsidy on business loans ends, Ho Chi Minh City Securities Corp. said.
“Companies have posted good earnings in the first half this year because they benefited from the low borrowing costs as part of the government’s stimulus package,” Trinh Hoai Giang, deputy general director at the Ho Chi Minh City-based brokerage, said at a conference Thursday.
Vietnam said in January it will use VND17 trillion (US$954 million) of its stimulus package to subsidize 4 percent of loans for companies to boost growth. The benchmark VN-Index has rallied almost 38 percent since April 23 and closed Thursday up 3.5 percent at 434.20.
The measure may advance to between 480 and 520 by the end of this year when companies report their annual earnings, said Giang, adding foreign investors are interested in energy, consumer goods and infrastructure stocks.
“Companies will have a tougher time next year, especially from the second quarter when they have to borrow with higher borrowing costs and world demand for Vietnamese goods may not recover,” Giang said. “The government has already spent about 80 percent of its funding for subsidizing loans.”
thanhnien, bloomberg
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