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Stock market’s Tet holiday would last until June?
Securities trading floors have more and more poorly patronized, which has made people worried that the stock market’s Tet holiday may not last 9 days, but six months long. If so, it would be very difficult to resume the market operation.
The Vietnamese stock market has been facing a lot of difficulties and challenges, including the macroeconomic uncertainties, input material price increases, high inflation rate and dong/dollar exchange rate fluctuations. However, the most fearful thing is that the cash flow and the confidence have got depleted.
The market would get frozen after Tet
The Prime Minister has approved the proposal by the Ministry of Labor, War Invalids and Social Affairs to allow civil servants and employees to enjoy a long Tet holiday which lasts nine days from January 21 to the end of January 29.
This means that the stock market would also have a long Tet holiday of nine days. Observers have warned that stock investors may not return to the market after such a long period, and that the stock market would get frozen.
In fact, a lot of securities investors have become discouraged and they want to leave the market already. They still keep going to trade floors just to watch the stock prices, planning to sell stocks out if the stock prices increase just by a little, to stop losses.
The stock prices have dropped dramatically, which reflects the big difficulties enterprises are facing, including the high inflation rate, the sky high interest rates, the tightened cash flow, and the increasingly high input costs.
The challenges are still ahead, waiting for enterprises in 2012. The macroeconomic uncertainties really do not support the strong recovery of the market. The prices of many key goods and services such as electricity, water, coal and foreign currencies are expected to increase further.
Securities investors have been reassured that positive signs of the national economy have become more obvious. Especially, the inflation has become controllable, while analysts believe that the 9-10 percent inflation rate in 2012 proves to be attainable. The banking system has experienced the most difficult period and it is now taking the first steps in the process of restructuring.
However, the information seems to be just a little frame which cannot lift the spirit of the securities investors, whose confidence has nearly got exhausted. A banking expert, who asked to be anonymous, thinks that the amount of domestic investors on the stock market is at a very low level, just about several hundreds of billions of dong. The volume of foreign capital is much higher, but it has been frozen. He has warned that if the State does not take actions to give the market a “psychological lever,” the stock market may get paralyzed after Tet.
Supporting to improve liquidity – the thing that needs to be done
The above said banking expert said that the biggest worry for the stock market is that the stock market may not have visitors. If so, the market would not only close for nine days for Tet holiday, but for six months long. If so, it would be very difficult to restore the stock market.
The State Securities Commission SSC has kicked off a restructuring of the stock market, which will go together with the economic restructuring. The idea has been applauded by economists, who believe that the restructuring would help the market develop in a more sustainable way.
However, the restructuring would take a long time, while the stock market needs to be rescued now, immediately. Experts have urged to take some short term measures to help improve the liquidity.
The stock market now needs the cash flow, and in order to persuade people to pour money into the market, investors need to see the positive impacts on the market to be caused by the state’s policies, and see the bright future of listed companies.
Especially, some experts still believe that the State Bank should impose a cap on lending interest rates. This is an administrative order, but this may bring the desired effects.
Manh Ha
vietnamnet
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