Sharing at the seminar "Securities prospects and opportunities to the end of 2020" organized by FiinGroup, Mr. Nguyen Tu Anh - Director of Department of General Economy & Central Economic Committee commented that interest rates decreased in The past time is reasonable, in the context of ample liquidity of the banking system and low credit demand.
Mr. Tu Anh said that in the coming time, interest rates will be difficult to increase, but whether to decrease or not, it is necessary to consider maintaining the stability of the exchange rate. If interest rates fall too low, it can increase the dollarization of the economy.
Meanwhile, Mr. Nguyen Duc Hung Linh - Chief Investment Officer of PVIAM said that the current deposit interest rates (about 6-6.5% / year for 12-13 month terms at ancient commercial banks medium portion) are well below inflation expectations by less than 4%, so further reductions in interest rates are possible.
"We are almost certain that given the current context, both in terms of cost-push and demand-pull, inflation cannot exceed 4% and the trend will be steadily decreasing. When we control the pork price, Vietnam's inflation will be low", Mr. Linh said.
Regarding the exchange rate, this expert predicts that the trade balance this year will be in surplus, the State Bank will buy more USD for foreign exchange reserves, thereby the exchange rate will be kept at a relatively stable level. Therefore, whether reducing the level of long-term interest rates to 6% or lower, it is still attractive enough to keep VND instead of keeping USD at 0% interest rate.
From the perspective of an investment fund manager, Mr. Dao Phuc Tuong noted that in addition to the positive impact of the lowering of interest rates on borrowers, one object that is negatively affected is the depositors. save.
Mr. Tuong emphasized that a lot of people do not know anything about stocks, about gold ..., only save money for interest. For them, when interest rates drop, interest returns decrease, their purchasing power also decreases. This has a great influence on consumer demand, especially the recovery of consumer demand after the epidemic.
For securities, Mr. Dao Phuc Tuong said that investors have recognized that securities are an alternative investment channel when interest rates are too low, people tend to put money into this investment channel.
However, this expert said that it is necessary to ask the question "why are interest rates low?". Low-interest rates indicate that the business is in trouble, proving that the risks to stocks are increasing. Therefore, in addition to the positive factor from the cash flow movement, investors should also pay attention to the risk premium. In the current context, the risk premium is increasing.
"We should not expect that falling interest rates will be good for stocks. Given the current level of interest rates, in my opinion, falling interest rates are a risk for stocks, not good for stocks contract ", Mr. Dao Phuc Tuong stated his perspective.
Commenting on how the cash flow factor affects the stock market in the coming time, Mr. Nguyen Duc Hung Linh said that it is difficult to have new cash flow flowing into the market at the moment, because "the price has increased. then it doesn't excite newcomers either ".
Mr. Linh emphasized that even if interest rates are reduced at the present time, it cannot stimulate people to move away from the existing accumulation channel, because For those who are interested in stocks invest in the period of March-May when the market bottomed and reversed going up, while the price level of the stock market is at a high level, so it is very difficult to attract new cash flows.
"I think at this stage, when overseas is selling and the market is very volatile, everyone is concerned about risks, the market may need a spark to create a fire. I think people dare to bravely buy-in waves but the market does not know the disease prospects, it is likely that these people have got a lot of information, "this expert said.
Sharing the same point of view, Mr. Dao Phuc Tuong said that in order to attract new cash flow, the stock market must have a "spark", perhaps from the policy or from the bright prospect of the business within 12-18 months. next.
Mr. Tuong also emphasized that the market must be cheap enough for investors to pour money. "The market we are currently in the period of lack of leadership, when we see leadership, then we are confident that the cash flow will come in because there is certainly a lot of money left," especially when looking at the lending limits for securities firms, looking at savings deposits. But why do they have to put money in when "the road is still foggy" when the valuation is not cheap enough to pour money? ", This expert suggested.
Mr. Tuong also shared his experience that those who have a lot of money in the stock market will pay attention to two basic factors: how far can the business go and when it can be sold.
Translated by Vietnam Credit