return icon

Banking, real estate not ideal options for short-term investors

By the end of this year, oil and gas, transportation, insurance, retail, and hydropower sectors will see positive signals, while the banking and real...

By the end of this year, oil and gas, transportation, insurance, retail, and hydropower sectors will see positive signals, while the banking and real estate sectors are not ideal options for short-term investment, said experts from DNSE Securities Company.

Experts from DNSE Securities Joint Stock Company said that the Fed continued to increase the US Dollar interest rate sharply by 75 basis points, leading to a high VND/USD exchange rate. VND depreciated against USD by 3.5-4 per cent in 2022, negatively affecting businesses that import goods or have loans in USD.

The State Bank of Vietnam (SBV) recently increased the operating interest rate by 1 percentage point due to the pressure of the Fed’s interest rate hike, showing that the SBV is prioritising the goal of controlling inflation and stabilising the macroeconomy, meanwhile maintaining low lending rates to support businesses. DNSE experts believe that this is a negative factor for the banking industry.

Amid rising interest rates to cool down inflation, global stock markets, as well as in Viet Nam, did not react positively as the cash flow sought safer havens such as the USD or Government bonds.

Inflation is under control, and the devaluation of the domestic currency is not as serious as in other countries, showing the proper management and direction of the Government and SBV in inflation control and exchange rate appreciation, and stabilising the country's economy.

Negatively affected

“The negative fluctuations in interest rates, as well as the high VND/USD exchange rate, will increase costs for businesses with a high debt structure in USD. Interest expenses increased due to continued high anchoring interest rates combined with exchange rate losses. The group of electricity and infrastructure; real estate sectors will be negatively affected by the current context,” said Nguyen Ngoc Linh, Proprietary Director of DNSE.

“Especially for real estate businesses that have loans in USD when carrying out large projects, these businesses will have to bear higher interest costs and deeper exchange rate losses due to USD appreciation, affecting business results.

“The increase of the operating interest rate by the State Bank to reduce the devaluation of the Vietnamese dong will help real estate businesses restructure debts, reduce interest rate and exchange rate risks. However, it takes time for the policy to come into reality, so in the current period, businesses will have to make efforts to prove their internal health and have many measures to combat external risks,” she said.

Oil and gas, transportation, insurance have opportunities

The crisis between Russia and Ukraine has reshaped the global flow of crude oil and changed shipping routes, making journeys longer as the EU switches to imports from the Middle East, and Russia switches to Asian countries such as China and India. It is expected that this will increase the price of fuel tankers. DNSE experts believe that the oil and gas transport group will benefit from this.

Insurance is an industry group that can benefit in the short term due to the SBV's move to increase operating interest rates, due to the specific nature of the industry, which is money trading and mobilising money through insurance products and bonds. Therefore, at the moment, this is the industry with the fewest risks and biggest benefits from the increase in interest rates.

Retail, hydropower

The retail industry is a notable industry group at the end of this year when the consumer demand for products increases after the COVID-19 pandemic, and at the same time, there are many holidays at the end of the year and petrol prices in Viet Nam are on the decline, causing inflation pressure to cool down.

The increase in electricity consumption thanks to the recovery of demand from the manufacturing sector after the pandemic also creates a push for the power sector, including hydroelectricity. VNS


Government plans to rearrange state-owned enterprises till 2025

Deputy Prime Minister Le Minh Khai has signed a decision approving a plan of rearrangement of state-owned enterprises for the period of 2022-2025 in the form of one-member limited company, equitization, re-arrangement and divestment.

Transport Ministry urges new ship channel for large vessels in Mekong Delta

The Ministry of Transport has urged Tra Vinh Province to implement compensation payment for site clearance and resettlement support to build a new ship channel for large vessels in the Hau River.

Toan retains WBA Asia belt against Amparo in Bangkok

Le Huu Toan successfully defended his World Boxing Association (WBA) Asia minimum-weight (48kg) belt during The Challenger event on November 30 in Bangkok, Thailand.

Billions of dollars from foreigners invested in Vietnam’s enterprises

Foreign capital keeps flowing into Vietnam through many different channels, helping investors regain their confidence in the stock market and the economy.

Urban areas, parks to be built on Red River alluvium grounds

Hanoi authorities plan to build new urban areas and eco-friendly housing, and develop open space with parks, urban squares and flood parks on thousands of hectares on the alluvium grounds of the Red River area.

Target of 1 million social housing units difficult to reach

The goal of developing 1 million social housing units may not be feasible.

Ministry to control rice import management

The Ministry of Industry and Trade (MOIT) fears the high level of rice imports and the failure to control imports will affect domestic production.

Gambling soars during World Cup

Football betting is taking place in the open air at venues where people gather to watch World Cup matches, or quietly online.

Michelin Guide to announce first Vietnamese restaurant selections

Hanoi and Ho Chi Minh City have been selected by Michelin as the latest destinations joining the international selection, as compiled by the Michelin Guide.

Ministry to crack down on Internet ads violations

The Ministry of Information and Communications held a conference in Hanoi on November 30 to roll out Internet advertising management measures.

Seven-day Tet holiday fixed for State employees

Officials, civil servants, public employees and workers of State administrative and socio-political organisations will enjoy a seven-day Lunar New Year (Tet) and four-day National Day holidays next year.

Vietnam has opportunity for energy transition towards green growth

Vietnam boasts substantial potential for wind power, particularly offshore wind power, providing an opportunity for the country to fulfill its energy transition target towards green growth.

PM requests combined efforts to combat IUU fishing

Prime Minister Pham Minh Chinh called for concerted efforts to fight illegal, unreported and unregulated (IUU) fishing while chairing a teleconference with 28 coastal provinces and cities on December 1.

Disciplinary measures against a number of leading officials, Party organisations

The Party Central Committee’s Inspection Commission held its 23rd session in Hanoi on November 29-30, during which it proposed disciplinary actions be taken against some leading officials and party organisations.

Big bosses lose billions of dollars

Several businessmen have built a fortune over the last decade, but their ambition of obtaining growth at lightening speed has caused their assets to drop dramatically.