Expert warns about challenges for financial market in 2020

The financial market faces six risks the market will have to cope with in 2010, according to Can Van Luc, chief economist of BIDV.

There are three major economic markets, the labor, goods and financial markets, and if those, the Vietnamese financial market made up 323 percent of GDP in 2019.

Expert warns about challenges for financial market in 2020

BIDV's Chief Economist Can Van Luc



Luc said in 2019 the financial market developed in a more active and healthier way,. The monetary and fiscal policies were coordinated well, with a reasonable money supply to the economy, which helped keep the inflation rate at 2.73 percent.

The economist also noted the better resilience of the economy with forex reserves reaching a record high of approximately $80 billion, equal to 3.7 months of imports.

There are three major economic markets, the labor, goods and financial markets, and if those, the Vietnamese financial market made up 323 percent of GDP in 2019.
 

The achievements helped Vietnam jump from the 77th to 67th in the WEF global ranking in the competitiveness index.


Regarding the stock market, in 2019, the capital mobilization through the corporate bond market went well with VND250 trillion worth of funds raised, up by 7 percent compared with 2018.

However, Luc thinks Vietnam still needs to make bigger efforts to create balance for the financial market, where the capital sources still heavily rely on bank loans.

As for stocks, VND314 trillion worth of capital was mobilized in 2019, up by 13 percent. The shares of technology and telecommunication firms had the best performance with the price increase of 36.7 percent, followed by insurance shares with the 20 percent increase. Meanwhile, the prices of securities companies decreased by 16.3 percent.

The credit grew by 13.7 percent in 2019. Currently, credit still makes up 135 percent of GDP, a relatively high level compared with the economy’s size and economic development.

As of the end of 2019, the bad debt ratio had decreased to 1.89 percent. If counting the latent bad debts and the debts at VAMC, the figure would be 4.6 percent. The plan to reduce the bad debt ratio to below 3 percent in 2020 is feasible.

Luc pointed out six challenges for 2020.

First, the institution for digital economy and digital banking has been slow to be set up, while the national and enterprises’ database is fragmented.

Second, the complicated factors in the world will affect the oil and gold prices and exchange rate.

Third, Vietnam needs to increase capital for banks and it bears pressure from public debt payment.

Fourth, the number of cyberattacks increased by 104 percent in 2019.

Fifth, there are financial risks, but there is no common focal point for all segments such as banking - securities - insurance to prevent and manage.

Sixth, how will Vietnam manage its financial economy when 58 banks are considering launching their own cryptocurrencies?

Linh Ha 

Foreign banks start consumer finance boost in Vietnam’s market

Foreign banks start consumer finance boost in Vietnam’s market

Foreign banks have decided to boost consumer finance loans as the business segment is forecast to maintain double digit growth this year.

Vietnam finance ministry takes step to stabilize market sentiment

Vietnam finance ministry takes step to stabilize market sentiment

Vietnam’s stock market over the last few days has gradually recovered and rebounded, said Vice Minister of Finance Vu Thi Mai.

 
 

Other News

.
US firms create record 4.8 million jobs in June
US firms create record 4.8 million jobs in June
BUSINESSicon  03/07/2020 

The reopening of businesses has spurred job growth but a rise in Covid-19 cases may hamper recovery.

Chubb Life Vietnam honored “Best Companies to Work for in Asia 2020”
Chubb Life Vietnam honored “Best Companies to Work for in Asia 2020”
BUSINESSicon  03/07/2020 

Chubb Life Vietnam has been recognized as one of the “Best Companies to Work for in Asia 2020” by HR Asia, the continent’s leading publication for Human Resources professionals.

VN government to sell stake in country’s biggest brewery
VN government to sell stake in country’s biggest brewery
BUSINESSicon  03/07/2020 

The Government will sell its 36% stake, equivalent to 230.8 million shares worth some VND37.6 trillion (US$1.6 billion), in the Saigon Beer-Alcohol-Beverage Corporation (Sabeco), the country’s biggest brewery, this year.

Fabric production an issue for Vietnam's textile industry
Fabric production an issue for Vietnam's textile industry
BUSINESSicon  03/07/2020 

Fabric production is a challenge for Vietnam's textile and garment industry when it comes to free trade agreements (FTAs) requirements on product origin.

Vietnam's FDI inflows to increase
Vietnam's FDI inflows to increase
BUSINESSicon  03/07/2020 

A new wave of foreign direct investment driven by global uncertainty such as the US-China trade war and the COVID-19 pandemic is imminent in Vietnam, 

Predatory debt collectors hustling on borrowed time
Predatory debt collectors hustling on borrowed time
BUSINESSicon  02/07/2020 

Debt-collecting businesses are to be banned in Vietnam as part of local government action to protect customers’ rights, with the upsurge of predatory lending services triggering heated debate and eroding public trust.

Proposal steers sports betting to starting line
Proposal steers sports betting to starting line
BUSINESSicon  03/07/2020 

A proposed national steering committee is expected to help Vietnam build clearer prize-winning entertainment rules and set up closer connections between government authorities and investors 

EVFTA will broaden skies for aviation across Vietnam
EVFTA will broaden skies for aviation across Vietnam
BUSINESSicon  03/07/2020 

Never-before-seen activities in Vietnam’s aviation sphere are expected to come to EU businesses soon on the back of the landmark EU-Vietnam Free Trade Agreement.

RCEP benefits on horizon for ASEAN
RCEP benefits on horizon for ASEAN
FEATUREicon  02/07/2020 

With the Regional Comprehensive Economic Partnership scheduled to be signed this November, doors will soon open to attract more investment and swell Vietnam’s trade with international partners.

An abundance of advantages to diversify ops into Vietnam
An abundance of advantages to diversify ops into Vietnam
BUSINESSicon  02/07/2020 

Amidst the new wave of foreign investment and relocation after the pandemic, director general of the Foreign Investment Agency Do Nhat Hoang explained Vietnam’s outstanding advantages and how it can seize arising opportunities.

Vietnam closes in on tech app tax avoiders
Vietnam closes in on tech app tax avoiders
BUSINESSicon  02/07/2020 

Apple and Google are once again under fire over tax avoidance in Vietnam, with none of their revenues from their app markets being retained in the country. However, a new law could soon enable local authorities to take their cut.

Drugmakers fight to attain approval
Drugmakers fight to attain approval
BUSINESSicon  02/07/2020 

Switzerland’s drug maker Novartis Pharma Services AG has announced a GMP qualification for Lek Pharmaceuticals d.d. within the scope of certification for medicines in Vietnam,

PouYuen lays off thousands  due to Covid-19 difficulties
PouYuen lays off thousands due to Covid-19 difficulties
BUSINESSicon  02/07/2020 

More than 6,000 workers of the Taiwanese company, PouYuen, in HCM City have been laid off due to the company's business difficulties during the Covid-19 pandemic.

Fitch Solutions revises up Viet Nam’s 2020 GDP growth
Fitch Solutions revises up Viet Nam’s 2020 GDP growth
BUSINESSicon  02/07/2020 

Fitch Solutions have revised up its 2020 real GDP growth forecast for Viet Nam slightly to 3.0 per cent, from 2.8 per cent previously.

Domestic demand the driving force for agriculture to develop
Domestic demand the driving force for agriculture to develop
BUSINESSicon  03/07/2020 

Nguyen Quoc Toan, director-general of the General Department for Agricultural Products Processing and Market Development, under the Ministry of Agriculture and Rural Development, 

Zalo Bank not licensed by SBV and MoIT
Zalo Bank not licensed by SBV and MoIT
BUSINESSicon  02/07/2020 

The State Bank of Vietnam (SBV) and the Ministry of Industry and Trade have affirmed that they have not licensed Zalo Bank to provide online built-in financial services.

EVFTA to come into effect in a month
EVFTA to come into effect in a month
BUSINESSicon  02/07/2020 

The EVFTA will abolish 65 per cent of the duties on EU exports to its developing partner, with the remainder phased out over a 10-year period.

Footwear sector to improve supply chain to take advantage of EVFTA
Footwear sector to improve supply chain to take advantage of EVFTA
BUSINESSicon  02/07/2020 

Vietnam’s leather and footwear industry should improve its supply chain performance to take advantage of the milestone trade deal that Vietnam has signed with the EU and to recover from the effects of the COVID-19 crisis, 

World Bank Vietnam has new head
World Bank Vietnam has new head
BUSINESSicon  02/07/2020 

From July 1, Ms. Carolyn Turk will work at the World Bank (WB) Hanoi office as its country director in Vietnam, according to the office.

China maintains position as Vietnam's largest import market
China maintains position as Vietnam's largest import market
VIDEOicon  02/07/2020 

Despite the first half of the year seeing Vietnamese export turnover to China only reaching a mere US$34.8 billion, China retained its place as the country’s largest import market, according to the General Statistics Office.

 
 
 
Leave your comment on an article

OR QUICK LOGIN