On November 13, the State Bank of Vietnam (SBV) and the Ministry of Construction (MOC) organized a conference on real estate credit and social housing development. The event was praised by investors as it showed great efforts to seek solutions to problems.

On November 14, banks, securities and retail shares were the most bustling. The VN-Index on November 14 morning increased by 13 points. Nearly all the 13 bank shares in VN30 saw the prices increase at the end of the morning session. The sharpest price increases were seen in VPBank shares (VPB), and the Bank for Investment and Development of Vietnam (BIDV).

Nearly all securities companies’ shares increased in prices. And the same situation was seen on the afternoon session of the day. Meanwhile, real estate shares were under selling pressure.

Closing the November 11 trading session, the VN-Index increased by 9.66 points (+ 0.88 percent) to 1,109.73 points, while the HNX-Index increased by 0.58 percent to 227.43 points. 

Of the 13 bank shares of VN30, only HDBank (HDB) saw the prices decrease slightly, while the remaining all saw prices increase. STB price rose to VND30,000 per share (+ VND750), BID to VND43,000 (+ VND900), TCB to VND31,500 (+ VND600)

The market liquidity was high, VND19 trillion, including VND17 trillion at the HCM City Stock Exchange (HOSE).

At a meeting between SBV, commercial banks and real estate firms, VPBank CEO Nguyen Duc Vinh repeated the government and state management agencies’ view that real estate is an important business field which needs high attention. Four or five conferences on real estate management have been held in the last year, and 3-4 directions from management agencies have been released.

However, despite the guideline, the real estate market has been facing difficulties because of difficulties of the national economy and bond crisis and problems in implementing the state’s policies and law enforcement.

Vinh stressed that institutional reform and legal barrier removal are major solutions to problems in the real estate market. Commercial banks are all ready to disburse money, and just need the ‘go ahead’ signal.

Vinh proposed that the central bank extend the validity of Circular 02 on restructuring debts and keeping the debt groups unchanged to facilitate banks’ lending to real estate firms. He also thinks that it is necessary to reconsider the risk coefficient of real estate loans (now at 200 percent), and reconsider subjects of the 2 percent interest rate subsidy credit package. It would be better if home buyers can access the credit package.

He said that businesses need to improve themselves and be sure that their operation is transparent. They should also consider selling assets, even if the deals bring loss.

Vinh stressed that the real estate projects with full legal status are safe projects and banks are willing to fund them. VPBank committed to disburse another VND10 trillion for the real estate sector by the end of the year, focusing on good projects, industrial real estate and housing real estate. In case of Novaland, if the realtor can settle its legal status, VPBank will make disbursement immediately.

High liquidity is a positive factor for the banking system. The overnight interest rate in the interbank market decreased to 0.62 percent on November 10.

SBV has recently stopped withdrawing money from circulation via T-bond issuance, while the net capital pumped into the market was VND50 trillion

This raises the possibility of low-cost credit in the last two months of the year.The liquidity of the banking system may have a positive impact on the stock market and securities companies.

The liquidity in the stock market has also improved. On November 14, the trading value of all the three bourses reached VND10 trillion, including VND8.85 trillion on HOSE.

Securities companies’ shares are also expected to increase in price thanks to the expectation on the new transaction system, KRX, using South Korean technology, which is about to operate this year end. ACB Securities has approval from SSC on the plan to increase charter capital to VND4 trillion.

Manh Ha