VietNamNet Bridge – Vietnamese investors have lost billions of dollars overnight because of heavy fluctuations in the asset markets.

Gold, dollar prices up, stock prices, deposit interests down

The domestic gold price has unexpectedly jumped since late last week on a sharp increase in demand, though the world’s price remains stable, staying firmly at the high level of $1,300 per ounce.

The domestic price is marching towards the VND37 million per tael threshold after a long period of hovering around VND35.5 million. This has led to a widening of the gap, to VND3.5 million per tael, between the world price and domestic prices.

Given the estimate by some economists that 500-1,000 tons of gold is held among Vietnamese, the sum total of gold assets in the country have increased in value by $0.8-1.6 billion. However, if noting that the world’s price has not moved, one could argue that Vietnamese have lost the same sum of money in buying the “peace of mind” gold provides.

Meanwhile, the VN and HNX indexes of Vietnam’s stock markets have seen the sharpest declines in their history, rendering investors’ wallets considerably lighter. Both indexes dropped by 6 percent on the historic May 8 trading session, vaporizing $3 billion in equity. The subsequent trading sessions helped regain 30 percent of that value. However, another $2.5 billion vanished on the first trading session of the following week.

In total, nearly $10 billion have been blown away by the strong winds in the stock market over the last six weeks.

Investors’ flight from equity has been attributed to the burning questions of the day. With share prices tumbling, many stock millionaires like Pham Nhat Vuong, Tran Dinh Long and Doan Nguyen Duc have seen their stock assets decrease by trillions of dong.

The decline in savings interest rates have also affected depositors’ pocketbooks, while commercial banks have seen their total assets drop dramatically. Vietcombank, for example, had its total asset value decrease by VND23 trillion in the first quarter, while SHB’s dropped by VND16 trillion.

Market fluctuations would still flutter investors

In fact, the gold price increases had been anticipated. People want to convert dong into other kinds of assets, out of fear of the currency’s devaluation. But with stock prices declining, bank deposit interest rates remaining low, and the real estate market still in hibernation, they seem to have no better option than buying gold.

However, what is happening in the gold market is still questionable to analysts. Demand is very strong in the south, while the market is quiet in the north. The gold prices quoted at the gold shops nationwide are the ones applied in the southern market.

In the latest news, dollar prices have soared since last Friday. Vietcombank, which is believed to be the biggest foreign currency trader in Vietnam, on Friday quoted the dollar price at VND21,175. That’s a jump of VND55 per dollar in total last week, the highest increase since last July.

An official of the State Bank, while denying a supply-demand imbalance as the reason behind the dollar price increase, suggested that people buying more dollars these days might be attributed to worries about uncertainties.

Manh Ha