Fed raises interest rates

According to a survey recently conducted by the US Federal Reserve (FED), the economy in four out of 12 regions of the US seems to be “at a standstill” or registering modest growth, while the economy in four other regions began to fall sharply last month. The economy in four other regions started to decline deeply in November. In its biannual report, the FED said that even in regions that recorded growth, economic activity was still at a lower level compared to the pre-pandemic period. In the context of the US continuously setting new records regarding the number of new infections and deaths each day in recent weeks, the labour market has also witnessed negative signals. A newly released report by the ADP Research Institute shows that US private-sector job growth in November fell to its lowest level since July, with employers adding only 307,000 new jobs. A senior ADP leader stated that although November saw an increase in the number of new jobs, the pace of job growth continued to slow down. The figure of 307,000 new jobs last month was only equal to 40% of the number recorded in September, proving too few to help the US recover the 19.7 million jobs lost in March and April. Commenting on the “gloomy picture” of the world’s largest economy, the FED said that the US is undergoing its largest wave of COVID-19 with the number of new infections per day skyrocketing, even at a higher level than the worst days recorded in last spring, forcing local governments to re-impose restriction measures and pushing the economy into more difficulty. Meanwhile, a growing number of economists are concerned that the danger of the health system breaking down before the pandemic ends could push the US economy into a “dual crisis” in 2021. Given the “dark cloud” overshadowing the economy, US politicians are stepping up with solutions to save the economy from slumping further. Speaking before the US House of Representatives Committee on Financial Services recently, Chair of the FED …

[Read more...] about Pandemic paints a gloomy picture for US economy

In his latest assessment of the global economic outlook, OECD Chief Economist Laurence Boone said for the first time since the pandemic began, there is now hope for a brighter future, progress with vaccines and treatment have lifted expectations and uncertainty has receded. However, the OECD has cautioned that the recovery will be uneven across countries. Where vaccine are deployed in countries with effective test, track and isolate systems, economic performance will be relatively improved. Output in many other countries is projected to remain around 5% below pre-crisis expectations in 2022. So far, the global recovery has been supported by trillions of dollars pumped in by governments and central banks. The OECD has stressed that the money taps must be kept open, despite breakthroughs on the vaccine front. The recovery has been seen to be stronger and faster, because more and more activities have resumed. In Asia, manufacturing activities continued to recover steadily in November, with positive signs recorded in the Chinese economy. Manufacturing activities in China have accelerated the fastest in ten years, showing that the world's second-largest economy is slowly returning to pre-pandemic growth. Stable recovery of global demand also helped manufacturing activities in Japan move close to a stable level, while manufacturing in the Republic of Korea has also reached its fastest pace in nearly ten years. The world's number one economy has also witnessed a recovery, though still fragile. The US Federal Reserve (FED) affirmed that measures to support short-term funding of markets are helping increase the flow of credit in the US economy. Progress in the labour market and positive information on the development of vaccines against COVID-19 have helped create more impetus for economic recovery. The US Secretary of the Treasury assessed that the package of measures under the Coronavirus Aid, Relief, and Economic Security (CARES) Act worth US$2.2 trillion has helped …

[Read more...] about Cautious optimism

Small investors oppose expanding trading lot Ho Chi Minh City Stock Exchange (HOSE)’s proposal to raise the minimum trading lot to 1,000 shares is receiving mixed opinions from market experts and investors. The proposal was initiated by newly-appointed General Director of HOSE Le Hai Tra as a solution to reduce system overloads which have troubled traders recently. A 1,000 minimum trading lot will limit the participation of small investors, while the stock market is moving towards fairness and equality, said a budding investor. “My friends and I, when joining the stock market, only have a few tens to several hundreds of millions of dong, raising the minimum trading lot to 1,000 shares will directly affect our investment capacity,” said individual investor Diep. “With expensive stocks, we may have to spend hundreds of millions of dong to buy the minimum 1,000 shares,” she said. According to Diep, the stock market has never had such a chance for growth. New cash flow into the market pushed liquidity to a record high level. However, the new proposal may not only prevent new investors from entering the market but also discourage existing investors. “The plan to raise the minimum trading lot to 1,000 shares could quickly reduce the number of orders delivered daily on HOSE. However, it will cause frustration among small investors who are directly affected by the plan as they think they are not protected,” said Do Bao Ngoc, Deputy General Director of Kien Thiet Securities Vietnam (CSI). “This plan, if in place, will affect the rapid development of the stock market under the current favourable conditions, one of which is great interest from global investors,” he said. “Under the new plan, the most affected are the investors whose trading accounts have VND1 billion or less,” said Nguyen Hoang Hai, Vice Chairman of Viet Nam Association of Financial Investors (VAFI) According to VAFI statistics, investors whose trading accounts have VND500 million or less …

[Read more...] about VIETNAM BUSINESS NEWS MARCH 8