Future opportunities Many international organizations point out that the world has few options left, aside from continuing to pump money to support the economy. Even when vaccines prove effective, the low-interest policy of the Central Bank will remain. The loosening of monetary policy has also been raised to a higher level, when the Central Bank of China, South Korea, and Thailand added new weapons such as the Central Bank Digital Currency (CBDC). Accordingly, the loosening of monetary policy will not stop, even when the Central Bank has been digitized. This is consistent with the 4.0 era, as well as with the method to tackle the ongoing pandemic. Even after the pandemic ends, there will be many changes in business thinking as businesses will have more plans, products and services, and allow much more flexibility. So the stock market will be strongly supported by policy as well as transformation of the economy and enterprises. Therefore, the Vietnam stock market with companies and enterprises that apply well and create business efficiency will help attract more investment capital, thereby positively affecting the stock price. When the vaccine becomes widely effective, many industries will recover again and the economy will revive and so will the stock market. In addition, the world stock market will continue to rise to new heights, which will also support Vietnam's stock market. The control of the disease, and reasonable macro-management will help in attracting Foreign Direct Investment flow. This foreign cash flow will soon lift the market along with capital flow of individual investors, F0 investors, and strong domestic organizations. Concerns of market rise If we want the stock market to maintain a growth rate after a hot rise, as in 2020 that saw a huge level of liquidity, more cash flow and a faster economic recovery is needed. As the economy goes on a recovery momentum, financial assets have increased hotly which may easily lead to the phenomenon …
Raising interest rates
VIETNAM BUSINESS NEWS MARCH 8
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 …
Cautious optimism
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 …