Investors have little to play with

Choosing a suitable investment channel at this time of dragging economic uncertainties is not simple.

In reality, from early 2012 on the stock price rallied sharply, following by bank interest rates and commodities prices. On the contrary, gold, US dollar and property prices kept sliding, with property price sinking the most.

What will be these markets’ future perspective plays a vital role in an investment decision? Let’s have a look on factors which could influence on investment decisions.

In respect to the bullion market, the world price of the metal sank to below $1,600 per ounce and inclined to slide further, mostly on the back of appreciating US dollar. The Vietnam dong/US dollar exchange rate is basically stable. Inflation is softening. The gap in domestic and world market gold price is shortening. In this context, betting on gold investment would not be a smart choice.

The US dollar price on the domestic market being on an even keel is thanks to a bunch of factors. Accordingly, albeit the dong-denominated mobilising rate shed sharply in the past months it still remains high compared to that of dollar denominated deposits. Besides, through its message the State Bank showed strong commitment to keep dollar rates surging from 2-3 per cent at most in 2012. Hence, hoarding US dollars would not be wise.

In respect to property, unsold stock is big while consumers seemingly take a wait-and-see approach hoping a further decline in property price. Meanwhile, there are signs some developers may dump their products to pay off bank loans. Hence, caution is needed when betting one’s luck on the realty market.

Putting money into bank is a safe investment channel, but current interest rates remain modest. With regulated ceiling mobilising rate 9 per cent per year, the interest rate still remains positive as inflation is forecast to dip below this level. However, most investors seemingly take their bank deposits a short-lived option before they find more profitable investment channels.

In this context, securities investment is increasingly looked at as the most viable channel to investors. That is because the VN-Index felt continually in the past two years to just one third currently against its peak in March 2007. Besides, the government and Ministry of Finance’s determination to prop up market have brought confidence to market players.

Some industry experts forecast the VN-Index could hit 500 points by the year end against current over 420 points. This means securities would potentially become the most lucrative channel to investors.