Major role to play for fresh investment channels amid shifting funding flows

It has been a bumpy ride for many so far this year. What opportunities and challenges does Exness see in this new round of volatility?

Thai Viet Dung, director of Exness Vietnam

The market in the first six months of the year had many risks for large and small banks in the US and Europe. The US Federal Reserve has increased the interest rate from March 2022 to 5.25 per cent in order to quell inflation, which causes the value of bonds held by banks to decrease in value suddenly in a short time.

GDP growth in the US in the first quarter was 2 per cent and the second quarter was 2.4 per cent, staving off recession, but recession risks still hang ahead in Q4 when the lag of tightening monetary policy has enough time to take effect.

However, there are opportunities when traditional investment products face many challenges and arise legitimate needs of investors in accessing different investment channels.

The sources of idle money in the system of financial institutions are considerable around the world. When the market starts to cool down because the Fed’s monetary policy changes in 2024 towards reducing interest rates again, this cash flow will find its way out and back into different investment channels that are still determining low prices, as well as seeking higher profits.

Favourite channels are still stocks, corporate bonds, gold, and crypto. Thus, we need to access as many asset classes to invest at the same time to share the risk in many different markets.

Over the decades, global investment flows have shifted dramatically, creating more opportunities for new funding channels. In the current context, what is the role of these channels?

As central banks around the world increasingly need to expand their balance sheets, current capital flows want to move between various continents and asset classes. Therefore, at favourable times, new investment channels or asset classes are always created and developed to receive a small part of capital that must be moved from different markets.

Over time, the amount of money available to invest in the market is increasingly expanding around the world, while traditional investment assets can only absorb a certain amount of money.

This means the generation of new investment channels or new asset classes is a fundamental need for investors. New investment instruments such as derivatives, cryptocurrencies, or new investment fund management products are emerging strongly in the second half of 2023.

Some traditional banks worldwide are showing signs of increasing their presence in cryptocurrency portfolios to diversify their services. How do you see this trend faring?

The task of commercial banks has been to find ways to optimise fee revenue from services provided to customers.

In recent years, the number of individual customers with demand for crypto transactions has increased significantly. According to some organisations, there are about 420 million people using crypto around the world. This is a major source of fee revenue for commercial banks when acting as a place to store the assets of most individual and institutional customers.

The crypto user growth rate is also among the largest in the industry, with an average growth of about 190 per cent annually. This is a large and stable fee revenue source, as many banks around the world have been supporting their customers to buy and sell crypto on their own personal bank accounts.

At a high-level policy roundtable on central bank cryptocurrencies in Morocco in June, the International Monetary Fund said that it is building a platform to support currency trading for a number of central banks globally, in an aim to promote global payments in a safer and more efficient manner.

Exness believes this trend is inevitable because of the need to diversify assets and risks, as well as seek high growth in the context of increasing inflation with many uncertainties.

Exness teams up with University of Nicosia to provide blockchain education Exness – a pioneer in fintech with a strong focus on the advancement of the financial markets – teams up with the University of Nicosia's (UNIC) Institute For the Future to offer blockchain courses to all its employees.

Exness welcomes new chief marketing officer Exness, one of the largest financial trading platforms, welcomes its new chief marketing officer, Alfonso Cardalda.

Exness to sponsor Forbes Investment Conference in Ho Chi Minh City Multi-asset broker Exness will be participating in the prestigious Forbes Investment Conference as an official sponsor in Ho Chi Minh City. Taking place on May 19, the event will provide an overview of significant investment channels, including real estate, stocks, and digital assets.

Equities touted as investment must at 2023 Wealth Advisor Summit As the second panel session of the 2023 Vietnam Wealth Advisor Summit wraps up in Hanoi, industry leaders shine a light on the shifting investment landscape. The summit, held on August 8 in Hanoi, witnessed the participation of more than 300 leaders from securities firms and fund management companies.