Pinpointing opportunities from traditional investment channels

July 14, 2022 | 16:45
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Amid global economic uncertainty, investors are urged to explore market opportunities from traditional investment channels.

The information was heard at the first panel of VIR's seminar on managing investments in a flexible environment. The seminar was hosted in Hanoi with the participation of top-notch economists and experts, who have provided deep analyses of the market conditions and opportunities for investors in the uncertainty period.

Nguyen Thi Hang Nga
Deputy chief investment officer, Vietcombank Fund Management (VCBF)

Pinpointing opportunities from traditional investment channels

The total asset value of open-ended funds and domestic ETFs across Vietnam reached VND74 trillion ($3.16 billion) in the first five months of 2022, an increase of VND1.9 trillion ($81.19 million) compared to the end of 2021.

The increase mainly came from stock funds, open-ended funds and ETFs. Meanwhile, bond funds recorded a decline of VND2.5 trillion ($106.8 million). The total value of fund management increased by about 1.9 per cent compared to the beginning of the year.

Despite the unfavourable market, our fund's assets still increased. VCBF is managing four open-ended funds. In particular, the return of the bond fund grew by 3.6 per cent within the first six months. The other two funds focusing on investing in large-cap stocks also achieved positive results after six months.

The analysis of the market prospect only plays a small role in our investment process. We don't rely on the prediction of market growth in the short term. We choose and hold investments in stocks which have long-term growth potential, good management team and benefit from Vietnam's economic development.

There are factors resulting in the decline of stock prices by 5-10 per cent, or even 20 per cent. However, we will not sell these stocks and buy them when their prices decrease. We will still hold these stocks of good companies with reasonable valuations in Vietnam's stock markets.

Meanwhile, we don't hold stocks that temporarily benefit from the supply chain disruptions. We continue to maintain this investment strategy with a diverse portfolio of stocks in different industries. Thus, our fund will be less hit by the dip in the market.

Nguyen Van Ngoc - Chairman, RB Group

Pinpointing opportunities from traditional investment channels

Real estate investors should take into account three factors when making an investment decision. The first is the right timing. At present, there are many negative indicators in the market such as credit tightening and the excessive growth of the market over the past two years.

The market will face difficulties in the next six months or even the next one or two years. However, Vietnam's real estate market has many attractive factors for investors in the medium and long term.

The second is the location. There are some regions and areas that benefit from the government's economic development policies and public investment capital flows. Some localities boast the advantages of developing tourism post-Covid. Timing is not good in the short term but there are many potential areas for real estate investment.

The third is the human factor, which is related to the different qualifications, knowledge, and experience of investors.

As investors' goals and financial capabilities are different, they may have formulated their own investment strategies. During this period, investors should opt for medium and long-term investments rather than short-term and speculative ones.

Tran Duc Anh
Director of Macro Research and Investment Strategy, KB Securities Vietnam

Pinpointing opportunities from traditional investment channels

In a period of stable economic development with little volatility, we can focus on business research.

However, in an uncertain context, it is very important to determine the trend of the industries. Given the current macro fluctuations, there will be some sectors that appear to be stronger or weaker than the general market, which depends on investors' expectations.

The bond issuance fraud of Tan Hoang Minh has affected the real estate market. After two and three months of the scandal, the real estate stocks plummeted, which also affected bank stocks.

The socioeconomic situation report by the General Statistics Office highlights the strong growth of domestic consumption in the first six months of 2022.

As a result, the total retail sales of consumer goods and services have increased steadily. It is clear that the retail industry benefits from pent-up demand post-COVID. Although not all retail businesses will grow strongly, the industry still offers opportunities for investors thanks to the people's rising income and the expanding middle class. The retail stock prices are not cheap so investors should pay attention to choosing the right time to buy stocks.

Dr. Le Xuan Nghia - Economist

Pinpointing opportunities from traditional investment channels

Volatility has hampered the global economy through the first half of 2022. The US inflation surged to a new pandemic-era peak in June, with US consumer prices jumping by 9.1 per cent year-over-year.

If the Russian-Ukrainian conflict lingers, it will have unforeseeable consequences on the global economy. The energy and food crisis are stemming from this instability.

It affects Vietnam by way of import. Specifically, Vietnam’s import price index increased by 11 per cent in June, which will be calculated in the consumer price index. Fortunately, Vietnam mainly imports goods for export. In other words, Vietnam imports inflation from the world.

The only way for Vietnam to ease inflation is to reduce taxes, which is a type of cost added to all goods. Take fuel for example – Vietnam imposes four types of taxes including 10 per cent VAT, 20 per cent special consumption tax, 7 per cent import tax, and 10 per cent environmental tax. Vietnam has approved a further 50 per cent cut in environmental tax on fuel.

Vietnam’s monetary policy remains stable amidst the global economic uncertainty. The country does not suffer from demand-pull inflation. This is the reason why Vietnam post a more stable economic recovery than other nations.

By Thanh Van

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