Friday, August 5, 2022 16:51
The financial strikes of the US all the time have an effect on the worldwide inventory market and the Vietnamese inventory market specifically due to its financial place. So, the latest occasion that acquired consideration within the common market is the US central financial institution, the Fed, elevating rates of interest, how does it have an effect on Vietnamese shares?
First, let’s check out the rate of interest actions of the Fed and Vietnam’s inventory market over the previous 20 years.
Based on the evolution of the chart, it may be seen that the Fed’s rate of interest improve has not had a huge impact on the adjustment of the Vietnamese inventory market, besides 2018. In reality, statistics from specialists present that, in Within the rate of interest hikes of the Fed, VN-Index solely adjusted barely at 0.12% (from 2014-2018).
In 2018, VN-Index corrected sharply (about 25% from the height in April 2018) from the height, largely as a result of impression of the US-China commerce struggle, however in a roundabout way from the Fed’s rates of interest.
Evaluation of the results of the Fed’s rate of interest hike on Vietnam’s inventory market:
– When the Fed raises rates of interest, it’s going to have an effect on the foreign money charges in addition to the commerce steadiness between international locations, which is able to put strain on the financial insurance policies of different international locations, together with Vietnam. If the State Financial institution of Vietnam is compelled to boost rates of interest to make sure the soundness of the trade fee in addition to the commerce steadiness, it’s going to have an effect on the enlargement of manufacturing and enterprise, thereby affecting company earnings and costs. share.
Nevertheless, through the years, interbank rates of interest in Vietnam are inclined to lower step by step and fluctuate not a lot, which helps to maintain the impression from the Fed’s rate of interest hikes not too nice.
– When the Fed raises rates of interest, it could trigger international traders to withdraw from Vietnam, affecting liquidity in addition to the upward momentum of the inventory market. In 2021, though the Fed has not formally raised rates of interest, the plans might also trigger concern for traders. In 2021, international traders web offered ~62 trillion VND and continued to web promote ~ 7 trillion VND in QI/2022. Nevertheless, this may be defined from the concern of excessive inflation resulting in an financial recession.
Think about the impression of the Fed’s fee hike in 2022 on the Vietnamese inventory market:
The Fed’s fee hikes will not have an effect on the financial system instantly, however often about 12 months later. Nevertheless, for the inventory market that’s closely influenced by investor sentiment, a right away response will happen.
From the worth chart, it may be seen that within the three Fed fee hikes, the adverse response solely happens within the second fee hike (Could 2022). Throughout this era, the inventory market correction was closely influenced by the struggle between Russia and Ukraine, in addition to the inflation state of affairs. So the actual response to the speed hike might be unclear.
Thus, the Fed’s rate of interest hike might solely have a short lived impression on the Vietnamese inventory market resulting from investor sentiment. If the State Financial institution of Vietnam doesn’t tighten financial coverage or the trade fee fluctuation between VND and USD just isn’t too massive, then principally, the impression might be negligible.