Savings seems a golden choice among all investment channels

14-Jul-2020 Intellasia | Thoi bao Ngan hang | 6:02 AM Print This Post

In the thought of many Vietnamese people, saving was still a safe investment channel with a quite attractive profit rate when the highest interest rate was about eight percent per year.

Gold, bonds were attractive but unpredictable

In Vietnam, the situation of Covid-19 had been basically controlled, but which in the world had been increasingly complicated. That also significantly affected the decisions to send money of investors in choosing effective investment channels. For Vietnamese people, popular investment channels included real estate, gold, securities, bonds, foreign currencies and savings. However, according to experts, the choice of investment channel depended on the risk appetite of investors.

The gold market in recent days showed that the heat had not cooled down. On the morning of July 8, the world gold price continued to rise violently and for the first time since 2011, it had reached the important threshold of $1,800 per ounce. Domestic gold price was listed by Doji Jewellery Gold and Silver Group at 50.08 million dong per ounce and 50.33 million per ounce sold, an increase of 50,000 dong in the buying direction and an increase of 100,000 dong selling compared to the end of the previous session. SJC gold price was quoted at 50 million dong per tael by Saigon Jewellery Company and sold at 50.42 million dong per tael, an increase of 50,000 dong in both directions in the session on July 8.

It was not difficult to explain the reason for the increase in the price of gold, as the Covid-19 epidemic in the world still complicated with the second wave of infection exploding in many countries such as the US and India, leading investors to seek safe haven properties like gold. In addition, experts said that the increase in money into gold exchanged-traded funds (ETF) boosted gold price up. According to Bloomberg, the amount of gold held by gold-backed ETF had reached nearly 3,235 tonnes, an increase of nearly 656 tonnes from the beginning of this year, which was even higher than the recorded rise in 2009. In cases where speculators saw the gold market had been feverish, they spent money on surfing, creating more opportunities for gold prices to rise.

Admitting that the rapid increase in gold made the short-term attractiveness, Chau Dinh Linh, from Banking University of Hochiminh City, said that it was difficult to predict gold price movements. It was likely that this precious metal would have a downward adjustment in the short term. Therefore, investors should be very cautious. Sharing the same opinion, Nguyen Tri Hieu, a financial expert, shared, gold prices could not keep increasing. Moreover, the domestic gold price had a difference between the buying and selling prices, so the risk became very high.

Another channel that was currently attracting attention was the corporate bond. According to the statistics of SSI Securities Corporation, the total amount of corporate bonds issued from the beginning of the year until then estimated at 159 trillion dong, up 50 percent compared to the same period in 2019. In particular, individual investors had direct purchase of nearly 22.7 trillion dong, equivalent to 15 percent of the total issuance, higher than the average of nearly 10 percent of 2019. According to SSI, the fact that corporate bonds absorbed a considerable amount of money was due to the yield of corporate bonds being 0.8 percent to 1.7 percent per year higher than the savings interest rate. However, recently the Ministry of Finance had once again warned investors to access information, carefully analyse the risks that might occur when investing in bonds. Especially investors should not buy bonds just because of high interest rates but had not thoroughly studied the characteristics of bonds and the risks might occur.

Savings deposit was slow but sure

Some other investment channels, such as securities, real estate, according to experts, were not very satisfactory. Affordable real estate was only attractive in some places and depending on the segment, but generally still in a gloomy state. Moreover, investing in real estate required investors to have long-term capital as well as to be knowledgeable about this market, rather than using leverage, the risks were huge.

For securities, Chau Dinh Linh said that the proportion of investors opening new trading accounts was high, but most of them were due to incentive activities, while the actual trading accounts were insignificant. Linh pointed out that although the new cash flow increased in the amount, but the real money for trading was not much. The stock market had surged up but soon after, it had been constantly gloomy. In addition, stocks were also affected by production and business activities. When many businesses were currently suffering from losses, it was difficult to create an increase in the value of stocks. Some securities companies largely stated that, in the short term, sideways fluctuations were expected to continue to be the main trend. Experts also said that this investment channel were not for all but investors who had knowledge about the market.

In the thought of many Vietnamese people, saving was still a safe investment channel with a quite attractive profit rate when the highest interest rate was still about eight percent year. That was the reason why according to the State Bank of Vietnam (SBV)’s statistics, as of June 19, 2020, capital mobilisation of credit institutions increased by 4.35 percent compared to the end of last year. Although the level of mobilisation was currently lower than the same period in 2019. In the context of the disease outbreak, the economy faced many difficulties, especially when the credit growed slowly, the number of capital mobilisation growth was still high.

As a financial expert shared, most people still thought about savings channel, because they themselves did not have much need for investment in other channels, but most people worked to accumulate, this was the general psychology. The story of moving to other investment channels when savings interest rates fall was existing, but in terms of the general context, this part was not much. According to this expert, most people were very fond of savings channels, with small amounts. Those who had a larger amount of idle money, wanted to investment, they would diversify investment channels, but in which savings were still one of the prioritised options.

 


Category: Finance, Vietnam

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