A number of local stock brokerages have forecast that Vietnam's central bank will further cut the benchmark rates near term, meaning that more new cash flows will pour into the market, Thoi Bao Kinh Te said.
Saigon Securities Incorporation, the leading stock brokerage in Vietnam, projected that there have been signs that SBV will cut further benchmark rate under pressures of cooling down growth of the country's economy and many central banks joined efforts in cutting rates over the world.
The government of Vietnam will have appropriate decisions in the coming months, including further slashing prime rates to help boost the stock market, low-profitable cash flow will probably pour into the stock market, which is at reasonably cheap level for long-term investments and also help change current investment concepts, SSI said.
Meanwhile, Vietcombank's Securities Co said high liquidity of banks after Vietnam starts to loosen its monetary policy, which will create a new stimulus for the market. Savings, which are less attractive now, will run into the market which has sharply slid now, VCBS forecast.
Ho Chi Minh City Securities Co (HSC) predicted that Vietnam will cut 2 per cent to 10 per cent per annum from now to the end of Jan of 2009. Eurocapital Securities also pointed out four reasons for further benchmark rate cut: improved liquidity among banks, abating deposit rates pressure, low credit growth, banks lowering lending rates to boost disbursements.
Statistics by Eurocapital Securities showed that 215 out of survey 292 listed firms reported debts accounting for a third of their total assets and most of them rely on bank loans.
The government will also halve corporate income tax for those firms which listed their shares in 2004-2006.
Total market capitalization value of 316 listed firms on HOSE and HASTC dropped to #12.5 billion as of Oct this year, down from US$20 billion a year ago. VN-Index has lost 63 per cent so far this year. (Vietnam Economic Times, HOSE)
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