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Companies hold cash as inflation strikes

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Many companies saw their capitalisation decrease close to their assets in cash which was considered safe in the ups and downs of the financial market turmoil triggered by the rate hike. —  Photo reatimes.vn

HÀ NỘI — Companies with abundant cash have an advantage in the inflation hurdle and a down-trending market.

The US Federal Reserve last week announced a rate rise by 0.75 percentage points – the strongest increase since 1994. Inflation in May rose to the highest level in 41 years, forcing the Fed to act more aggressively than forecast.

In Việt Nam, although the inflation kept stable at 2.64 per cent in April, risks existed as Việt Nam will find it tough to stay out of the global rising inflation trend. Several banks started to increase deposit interest rates.

The rate hike created turmoil for the global financial market, including Việt Nam, with the VN-Index dropping by dozens of per cent in just over a month, with many stocks falling by 40-60 per cent.

According to Mirae Asset, many companies saw their capitalisation decrease to close to their assets in cash, which is considered safe among the ups and downs.

Updates from Fiinpro showed that Vietnam LPG Trading Joint Stock Company (PVG) had the largest net cash ratio, about VNĐ690 billion, equivalent to more than 218 per cent of the company’s capitalisation.

Hoàng Huy Financial Services Investment (TCH) had a net cash value of VNĐ7.8 trillion or 97.5 per cent of its capitalisation. Conteccons Construction (CTD) ranked third with a net cash value of nearly VNĐ3 trillion or 94 per cent of its capitalisation.

Many companies operating in the manufacturing industry saw good cash flow in the first quarter of this year, such as Petroleum Technical Services Corporation (PVS), PV Oil (OIL),  Petro Viet Nam Cà Mau Fertiliser (DCM) and Đồng Phú Rubber (DPR).

Insurance stocks were also expected to benefit from rising rates as these companies mainly invest in bonds and deposits at banks, with a modest proportion invested in stocks and real estate.

Companies with a high proportion of cash were BIDV Insurance Corporation (BIC), Agriculture Bank Insurance Joint Stock Corporation (ABI) and Bảo Việt Insurance (BVH).

Insurance stocks will also benefit from the plans of State capital divestment and increasing foreign ownership as well as the economic recovery in the second half of this year, which will help increase premium revenue.

According to Rồng Việt Securities, shares of industrial zone companies will also benefit from the development of e-commerce and the foreign direct investment inflow into Việt Nam.

SSI Research said that companies with available land for lease would have more advantages thanks to the increase in leasing prices of around 8-20 per cent in industrial zones such as Châu Đức, Phú Mỹ, Bàu Bàng and Yên Phong. — 

Source: https://vietnamnews.vn/economy/1252263/companies-hold-cash-as-inflation-strikes.html

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Vietnam’s 2022 economic growth projected at 7%

Vietnam’s GDP is likely to expand by around 7 percent in 2022, much higher than 2.58 percent growth of 2021.

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Minister of Planning and Investment Nguyen Chi Dung made the above statement at the Cabinet meeting in Hanoi on July 4.

With this scenario, the economy needs to expand 9 percent in the third quarter and 6.3 percent in the last quarter this year, the minister said.

In the first half, the Southeast Asian country’s GDP accelerated to 6.42 percent growth compared to the optimistic scenario of 5,1-5,7 percent as figured out in the Government’s Resolution No. 01/NQ-CP, dated January 01, 2021 on major tasks and solutions for implementation of socio – economic development plan and state budget estimate for 2022. 

Especially, the GDP grew 7.72 percent in the second quarter, which is the fastest growth pace for April-June period since 2011.

Earlier, the World Bank predicted Vietnam’s 2022 GDP growth at 5.5 percent if the COVID-19 pandemic is controlled.

The projection is lower than the Vietnamese Government’s predictions at 6.5-7 percent, HSBC at 6.5 percent and Standard Chartered at 6.7 percent.

Source: https://e.nhipcaudautu.vn/economy/vietnams-2022-economic-growth-projected-at-7-3346528/

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Dragon Capital buys 2.1 million shares of Sacombank

Asset management company Dragon Capital has bought 2.1 million shares of HCMC-based Sacombank, increasing its stake in the bank to 6.09 percent.

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On June 29, two affiliated funds, CTBC Vietnam Equity Fund and Norges Bank, bought 2.3 million shares of the lender while a third, Samsung Vietnam Securities Master Investment Trust, sold 200,000 shares.

The value of the deal is estimated at VND47.5 billion (US$2.03 million) based on the share’s closing price last Wednesday.

Funds under Dragon Capital own 114.8 million shares or a 6.09 percent stake in the bank.

In March, Dragon Capital had raised its stake from 4.98 percent to 5.05 percent, after its largest fund, Vietnam Enterprise Investment Limited, bought 1.25 million shares.

Source: VnExpress

Source: https://e.nhipcaudautu.vn/companies/dragon-capital-buys-21-million-shares-of-sacombank-3346515/

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Vietnam targets 7% GDP growth this year: minister

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HANOI — Vietnam is aiming for economic growth of 7% this year, the country’s planning and investment minister said on Monday, higher than an official target of 6.0%-6.5% set previously.

To achieve this, year-on-year economic growth in the third quarter needs to be 9.0% and in the fourth quarter 6.3%, minister Nguyen Chi Dung also said during a government meeting.

Dung said Vietnam’s budget was in surplus, giving scope for fiscal policy to be used to support businesses and residents.

“Credit institutions will need to further cut their lending interest rates to reduce input cost pressure for businesses and for the economy,” he said.

Vietnam, a regional manufacturing hub, started lifting its coronavirus curbs late last year, allowing factories to resume full operations.

The economy is recovering after growing only 2.58% last year, the slowest pace in decades.

The Southeast Asian country reported GDP growth of 7.72% in the second quarter, backed by strong export growth, but warned of upward inflation pressure for the rest of the year. 

Source: https://tuoitrenews.vn/news/business/20220704/vietnam-targets-7-gdp-growth-this-year-minister/67932.html

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