Last updated: Thursday, May 16, 2013
What to Invest?Posted: Wednesday, May 30, 2012
Vietnam’s securities market is suffering a significant price decrease after a long time of increase. Gold has seen price diving while real estate has been predicted to reach plateau. Which field to investment in is now a hot topic.
Will securities market be the same as 2011 scenario?
When investors become more optimistic and confident than ever, the market starts to reverse against the uptrend. The continuous diving times have pressed on securities investors in general, especially individuals.
It was predicted by many securities companies that in May 2012, opportunities for investors to buy and keep stocks are quite clear. The investors themselves have felt confident, given HNX index having recovered to 52 percent since 2012 and improved liquidation of the market. It has seen many investors buying in.
Upon good mood of investors, the market suddenly reversed. In a wink, HNX reduced by 10 percent in only more than a week. The market’s moves in May has made investors think about scenario in 2011 when market diving caused a half of stocks in over 700 codes in two stock exchanges to stay still. Especially penny stocks are causing investors a hard time, even many small stocks have no liquidation.
The situation large firms buying out small ones still exists as an inevitable trend of Vietnamese securities market. Thus, individual investors will be at the most disadvantage in these games. Obviously, after 2 first months, the market saw remarkable moves; large organizations and foreign ones started to release their products in the context that the market witnessed increasing points. According to many experts, despite unavailable specific statistics in March and April, foreign and large organizations have released a volume of stocks valued about US$1.5 billion.
Stocks and gold
By a second half of April 2012, when the securities market saw signs of staying still, there were hundreds of stocks having growth rate of 70 – 100 percent. Such a rate can knock out any investor, especially those investing in gold and real estate at this time. However, the higher the profit is, the more risky it is. Despite price paid for this lesson, many have still committed to the mistake.
Given the relative comparison between two markets, gold market has rather high stability. With investment in gold, people have a trust which is narrow fluctuation margin and rather low possibility of sharp price fall. According to calculation, since October 2011 when gold trading and management policy were tightened, the gold price has only fluctuated between VND49 million and VND41 million/ounce (reducing by 20 percent against the peak).
Given the opinion of economic experts and latest moves of gold market, in the remaining months of 2012, the domestic price of gold might continue to decrease to VND37-38 million per ounce, following the common trend of the world gold market. In comparison with the peak in 2011, the decrease will be 30 percent, which is considered the plateau at the threshold stimulating demand power of the market.
Real estate – the most stable one?
Being considered the most stable one with lowest risk, real estate market is very selective about investors with requirements of much higher investment compared with securities and gold. Although many segments of real estate market has stayed still and seen price decrease in 2012, concerning the whole market in general, monthly price fluctuation margin is not large. For those spending their own money on investment, the decrease in real estate cannot cause such shocks as in securities market.
It seems to see no decline in Hanoi and HCMC real estate markets since the beginning of the year. Apart from the segment of medium and luxury apartments which was frozen due to too large demand (over 30,000 apartments) and had to offer promotional selling programs, the other segments have still kept the price, even seen slight increase with projects with convenient locations and good infrastructure.
Statistically, in Hanoi real estate market, the segment of ground land projects in the suburb also witnessed sharp price falls, in which the largest fall was up to 35 percent since early 2011. Concerning rates of spent money and price fluctuation, it was too little compared with loss of securities investors.
Real estate itself is considered by investors a property whereas stocks is regarded as a tool for surfing. Thus, the concepts of loss and gain are easier for securities investors etc.