Which investment channel will money flow into in the near future?

(TBTCO) – In the context of bank interest rates continuously falling sharply and remaining at low levels, where to invest to increase profits while still ensuring efficiency and safety is the concern of many investors.

Deposit interest rates hit the bottom of the Covid-19 period

In the early days of December 2023, regular VND savings deposit interest rates at banks’ counters continued to decrease by 0.1 – 1.35%/year compared to the previous month. The highest deposit interest rate for a 12-month term is only 5.7%/year, the lowest is only 4.8%/year.

Specifically, state-owned commercial banks such as Vietcombank, BIDV, Vietinbank and Agribank can only mobilize savings deposits with interest rates from 2.4%/year to 5.3%/year for terms from 1 year. – 12 months. In other commercial banks, dong interest rates also dropped sharply. For terms of 1 – 12 months, Techcombank is mobilizing deposits with interest rates from 3.4% – 5.2%/year; MB mobilizes from 3.2% – 5.1%/year…

Which investment channel will money flow into in the near future?
Deposit interest rates hit the bottom of the Covid-19 period. Photo: TL

In a recent report, VnDirect Securities Joint Stock Company said that as of October 31, 2023, credit had increased by 7.39% compared to the beginning of the year, 11% lower than the growth rate in the same period last year. .62%. Meanwhile, M2 deposit growth continues to improve despite the decrease in deposit interest rates.

The reason for weaker credit growth over the same period is that customers’ debt repayment ability is weakened due to high interest rates on loans in the late 2022 period while income decreases and the real estate market remains gloomy. .

With the State Bank’s orientation on reducing lending interest rates to support businesses, VnDirect believes that from now until the end of 2023, credit growth will improve and reach 10% compared to the beginning of the year thanks to the following sectors: Production recovered with production orders increasing again, the construction industry recovered thanks to promoting public investment in the last months of the year and domestic consumer demand increased again during the year-end holidays.

The average earnings-to-price ratio (E/P) of Vn-Index in November was about 7.4% while the average 12-month deposit interest rate of commercial banks in November continued to decrease by 0. 2 percentage points compared to the previous month to 5.14%/year, causing the gap between E/P and bank deposit interest rates to continue to widen and equivalent to the mid-term bottom of the market at the beginning of the year. fourth quarter/22.

As of November 24, 2023, the average 12-month deposit interest rate of state-owned banks has decreased to an average of 5.13%/year, down 0.1 percentage point compared to the end of October. Meanwhile, 12-month deposit interest rates of private banks range from 4.6% to 5.7%/year with an average of about 5.14%/year, down nearly 0.3 percentage points compared to with last month.

Some commercial banks with the largest average decrease in 12-month term deposit interest rates compared to the previous month include: STB (-0.7 points), ACB (-0.5 points), SHB (-0 .3 points %) and LPB (-0.3 points %). Thus, deposit interest rates are lower than during the Covid-19 period.

VnDirect experts believe that this is the right time to invest in the medium and long term in the stock channel because the market valuation is quite attractive in the context of current low deposit interest rates and global income. The market is forecast to improve from Q4/23.

Where will the smart money go?

In the context of banks’ deposit interest rates falling to record levels, experts expect savings cash flow to shift to other investment channels such as real estate, stocks, gold…

Sharing about the attractiveness of investment channels, Mr. Phan Khanh Linh – Director of TechProfit Vietnam Consulting and Investment Company Limited said that stocks are still an attractive investment channel. Because the real estate market still has legal problems that make it difficult for real estate businesses to sell, besides, although the market’s liquidity has improved, it will take quite a long time to become vibrant again. . Meanwhile, savings interest rates are low, and gold and foreign currencies are difficult to predict. “Therefore, I think that as long as there is an “east wind”, the stock market will improve” – ​​Mr. Linh said.

Which investment channel will money flow into in the near future?
Expect cash flow to flow into stocks. Photo: TL

From another perspective, Dr. Nguyen Tri Hieu, an economic expert, said that in reality, even though interest rates have dropped sharply, people do not have strong consumption needs, nor do they invest much in advance, so all cash flow is still focused on pouring in. put into the bank.

According to Dr. Nguyen Tri Hieu, almost all investment channels have great risks and still have many unpredictable fluctuations. Of the five current private investment channels (stocks, real estate, gold, foreign currency and savings), only banks are considered the safest place to store cash flow. Because even if interest rates fall sharply, putting money in banks is still safe, not as risky as other investment channels, but still profitable.

“To be safe, people still choose to save money in banks. Meanwhile, real estate recovers, but perhaps in the second half of 2024. The real estate market also needs time to recover. “When capital flows and stock markets are more positive, countries’ monetary policies are more stable, creating a premise for Vietnam’s monetary policy” – Mr. Hieu shared.

According to experts, the economy has good internal conditions to recover in 2024 including low interest rates, stable exchange rates, imports and exports begin to grow again and public investment is still being promoted. strong. The prospect of recovering business growth is also gradually becoming clearer when low enough interest rates will begin to stimulate economic activities and increase money turnover.

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