VINACHEM

Bank deposit interest rates are on the rise. The VN Index has surpassed the 700 point threshold. The real estate market is warming up. Meanwhile, gold and dollar prices are unpredictable.

A new peak for bank deposit interest rates was created when VP Bank began issuing 5-year certificates of deposit (CD), applied to deposits of VND5 billion and higher.

Prior to that, Sacombank offered an interest rate of 8.8 percent per annum for the first year of a 7-year CD in Vietnam dong.

Meanwhile, Viet A Bank offered interest rates of up to 8.2 percent for short-term 6-12 month CDs. At LienVietPost Bank, the interest rate is 8 percent for 18-month, 24-month and 60-month CDs.

Commercial banks now also set attractive interest rates for normal deposits. PVCombank pays 7.5 percent in interest rate for 12-month term deposit, HD Bank 7.6 percent for 18-month deposit, while Eximbank pays 8 percent for 24-36 month deposits.

The VN Index of the HCMC bourse has seen the 7.5 percent increase so far this year. Analysts commented that the upward trend is clear in medium term.

The liquidity in the stock market is strong with the trading value of up to VND3 trillion in some trading sessions.

A lot of shares, such as CII, HPG, ROS, VNM and TRC, are being hunted by investors thanks to the good business performance, the expected high dividends and the predicted rubber price increases.

Analysts believe that the listing of a lot of large enterprises (Petrolimex lists shares in April, while PV Power makes IPO and lists shares in 2017) will be a magnet to investors.

CIEM reported the real estate price increased by 5-7 percent in 2016.

The HCMC Real Estate Association (HoREA) has predicted that the demand for apartments continues to increase in 2017 from those who buy apartments for accommodation and for investment.

Meanwhile, Pham Lam, general director of DKRA, a real estate firm, predicted the low-cost apartment price increase in 2017, about 3 percent.

As for land, the price may increase by 20 percent per annum, thus bringing the profit three times higher than bank deposits (7 percent per annum). In 2016, the price increased by 10-60 percent depending on the positions.

Keeping dollars is not the favored investment channel now as the dollar deposit interest rate is now at zero percent. The dong has lost 0.4 percent of its value so far this year, from VND22,159 per dollar on January 2 to VND22,253 on March 23.

As for gold, the price is not likely to increase sharply amid the price increases of some key products (oil, rubber and steel). However, political uncertainties will support the gold price increase. - VNN