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Cash flow running from stock market to other investment channels   2010-10-13 - Dau tu

Since the VN Index has been decreasing sharply, a lot of investors have decided to pour their money into other investment channels instead of securities.


Securities investors have been leaving the stock market since the market liquidity has decreased gradually. Both sellers and buyers keep hesitant to make transactions at this moment. Securities companies all have reported the sharp fall of the number of transactions recently in comparison with April and May.

Analysts say the cash flow to the stock market has stopped. It is partially because investors still want to keep cash or inject their money in other investment channels rather than the stock market. The tendency has been growing over the last two months and it has become clearer in the last two weeks.

According to General Director of Vietnam International Securities Company Pham Linh, the company’s latest survey shows that the top choice of investors for now is making deposits at banks, while purchasing dollar and buying gold are the second and third choices.

According to Linh, most of investors still keep a close watch over the gold market. However, only a few people spend money to buy gold, because the gold price fluctuates all the time and no one knows for sure how the gold prices would perform.

My, an investor in HCM City, said that his assets are now in cash (80 percent) and securities (20 percent). He has sold nearly all the stocks and he has been sitting idle for the last two months.

My has revealed that he plans to make investment in gold. If the gold price increases sharply, he would get the huge profit of one million dong per tael of gold per day. However, My fears that the gold price may drop suddenly one day, because the gold price is really unpredictable.

Therefore, it is estimated that only about 10 percent of the people who have idle money.

Meanwhile, the stock market has become less attractive due to the securities price falls. In such circumstances, people would rather make deposits at banks, even though they can only enjoy the modest interest rate of one percent per month. A lot of securities investors have also decided to deposit their money at banks to preserve their capital before going back to the stock market in the future.

Experts say the stock market needs a lot of supporting factors to bounce back. If the VN Index surpasses the resistance level of 460-470 points, listed companies announce satisfactory business result for the third quarter of the year and the national economy shows good signs, the stock market will prosper again.

Bui Quang Duy from Beta Securities Company said besides gold, dollar also proves to be an attractive investment channel, because the demand for dollar is forecast to continue increasing towards the end of the year. Businesses will have higher demand for dollar in the last months of the year, because they need dollar to make payment for import deals.

Besides gold and dollar, buying bonds has also become the favourite investment channel, according to Nguyen Hoai Nam from Sacombank Securities Company. Nam said those investors who like save investment deals, would prefer bonds.

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