RANGE MARKET WITH LOW LIQUIDITY BUT A HIGHER POSSIBILITY FOR POSITIVENESS

During the week between March and before the Fed’s FOMC meeting, there was a number of important macro news that affected the market appeared:

• Domestically, after a lot of efforts from the government, the State Bank of Vietnam (SBV) has made a move to reduce one of the operating interest rate, resulting in a meaningful decrease in deposit interest rates at banks.
• Regarding the stock market, the Vietnamese stock market had a positive preliminary reaction in the March 15 session right after the news of the reduction in operating interest rates was released. However, the next day, the market reversed into a deep correction when the market sentiment turned pessimistic as Credit Suisse shares (hereinafter abbreviated as CS) fell deeply with growing concerns about the bank’s possibility to shut down.
• For CS, not only a general feeling about the connection with the international market, but the apprehension of the Vietnamese market in our opinion is well-founded. CS is one of the names that have been present for a long time in Vietnam, participating in arranging capital for both Vingroup and Novaland and many other large enterprises. The problem of Credit Suisse will directly affect the channel of arranging foreign capital (offshore) for large enterprises in Vietnam (implementing many projects with large capital needs, especially some big real estate projects which are beyond the ability of domestic banks to increase funding), a number of projects that CS participates in financing will find it difficult to follow the original roadmap or even have to find new sources of capital.

• At the moment, the market is still focusing on waiting for the results of the FED meeting to see if the US will continue to raise interest rates like the ECB last week. However, we consider this particular event to be just one factor to consider, key points to think about include: