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Central bank may be granted sole authority to cast gold
2:42 AM |
The Government is considering granting the sole authority to cast gold to the State Bank of Vietnam (SBV), instead of the current four or five firms.
SBV may soon have the unique right to cast gold
Dr Le Xuan Nghia, Vice Chairman of the National Financial Supervisory Commission (NFSC) said the move is expected to ensure that gold made in the country will meet both domestic and international standards.
If so, SBV may be allowed to set up a wholly-owned company that will take over such a task as well as setting up agents nationwide who would ensure gold supply, according to Nghia.
Gold that is cast by the SVB’s firm must meet standards that would allow it to be traded on modern gold transaction floors, and be eligible for certificates of deposits, which could be traded as an asset, he noted.
Under the Government’s proposed decree on gold trading, individuals would still be allowed to trade in and store gold bars, he emphasised. On May 20, an SBV official said the institution may issue a regulation to request commercial banks to stop mobilising capital and lending in gold upon the Government’s demand.
Dr Le Xuan Nghia, Vice Chairman of the National Financial Supervisory Commission (NFSC) said the move is expected to ensure that gold made in the country will meet both domestic and international standards.
If so, SBV may be allowed to set up a wholly-owned company that will take over such a task as well as setting up agents nationwide who would ensure gold supply, according to Nghia.
Gold that is cast by the SVB’s firm must meet standards that would allow it to be traded on modern gold transaction floors, and be eligible for certificates of deposits, which could be traded as an asset, he noted.
Under the Government’s proposed decree on gold trading, individuals would still be allowed to trade in and store gold bars, he emphasised. On May 20, an SBV official said the institution may issue a regulation to request commercial banks to stop mobilising capital and lending in gold upon the Government’s demand.
Each Vietnamese bears USD886 in public debt
2:33 AM |
With public debt accounting for 48% of the GDP, each Vietnamese citizen currently owes VND18.6 million (USD886).
The Vietnamese public debt has been estimated at USD80 billion, spread over a the total population of 90.5 million people. Vietnam’s public debt increased by 11.2% on year by the end of 2013.
Early this year, the Vietnamese government issued Resolution No.1, requesting a curbing of the state budget deficit at no more than 5.3% of the GDP and controlling loans without government guarantees.
The government has also asked the Ministry of Finance to take measures to manage public debt and use loans more efficiently in order to keep debt at manageable level, below 65% of the GDP.
With the above-mentioned figures, Vietnamese public debt is still considered manageable, but the country faces the risk of a debt increase. At a National Assembly meeting, held in November 2013, Prime Minister Nguyen Tan Dung said with the state budget deficit would be around VND224 trillion (USD10.6 billion) in 2014 and government bonds would total VND170 trillion (USD8.1 billion), Vietnam’s public debt is expected not account for 65% of the GDP this year and repayment is a major concern.
At a seminar in late 2013, Dr. Pham The Anh warned that the biggest potential risk for the Vietnamese public debt is not the debt on paper, but bad debt from state-owned enterprises (SOEs) which may require the state budget for their repayment.
Dr. Anh cited a report submitted to the National Assembly by the government which said that the total debt of wholly state-owned enterprises was estimated at VND1,550 trillion (USD73.8 billion) in late 2012, equal to around 52.5% of the GDP.
After deducting 11.7% of the debt guaranteed by the government, 40.9% of the SOE debt was not guaranteed.
Despite not receiving government guarantees, the government still supports SOEs, in hopes of saving them from bankruptcy.
If SOE debt, which is not guaranteed, as well as the debts accrued in the construction sector are included, Vietnam’s real public debt will account for 98.2% of the national GDP, Anh said.
The Vietnamese public debt has been estimated at USD80 billion, spread over a the total population of 90.5 million people. Vietnam’s public debt increased by 11.2% on year by the end of 2013.
Early this year, the Vietnamese government issued Resolution No.1, requesting a curbing of the state budget deficit at no more than 5.3% of the GDP and controlling loans without government guarantees.
The government has also asked the Ministry of Finance to take measures to manage public debt and use loans more efficiently in order to keep debt at manageable level, below 65% of the GDP.
With the above-mentioned figures, Vietnamese public debt is still considered manageable, but the country faces the risk of a debt increase. At a National Assembly meeting, held in November 2013, Prime Minister Nguyen Tan Dung said with the state budget deficit would be around VND224 trillion (USD10.6 billion) in 2014 and government bonds would total VND170 trillion (USD8.1 billion), Vietnam’s public debt is expected not account for 65% of the GDP this year and repayment is a major concern.
At a seminar in late 2013, Dr. Pham The Anh warned that the biggest potential risk for the Vietnamese public debt is not the debt on paper, but bad debt from state-owned enterprises (SOEs) which may require the state budget for their repayment.
Dr. Anh cited a report submitted to the National Assembly by the government which said that the total debt of wholly state-owned enterprises was estimated at VND1,550 trillion (USD73.8 billion) in late 2012, equal to around 52.5% of the GDP.
After deducting 11.7% of the debt guaranteed by the government, 40.9% of the SOE debt was not guaranteed.
Despite not receiving government guarantees, the government still supports SOEs, in hopes of saving them from bankruptcy.
If SOE debt, which is not guaranteed, as well as the debts accrued in the construction sector are included, Vietnam’s real public debt will account for 98.2% of the national GDP, Anh said.
Public debt may exceed state revenues by 25% this year
2:31 AM |
Vietnam's public debt may be 25% more than the country’s total state revenues this year and it may climb to 30% in coming years, said Dr. Tran Dinh Thien, head of the Vietnam Institute of Economics.
Dr. Tran Dinh Thien, head of Vietnam Institute of Economics
Thien announced his projection during a recent two-day economic forum, where he added that bad debt and public debt have formed a "bottleneck" and represent the biggest challenge to the Vietnamese economy.
According to Thien, there is still a lack of reliable risk assessment on bad and public debt, and there is a huge discrepancy between the released numbers and the reality of these debts in Vietnam.
Recently it was revealed that public debt accounted for 55.7% of the country’s GDP, still considered a safe level, while regulations cap it at 65%. This has created a misperception of the national public debt. Thien pointed out that, If the debt of state-owned enterprises, which is not guaranteed by the government, and debt taken on for public construction works were included, the country's total debt would account for 100% of the GDP.
Thien also noted that Vietnam is facing the risk of public debt growing at a faster rate than the GDP. At the same time, the governments ability to repay remains limited.
He cited figures on the rise of public debt in Vietnam in the period between 2010 and 2014. This year, the country will have to pay VND209 trillion (USD9.9 billion) of its debt, which may surpass the country’s total revenues for the year.
Thien suggested that the government speed up revision of the laws on public debt and state-owned enterprises as well as the equitization of private companies.
Dr. Tran Dinh Thien, head of Vietnam Institute of Economics
Thien announced his projection during a recent two-day economic forum, where he added that bad debt and public debt have formed a "bottleneck" and represent the biggest challenge to the Vietnamese economy.
According to Thien, there is still a lack of reliable risk assessment on bad and public debt, and there is a huge discrepancy between the released numbers and the reality of these debts in Vietnam.
Recently it was revealed that public debt accounted for 55.7% of the country’s GDP, still considered a safe level, while regulations cap it at 65%. This has created a misperception of the national public debt. Thien pointed out that, If the debt of state-owned enterprises, which is not guaranteed by the government, and debt taken on for public construction works were included, the country's total debt would account for 100% of the GDP.
Thien also noted that Vietnam is facing the risk of public debt growing at a faster rate than the GDP. At the same time, the governments ability to repay remains limited.
He cited figures on the rise of public debt in Vietnam in the period between 2010 and 2014. This year, the country will have to pay VND209 trillion (USD9.9 billion) of its debt, which may surpass the country’s total revenues for the year.
Thien suggested that the government speed up revision of the laws on public debt and state-owned enterprises as well as the equitization of private companies.
Bad debt among the biggest monetary challenges of 2014
2:30 AM |
Economist Bui Kien Thanh said the Vietnamese monetary system has seen encouraging signals, but still sees three major obstacles in the way of a full market recovery in 2014, including bad debt.
Economist Bui Kien Thanh
According to the economist, the biggest challenge for the local monetary market in 2014 is bad debt. Last year the Vietnam Asset Management Company (VAMC) bought up a large amount of bad debts and plans on continuing doing so in 2014. However, the big task for the company this year will be how to deal with the debt it has already bought. The majority of this debt comes from the real estate sector, which has remained frozen in recent years. How to turn bad debt into money is a challenge for VAMC.
Another big problem on the list is interest rates, which are among factors affecting business operations in the country. The preferential interest rates for Vietnamese companies is around 10%, but the level for overseas and foreign-invested firms in Vietnam is only 1-2%. Currently, the Vietnamese business community expects to enjoy a long-term interest rate of 6%.
The third challenge listed was complicated cross-ownership in the banking system leading to problems for banks in the control of cash flow. This, Thanh said, compounds the problem of bad debt.
The State Bank of Vietnam needs to deal with the situation in which an individual or organisation buys stake in a bank which exceeds the regulated rate, he said, adding that individuals must take responsibility for these violations related to cross-ownership.
Economist Bui Kien Thanh
According to the economist, the biggest challenge for the local monetary market in 2014 is bad debt. Last year the Vietnam Asset Management Company (VAMC) bought up a large amount of bad debts and plans on continuing doing so in 2014. However, the big task for the company this year will be how to deal with the debt it has already bought. The majority of this debt comes from the real estate sector, which has remained frozen in recent years. How to turn bad debt into money is a challenge for VAMC.
Another big problem on the list is interest rates, which are among factors affecting business operations in the country. The preferential interest rates for Vietnamese companies is around 10%, but the level for overseas and foreign-invested firms in Vietnam is only 1-2%. Currently, the Vietnamese business community expects to enjoy a long-term interest rate of 6%.
The third challenge listed was complicated cross-ownership in the banking system leading to problems for banks in the control of cash flow. This, Thanh said, compounds the problem of bad debt.
The State Bank of Vietnam needs to deal with the situation in which an individual or organisation buys stake in a bank which exceeds the regulated rate, he said, adding that individuals must take responsibility for these violations related to cross-ownership.
Vanguard Prime Money Market Fund
3:30 AM |Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. See performance data current to the most recent month-end. Click to view standardized returns, fees, and expenses.
The minimum investment can vary by fund and share class. Select different criteria to see additional classes. Choose a fund name to view the fund profile for additional detail.
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited.
Performance data for periods of less than one year do not reflect the deduction of purchase and redemption fees that may apply. All other performance data are adjusted for purchase and redemption fees, where applicable. Vanguard funds apply a $20 annual account service fee to all funds with balances below $10,000 in many types of accounts, unless an exception applies, which is not reflected in the figures. If this fee was included, the performance would be lower.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.
All investing is subject to risk, including the possible loss of the money you invest. Past performance is no guarantee of future results. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Diversification does not ensure a profit or protect against a loss. Vanguard provides services to the Vanguard funds and ETFs at cost.
Vanguard average stock index fund expense ratio 0.21%, industry average stock index fund expense ratio 0.81%; Vanguard average bond index fund expense ratio 0.13%, industry average bond index fund expense ratio 0.49%; Vanguard average money market fund expense ratio 0.15%, industry average money market fund expense ratio 0.18%. Sources: Vanguard and Lipper, a Thomson Reuters Company, as of December 31, 2013.
For the 10-year period ended December 31, 2013, 10 of 10 Vanguard money market funds, 49 of 51 Vanguard bond funds, 17 of 18 Vanguard balanced funds, and 81 of 91 Vanguard stock funds—for a total of 157 of 170 Vanguard funds—outperformed their Lipper peer group averages. Only funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company.
Read more…
The minimum investment can vary by fund and share class. Select different criteria to see additional classes. Choose a fund name to view the fund profile for additional detail.
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited.
Performance data for periods of less than one year do not reflect the deduction of purchase and redemption fees that may apply. All other performance data are adjusted for purchase and redemption fees, where applicable. Vanguard funds apply a $20 annual account service fee to all funds with balances below $10,000 in many types of accounts, unless an exception applies, which is not reflected in the figures. If this fee was included, the performance would be lower.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.
All investing is subject to risk, including the possible loss of the money you invest. Past performance is no guarantee of future results. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Diversification does not ensure a profit or protect against a loss. Vanguard provides services to the Vanguard funds and ETFs at cost.
Vanguard average stock index fund expense ratio 0.21%, industry average stock index fund expense ratio 0.81%; Vanguard average bond index fund expense ratio 0.13%, industry average bond index fund expense ratio 0.49%; Vanguard average money market fund expense ratio 0.15%, industry average money market fund expense ratio 0.18%. Sources: Vanguard and Lipper, a Thomson Reuters Company, as of December 31, 2013.
For the 10-year period ended December 31, 2013, 10 of 10 Vanguard money market funds, 49 of 51 Vanguard bond funds, 17 of 18 Vanguard balanced funds, and 81 of 91 Vanguard stock funds—for a total of 157 of 170 Vanguard funds—outperformed their Lipper peer group averages. Only funds with a minimum 10-year history were included in the comparison. Source: Lipper, a Thomson Reuters Company.
Money market instruments, what is it?
6:37 AM |Money market securities are essentially IOUs issued by governments, financial institutions and large corporations.
As money became a commodity, the money market became a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. Trading in the money markets is done over the counter and is wholesale. Various instruments exist, such as Treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage-, and asset-backed securities. It provides liquidity funding for the global financial system. Money markets and capital markets are parts of financial markets. The instruments bear differing maturities, currencies, credit risks, and structure. Therefore they may be used to distribute the exposure
The money market is a subsection of the fixed income market. We generally think of the term fixed income as being synonymous to bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that matures in less than one year). Money market investments are also called cash investments because of their short maturities.
Money market securities are essentially IOUs issued by governments, financial institutions and large corporations. These instruments are very liquid and considered extraordinarily safe. Because they are extremely conservative, money market securities offer significantly lower returns than most other securities.
One of the main differences between the money market and the stock market is that most money market securities trade in very high denominations. This limits access for the individual investor. Furthermore, the money market is a dealer market, which means that firms buy and sell securities in their own accounts, at their own risk. Compare this to the stock market where a broker receives commission to acts as an agent, while the investor takes the risk of holding the stock. Another characteristic of a dealer market is the lack of a central trading floor or exchange. Deals are transacted over the phone or through electronic systems.
The easiest way for us to gain access to the money market is with a money market mutual funds, or sometimes through a money market bank account. These accounts and funds pool together the assets of thousands of investors in order to buy the money market securities on their behalf. However, some money market instruments, like Treasury bills, may be purchased directly. Failing that, they can be acquired through other large financial institutions with direct access to these markets.
There are several different instruments in the money market, offering different returns and different risks. In the following sections, we'll take a look at the major money market instruments.
Read more…
As money became a commodity, the money market became a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. Trading in the money markets is done over the counter and is wholesale. Various instruments exist, such as Treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage-, and asset-backed securities. It provides liquidity funding for the global financial system. Money markets and capital markets are parts of financial markets. The instruments bear differing maturities, currencies, credit risks, and structure. Therefore they may be used to distribute the exposure
The money market is a subsection of the fixed income market. We generally think of the term fixed income as being synonymous to bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that matures in less than one year). Money market investments are also called cash investments because of their short maturities.
Money market securities are essentially IOUs issued by governments, financial institutions and large corporations. These instruments are very liquid and considered extraordinarily safe. Because they are extremely conservative, money market securities offer significantly lower returns than most other securities.
One of the main differences between the money market and the stock market is that most money market securities trade in very high denominations. This limits access for the individual investor. Furthermore, the money market is a dealer market, which means that firms buy and sell securities in their own accounts, at their own risk. Compare this to the stock market where a broker receives commission to acts as an agent, while the investor takes the risk of holding the stock. Another characteristic of a dealer market is the lack of a central trading floor or exchange. Deals are transacted over the phone or through electronic systems.
The easiest way for us to gain access to the money market is with a money market mutual funds, or sometimes through a money market bank account. These accounts and funds pool together the assets of thousands of investors in order to buy the money market securities on their behalf. However, some money market instruments, like Treasury bills, may be purchased directly. Failing that, they can be acquired through other large financial institutions with direct access to these markets.
There are several different instruments in the money market, offering different returns and different risks. In the following sections, we'll take a look at the major money market instruments.
