Previously on Part 1: https://stockthinktank.wixsite.com/home/post/personal-investment-on-the-vietnamese-stock-market-under-the-impact-of-the-covid-19-pandemic
4. Some recommendations
4.1. For individual investors
Firstly, be more careful with risks
Although Vietnam controls the Covid-19 epidemic quite well, this does not guarantee safety with the unusual developments of new SAR-CoV-2 variants. . If the Covid-19 epidemic situation is more serious in Vietnam and around the world, negative impacts on the economy are inevitable. Crowd psychology, TINA or FOMO effects sometimes make people forget about hedging. However, a rising market is the time when the market also has the most potential risks.
Second, it is necessary to update financial knowledge and improve the professionalism of investors in the stock market, especially individual investors.
Most of the individual investors who have just entered the market (F0) are still limited. financial knowledge, so it is easy to take risks during the initial investment process, and the professionalism is not high. To grasp investment opportunities, each individual investor needs to be equipped with basic financial knowledge, understanding the stock market as well as the investment context.
Third, be careful with the stock bubble
There are no clear signs yet, but the large cash flow into securities in recent years is easy to create a bubble for stocks. Too many investors participating in a short time with a large amount of money can easily push up the stock price. exceed the true value. The psychology of surfing will not be sustainable, but it is advisable to combine long-term holding stocks.
Fourth, be careful with high margin
Currently, margin is at a high level, some securities companies have exceeded the margin lending ceiling. According to statistics, more than 30 securities companies on the market as of March 31, 2021 have loaned more than 110,000 billion VND to investors, a record high for Vietnamese securities. High margin will be a big risk when the market corrects. Investors should only use margin when there is a stable cash flow for the family.
4.2. For state management agencies
Firstly, actively implementing solutions to support the stock market in the context of the complicated development of the Covid-19 pandemic
If the situation of the Covid-19 pandemic becomes more complicated, travel restrictions and social distancing are a must, so it is necessary to cut administrative procedures, develop an online working plan... to market. still ensure the circulation of money in the whole economy.
The government should issue guidelines on how to respond to the impact of outbreaks, as well as specific measures to restore market operations and limit market overreaction. with shocks that cause chaotic price drops. It is necessary to strengthen the initiative and preparedness both from the regulatory authorities, supervisors and financial institutions, which play a very important role, in which it is necessary to pay attention to the development of plans to ensure maintain operations and provide financial services, as well as have plans and plans to manage risks that may arise in the context of the complicated development of the Covid-19 pandemic.
Second, strengthen the role of investment agents, professional advisors, open-ended funds, stock and bond ETFs operated by reputable investment funds to ensure safety and minimize risks for investors. personal investment…
Third, increase investment in technology, ensure system infrastructure, control risks in remote working conditions, increasing the risk of network security risks.
The rapid increase in the number of investors has made the exchange often overloaded and blocked. This hinders the bull market. In the era of the Fourth Industrial Revolution, the digital economy and digital finance are developing more and more strongly, Vietnam needs to make stronger strides in terms of institutions, technology, human resources, level of professionalism, transparency, resilience, response to external shocks.
In addition, the fact that organizations and individuals have to switch to work from home and move most of their business activities to a digital platform has significantly increased the risk of cyber attacks, making transactions difficult. and management becomes more risky. Therefore, supervisors and regulators need to ensure secure remote access and protect access to trading systems. At the same time, it is required that market members take similar measures to ensure safety against network security risks, protect the interests of investors as well as the safety of the system.
Fourth, ensure the transparency of the market in two aspects
(i) Require market participants to provide timely information regarding unusual events. Disclosure requirements for issuers are particularly important given the impact of the Covid-19 pandemic on a company's revenue and profits. Regulators are also dealing with delays in disclosure, reporting and other issues affecting public companies and regulated entities.
(ii) Provide clear and timely information to inexperienced investors about market risks. The fact that the management agencies actively provide, guide and explain professional measures such as circuit breaker, stop trading, etc. to investors will help avoid selling-off trading pressure.
Fifth, improve the supervisory capacity of the supervisory agency
State agencies need to improve their supervisory capacity by identifying key risks (operational risks, market risks, liquidity risks, payment risks, cyber security risks, etc.) , as well as building the infrastructure to support remote monitoring in the event of a more complex disease, increasing the frequency of monitoring through the provision of complete and continuous financial information. , strengthen supervision coordination through information sharing.
Sixth, the State Bank should continue to direct commercial banks to strictly control the flow of investment credit into the stock market to ensure the stable and sustainable development of this market, in order to avoid over-development. heat causes the risk of "bubble", high risk.
REFERENCES
https://vneconomy.vn/nhan-dien-4-rui-ro-voi-thi-truong-chung-khoan-nha-dau-tu-khong-the-bo-qua.htm
https://www.vanlanguni.edu.vn/tin-tuc-size-bar/2854-tac-dong-cua-dai-dich-covid-19-den-thi-truong-tai-chinh-viet-nam-va-mot-so-giai-phap
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