HANOI: A lower interest rate environment and policies to remove difficulties and boost the economy will be drivers for the stock market in the last months of the year.

       The securities channel remains appealing, with the market’s benchmark VN-Index up nearly 17% since the beginning of the year, despite the tough economic year.

       One of the main growth drivers of the market comes from low interest rates and expectations of supportive policies.

       Agriseco Securities, in its recent report, said that cuts in interest rates will positively support cash flow into the stock market.

       The State Bank of Vietnam (SBV) has reduced the operating interest rate four times in a row starting from the end of the first quarter of 2023, while commercial banks are also reducing deposit and lending rates to support businesses to recover and improve business performance.

       As result, this will increase the attractiveness of the stock market.

       In general, lowering interest rates usually has a positive effect on the economy, but it takes time to digest.

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       Statistics of Agriseco Research showed that when interest rates decrease, the stock market moves positively in the mid and long term.

       The bullish is normally reflected in the VN-Index after one year of implementation, and within one month since the interest rate cut, the market’s trend is not clear.

       According to Agriseco Research, in 18 cuts of the operating rate by SBV in the past, 17 times VN-Index advanced after one year (94% of probability) and 10 times VN-Index ticked higher after one month (56% of probability).

       Also supporting the economy, the profit of the whole market is expected to regain its growth momentum in the second half of the year. — Viet Nam News/ANN