Dr Le Tham Duong, Head of Business Management of Banking University of Ho Chi Minh City, predicted that the stock market will be a thriving investment channel in 2012.

The year 2011 was a difficult year for investors as most investment channels posted difficulties or were even bleak throughout the year. Hence, many are hoping for a brighter year in 2012 with improving economy and they could find an efficient investment channels in 2012.

Dr Le Tham Duong, Head of Business Management of BUH, sees 2012 economy prospect with more difficulties than favorable changes. Problems of economic growth, inflation, interest rates, import and export situation ... will heavily depend on the State's policies whose direction is still under discussion. Hence, it is impossible to clearly discern the overall picture of Vietnam economy in 2012.

However, Duong still believed that stocks will be a prospering investment channel in 2012 for some reasons. Firstly, he thinks authorities are forced to take measures to stabilize the stock market as the ups and downs of this market has a very large impact on the economy. The stock market has been sluggish for a long time and valuations are now quite low, when the market plunges, the funds are withdrawn from stocks; businesses cannot raise capital for production and business. Indeed, in the recent meeting, the Congress also announced to soon introduce measures to fix this market.

Secondly, upcoming plans to restructure SOEs will soon help the economy to rebound. When the economy improves, stocks would also prosper.

Regarding real estate investment channel, 4th quarter of 2011 was the most severe period for property speculators and investors. What has not been revealed in mid- 2011 has shown itself in November 2011.

Many real estate businesses had to withdraw or to declare bankruptcy. The reason was that they were no longer able to bear huge debts and high interest rates charged by banks.

According to statistics, real estate businesses have huge debt of up to VND 245,000 billion (not to mention corporate bonds). This amount is mainly stuck in the middle-high quality apartment projects - and some high-ground projects.

Therefore, according to economic specialist Le Xuan Nghia, Vice President of the Financial Supervisory Commission, what the Government currently worries the most is debt for bad real estate loans. Risks from the real estate sector are very large to banks; thus the recovery of the real estate market is not only a cure for banks but also for other economic sectors.

The last session of Congress decisions are also made to save Vietnam real estate market in time to come. Thus, many investors hope that in 2012, the real estate market will warm up, giving opportunities to pour their capital into.

Savings is one safe haven for investors this year, especially as 2011 ends. Economic specialist Vo Tri Thanh predicted, in the first few months of 2012, when the market does not have any remarkably prospering investment channel, savings is still the most attractive investment channel.

Currently, banks are encouraging short-term savings with interest rate ceiling of 14% or even interest rate for deposit is also approximately equal to 14% ... The interest rates are considered beneficial for small investors, with not much capital concentration, savings in the short term, both profitable and safe.

The statistics also show that idle cash flow has returned to this safest investment channel. Besides, to attract idle capital at year end, banks also created a lot of promotion with attracting gifts and improved customer services

However, for investors who want huge profits, saving at banks, despite security, is just a temporary measure. They are hoping that hot investment sectors such as real estate, gold, stocks would prosper, but they have not gained confidence. Many have thought to redirect investment into the field of commodity trading.

According to SSC, commodity is considered as the second transaction channels after stock. Volume of contracts created on this investment channel increased since 2009 and surpassed stock in 2010.

In Vietnam, the Department of Vietnam Commodity Exchange (VNX) is of the first commodity exchange put into operation from January 1 / 2011. There are only three main product groups currently, including coffee, rubber, steel and some product with international standards being traded at VNX.

Senior expert in finance, Bui Kien Thanh, the first Vietnamese to receive foreign education in finance, said that commodity trading is the investment value of the goods, and will be an interesting channel in the long run. "In 2012, it would be very profitable to invest in coffee and tea," Thanh said.

According to his analysis, currently Vietnam coffee industry ranks second in the world, after Brazil with production of over 1 million tons, sales over $ 2 billion / year. However the quality still remains poor and prices are still lower than global market. This is a potential industry for development, improvement in quality, and more efficient market.

As for tea products, with an output of about 1 million tons / year, Vietnam is ranking fifth worldwide and has strong ability to rise, with better management of raw materials to create higher quality products and strong brand. Instead of exporting at below 5 USD / kg, export price may be increased to above 10 USD / kg or even 50 to 100 USD / kg for high quality tea. Then the whole industry revenues could reach $ 5 billion and rising higher rather than the current less than $ 2 billion.

Another important thing is that these goods has 100% localization rate. However, their revenue is quite low compared to many processing industries (turnover 50 to 10 billion USD per year), while these industries have very low localization, mostly include temporary import for export, not advantageous for sustainable economic growth.

According to Thanh, besides goods, many services will also be very profitable in 2012 such  as banking or asset management.

For Vietnam, 2012 is the year to restructure the economy, and prepare for sustainable development in the coming years. Therefore, one of the most attractive investment channels is banking. In any circumstances, banking services are also essential for economic development.

Commercial banking system in Vietnam is still developing period, so this area is filled with potential.  The largest private Commercial Bank of Vietnam currently has the total assets of approximately $ 10 billion, while total assets of a large sized banks in the region is over $ 100 billion and of leading banks the world is over 1000 billion dollars.

Comparing to the whole industry, total assets of the commercial banking system Vietnam is only $171 billion, compared to Singapore $ 1,916 billion. Hence, growth potential and profitability of banking sector in Vietnam in the coming years is enormous.

Besides investing in banking, asset management sector is also as attractive to channel funding into. In 2012 there will be plenty of opportunities to seize unlisted good companies that lack financial resources for development. Stagnant stock market also provides an opportunity to buy and merge a number of companies that have good products, good market, good operating forces.

Source StoxPlus