logo vietnam inflation and investment strategies investment department jul 2011
TRANSCRIPT
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LOGO
Vietnam Inflation and Investment Strategies
Investment Department
Jul 2011
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Contents
Inflation introduction1.
Vietnam Overview2.
Investment Strategies 3.
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What is Inflation ?
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What is Inflation ?
INFLATION
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What is Inflation ?
INFLATION
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What is Inflation ?
INFLATION
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What is Inflation ?
INFLATION
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In Economics, Inflation is a rise in the general level of prices of goods and services in an economy over a period of time
What is Inflation ?
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Method to measure inflation is CPI (Consumer Price Index)
What is Inflation ?
Month over month
Year over year
Year to date
CPICPI
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Method to measure inflation is CPI (Consumer Price Index)
What is Inflation ?
Month over month
Year over year
Year to date
CPICPI
Vietnam
1.17%
22.16%
14.61%
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For Government fiscal & monetary policies
For enterprises expenses, salary policies, …
Investors real profit
Employee real income
For countries the living index
Meaning of Inflation
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Contents
Inflation introduction1.
Vietnam Overview 2.
Investment Strategies 3.
4.
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Vietnam CPI Basket
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Vietnam CPI Basket
1
86
2
3
4
Vietnam
CPIBasket
Housing & construction10.01%
Food and foodstuffs39.93%
9
10
5
7
11
11 key
items
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Vietnam CPI Basket
1
86
2
3
4
Vietnam
CPIBasket
Housing & construction10.01%
Food and foodstuffs39.93%
Transport 8.87%
Family appliances and tool 8.65%
Medicament health5.61%
Textile footgear and hat7.28%
9
Drink and cigarettes4.03%
10Communication2.73%
Education5.72%
Entertainment and tourism3.83%
Other3.34%
5
7
11
11 key
items
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Vietnam CPI Basket
1
86
2
3
4
Vietnam
CPIBasket
Housing & construction10.01%
Food and foodstuffs39.93%
Transport 8.87%
Family appliances and tool 8.65%
Medicament health5.61%
Textile footgear and hat7.28%
9
Drink and cigarettes4.03%
10Communication2.73%
Education5.72%
Entertainment and tourism3.83%
Other3.34%
5
7
11
11 key
items
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Vietnam Inflation Overview
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Vietnam Inflation Overview
Phase: 1976 – 1981 %
Hyper inflation
1976 – 1981 ~ 60%
Initial stage after
the war Wrong economic policies
REFORMperiod
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Vietnam Inflation Overview
Phase: 1981 – 1988 %
Hyper inflation
1976 – 1981 ~ 60% 1981 – 1988 ~ 514%
Initial stage after
the war Wrong economic policies
REFORMperiod
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Vietnam Inflation Overview
Phase: 1988– 1992 %
Hyper inflation
1976 – 1981 ~ 60% 1981 – 1988 ~ 514% 1988 – 1992 ~ 46%
Initial stage after
the war Wrong economic policies
REFORMperiod
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Vietnam CPI Overview
1992 – 2000 ~ 8.2% 2000 – 2011 ~ 9.4%
Phase: 1992 – 2011
ASEAN countries
financial crisis
Government boosted GDP
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Current CPI remain at high level Tighten monetary and fiscal policies
Top ten highest inflation Countries as of Jun 2011
Vietnam CPI Overview
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Reasons of Inflation
Credit growth vs CPI
Higher credit growth -> higher inflation Delay time: 5 – 8 months
1. HIGH credit growth for non manufactory industry
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Reasons of Inflation
2. LOW investment efficiency
Vietnam ICOR vs CPI
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Reasons of Inflation
2. LOW investment efficiency
Vietnam ICOR vs CPIVietnam ICOR vs other peers
countries
Average line
LOWER investment efficiency => HIGHER inflation
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Contents
Inflation introduction1.
Vietnam Overview 2.
Investment Strategies 3.
.
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Investment strategies
Vietnam
US market
CPI
CPI
current
1978
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Investment strategies1978
currentVietnam
US market
CPI
CPI
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Investment strategies
Correlation between Current Vietnam and US 1978:
-CPI was twice at its peaks within 3- 4 years-US CPI gradually decreased => VN CPI also gradually decrease in the next 15 years ?
1978
currentVietnam
US market
CPI
CPI
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Investment strategies
Investment strategy for 15 coming years (from US experiences)
1978
currentVietnam
US market
CPI
CPI
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Vietnam
US market
CPI
CPI
10ys bond yield
Investment strategy for 15 coming years (from US experiences)
1.Bonds investment ~ 184%
Investment strategies
current
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Vietnam
US market
CPI
CPI
10ys bond yieldStock index
Investment strategy for 15 coming years (from US experiences)
1.Bonds investment ~ 184%
2.Stock investment ~ 580%
Investment strategies
current
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Vietnam
US market
CPI
CPI
Stock index10ys bond yield Real estate
index
Investment strategy for 15 coming years (from US experiences)
1.Bonds investment ~ 184%
2.Stock investment ~ 580%
3.Real estate investment ~ 5%
Investment strategies
current
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Vietnam
US market
CPI
CPI
Stock index10ys bond yield Real estate
index
Investment strategy for 15 years coming years (from US experiences)
1.Bonds investment ~ 44%
2.Stock investment ~ 580%
3.Real estate investment ~ 5%
Stock
Investment strategies
current
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LOGO