Changing Tax Rates Impacts on the Risk Level of Vietnam Construction Material Firms

Dinh Tran Ngoc Huy

doi:10.4172/2169-026x.1000110

Abstract

The Viet Nam stock market has been affected by the financial crisis 2007-2009. This study analyzes the impacts of tax policy on market risk for the listed firms in the construction material industry as it becomes necessary. First, by using quantitative and analytical methods to estimate asset and equity beta of total 57 listed companies in Viet Nam construction material industry with a proper traditional model, we found out that the beta values, in general, for many companies are acceptable. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is not large disperse in equity beta values, estimated at 0,957, 1,011 and 0,961.These values are lower than those of the listed VN construction firms. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), we recognized equity /asset beta mean and asset beta var increase if tax rate increases from 20% to 25%, then decrease when tax rate goes up from 25% to 28%. Finally, this paper provides some outcomes

Highlights

During the global crisis 2007-2009, Viet Nam stock market (Figure 1) has difficulties and opportunities
We perform a market risk analysis with quantitative methodology based on asset and equity beta of 57 listed companies in the group of construction material firms
The impacts from the financial crisis happened during the period 2007-201; in this study, we use the live data from the stock exchange market in Viet Nam (HOSE and HNX) during the four or five years period to estimate systemic risk results and tax impacts

Summary

Introduction

During the global crisis 2007-2009, Viet Nam stock market (Figure 1) has difficulties and opportunities. We perform a market risk analysis with quantitative methodology based on asset and equity beta of 57 listed companies in the group of construction material firms. The above industry faced many difficulties in previous years such as how to increase the number of customers, service quality and revenues; they have to deal with some problems from the global crisis. Together with the development of real estate industry, throughout many recent years, Viet Nam construction industry is considered as one of active economic sectors, which has certain positive effect for the economy. This paper emphasizes on analyzing un-diversifiable risk in the above industry in one of emerging markets: Vietnam stock market (Figure 2) during and after the financial crisis 2007-2009. There is no research, so far, done on the same topic

Methods

Results

Conclusion