Abstract
Vietnam financial service industries are growing and contributing much to the economic development and has been affected by inflation. High and increasing inflation might reduce values of insurance and banking contracts. This paper measures the volatility of market risk in Viet Nam banking, insurance and stock investment industry after this period (2015-2017). The main reason is the necessary role of the financial system in Vietnam in the economic development and growth in recent years always go with risk potential and risk control policies. This research paper aims to figure out how much increase or decrease in the market risk of Vietnam banking, insurance and stock investment firms during the post-low inflation environment 2015-2017, compared to what happened in the financial crisis 2007-2009.First, by using quantitative combined with comparative data analysis method, we find out the risk level measured by equity beta mean in the banking industry has increased whereas the risk fluctuation also increased. Second, stock investment industry has the level of market risk as well as the risk fluctuation decreasing. Third, different from the 2 above industries, insurance industry experienced the level of market risk increasing while the risk volatility decreasing. Then, one of its major findings is the comparison between risk level of stock investment industry during the financial crisis 2007-2009 compared to those in the post-low inflation time 2015-2017. During the financial crisis 2007-09, stock industry has the highest beta value whereas during the post-low inflation time, banking industry maintained the highest value. Finally, this paper provides some ideas that could provide companies and government more evidence in establishing their policies in governance. This is the complex task but the research results shows us warning that the market risk need to be controlled better during the post-low inflation period 2015-2017. And our conclusion part will recommends some policies and plans to deal with it.
Highlights
IntroductionThroughout many recent years (2006 until now), Viet Nam banking, insurance and stock market are evaluated as one of active markets, which has certain positive effect for the economy and become one of vital players in the financial system of the nation
Throughout many recent years (2006 until now), Viet Nam banking, insurance and stock market are evaluated as one of active markets, which has certain positive effect for the economy and become one of vital players in the financial system of the nation.These companies have been affected by inflation
We summarize the data as the analysis follows: For the banking industry, different from stock and insurance industry, the market risk level has been increasing during the post-low inflation environment (2015-17) as shown by equity beta mean in the above chart, whereas the risk fluctuation has been increasing
Summary
Throughout many recent years (2006 until now), Viet Nam banking, insurance and stock market are evaluated as one of active markets, which has certain positive effect for the economy and become one of vital players in the financial system of the nation. These companies have been affected by inflation (see more in the below conceptual theories part). This study will calculate and figure out whether the market risk level during the post-low inflation time (201517) has increased or decreased, compared to those statistics in the financial crisis time (2007-2009)
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