[NEWS] - Bank deposits are flowing into securities?

According to experts, falling interest rates partly boosted this cash flow from bank deposits to channels with higher potential returns such as the stock market.

In a recent analysis report, VCBS Securities Company showed that, from the beginning of the year until now, the deposit interest rate has decreased by 100-130 points. The State Bank has also adjusted down 4 times with the total operating interest rate reduced by 0.5-2%/year.

The reduction of interest rates is a premise to support businesses and people to easily access loans at low cost to serve production and business. For the financial market, the interest rate level in a downtrend is expected to continue to promote a part of cash flow from deposit investment channels to a profitable channel with higher potential than the stock market.

Similar to many other experts, securities will become more attractive to investors shortly when deposit interest rates are low. According to an analysis report from VNDirect, savings deposits will become less attractive in the second half of 2023. The average deposit interest rate with a term of 12 months may drop to 6.5% - 6.8 %/year at the end of 2023 and will decrease lower by 2024. Investors’ cash flow may partially shift to other investment channels with higher yields. This trend will gradually become clearer by the end of 2023.

According to information from VNDirect, investors may increase the proportion of stocks when the domestic interest rate level cools down more clearly from the beginning of 2023. Interest rates will gradually decrease and have a positive impact on the earnings market shortly as well as will reduce the opportunity cost of investing in the stock market.

VNDirect estimates that the stock market will have many positive medium and long-term prospects in 3 months. Meanwhile, savings deposit currently has a positive outlook but will change to long-term neutral in about 1 year.

Hoang Yen (Collection source)