Where Beta Going - Case in Viet Nam Commercial Electric Industry During Post-Low Inflation Period 2015-2017

1Dr. Pham Tuan Anh, Dinh Tran Ngoc Huy*, Dr. Le Thi My Phuong, Luong Minh Lan and Nguyen Thi Phuong Thanh

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Abstract:

The Vietnam economy and commercial electric industry have gained lots of achievements after the financial crisis 2007-2011, until it reached a low inflation rate of 0.6% in 2015. Software companies face challenges in expanding Vietnam market such as pricing policy and supporting services, etc. This paper measures the volatility of market risk in Viet Nam electric industry after this period (2015-2017). The main reason is the vital role of the software company group 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 commercial electric firms during the post-low inflation period 2015-2017. First, by using quantitative combined with comparative data analysis method, we find out the risk level measured by equity beta mean in the commercal electric industry is acceptable, i.e it is little lower than (<) 1.Then, one of its major findings is the comparison between risk level of electric industry during the financial crisis 2007-2009 compared to those in the post-low inflation time 2015-2017. In fact, the research findings show us market risk fluctuation, measured by asset and equity beta var, during the post-low inflation time has decreased slightly. 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 volatility might be higher during the post-low inflation period 2015-2017. And our conclusion part will recommend some policies and plans to deal with it. Finding new potential markets and credit and financing policies are among directions for electric companies.

Keywords:

Risk Management, Asset Beta, Financial Crisis, Commercial Electric Industry, Policy.

Paper Details
Month4
Year2020
Volume24
IssueIssue 5
Pages3542-3552