Asset and Equity Beta of Viet Nam Public Utilities- Electric Power and Water Industries after the Low Inflation Period

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Asset and Equity Beta of Viet Nam Public Utilities- Electric Power and Water Industries after the Low Inflation Period

June 24, 2020 Economics and Management 0

The Vietnam economy has obtained lots of achievements after the financial crisis 2007-2011, until it reached a low inflation rate of 0.6% in 2015. Vietnam Water & Electric power Company group are growing and contributing much to the economic development and has been affected by inflation. High and increasing inflation might reduce values of Water& Electric power Company group contracts. This paper measures the volatility of market risk in Viet Nam Water& Electric power Company group after this period (2015-2017) and recommends policies for sutainable water treatment and development. The main reason is the necessary role of the of Water& Electric power Company group system in Vietnam in the economic development and growth in recent years always go with risk potential and risk control policies.  Hence, this research paper aims to figure out how much increase or decrease in the market risk of Vietnam Water& Electric power Company group firms during the post-low inflation environment 20152017. First, by using quantitative combined with comparative data analysis method, we find out the risk level measured by equity beta mean in the water and electric power industry is acceptable, as it is lower than (<) 1. Then, one of its major findings is the comparison between risk level of stock investment industry compared to those of Water Company group in the post-low inflation time 2015-2017. In fact, the research findings show us market risk level of water and electric power group during the post-low inflation time is lower (equity beta mean = 0.412). Then, another major finding is the comparison between risk level of electric power industry in the post-low inflation time 2015-2017 compared to those in the crisis 2007-09. In fact, the research findings show us market risk level of electric power group during the post-low inflation time is higher. 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 20152017. And our conclusion part will recommends some policies and plans to deal with it. Basically, we need to have a better integration management of water cross the country, identify challenges in water treatment and resolve them.

Author(s) Details

Dinh Tran Ngoc Huy
Banking University, Ho Chi Minh City, Viet Nam and Graduate School of International Management, International University of Japan, Niigata, Japan.

Nguyen Thi Phuong Thanh
Thai Nguyen University of Information Technology and Communications, Thai Nguyen, Viet Nam.

Pham Tuan
Anh Thuongmai University, Hanoi, Viet Nam.

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