Measuring Equity and Asset Beta– Evidence in Viet Nam Three Insurance and Financial Service Industries After Crisis 2007-2009 and Low Inflation Period 2015-2017

Dinh Tran Ngoc Huy
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Dinh Tran Ngoc Huy: Faculty of Economics, Binh Duong University, Viet Nam MBA, Graduate School of International Management, International University of Japan, Niigata, Japan

International Journal of Economics and Financial Research, 2019, vol. 5, issue 8, 196-208

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.

Keywords: Risk management; Asset beta; Financial crisis; Banking industry; Insurance industry; Stock investment industry; Macro policy. (search for similar items in EconPapers)
JEL-codes: C83 G01 G39 (search for similar items in EconPapers)
Date: 2019
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