After the mid-September meeting with the Fed's decision to raise the benchmark interest rate by 75 basis points, the world outlook quickly changed to negative. The rising risks of a recession as well as the probability of defaults of major companies has been threatening global financial markets. In addition, the escalation of the Russo-Ukrainian war that has not yet ended is an added worry for the financial market outlook. In its recent report on Sep 2022, OECD revised forecasted earnings growth of most of the economies. In which, global GDP growth in 2023 reduce to 2.2% from previous forecast of 2.8%.

In Vietnam, we believe that the lending interest rate in some industries/enterprises with a solid operating foundation could steady increase following the increase of the average mobilization costs of banks. However, money supply growth is generally slower than credit growth given the Dong is still being net withdrawn on OMO and the SBV has been a net seller of the USD. At the same time, Decree 65 (amending Decree 153) on private bond issuance will limit part of the capital mobilized from retail investors at some point, at least in the short-term. Credit quota from banks, therefore, will have to share a part for this "shorten amount". Accordingly, we believe that lending interest rates in high-risk areas will continue to increase rapidly in the near future. It can be understood that, although the SBV has increased its operating interest rates by 100 basis points, with the current uncertainty in the world, we expect the SBV's monetary policy will keep tight and cautious.

Additionally, we forecast the outlook for growth of sectors in Q322 are generally still positive compared to same period, but will decrease significantly compared to 2Q22. In our base case, we expect

VNIndex to fluctuate between 1050-1150.