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

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 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 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 2015-
2017. 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.