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Market fall doesn’t discourage foreign investors
Foreign investors are still eyeing Vietnam, though the stock market is expected to face challenges and pitfalls in 2008.
Dragon Capital plans to set up three more investment funds this year, raising the total capital it manages to $3bil, while BVIM plans to increase the total capital it manages to $300mil. Credit Suisse is considering setting up a representative office in Vietnam after its staff began tiring of traveling between Hanoi, HCM City and Singapore. This suggests Vietnam remains a very attractive market in the eyes of foreign investors.
Phan Minh Tuan, Chief Representative of Dragon Capital, said securities, infrastructure and real estate funds will be set up this year, alongside the capital increase of already existing funds.
“We still believe that Vietnam deserves investments. Its national economy grows well, the international community appreciates and respects Vietnam’s economic development which reflects the commitment of donors at the Consultative Meeting 2007,” said Mr. Tuan.
Dragon Capital’s experts think it is the right time to reenter the stock market, which is why Dragon Capital did not join Bao Viet and Vietcombank’s IPOs, but did register for Sabeco’s IPO, held January 28.
“Though Sabeco’s initial share price is relatively high, we believe it has potential in the brewery industry,” said Mr. Tuan. Good governance skills, a clear development strategy and high growth possibility are the three most important factors Dragon Capital takes into account when deciding whether to make investments.
A senior manager of BIDV-Vietnam Partner (BVIM) said the fund will inject money in both listed and unlisted shares, provided that the companies have high growth potential.
Of course, investment funds have different viewpoints about what ‘high growth potential’ means. Explaining why his fund decided to purchase Vietcombank shares while share prices were considered overly high, an official from one investment fund said that Vietcombank’s share prices shouldn’t be compared to ACB’s or STB’s. The three banks can all be described as reliable but Vietcombank’s potential is much greater than the latter two.
Experts have warned that the global economic recession and the falling financial market may make investors hesitate when considering injecting funds into Vietnam. However, no sign of this has yet been seen. In its report about Vietnam’s financial market released in January 2008, HSBC said this is the right time to make investments in the domestic bourse.
Recently, several foreign institutions have been selling their shares. However, their move was not further prevent losses, as many thought, they just wanted to restructure their portfolios. Experts said that the institutions did not incur loss though they sold at low prices. The investors sold the shares which they bought long time ago, before the companies listed on the bourse, for prices lower than the sale prices.
As for individual investors, they will buy shares when they can see signs of a global economic recovery, and vice versa. Foreign investors bought 1.11mil shares (VND106.43bil) on January 24 and sold 706,680 shares (VND61bil). The figures for January 25 were 987,130 (VND99.5bil) and 364,450 (VND27.427bil), respectively
Statistics from the Vietnam Securities Deposit Center showed that the number of accounts opened by foreign investors at securities companies keeps increasing. It is estimated that by the end of January, 535 institutions and 8,598 individual investors will have accounts for securities transactions in Vietnam.
VNN
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