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Trying hard to find capital for Vietnamese stocks
The decrease in stock prices on the US bourse has not had considerable impacts on the net value of foreign investment funds in Vietnam, but it has made it more difficult to raise funds from foreign investors.
Stock prices in Vietnam are considered very attractive and now a good time for investors to purchase stocks
Stock prices in Vietnam are considered very attractive and now a good time for investors to purchase stocks. However, the problem is that foreign investment funds do not have money to disburse.
Andy Ho, Managing Director of VinaCapital, a fund management company, said that the US financial crisis has had indirect impacts on investment funds’ portfolios, including the ones managed by VinaCapital.
Ho said that investors now tend to hold cash and safe assets, like government bonds, instead of shares. What investment funds need to do now is to persuade investors about the strong economic development of Vietnam in the medium and long term as well as the attractiveness and quality of investment opportunities in Vietnam.
Managing Director of Dragon Capital management company Dominic Scriven said that it now requires more exertion than last year to persuade investors to inject money in stocks.
“Investors have become more cautious. They do not want to inject money in venture investment channels. There is a growing tendency of keeping cash,” he said.
However, he asserted that it is now the right time to inject money in stocks as stock prices are very attractive. He said that it was much easier to get capital two years ago than now, but it was more difficult to find attractive investment opportunities. Dragon Capital deliberately did not raise much money in 2006 and 2007, though the market was hot at that time, as it foresaw the problems of the overly hot market.
Mr Scriven said that the US financial storm has, to some extent, affected the feelings of investors. However, as the crisis is step-by-step mitigated, investors will calm down.
He related that during a meeting with European investors two weeks ago, some investors asked him if they should sell their investments in Vietnamese stocks. “My answer was that they should keep the stocks as Vietnam’s stock market has great development potentials,” he said.
Ho from VinaCapital said that the funds are still disbursing for attractive projects. Vietnam Infrastructure Ltd continues disbursing for infrastructure development projects in Vietnam, while DFJV, which targets high-technology businesses, has injected money in seven projects.
He affirmed that VinaCapital has not changed the way it selects investment projects in Vietnam. “We believe in Vietnam’s stock market development in the medium and long term.”
VNN
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