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Foreigner investor portfolios lost half of value in 2008
The State Securities Commission has announced that the value of overseas clients’ investment portfolios were cut in half by the end of 2008, a harsh effect of the global economic downturn.
As of December 31, 2008 foreigners’ investment portfolios remained at US$4 billion.
The falling value of portfolios was partially due to the tumbling price of shares, which were estimated to slump 70 per cent from last year’s prices, said the commission.
"2008 was noted as the most severe year ever for stock markets world wide, and the local market is not excluded from this. The internal economic struggle and the impact of the global crisis drove the benchmark indices down 70 per cent from their peak during the 2006-07 period," said a representative from the market development department under the commission.
Due to the market turmoil, foreigners were directing their investment capital into different channels, such as the property market, which also caused a fall in the total investment capital they poured into the stock market, said the commission.
The commission also discovered that two-thirds of the overseas investment portfolios belonged to closed funds, who pledged to invest in the country for at least five years. "The pressure for foreigner’s net sale would be slight," said the representative.
Nguyen Hai Quy, an analyst from a Ha Noi-based securities firms, said that foreigners began reinvesting in the country’s market as soon as the global economic downturn seemed to be easing.
He said that investors from neighbouring countries were still eyeing Viet Nam as a promising destination for investment. He said the reduction of overseas capital was a temporary effect of the economic downturn.
VNS
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