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Foreigners pass on local market
Foreign investment in Viet Nam has shown some positive signs, although net buys on the nation's stock exchanges totalled only VND600 billion (US$28.5 million) in the first six months of this year.
In the first two weeks this month, authorities announced Maybank Kim Eng Securities Pte raised its holdings in many listed firms.
Specifically, the Singaporean company lifted its ownership in Petrolimex Tanker Co (PJT) to over 5 per cent, in Van Lang Technology Development and Investment (VLA) to 9.53 per cent, in Higher Educational And Vocational Book (HEV) to 12 per cent and in Education Cartography And Illustration Co (ECI) to 9 per cent.
In addition, it is a major shareholder of construction materials supplier Beton 6 (BT6) and West Coach Station (WCS), while it also purchases shares of companies on the unlisted public company market.
Most transactions of Maybank Kim Eng took place in penny stocks, which was unusual when viewed in the context of trends among foreign investors.
Kim Eng Vietnam Securities Co's general director Le Minh Tam said Maybank Kim Eng was an investment trust service provider and not a self-trader.
"The massive buys recently were due to growing interest from the company's customers in Viet Nam's stock market," he told the publication Dau tu Chung khoan (Securities Investment).
Meanwhile, Kim Eng's analyst Nguyen Thi Ngan Tuyen noted foreign investors wanted to invest in sectors with stable cash flows, such as water services, transportation, health services and commerce.
"The new money pouring into Viet Nam's market is long-term and idle, with a 5 to 10 year vision," Tuyen said. The buyers thought a number of shares had plunged to attractive prices based on value for investors, she added.
Data about transactions by foreign investors on both national stock exchanges does not reflect the true state of foreign investment, as many transactions were made outside of the order matching system.
For example, Epsom Limited Investment Fund sold around 1 million Vinamilk (VNM) shares to Deutsche Bank AG London at a price higher than that in the market, and KWE Beteiligungen AG sold 0.8 million Binh Minh Plastics Co (BMP) shares to The Nawaplastic Industries Co.
In addition, some foreign investors struck co-operative deals rather than just making a simple financial investment. Typically of this trend was collaboration between Japanese partner Ezaki Glico and Kinh Do Confectionery (KDC), Diageo Group and Ha Noi Liquor Co, and Chilean pharmaceutical producer CFR International SPA and domestic counterpart Domesco (DMC).
"Co-operation is becoming a hot trend among large foreign investors," said HCM City Securities Co's head of corporate finance consultancy Trinh Thanh Can.
While a number of foreign funds are going to dissolve by next year, many member funds have emerged such as Orchild Fund, Platinum Victory and Red River.
A securities analyst speaking on condition of anonymity predicted these funds could become a major force in the market
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