Foreign Investors Withdraw Money from Vietnam Bonds
Foreign players have sold a large volume of bonds since the start of June amid the glum stock market to withdraw their capital out of Vietnam's government bonds, the Lao Dong newspaper said.
They are stimulating thousands of billions dong in cash, the newspaper said.
While the local economy is coping with galloping inflation, foreign investors fear of the depreciation of Vietnamese dong in the near future while the bond coupon is fixed.
The risk in exchange rate is the most important factor to foreign investors as they may get less U.S. dollar in case dong sharply devalues as analyses of foreign institutions.
“Foreign institutions are finding ways to get rid of bond market as they bought in a large volume of bonds by this time last year when the local economy refers to an appreciation of dong,” said Fiachra Mac Cana, general director of HCM Securities Corp (HSC).
Foreign investors were net sellers of bonds valued at VND1.1 trillion in the first week of June. The foreign investment in Vietnamese shares also decreased last week, reducing the purchasing power of the whole market. The VN-index closed at 373 points on June 10. (Labor)
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