Different from the quiet atmosphere in 2008 when foreign invertors withdrew their capital from the market, Vietnam is currently receiving more positive signs. However, objects and investment methods of investment will be far different. That is an assessment of VinaCapital Group, the biggest asset management group in Vietnam, at the annual conference for investors which recently took place in Hanoi.
Foreign Indirect Investment (FII) is more indifferent to stock market
Mr Horst Geike, Chairman of VinaCapital Group, believes that Vietnam’s stock market is still growing well with a growth rate of over 80 % during the last nine months. However, almost all foreign investors are still absent from the market with a total net purchase value of approximately US$36 million. Purchase of the foreign sector keeps declining during the last year. Foreign investors seem to ignore Vietnam and switch their capital to Thailand and Indonesia.
In addition, the number of new investors is getting smaller and smaller. The disbursement rate, however, is still high, which shows that investors are doing well – states Mr Horst Geike.
Mr Don Lam, General Director of VinaCapital, states that Vietnam’s securities market still has opportunities for a stronger development. A vast majority of new investors think of long-term profit instead of speculating and surfing only. He tells that the capital flow will increase in coming time, thanks to investment switched to new markets. Under current circumstances, investors will seek stable markets first and foremost. This is an opportunity for Vietnam when the economy has shown recovery signs.
It has been a difficult period for asset managers. VinaCapital can be taken as an example. The price of three funds managed by this organization which are listed in London Stock Exchange falls dramatically compared to the prime time of 2007. At that time, total asset value managed by the group amounted to US$2.2 billion. The current net asset value of the group is US$1.8 only.
Hot areas appeal to FII
Whether FII flows into Vietnam depends on the overall picture of national economy (GDP growth rate, privatization pace of SOEs, etc.) With what Vietnam achieves in recovering the economy after the crisis, significant global investors will come to Vietnam within the next two years, states Mr Don Lam.
Mr Andy Ho, Managing Director and Head of Investment of VinaCapital, says that potential areas for investment in Vietnam in 2010 will be healthcare, consumer goods, financial service, energy, housing for middle class and retail areas. Meanwhile, tall buildings for office, hotel sector, luxurious apartments and short-term stock speculation will be less appealing.
According to analysis, investing in retail market is highly potential when the number of people does shopping in supermarkets in America makes up 80 %, in Europe, 70 %, and in China, 12 %. Meanwhile, this number in Vietnam is six % only. Experts of VinaCapital Group see that Vietnam has lots of potentials to develop the retail sector in the time to come.
Apart from VinaCapital, many foreign economics experts also believe that there are currently many good investment opportunities for investors. However, cautious selection is necessary.
Representative of VinaCapital says that, “Currently, establishing a new fund (fund for unlisted real estate) in order to attract organized investors is a new trend since investors can participate in and control global financial activities more closely. VinaCapital is going to set up such a fund.”
Huong Ly
Vietnamese
