Foreign investors now hold an estimated US$8 billion worth of Vietnamese shares, Nguyen Ngoc Canh, Director of the International Cooperation Department under the State Securities Commission (SSC).
The foreign portfolio investment (FPI) started flowing strongly into Vietnam in late 2006 when the country prepared to join the World Trade Organization, and it recorded at US$11 billion-US$12 billion in 2007, making up over 50% of total foreign investment here.
After a strong fall in 2008 amid the global financial crisis, the FPI has come back to local shares since the beginning of this year. The SSC will have some measures to attract this capital source, Canh said.
Authorities will need to simplify trading procedures, improve quality of listed shares, upgrade infrastructure for the market, and particularly stabilize forex and monetary policy to avoid depreciation of Vietnam dong.
Canh said the Ministry of Finance is to allow the operation of open-end funds, which is a totally new investment channel in Vietnam, aiming to increase market liquidity and draw greater foreign interest in the post-crisis period.
Under commitment with the WTO, Vietnam will also encourage foreign-owned securities institutions to provide services in the country.
Earlier, the SSC’s Chairman Vu Bang said the commission has submitted an overall plan on crisis prevention and portfolio investment management to the government, including measures to avoid unexpected foreign capital reversal.
Vietnam’s stock market now accounts for 40% of its gross domestic products (GDP), with the listings of 555 companies and 926,000 trading accounts, including over 14,000 of foreign investors.
The market value is expected to reach between 80% and 110% of the GDP by 2020, the Finance Ministry said. (Securities Investment)
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