Foreigners forecast a good year for Vietnamese securities market

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VietStock FI English - 33 month(s) ago 6 readings

In the eyes of foreign investors, the toughest period of Vietnam’s national economy is over. The stock market gets warmer, which has attracted foreign investors back to the Vietnam’s stock market.

The thing that has most impressed foreign investors now is the continued increase of the VN Index. The Vietnamese stock market is the market which witnessed the third sharpest increases of stock index in the world. Meanwhile, the more transactions have been reported with the daily trading volume increasing by four folds.

Most of the money poured into the Vietnam’s stock market so far this year comes from domestic investors. However, foreign investors have also shown their interests in the market, Fiona Rintoul reported on The Financial Times.

The newspaper said that Templeton Frontier Markets, the investment fund specializing in disbursing money for fledgling markets, has decided to increase the capital allocation ratio for Vietnam to 8.4 percent, turning Vietnam into the geographical market which receives the fifth biggest capital allocation ratio of the fund.

Meanwhile, some other investors have made similar moves, or consider implementing the same strategy as Templeton.

More and more investors have come, and more meetings in foreign countries have been organized to discuss the opportunities in Vietnam, The Financial Times has quoted Kevin Snowball, CEO of the Vietnam Asset Management. This is a close fund specializing in making investment in Vietnamese market, listing on London stock market.

After five years of decreasing, the period that Dominic Scriven, Managing Director of Dragon Capital, called the very tough period of the Vietnam’s economy, which witnessed the crisis of the state owned shipbuilder Vinashin, that Vietnam’s economy has prospered again.

Johan Kruimer, Managing Director of the HCM City Securities Company, has noted that the policies applied since 2011 have shown their positive impacts, according to Thoi bao Kinh te Vietnam.

Since taking his office in 2011, Governor of the State Bank Nguyen Van Binh has made a lot of exertions to curb credit growth. In 2011, Vietnam’s credit growth rate dropped from 28-29 percent to 12 percent, while the downward trend is believed to continue this year.

The policy has resulted in the stabilization of the Vietnam dong after many years of depreciating. The latest depreciation of the dong occurred in February 2011.

Snowball also thinks that Vietnam dong was the currency with the most stabilized value in 2011. This is really a surprise to many people, if noting that Vietnam is the country where people keep gold more than any elsewhere in the globe.

Dau tu chung khoan has reported that Vietnam is considering removing some complicated procedures to attract more foreign investors to the Vietnamese stock market.

Sources have said that the State Securities Commission has submitted to the Ministry of Finance the plan to amend the regulations on the activities of foreign investors in Vietnam, and the regulations on the establishment and operation of securities trading institutions’ representative offices in Vietnam.

If so, foreign investors would be able to more easily disburse Vietnamese stocks. Especially, the procedures to get securities trading codes would be simplified. Foreign investors have also reassured that they would not have to wait too long to reach the summit of their hopes, because the leaders of the Ministry of Finance would make final decision within April 2012.

Doanh Nhan Saigon newspaper has quoted the Ban Viet Securities Company as saying that in the first two months of 2012, foreigners’ share net purchase value reached 80 million dollars.

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