In his opinion, international investors can choose Vietnam as a destination when Vietnam joins the World Trade Organisation (WTO) this year. The country’s admission to the WTO will stimulate foreign investors to follow pioneering giant groups in Vietnam such as Intel Corp and Ford Motor Co.Intel which have pledged to invest US$100 million in an automobile assembling factory in Hanoi.

The Ho Chi Minh City Securities Trading Centre (HOSTC) has operated for six years, attracting 49 companies whose shares are listed on the bourse with a total value of US$3.1 billion. This is a big leap forward as only two companies listed their share at HOSTC with total investment of VND270 at its inception in 2000.

The Head of Emerging Markets, Global Active Equity SSgA, Brad Aham, said there are more and more companies wanting to list their shares on the Vietnamese stock market because Vietnam has maintained a high economic growth rate and attracted large foreign investment inflows.

Vietnam-Index has increased to 66 percent this year, the highest growth rate among securities indexes in Asia while China-index was placed second.

Christopher Wood, a strategist from CLSA Ltd has advised investors to buy Vietnamese stocks as Vietnam will be a lucrative market in the coming years with spectacular growth thanks to more participation of companies.

Speaking at a conference on CLSA Ltd’s investment held in Hong Kong in late September, Mr Wood also advised foreign investors to allocate their total indirect investment capital for Asia, except Japan.

The Sai Gon Thuong Tin Joint-stock Commercial Bank (Sacombank) was the first bank listed on the bourse in July, thus increasing the bank’s market value to 50 percent. The Bank for Foreign Trade of Vietnam (Vietcombank) and the Mekong Housing Bank (MHB) are expected to issue their stocks next year. The issuance of bank stocks shows a remarkable development in the Vietnam securities market.

The chance of investment in the Vietnam securities market is widely open after the Government boosts the purchasing of stocks in State-owned enterprises. According to analysts at the Ho Chi Minh Securities Trading Centre, the value of the Vietnam securities market will achieve an annual average growth rate of between 20-30 percent in the coming years, while GDP growth rate is expected to increase just 7 percent.

This will drive market value of the Vietnam securities market up to US$24 billion and GDP to US$80 billion in 2010.

After Vietcombank and MHB join the stock market, a series of corporations will follow, including Electricity of Vietnam and the Vietnam Post and Telematics Group.

However, investment in the securities market at the moment still faces some difficulties as it is not easy for investors to find companies which have good amount of stock volumes to buy or sell without causing any fluctuation in prices.

On average, just US$3.6 million is transacted at the Vietnam securities market every day, while the figure is US$314 million in Thailand and US$3.2 billion in the Hong Kong securities markets.

“Currently, the Vietnam securities market has not yet been on our radar screen because of its low liquidity in stocks,” said Nick Timberlake, who manage US$221 million of the global emerging market fund of the London-base HSBC.

In addition, foreign investors are limited by holding no more than 49 percent of stock at listed companies and they will have to invest through a domestic securities company and open a Vietnamese-dong bank account.