A recent survey conducted by the State Bank of Vietnam on the portfolio investment capital in Vietnam has confirmed the upward trend in foreign investment in the country. Currently, 74 foreign investment funds are present in Vietnam, including 22 funds established in the first eight months of the year. The funds include big names like Sumitomo Mitsui Vietnam, Fullecton Vietnam Fund, Credit Agricole Fund, which bring capital from Singapore, Japan and South Korea to Vietnam.

The total capital brought to Vietnam by the end of August is believed to reach $6bil, or 10% of GDP, which shows that Vietnam remains attractive in the eyes of foreign investors. At a business forum held recently in HCM City, foreign investors said that it was now very simple to raise funds to be injected in Vietnam’s stocks. Investment funds are now ready to pump more capital into Vietnam’s market once big corporations are equitised and make IPOs.

In fact, despite the market falls, foreign investors have never left Vietnam. Statistics show that at many trading sessions, foreign investors’ transaction volumes have accounted for 1/3 of the total trading volume of the market.

Foreign investors prove to put high hopes on big corporations’ IPOs. Since Bao Viet (insurer) sold 10% of its stakes to HSBC for $255mil, three other banks, Vietcombank, Incombank and BIDV, have been intensively looking for foreign strategic investors, to whom they are planning to sell 7-10% of total stakes.

Bao Viet and the said banks are the leading financial institutions in Vietnam, and thus the targets of many international investors. Therefore, it is predictable that foreign investors will have to spend several hundred million dollars to become the strategic shareholders of the banks and insurers.

Most recently, when commenting about Vietnam’s stock market, Sang-Ho Ryu, Managing Director of KIS, a South Korean securities investment group, said that the economic growth rate of Vietnam at 8.5% proved to be very impressive, and promised attractive investment deals on the bourse.

Refusing to consider the worries about the falls of the stock market, Mr Sang-Ho Ryu said that the stock market was in the correction period after a period of overly high development.

The market falls can bring big opportunities, when investors can buy stocks at soft prices before the stock market recovers. Foreign investors may well understand that Vietnam’s stock market is very promising, and they are now more enthusiastic than ever before.

Source: DTCK.