According to Alex Hambly, Managing Director of Prudential Vietnam Fund, besides the disbursed capital some $4-5bil worth of FII is waiting to be injected in Vietnam, a part of which will be put into the IPOs of big banks and corporations, namely Vietcombank, BIDV, MHB, Incombank and MobiFone.

“Vietnam is now considered fertile land for investors to seek profit, and many investors have pocketed fat profit from the newly emerging market,” said Alex Hambly. Prudential Vietnam has disbursed all its capital of $30mil. The fund is expected to raise $300mil more of capital to be injected in Vietnam.

However, Mr Hambly expressed his concern about the young and inexperienced labour force of the financial market, which remains too weak to meet the rapid development of the market.

Mr Hambly was also interested in the capability of the national economy to absorb capital. The foreign capital is now flowing into Vietnam, but it may flow into other markets if Vietnam cannot absorb the capital well.

Brad Durham, Managing Director of the US-based Emerging Portfolio Fund Research, said that as Vietnam was integrating into the world’s economy, it would be able to attract more foreign direct investment (FDI) and FII from the global market. It is because foreign investment funds tend to choose emerging countries which are in strong development, like Vietnam, to inject money into. It is clear that making investment in such countries will bring about higher profit.

A research conducted by Emerging Portfolio Fund Research recently showed that in 2003, the investment capital in global markets was $425bil in total, while the investment funds’ capital to the US and Japan was $63bil in the same year.

It is estimated that 25 big foreign funds are making investment in Vietnam with most of the capital flowing to industries, services and finance sectors, according to Mr Durham.

Nevertheless, he said that the figure proves to be modest if compared to the real demand and potentials. The total capital which has been invested in Vietnam by foreign funds just accounts for 0.05% of the total available capital of the funds.

In fact, the funds have just put a little money in the market. However, as Vietnam integrates more deeply into the world’s market, the FII capital is expected to reach $50bil, equal to that of Malaysia currently.

Investment fund managers said that in order to effectively attract FII, the government of Vietnam should create the best conditions for investors by upgrading infrastructure and concretising the policies on capital flow control.

Source: DTCK.