Mr Dominic Criven, Director of Dragon Capital shared his views with the press on Vietnamese capital market in the coming years.
It is reported that Vietnamese market is receiving an influx of indirect investment from foreign investors. Is it a long-term or short-term capital and how will it affect Vietnamese market?
I am not very well informed, but according to my assessment, most of the capital is form investors or financial institutions who wish to establish medium and long-term engagement in Vietnam. Some of them might be short-term investors. Such investors are available in all markets, and actually there are many short-term investors in Vietnam. According to me, short-term investments do not impair the market. It is form that we must get used to it and understand it. The market must have the participation of all sectors: long, medium and short terms.
Do you think that Vietnamese stock market is overheated or stock price too high?
Market is market, we have to accept its law. It is difficult to say whether enterprise value is in conformity with Vietnamese stock market. It needs an analysis on the development of businesses in the future. We must evaluate the quality of businesses in the recent past, profitability and risk in interest rates. Combining all these factors, we can have an assessment on the businesses.
What is the most important factor for a stable stock market in Vietnam ?
We must consider many factors to obtain an accurate assessment, such as the accumulation in the population, capital demand, inflation, interest rate, growth rate, business profit, quality of business management, ownership of listing companies, etc.
There were precedents in other countries where investors invested massively in a market and then withdrew them quickly. How could Vietnam prevent it ?
There were such cases in the world. That is why the Capital Market Sub-Committee (Vietnam Business Forum) has proposed that Vietnam should study various forms of investments and motivation of investors to encourage them in the best form. Naturally, it also depends on the openness of Vietnam.
I don’t think that investors will invest massively in Vietnam. They will not make such a big risk, but continue their specific plan and direction before investing in foreign market. Therefore, I think, Vietnamese government does not need to control the capital flow yet.
Do you think that foreign investors are interested in bond market in Vietnam ?
In addition to stocks, foreign investors are also interested in bond market. In bonds, profit is fixed, so is risk. However, there is no precise answer to fixed risk of bonds. In the past, stock profit increased, and risk also increased. Stock market was developed first. We can analyze risk and profit and develop bond market.
Lan Anh
Vietnamese
