Foreign indirect capital inflows into the equity market of Vietnam will sharply decrease in 2009 due to impacts from the world economic recession, foreign financial institutions said at a conference held by the National Assembly’s Economics Committee late last week.
Dominic Scriven, general director of Dragon Capital, said foreign indirect capital into developing countries will fall by 34 per cent to US$600 billion in 2009 and further drop in the years to come.
Vietnam received 0.87 per cent out of a total of US$1 trillion of indirect capital inflows into developing countries in 2007. The figure fell to nearly 0 per cent last year and is forecast to be very low this year, he noted.
Foreign experts said the country’s bond and share market is not really attractive, given that based on the P/E ratio of 10.2 in 2009, the prices of Vietnamese shares are reasonable and not lower than those in other countries.
Both enterprises and government will also find hard in selling bonds this year due to the expected further depreciation of Vietnam dong against the U.S. dollar. Dominic forecast foreigners will invest less in Vietnam’s bonds, thus the country’s plan to raise VND80 trillion this year seems so difficult.
Meanwhile, Ban Viet Securities Co. emphasized on the difficulty to raise funds via the stock market this year. It said almost enterprises had to rely on capital raised during 2007 to survive in 2008.
Net profits of listed firms in 2008 were also estimated to fall 10 per cent. Almost leading companies in Vietnam currently have to pay an interest rate of 12 per cent for loans through bond issue, a heavy burden amid the falling interest rate trend in 2009, Ban Viet said.
Currently, foreigners hold US$3 billion worth of shares, including 19 per cent of shares on HOSE and 14 per cent shares on HASTC, and US$500 million worth of bonds compared to US$3 billion in early last year, Ban Viet noted.
Many proposed that local authorities should set up over-the-counter-(OTC) and list shares of Sabeco, Vietcombank, Habeco, Vietinbank as scheduled and should not intervene into the market. (Labor, Securities Investment)
Vietnamese
