Foreign Portfolio Value in Vietnam Falls US$4 Bln in 2008
The portfolios of foreign investments in Vietnam’s stock market were valued at US$4.6 billion by the end of last year, losing US$4 billion in its value from the peak in early 2008.
Nguyen Son, head of the Market Development Division of the State Securities Commission (SSC), said foreign investors traded local shares worth average US$300 million each month. The figure peaked at US$880 million in October and around US$350 million in November.
Foreigners bought in local shares in the beginning months of the year and started to be net sellers, especially of government bonds and high-liquidity shares, in the final months, he noted.
Son said although the foreign portfolios fell, foreign capital were not running out of Vietnam because local share prices fell 70 per cent, foreign players just restructured their portfolio, and they shifted to invest in other channels such as property.
About two thirds of foreign portfolios were held by closed funds; therefore, foreigners also found harder to make capital withdrawals, he said.
However, Son emphasized foreigners’ stock selling or partial capital withdrawal would create pressure on exchange rate and domestic investors’ sentiment, which could affect the country’s foreign currency reserve and banks’ liquidity.
The VN-Index closed the year of 2008 at 303.21 points from over 900 points in the beginning of the year. (Vietnam Economic Times)
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