Foreign investors remained net sellers of Vietnamese equities in recent months but analysts said to look for a net buying trend once market opportunities emerge, the state-run Investment newspaper quoted analysts as saying.
The Ho Chi Minh Stock Exchange (HOSE) statistics showed that foreigners were net sellers of around 4.9 million shares worth VND76.2 billion in the first week of March, compared with around 10 million shares in February this year, partly attributed to hedge funds’ selling to return capital as the fiscal year ended.
Fiachra MacCana, head analyst of in the Ho Chi Minh Securities Corporation (HSC) said the domestic stock market had not shown signs of bottoming out and foreign investors maybe selling now to buy later.
“The global market might worsen in the next few months and we are very careful about returning to the market now. Valuations are reasonable but may be getting cheaper,” MacCana told HSC clients last week.
The predictable dong depreciation trend by Vietnam to boost weakening exports in the coming months is another major reason for foreign investors’ heavy selling, other analysts added. “We expect the dong to depreciate up to 10 per cent in 2009,” MacCana said.
Ken Tai Chee Ming, Singapore-based Kim Eng Securities’ senior technical strategist, said compared to Vietnam’s regional peers, Vietnam’s equities were not too expensive, but not too cheap. “Technically, the VN-Index should see no bottom in the next 3-6 months,” he noted.
While domestic investors have been concerned about a possible sharp pullout of capital of foreigners from Vietnam, Tan Viet Securities’ Research Director Hoang Xuan Quyen said their recent selling was largely to restructure portfolios, not pull out.
“I think that this capital sum will stay in Vietnam as the country’s medium to long-term equity market is more attractive than other regional countries thanks to higher economic growth,” said Quyen.
By late 2008, foreign players’ total equity holdings nearly halved to US$4.6 billion and Vietnam-dedicated fund management firms were planning to call for more foreign capital, a source from Habubank Securities said.
Foreign portfolio investment into Vietnam is mainly through close-ended funds with duration of 5-10 year. (VIR)
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