The U.S. economy’s health is a key factor for investment management funds in considering investment in the Vietnamese stock market amid the global downturn, fund managers have said.
Pham Do Chi, deputy general director of VinaCapital Group, the largest equity investment fund in the country, said the U.S. economic situation influences the Vietnamese market since a slump in exports to the world’s largest economy would hit local listed firms.
VinaCapital is cautious about investment in Vietnam as the U.S. economy is still in recession, he said. “Once I thought the U.S. economy will recover by the end of this year. But now I think it will recover by mid-2010 at the soonest,” Chi noted.
General Director of Saigon Asset Management (SAM) Nguyen Thu Lu also said if the local market drops further, SAM will slash its holding in export companies, financial firms and banks which are likely to struggle this year.
Funds are now not interested in new projects to keep cash. They are investing in medium-priced buildings and 3- and 4-star hotels to meet domestic demands instead of high-end office buildings and 5-star hotels, Chi said.
Pham Ngoc Bich, general director of Prudential Fund Management Co., said its property fund has not disbursed any of US$140 million it mobilized last year. SAM’s real estate fund also has 40 per cent in cash.
Some 20 per cent of Dragon Capital’s fund is also in cash and bonds, said managing director Dominic Scriven.
Vietnam, however, still has some advantages in GDP structure, high domestic consumption, limited debts and a better payment balance this year, which is not as bad as in the U.S., said Dominic Scriven.
Foreign public funds in Vietnam saw their net asset value (NAV) fall 13.2 per cent on average since the beginning of this year as of March 7. (Securities Investment, Thanh Nien Daily)
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