Funds Cautious to Invest in Vietnam Stocks Despite Market Rally
Almost close-ended investment funds in Vietnam are cautious and are keeping cash instead of putting in local stocks which has seen a sharp rise over the past several weeks, fueled mainly by local buying and foreign markets’ rally.
Dragon Capital now has US$100 million in cash, Vinacapital has US$90 million, Prudential fund keeps VND4 trillion (US$236.1 million) in cash and VND12 trillion in g-bonds.
VOF Investment Limited, managed by VinaCapital Group, were net sellers of US$7 million of shares in the first quarter, and kept selling in April and May. Dragon Capital’s VEIL raised cash ratio to 10 per cent from 9 per cent in late April.
The recent foreign net buy has been made by hedge funds of Deutsche Bank and CitiGroup, the Saigon Economic Times said.
Funds said although the market has resisted against the downtrend, the uptrend is still volatile.
They are worried about Vietnam’s possible large budget deficit, which may be higher than 8 per cent set by the government. Foreign funds also doubt of profit growth of listed companies in 2009.
Local individuals and institutions, however, have still hunted bargain as the stock prices are rather low and the worst of economic crisis has been over. Capital has run out of g-bonds, gold and property to flow into profitable equity market.
An official from the State Bank of Vietnam said the central bank would continue pumping capital into the economy, after the commercial banks have lent total VND291.886 trillion of subsidized loans since early February.
The VN-Index tested the new resistance benchmark at 400 points Tuesday and may head to 420 soon. (Saigon Economic Times)
Vietnamese
