Foreign investment funds, though still optimistic about the long-term potentials of the stock market, have become more cautious with investment decisions.

Opportunities in difficulties

Andy Ho, Managing Director of VinaCapital Group, believes that Vietnam’s current difficulties are just temporary, while the national economy has long-term development potentials.

While other Asian markets are witnessing an outflow of investment capital, Vietnam has received $600mil worth of foreign portfolio investment so far this year.

The sum is not big, but it shows that foreign investors are still interested in Vietnam’s market.

According to Andy Ho, the falls of the stock market recently have, more or less, been affecting the investments of funds. However, the funds managed by VinaCapital have not suffered heavily, as they had fortunately diversified their investment portfolios with money injected in real estate and private companies as well.

Ho said that it is now the right time for investment funds to inject money in blue chips as they have become much cheaper than previously on both the Hanoi and HCM City bourses, in private companies, and in medium- and long-term bonds.

Instead of making investments in shares, funds now can negotiate to buy good companies at soft prices, Ho said.

Nguyen Xuan Minh from Vietnam Asset Management also said that the current market provides good conditions for investors. Minh said that he has more opportunities now to invest in good companies at low prices. It is because the prices of many companies have been falling dramatically, though their business remains very good.

Duong Thu Huong, Public Relations Director of IDG Ventures, also said that previously, she could hardly find any companies that could meet the requirements for IDG to make investment in. Meanwhile, there are now many good companies suitable to IDG’s investment strategy.

“The slowdown of economic growth, to some extent, has its good points, as it helps investment funds realise which enterprises they should invest in,” Huong said

IDG Ventures would not have injected $500mil in information technology companies and launched two new investment funds, as it has just announced, if it thought Vietnam’s market wanted potential.

Taking cautious steps

Minh said that portfolio investment in Vietnam will increase when macroeconomic indices, including the exchange rate, trade balance and inflation, are stable.

However, Minh said that Vietnam will have to compete with other markets to attract foreign investors. Share prices in many other markets in the world have also become cheaper and attractive to investors. The currency shortage will make investors cautious about investment decisions.

Meanwhile, information provided by Vietnamese companies proves to be less transparent compared to other countries. This is considered a big risk foreign investors have to face when injecting money in Vietnam.

“I do not think that foreign investors’ money will flow into Vietnam so hurriedly and rapidly as it did one or two years ago. Investors will consider investments more carefully and differentiate good companies from bad ones,” Minh said.

Louis Nguyen, Chairman and General Director of Anpha Capital Group (ACG), said that ACG’s investment decisions have been made after selective and thorough consideration, which has helped ACG’s investments stay safe from the VN Index falls.

He said that the VN Index is unpredictable, and that ACG is closely watching investment opportunities in the companies which are being undervalued, and will make investment when the VN Index bounces back.

He added that ACG is eyeing the three best companies in every business field. If the VN Index stabilises, ACG will disburse some $50mil from now till the end of the year.

Source: VietNamNet Bridge