Stagnant stock markets worldwide are making it hard for foreign investment funds to mobilize capital for projects in Vietnam.
Since 2010, even major names such as VinaCapital and Mekong Capital haven’t been able to raise funds to invest in Vietnam. VinaCapital, for example, failed to set up a stock fund worth US$200-300 million for investments in Vietnam’s stock market.
Some foreign investors are thus reconsidering whether to invest in Vietnam, said Andy Ho, VinaCapital’s Managing Director.Mekong Capital has also been unable to set up any new fund since 2010, said its General Director Chris Freund.
In addition to the local currency instability and inflation risk, Freund said the biggest factor determining the possibility of capital mobilization was divestment results of previous investments.
“Divestment results of funds in Vietnam are normally not as good as in China, Indonesia, or India,” Freund said.
However, the current results of Mekong Capital and other fund managers are improving gradually through investments in good firms such as ICP, Masan Food, Diana, and Saigon Paper, he said.
Fiachra Mac Cana from Ho Chi Minh City Securities Co. said foreign funds would invest in Vietnam only when they reduced investments in other markets.
Besides, Vietnam is now not included in an investment list of large funds. However, if they decided to pour only 0.5 percent of their money into Vietnam, dozens of others would follow suit as they often invest on the trend and grasp chances if notice a potential market, Fiachra said.
Several investors are fretting over a wave of divestments in 2012 and 2013 because of the expiry date of funds but Fiachra said he remained positive.
“If the central bank allows banks to provide stock investment loans next year, local investors will use up all funds of foreign investment funds,” he said.
Chris Freund said good investments such as Hoan My Hospital would raise the value of investment operation in private enterprises in Vietnam. Investment funds normally hold shares of a firm from 3 to 7 years and divestments occur when funds are due to expire.
Thomas Lanyi, Investment Director of Mekong Capital, said divestments were an inevitable part of stock investment.
TBKTSG
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