Vietnam - Experts debate capital withdrawal from Vietnam stock market in 2012

The story on foreign funds’ capital divestment pressure on Vietnamese stock market is not new but the prediction on foreigners’ withdrawal of 25 trillion dong in 2012 is a doubtful figure.

In next three years, many foreign funds will likely organize meetings to discuss whether they would continue investing or withdrawing capital out of from Vietnam market. Probably the foreign funds will withdraw capital from stock market to invest in more attractive and adventurous investment channels in Vietnam.

“So the prediction that foreigners will divest whole 25 trillion dong is unreasonable. As we withdrew capital in Halico, Hoan My Co and then re-invested more in some other enterprises because factually our investments remain profitable”, Andy Ho—General Director of VinaCapital fund said.

Meanwhile, Mr Nguyen The Lu, General Director of Saigon Asset Management (SAM) noted that he would present the reasons why foreigners should retain investments in Vietnam for longer.

Why should foreign investors withdraw capital at this time and accept a loss of 30-50% compared with initial investment value? Should they continue staying in 1-2 more years to have chances to earn profits? These questions will have to be offered and convincible for foreigners.

Concerns on inflation, interest rates, forex rate, bank restructuring and equitisation of SOEs are going in right direction in Vietnam but the implementation methods and effects remain being a big question mark for foreign players.

“We saw disputes in planned targets like both curbing inflation and planning high growth rate. Or a senior leader offered a detailed action plan but when the plan had to face very touch barriers as being conducted”, a fund representative shared.

Two roadshows of Bank for Investment and Development of Vietnam (BIDV) in Hanoi and HCM City seemed to be not enough for answering investors’ questions, especially foreigners are interested in the bank’s 3% charter capital auction to be scheduled on December 28, 2011. Foreigners may wonder whether the auction aims at them when it will be held between Noel and Solar New Year holidays.

Apparently, keeping foreign capital in Vietnam market is the matter of each enterprise in need of capital attraction and the government.

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