The confidence of Japanese investors in the Vietnamese stock market
remains unchanged, and the arrest of banking mogul Nguyen Duc Kien is not a
serious enough event to require an urgent escape from it, newswire Vietstock
quoted a Japanese expert.
“It is not easy to find a stock
market with projected Price-Earnings Ratio (P/E Ratio) at only 10, high
dividend rates, and cheap stock prices as that in Vietnam,” Akira Le quoted
Japanese economist Imai Masayuki as saying in a recent interview at a Tokyo
television channel.
Kien’s arrest has dominated both
local and international media reporting on the Vietnamese economy, overwhelming
positive information about the macroeconomic, financial and banking sectors, he
said.
Psychological confusion has
inadvertently overshadowed everything, leading local investors towards panic
selling.
“The arrest of an entrepreneur
that can shake a broad stock market is rare,” added Masayuki.
“But this may happen only in the
short term, helping the market adjust after several consecutive rallies.
“The current state of Vietnam’s
economy and the Vietnamese securities market is similar to Japan from
1950-1960, when Japan was still poor.
“It was difficult to control the
Japanese banking system then, and local enterprises were working with a
reckless manner due to the lack of transparency, causing a lot of business
mistakes.”
But the situation eventually
improved thanks to the prosecution of many economic and financial criminals
which contributed to the deterrence of economic and financial crimes and the
improvement of business leadership quality.
It also helped business
communities realize that personal reputation is the most important thing in
doing business.
As famed investor Warren Buffett
once said: "It took 20 years to build a reputation, but it only takes two
minutes to destroy it", Japanese investors can sympathize with the current
situation in Vietnam after looking back into the history of Japan.
Experts say that this phenomenon
is common in emerging economies.
After the arrest of Kien on
Tuesday, a wide range of financial information channels in Japan, such as
Yahoo! Finance Securities Japan, Morningstar Japan, and MarketHack stepped in
to report the case.
According to Yahoo! Finance
Japan, the arrest of Nguyen Duc Kien – a member of the Asia Commercial Bank
(ACB) founding board, has sent shockwaves across the country.
Kien’s reputation and influence
led local investors to a panic sell-off of bank shares, creating a spillover
effect on all other stocks.
Before the arrest story broke, a
Japanese investor who once lived in Ho Chi Minh City commented on Twitter that
he thought the cause of the stock drop immediately after the opening of
Tuesday’s trading session was the rise of the consumer price index (CPI) in
Hanoi and Ho Chi Minh City. But to his surprise, there was shocking news: “Kien
was arrested".
"Domestic investors rushed
to sell everything, even good stocks unrelated to ACB. Taking advantage of the
plummeting market, foreign investors bought large amounts of stocks. We need to
monitor market developments in the next few days ".
Imai Masayuki, an expert on the Vietnamese stock market, regularly
appears on television channels, like StockVoiceTV, and other Japanese
investment magazine and financial websites, like Yahoo! Finance, Morningstar,
and MoneyPost.
Akira Le, founder CFOViet.com, is now living and working in Tokyo,
Japan.
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