Pham Do Chi, deputy general director of VinaCapital Group, the nation’s largest investment firm, said the US economic situation influences the Vietnamese market since a slump in exports to the world’s largest economy means many listed firms would be hit.
His firm is cautious about investment here as the US economy is still in recession, he said.
“Some optimistic analysts think the US economy will recover by the end of this year,” said Chi. “I once thought the same. But now I have changed my mind. I think it will recover by mid-2010 at the soonest.”
He said though Vietnamese shares follow US trends, it does not mean that the market always tracks overnight gains or falls on Wall Street.
Nguyen The Lu, general director of Saigon Asset Management (SAM), said if the local market drops further, SAM would trim its holding in export companies, financial firms and banks since they are likely to struggle this year.
According to fund manager Dragon Capital, Vietnam remains at the mercy of international trends, and rallies will need to get confirmation from offshore.
The VN-Index, Vietnam’s major stock index, slumped 66 percent last year and was Asia’s worst performer as the economy grew at its slowest pace since 1999, hurt by slumping demand for the country’s exports.
Emerging-market equity investors withdrew a record US$48.3 billion from their funds in 2008, said US-based EPFR Global, which provides investment flow data globally.
Speaking about real estate investment, Chi said fund managers are now investing in medium-priced buildings and three- and four-star hotels instead of high-end office buildings and five-star hotels unlike earlier.
Lu said 40 percent of his company’s real estate fund is now in cash, explaining it is being very careful for fear that real estate prices could decrease further.
Dominic Scriven, managing director of Dragon Capital, said since Vietnam has some advantages like high domestic consumption, what has happened in the country is not as bad as in the US.
Lu said: “At 10:00 p.m., I can see Lotte Mart supermarket in Ho Chi Minh City’s District 7 still crowded. Restaurants in the city are still busy. It is very different to what is happening in the US.”
Source: Dau Tu Chung Khoan
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