Vietnam’s poorly performing stock market could still attract large numbers of institutional investors despite the US economic slow down and the sub-prime credit crunch, fund managers have said.
The market still contains many unpolished diamonds
“The recent fluctuations in the securities market just increase the value of an investment in Vietnam and while some investors may be weary due to these fluctuations, the savvy investors will see the market as a great buying opportunity,” said Ducchi T. Quan, chief operation officer and general counsel of AI Capital.
“Even with the US slowdown, Vietnam’s economic development will continue and her economy will sustain the growth rates, thus the slowdown will not only promote a “flight to quality” but also a “flight to returns,” Quan said.
Quan is hedging his bets on funds becoming a stronger buy over the next few years and is rolling out new products for the forecast demand.
“In the first half of 2008, we will launch two AI Capital private equity M&A funds - one for Vietnamese investors and one for qualified foreign investors besides opening up another office in Ho Chi Minh City to complement the one in Hanoi.”
As for the recent State Bank decision to reduce dollar purchases, he was optimistic.
“The bank will do what is necessary to maintain liquidity in the market to support the continuing development of the country.”
This was a change in short-term policy by the State Bank and firms would wait for medium-term policy direction to become clearer, said Dominic Scriven, director of Dragon Capital.
“Vietnam offers great long-term promise across its economy. We will be looking - as we always have - for sectors of good growth visibility, and for management committed to clear strategy and governance models,” said Scriven.
Dragon Capital, according to a company source, is working on setting up three new funds valued at up to $3 billion later this year.