Fund managers are more optimistic on the domestic stock market this year, promising a better capital influx from institutional investors compared to the tough time last year.
Andy Ho, Head of investment in VinaCapital, one of the leading fund managers in Viet Nam, said he expected domestic markets to continue rallying on the global markets recovery prospect.
On a price-to-earnings analysis, the local market was low compared to markets worldwide, even the US or China, while the economy was showing prospects of growth, Ho said, while noting concerns over inflation and the Government's policies to stem it.
It was also difficult to predict how much foreign capital would flow into the local market, however, because most of it came from the US, the EU or Japan, the countries challenged the most by the economic crisis, but the maturity of local investors was making local markets attractive to foreigners, he said.
MBCapital General Director Phan Anh concurred, saying that many foreign investors were positive on the domestic market prospects, reflected through their talks with his fund on investment opportunities in Viet Nam.
"Although economic problems are not yet behind us, there was increasing belief that the global economic crisis was over, providing economies with great opportunities to soar in the coming years," Anh said.
Additionally, new derivative tools were expected to be applied this year, encouraging institutional investors to further participate to domestic markets.
SSI Asset Management commentator Dang Thi Hong Phuong said the local economy and stock markets would face challenges this year and it would be tough to lure foreign capital because of the local banks' liquidity and credit administration.
This meant fund managers would have to work harder to lure more capital from overseas, she said, suggesting market regulators to provide relaxed conditions to support fund managers, such as allowing individuals, foreign companies and enterprises with the State holding major stakes, to participate in the private funds. If the economy was managed properly, stock market prospects should be brighter in the second quarter, said Dang Luu Dung, General Director of FPT Capital.
Dung said his fund would continue with its long-term investment strategies, but would maintain flexibility to catch market opportunities.
Dragon Capital founder Dominic Scriven said banking, food and beverages and pharmaceuticals were among the best opportunities this year. Giant State-owned enterprises were worth watching for changes in their equitisation method by making deals with foreign strategic partner before initial public offerings.
Meanwhile, Thomas Lanyi, of Mekong Capital, said his fund was focusing on unlisted private companies, especially its Viet Nam Azalea Fund which was keeping an eye out for companies who planned to make initial public offerings within two years. The fund was selecting firms that had a high business growth last year, Lanyi said.