Entirely foreign-invested securities and fund management companies will be authorised to operate in Viet Nam effective January 12, creating challenges for Vietnamese firms but also opportunities for market to develop.
Japanese investors were very interested in buying small domestic companies, agreed the head of investment research for Kim Eng Securities Co Michael Kokalari.
Kim Eng’s analyst Phan Dung Khanh saw the full opening of the market as a major opportunity which would give the market access to different flows of capital.
“The price-to-earnings ratios of our securities market is about 10, and it’s lower than other markets in the region, creating a lot of value investment opportunities for interested investors,” said Khanh.
The question remains whether the Vietnamese market is alluring enough to international investors, as some bottle-necks in the economy have not yet been removed such as high inflation, high interest rates and slowing growth.
The capitalisation of the Vietnamese stock market was estimated at US$ 34 billion, which was unappealing to foreign entities, said HCM Securities Co’s deputy director Trinh Hoai Giang.
But Stock Exchange of Thailand chief executive Charamporn Jotikasthira said Viet Nam had great potential.
“It’s because we are all in the ASEAN region, which is the ninth largest economic power in the world,” Jotikasthira said.
Technology was a key factor, and development in the past four or five years has been rapid, he said.
“ASEAN has a few exchanges that are at the forefront in technology. By joining ASEAN, you automatically will be able to join in a similar platform.”