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Foreign investors also exhausted?   2009-03-04 - DTCK


Transactions by foreign investors on the stock market have become reportedly thinner. What are they doing and what are they planning to do?


Transactions by foreign investors on the stock market have become reportedly thinner

According to Dat Viet Securities Company, in the week of February 16-20, the net sales of foreign investors on the stock market were five times higher than purchase. The total sales turnover was VND16.66bil, while the purchase turnover just VND3bil.


Foreign investors’ tendency to sell continued in the week of February 23 to February 27 and the first week of March.


In fact, foreign investors have been selling more than purchasing for many months. This has not much affected domestic investors’ behaviours; however, the fact that foreign investors have not been purchasing stocks even though stock prices are at record lows has raised many questions.


Foreign investors have not only sold more than purchased they have also reduced new investments deals. The managing director of an investment fund in HCM City admitted that his fund is being questioned by shareholders about unprofitable investments affairs in the last two years. Therefore, he is not thinking of investment plans at this moment.


Louis Nguyen, Chairman of SAM, which is managing two investments funds now listing in Germany, said that since the beginning of the year, SAM has disbursed some $4-5mil in several domestic companies. The figure proves to be very small in comparison with previous years.


Louis said that the market now proves to be very attractive as stock prices have become much cheaper while there are many choices. However, most of the investment funds are inactive because they are running out of money. It is very difficult to persuade investors to spend money on investments these days.


Domestic investors are puzzled by the fact that foreign investors have been pushing up sales while investment funds have run out of money. These factors raise concerns that the demand needed to help the stock market bounce back has been severely damaged.


A securities expert in HCM City said that the market is now awaiting new push demands from new investors and new investment funds as stock prices have dropped to levels low enough to ‘stimulate the cupidity’ of investors who have not incurred losses in the recent past.

The VN Index is still looking for a new bottom line. The stock market remains lacking liquidity, while stocks continue losing their value. Investment opportunities are available, but the market needs one thing to recover – capital inflows.

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