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Foreign stock investors increase buying   2009-07-28 - VNS

Foreign stock investors as of last Thursday had placed buying orders for the 20th successive session while many local investors increased stock sales in the gloomy trading atmosphere of the stock market.


Foreign investors purchased over 19.8 million shares and sold just over 8.3 million shares over the last five sessions. Some experts said that the investors had confidence in the sustainable growth of the market.

Nguyen Ho Nam, general director of Sacombank Securities Co., said the company had opened many new accounts for overseas investors. Around 90% of domestic investors disbursed money for stocks in May but the number has dropped sharply. Meanwhile, more institutional investors have joined the market, he said.

Nam said that the local stock market was in a period of stable development as many listed firms have posted good business results. The economy also showed signs of recovery last month.

Nguyen Mien Tuan, general director of Viet Dragon Securities Corporation, said the economy was showing signs of recovery and foreign investors, most of them being investment funds in Vietnam, thought it a good chance to buy shares. In contrast, other individual investors reduced stock purchases, saying that the credit tightening policy would decrease capital flow into the stock market.

The State Bank of Vietnam (SBV) since mid June has been asking commercial banks to limit consumer loans and cut interest rates on banks’ compulsory reserves from 3.6% to 1.2% per year from last Friday. This will force banks to raise negotiated lending rates, said Pham Do Chi, chief economist of VinaCapital Group.

SBV’s credit tightening policies in the short term will reduce capital inflow and liquidity of the stock market. The policy may cause some investors to sell stocks but will help curb the risk of high inflation, ensure macro stability and maintain sustainable growth of the stock market, Chi stressed.

Vietnam’s Price to Earning (P/E) ratio is currently around 15, an average rate compared to those of Germany, the U.K., Taiwan and China. Institutional investors in Vietnam have boosted purchases of blue-chips in the financial, real estate and consumption sectors.

This month, with some standstill sessions, is a good time for them to buy blue chips at low prices, said Saigon Securities Inc. (SSI)



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