Equity funds flock to Vietnam’s stock exchange
(VOV) - Frontier-market equity funds from Sweden and South Africa are pouring millions of US dollars into the Vietnam stock market, lured by Southeast Asia’s improving economic outlook for growth.
According to a report by Bloomberg, in light of the bright economic prospects, overseas money managers view current stock valuations of companies listed on the Vietnam exchange as low.
Many money managers say they plan to double or even triple their equity investments over the next two years, Bloomberg reports.
Asia Frontier Capital (AFC) – an investment fund specializing in investing in emerging market equity funds (frontier funds) recently released a 36-page report entitled “Why Vietnam” which provides a convincing analysis that the Vietnamese economy is recovering along with reasons why investors should invest in the country’s emerging market.
Managers from AFC have invested about 20% of their total portfolio (US$17 million) in Vietnamese stocks, higher than any other emerging market.
Andreas Vogelsanger, AFC Vietnam CEO is bullish on the Vietnamese economy, saying that that AFC now holds shares in 70 small and medium-sized enterprises in Vietnam.
Vogelsanger said that the Vietnamese Government has turned the economy around curbing inflation from 20% in 2008 to 5.4% at present. He is confident Vietnam’s economy is on the track.
Frontier investment funds from Sweden and South Africa, including AFC, collectively have pumped a net US$277 million into Vietnamese stocks, 5.3% more than the whole of 2013 Bloomberg reports.