Foreigners brave market nosedive to buy more shares

Sunday, May 25, 2008
Foreign investors showed great faith in Vietnamese stocks, heavily buying shares offloaded by local players this month, brokers said. The VN-Index of 154 listed companies on the Ho Chi Minh Stock Exchange tumbled every day over the past three weeks, losing more than 18 percent, to close at 428.05 points on Friday.

So far this year, the benchmark index has plunged 54% to take out the unfavorable honor of being the world’s worst performing stock market.

Despite the gloomy market that has prompted local traders to jettison their stocks, foreigners remained net buyers.

When the market retreated below 500 points on May 12, foreign traders pumped in VND54 billion (US$3.3 million) into shares.

On May 20, local investors continued their share selling frenzy, sending the VN-Index below another key resistance level of 450 points.

In contrast, foreigners bought shares worth VND19 billion ($1.19 million).

The index dropped further in the next trading day, with 140 stocks falling, as local traders kept bailing out of the market.

Foreigners again continued to defy local player’s panic, notching up shares worth VND19.2 billion ($1.2 million).

They bought shares worth VND65.2 billion ($4 million) on Friday when the VN-Index lost 6.7 points, or 1.54%, to close at 428.05.

Investment fund Anpha Capital Managing Director Louis Nguyen revealed his fund had only lost around 2% over the first three months of the year.

His fund had entered the share market relatively late, favoring other investments in the early months of the year.

Profits from these investments had helped his fund avoid heavy losses, he said.

Despite expecting his fund’s losses from stocks to increase as the market’s free-fall continued, Nguyen said shares were becoming very attractive.

He said Anpha Capital was eyeing shares of five or six companies, which had good earning reports.

Another director of a foreign-owned investment fund in HCMC, who did not wish to be named, said his fund sustained fairly heavy losses as the market slumped this year.

However, he said his fund will still buy more shares on both formal and informal markets.

“We planned to pump more money in the market when it fell below 500 points.

But it kept on falling further, so we decided to wait for a suitable time,” he said.