VNStockNews.com - Investors will only enter the stock market if the government stabilizes the economy, Nguyen Ho Nam, chairman of Sacombank Securities Company, told Tuoi Tre.
Part of the US’ second stimulus package, which was not fully utilized, has flowed into emerging economies like Thailand and Indonesia where businesses suffered from a shortage of funds during the global meltdown, he said.
They have benefited substantially from this, especially by making IPOs, he said.
However, in Vietnam, though share prices are now 30-40 percent cheaper than in neighboring markets, a liquidity crisis and low confidence have kept away portfolio investors while the government’s measures to fight inflation have further hit liquidity, he said.
Vietnamese businesses are thus caught in an impasse since bank interest rates are soaring and the stock market is illiquid, he said.
Foreign portfolio investors are keeping away from Vietnam because of its unstable macro economy, he said, pointing out that no one will put their money in a market where the exchange rate is volatile.
Some Vietnam-based foreign investors have bought large quantities of stocks recently, but this is not enough to boost the whole market, he said.
To attract foreign capital, the government should first and foremost stabilize the dong-dollar exchange rate, he said.
“We missed one boat; we should not miss another now.”
