Wednesday , October 4 2023

Investment funds to buy the dip as Vietnam market plunges

Fund managers are betting on a recovery in Vietnam’s stock market after recent plunges thanks to the country’s long-term economic prospects.

The benchmark VN-Index has fallen by 30% this year as inflation and global geopolitical tensions raise concerns among investors.

It is now at 1,035.91, lowest since February 1 last year.

But investment firms such as Coeli Asset Management SA are looking to increase their positions in the country by buying the dips.

“There are a lot of high quality companies with fantastic structural growth opportunities trading over a standard deviation below their historical averages. It’s a great time to buy,” Coeli Asset fund manager James Bannan told Bloomberg.

Quynh Cao, director of institutional sales at SSI Securities, said that Vietnam stocks are ripe for a short-term rebound after a selloff that started in late August. Even so, investors will keep a close eye on the market “to see if the bear is still strong or if we are reaching the bottom.”

Vietnam’s economic prospects remain strong, according to analysts. The World Bank expects Vietnam to lead growth among major Asia Pacific countries at 7.2%.

The country has also been the main beneficiary of the supply chain shift from China with Apple, Lotte, Samsung and other multinationals continuing to expand their Vietnam presence.

“Vietnam remains our top country pick,” said Asia Frontier Capital Ltd.’s Hong Kong-based fund manager Ruchir Desai.

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