Stock market decline short-term phenomenon: experts

“Vietnam’s market is going down sharply, but in my opinion, it is only short-term, investors need to calm down and stay confident. In the long-term, the market will stabilize,” said Don Lam, co-founder and general director of VinaCapital.

Last week, liquidity on the HCMC stock exchange improved significantly with each session above VND16,000 billion ($689.65 million), but it suddenly lost its recovery momentum in the Friday session, with the day’s trading volume plummeting to less than VND13,000 billion ($560.34 million).

Other experts at the forum hosted in HCMC also confirmed that the market was being affected by many factors both international and domestic, including the unstable global economy due to inflation, the Ukraine crisis and the U.S. interest rate hike.

Domestically, a few recent incidents that related to stock manipulation had also affected the market.

After returning from a business trip overseas, Don Lam said that foreign investors are very interested in the Vietnamese market. In order to recover, stabilize and attract foreign capital inflows, efforts should be made to promote the stock market status from marginal to emerging, he said.

Market liquidity needs to reach $2-3 billion per day; solvency, governance and information capabilities must be improved and made more transparent. Alongside this, the ownership limit for foreign investors needs to be increased, Don Lam said.

“If we can get promoted, we can bring another $10 billion of new capital into the market,” he said. “We need more equitization to have more products for investors to purchase. A legal framework for independent pension funds is needed, encouraging individual investors to invest in specialized funds,” he added.

As of April 2022, the stock market capitalization of Vietnam stood at $234.34 billion.