Foreign investors all have positive assessments of Vietnam

Mr. Dominic Scriven, Chairman of Vietnam Dragon Capital Fund Management Company.

2023 is a year of many difficulties and challenges, however, the Vietnamese stock market has gradually stabilized after the process of handling violations in the market. How do you evaluate the development of Vietnam's stock market today?

Up to now, the capital market in general is equivalent to 70% of GDP, including the Government bond market, corporate bond market and stock market. The stock market is now equivalent to 50% of GDP, at its peak it was about 78% of GDP. And as far as I know, the Ministry of Finance's goal is to reach 120% of GDP by 2030. Thus, the market has a lot of room to develop in the next 10 years.

The most important value in the stock market is not the financial factor but the reputation factor, experience as well as the trust of investors, businesses, and even state agencies. Trust is extremely important. It can be said that in the last 10 years, Vietnam's stock market has developed quite rapidly in volume. If the capitalization value of the stock market 10 years ago was about 35 billion USD, now it is more than 250 billion USD, which means an 8-fold increase in 10 years. Although investors have suffered many difficulties in the past two years, I think we should stay calm and have a long-term vision, accepting the necessary adjustments to make the future of the market safer, more efficient with better quality.

In your opinion, is the quality of goods or the quality of businesses listed on the market today improved more?

There are many types of businesses listed on the Vietnamese stock market. In Vietnam, there are more than 1,500 businesses on all three trading floors. Among them, about 70 leading enterprises account for 70%, 80% of the total market capitalization, this is similar to other markets. Therefore, when talking about enterprise quality, we will have to talk about these 70-80 leading enterprises. And we are quite satisfied with these businesses. Currently, the market has approximately 50 enterprises with a capitalization value of over 1 billion USD. Regarding management quality, more attention has been paid to sustainable management models in business.

What does Vietnam need to do to attract capital flows from large investment funds in the coming time, sir?

Overall, foreign investors have positive assessments of Vietnam in many aspects, including economic and financial stability, political stability, development trends, and both in terms of population including the attractiveness of the stock market. However, there are still challenges that prevent Vietnam from attracting all foreign investment capital according to its potential. A study released by the World Bank shows that if the conditions are met, Vietnam can attract about 50 billion USD.

From the perspective of a fund management company, we realize that participating in listed companies in Vietnam still has some difficulties. One reason that people talk about a lot is the restriction of ownership rate, but that's only part of the problem. The main thing is the scale of businesses and their stock liquidity. Besides, there are also reasons related to the structure of the market, for example, foreign investors must transfer money first to be able to trade, or some listed companies have websites but do not post information in foreign language. So I think if the Vietnamese market wants to attract that 50 billion USD, or maybe more later, it must gradually approach these issues.

In your opinion, what difficulties will the global market continue to face in 2024 and what will be the positive points and opportunities for the global economy in 2024?

As noted, in the past 3 years, Vietnam has had strengths but it is difficult to avoid influences from external factors. 2023 is quite difficult for Vietnam but the situation gets more positive with each quarter and that trend will probably continue in 2024.

Regarding the general situation of the world economy, it can be said that there has been a soft landing. However, how to land is still a question mark. Therefore, we must continue to monitor the numbers coming from the US, Europe and Japan every month. But I think that the recovery we are seeing globally, especially in Vietnam, will continue through the coming quarters, which will lead to a recovery of listed companies in terms of revenue and profits. However, businesses also need to pay attention to the task of risk management.

To contribute to promoting the development of Vietnam's stock market, Dragon Capital Vietnam Fund is paying attention to the following tasks: supporting Vietnamese individual investors to raise awareness and understanding of investment and apply more effective risk control measures to participate in the Vietnamese stock market; focuses on promoting the diverse development of institutional investors in Vietnam, paying attention to the development of open funds, closed funds and pension funds. Besides, we will also help listed businesses improve the quality of content, management and risk, messages to investors, etc; Simultaneously, we will support foreign investors to understand more about Vietnamese market.

Sincerely thank you!