Will Vietnamese stock market benefit from open-end fund boom?
Will Vietnamese stock market benefit from open-end fund boom?
Despite the dark days of the stock market, more and more open end investment funds have been set up. However, it’s still too early to say about their performance.
According to the State Securities Commission (SSC), in the first half of the year alone, the watchdog agency granted license to four open end funds, while it is considering licensing five more in the time to come. It is expected that 15-20 such funds would be set up in 2013.
As such, Vietnam has had 47 fund management companies so far, 18 securities investment funds, 8 investment funds which are following the procedures to get dissolved and 26 operational representative offices.
It is quite a surprise that Vietnam still witnesses the investment fund boom in the context of the gloomy stock market.
The number of fund management companies reportedly decreased significantly in the first six months of the year. Some left the market in different ways: one is following the procedures to get dissolved, one has halted its operation, two others have been put under the watchdog agency’s special control.
Explaining the establishment of a series of open end funds, securities experts said that the fund management companies, which can foresee the things to come, try to set up the funds in anticipation of the market recovery.
The experts said that unlike close end funds, open end funds’ investors can sell fund certificates or withdraw capital at any time, which could help raise funds more easily.
In general, fund management companies don’t want to be slower than the rivals in providing new services. Meanwhile, they can establish funds now in most favorable conditions, as the watchdog agency encourages setting up new funds to attract more capital to the stock market which has been gloomy for a long time.
Besides, fund management companies have been making every effort to shift from close end funds to open funds to retain investors.
Analysts have noted that in these circumstances, under the macroeconomic difficulties, it would be safer to set up the open funds specializing in making investments in bonds. Meanwhile, the expected profitability is really attractive if compared with the other investment channels.
However, the director of a company said since the share market has become bustling again, it’s not easy to persuade investors to pour money into bonds. Meanwhile, institutional investors need more time and the driving force to invest in open end funds. They need to think twice before making investments at the time when all institutions and businesses have scaled down their investment activities in the stock market after one year of taking loss.
Eastspring Investments fund management company--is believed to hold the biggest market share with about 38 percent of total assets of the funds. The company is running a big training campaign on open end funds at securities companies. This shows the special interest in open funds by enterprises.
The representative of PRUBF1 fund has revealed that after the fund dissolution and the asset liquidation by October 2013, new products would be introduced to investors, so that they can continue making investments with the new services.
As for VinaWealth, besides the VFF bond open fund, the company may set up a share open fund, slated for August 2013.
vietnamnet
