This year, Vietnamese equities are dealing with a new set of second-quarter blues, namely tepid appetite by foreign investors for initial public offerings of state-run companies. Vietnam’s plans to loosen foreign ownership limits on state-controlled companies were seen as a major catalyst in VNM’s stellar performances late last year and early this year. [Bad Debt Effort Good for Vietnam ETF]
However, slack demand for the first batch of government IPOs is raising concerns about the appetite for hundreds of other offerings still to come, the Wall Street Journal reports. “Only a quarter of the 304.5 million shares offered by 13 companies in the first quarter of this year were sold. Foreign funds participated in just one listing,” according to the Journal.
The benchmark Ho Chi Minh VN Index is Asia’s best performer this year, but currently resides at 10-week lows. Worsening the situation are increased margin calls by local Vietnamese brokerages.
Market Vectors Vietnam ETF
