Foreign capital flow to Vietnam to shelter from regional uncertainties  Economists all have affirmed that Vietnam would witness a strong foreign capital inflow this year. However, it is unclear if the investors come to Vietnam to implement their long term business strategies, or just to seek temporary shelter.    Ong Seng Yeow, a senior executive of the Malaysian Maybank Kim Eng (MBKE), said during his working visit to Vietnam some days ago that he got surprised about the high growth of the Vietnam’s stock market in 2013 and the first months of 2014. Meanwhile, the senior executive, in his first visit to Vietnam two years ago, told the investors that this was not the right time for them to invest in Vietnamese stocks once the conditions were not favorable enough. MBKE cited the figures to show the high growth rate of the market. In 2013, the value of the foreign investment portfolios increased by $3.3 billion to $12 billion. The capitalization value of ETFs increased by 24.3 percent to $375.8 million in the same year, and had reached $479.8 million by the end of February 2014. Answering the questions of the local press on the sideline of a recent workshop, the expert from MBKE said he believes Vietnam would be able to better attract foreign capital than the other regional countries this year. Three reasons have been cited to explain the forecast: the cheap Vietnamese stocks, the improved macro economy and the information about Vietnam’s move to offer higher foreign ownership ratios in Vietnamese businesses. The government’s efforts to restructure the national economy in 2011 and 2012 have begun shown their active effects. The macroeconomic indexes have been stable, while the inflation has been successfully curbed, the local currency value has been stabilized and the foreign currency reserves have increased. Meanwhile, the changes in the policies are believed to encourage investors to pour their money into Vietnam. The state-owned enterprise equitization process would be sped up, while the banking bad debts would be eased thanks to the national asset management company. After the global finance crisis, a lot of foreign investment funds realized that it would be very risky to “pour money into one basket.” This has prompted them to make investments in groups of countries or in a region. Dragon Capital, for example, which has been very familiar with the Vietnamese market, has decided to inject money in many other countries, including Thailand, Cambodia, Laos, Bangladesh, possibly in Myanmar the Philippines in the time to come. Dominic Scriven, CEO of Dragon Capital, said on Dau tu that 10 years ago, investors mostly talked about China and India, but they nowadays tend to talk more about the investment opportunities in ASEAN countries instead thanks to their improved political and economic positions in the world. Of the ASEAN countries, according to Ong Seng Yeow, Thailand is at a disadvantage due to the political uncertainties. As Indonesia is preparing for the president election, investors wouldn’t make investment decisions at this moment until they can see a brighter prospect in the country. Meanwhile, the stock prices in the Philippines are relatively high. However, while affirming that Vietnam has great advantages in comparison with other regional countries in attracting capital, the expert from MKBE has warned that once the uncertainties in the countries are settled, the capital flow may head back to the markets. If so, Vietnam would serve as the place for foreign capital to shelter from the uncertainties. DNSG