Vietnam ETF first highlights ECM interest

Author: Ashley Lee | Published: 4 Sep 2014

The IPO of Vietnam’s first domestic exchange-traded fund (ETF) shows that foreign investors have revived their interest in the country’s equity capital markets.

But investment restrictions in listed companies mean that overseas ETFs may not be able to maintain their preferred allocations.

Vinafund raised VND 200 billion ($9.4 million) in the VFMVN30 IPO on the Ho Chi Minh City Stock Exchange (HOSE), which ran from July 21 to August 20. The fund will follow the VN 30 index, which is managed by HOSE.

Market sentiment is buoyant, and the country’s equity capital markets are some of the best-performing globally this year. Further state-owned enterprise privatisation is expected to spark more deals.

However, foreign investment restrictions in listed companies mean that exchange-traded funds overseas...