Bulls vs Bears

So many contrary opinions in this market... What's a poor investor to do?

The wise move most probably is to keep your powder dry and sit on your cash for now, since cash is king during a market downturn and there are likely to be plenty of opportunities to buy.

Having said that, feel free to have a look at all the other opinions out there and make up your own mind...

PXP is apparently looking to pick up some bargains, while hedging its bets a bit.

PXP Vietnam to Start Hedge Fund , Bets on Stock Market Recovery

The Vietnam Value Fund will be PXP's first open-ended fund, allowing investors to withdraw their money after a one-year lock- in, with restrictions on what can be redeemed at once.

The fund will have the ``flexibility to use hedging when and where available, and if the manager feels it appropriate taking pricing and market conditions into account,'' Snowball said.

Meanwhile HSBC and others see continued foreign selling amid a general lack of compelling value...

HSBC explains foreigners’ net sales (Vietnam Net)

In September, the net sales by foreign investors reached US $21 million, while the figure rose to US $48 million in October.

However, according to HSBC, foreign investors still hold the listed stocks worth US $3.1 billion and some US $1.5 billion worth of unlisted stocks. Therefore, foreign investors may continue selling stocks in the time to come.

HSBC believes that one of the main reasons that led to the continued net sales is that Vietnam’s stocks are still more expensive than in other Asian markets

At the end of October, the P/E Index was calculated at 10.4, while it was 9.2 in other Asian markets, except Japan.

And then there are local companies liquidating to beef up their bottom line and raise cash....

Major firms dump share holdings

"Whether many companies can meet their profit targets for the year now depends not only on their own management but also on the situation on the stock market between now and the end of the year," Chi said.

In the third quarter, many companies had already sold shares in their investment portfolios in an attempt to maintain profitability, he added.

For instance, Tan Dai Hung Plastic Joint Stock Co chairman Pham Trung Cang announced at a shareholders meeting in mid-September that his company would liquidate all of its shares in Asia Commercial Bank (ACB), ALTA Co (ALT) and Eximbank – investments with a combined value of about VND128 billion ($7.6 million) – in order to free up capital to invest in new projects.

Cang predicted that, between now and the end of next year, there was little chance the stock market would recover the levels it reached at the end of last year...

In order for Tan Dai to maintain its financial investments, he said, the company might have to establish provisional funds for share price reduction and face high risks in a market continuously trending downward.

Among other firms rethinking their financial investments, Sacombank has sold more than 2.8 million certificates it held in the Viet Nam Investment Fund (VF1) and 165,000 shares of Viet Nam Tanker (VTO).

Sai Gon Securities Inc has dumped 1.6 million shares of Vinh Son Song Hinh Hydro Power (VSH), 200,000 shares of Vinashin Petroleum Investment and Transport (VSP) and 300,000 shares of PetroVietnam Drilling (PVD).

Refrigeration Electrical Engineering Corp has sold 3.6 million Sacombank (STB) shares, while Bao Viet Securities has sold 500,000 shares of Cavico Viet Nam Mining and Construction (MCV)...

"If companies have good capital projects for development, liquidating all or part of their investment portfolios to raise capital for these projects is better than letting capital lie idle, [particularly] in a context when loan costs are high," Huy Nam said.

Which brings us back where we started. Like I said CASH IS KING!

"Share liquidation also helps firms avoid continuously having to establish provisional funds to cover stock losses if the market continues to decline."