Total foreign investment in the nation's stock market has fallen to 7 billion USD in 2009 from a peak of 11-12 billion USD in 2007, but current rates of investment represent a significant recovery from the 2008 economic crisis, State Securities Commission chairman Vu Bang told Vietnam News.

A new State Bank of Vietnam report on foreign indirect investment showed that an estimated 1.8 billion USD worth of foreign capital was injected into securities in the first six months this year.

The wind-up of some overseas investment funds might have temporary impacts on market development, Bang said, noting the period in 2008 when foreign institutional investors dumped bonds and withdraw capital from the national stock markets. However, domestic institutional investors ended up reaping the benefits, absorbing bonds which later yielded returns of up to 20 percent.

Earlier this past week, the Vietnam Enterprise Investment Ltd (VEIL) fund and Vietnam Growth Fund – both managed by Dragon Capital, one of the leading investment fund managers in Vietnam – held annual shareholders meetings and announced plans to remain in Vietnam, despite the urging of some stakeholders to wind down the funds

Dragon Capital CEO Dominic Scriven said that the decisions to continue reflected a clear sentiment that now was not the time to be exiting Vietnam, given its strong market fundamentals and low equity valuations.

Dragon Capital would orientiate its investments towards some State-owned giants soon to equitise, including mobile phone service provider MobiFone and beverages giants Sabeco and Habeco, said Dragon Capital deputy director Phan Minh Tuan.

The funds would be flexible in investment strategies, with focuses on medium- to long-term investments, Tuan said.

Vietnam 's political and economic situation remained quite stable while the EU and US economies have begun recovering from the 2008-09 crisis, he noted. More foreign investors seemed optimistic about investments in Vietnam and the Far East, Tuan had found during recent trips to Japan , the EU and US.

Jean-Pierre Lehmann, founding director of The Evian Group, wrote for the US-based website Real Clear World that Vietnam was a rapidly rising economic power and a country fast emerging as a winner in the globalisation process.

Foreign investors have returned, many former boat people have returned and the economy has boomed as Vietnam managed to weather the storm of the 2008-09 recession, Lehmann has noted.

Professor Le Van Chau, chairman of Vietnam Association for Securities Businesses, said there was need for accurate analysis and assessment of foreign indirect investment in order for market regulators to develop proper policies to lure it effectively.

A transparent environment with diverse financial products and services would contribute to ensuring foreign investment inflows, Chau said./.