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Vietnam's Spotty IPO Record

Government overpricing of offerings by Vietcombank and other companies has hampered fundraising and the performance of Vietnam's stock market
A monitor flashes mainly red, representing the price of shares going down, as investors look at a stock board, 09 November 2007. The local stock market has been on a downward trend for a number of weeks.
A monitor flashes mainly red, representing the price of shares going down, as investors look at a stock board, 09 November 2007. The local stock market has been on a downward trend for a number of weeks. HOANG DINH NAM/AFP/Getty Images

This time a year ago Vietnam was one of the world's hottest frontier markets. Billions of dollars in foreign money were pouring into the country from hedge funds, private equity investors, and mutual funds from New York, London, Tokyo, and Hong Kong. When the Ho Chi Minh stock exchange closed for the Tet Lunar New Year holiday on Feb. 15 last year, the market was up 46%.

But on the eve of the Year of the Golden Mouse—or Year of the Rat, as it is less euphemistically known—which starts Feb. 7, Vietnamese equities seem to have lost much of their luster. Sure, the specter of a U.S. recession is hovering over faltering equity markets across the globe, and the Ho Chi Minh index fell as much as 17% in late January before regaining some ground to close down 7.25% so far this year. (The markets closed on Feb. 1 for the weeklong Tet holiday.) While in the short term Vietnam is sure to continue feeling the impact of market turmoil in the U.S. and Asia (BusinessWeek.com, 2/5/08), the biggest weight on the Vietnamese stock market's performance ultimately will be the uncertainty over the country's herky-jerky initial public offering process.