Dr. Edmund Malesky, an US economist, made the comment after conducting a survey of over 8,177 domestic private firms and 1,540 foreign companies in Vietnam.

The incident was a great shock to both Vietnam’s stock market and the international financial community, pulling down HoSe and HNX indexes, Malesky emphasised.

“This was a bad day and affected investor confidence in the market. Before the incident, several investors said that they had positive plans or expected to expand business in the time to come. However, many of them have seemed to have changed their minds,” he assessed.

According to him, enterprise confidence had dropped to its lowest point in 2012, at 33%, since the release of the country’s provincial competitive index (PCI). The rate stood at over 47% last year and around 45% before Kien’s arrest.

The number of questioned enterprises that had plans for business expansion next year fell to only 24%, he noted.

“We’ve found that most enterprises were worried about the macroeconomic situation rather than having their assets revoked or financial instability,” he said.

When talking about corruption, before August 20 up to 48% of enterprises admitted that they paid commissions or gave bribes to get purchase contracts with state agencies but they seemed to be reluctant to give answers after that.

Meanwhile, many enterprises avoided the question and considered it too sensitive to discuss. Only 27% of enterprises admitted having paid bribes after Kien’s arrest.

Foreign invested companies were also affected by the incident, including those from the Philippines, Italy and Malaysia, according to the survey’s results.

The larger enterprises, the more they were affected by the incident, he added.

By Bich Diep - Dan Tri News - December 06, 2012