AKIPRESS.COM - 
Clashes between Vietnam and China in the South China Sea sent Vietnamese stocks tumbling in May, putting the benchmark index on track to rank as Asia's worst performer for the month.
The market has clawed back some ground in recent days, but losses this month and in April mark a sharp reversal for Vietnam. Until recently, global investors had piled into the high-flying frontier market due to its fast economic growth and optimism about government-led reforms, the Wall Street Journal said Thursday.
The Hochiminh VN Index is down 4.4% so far in May, trading near a four-month low, and is on track for its worst month in nearly a year. Meanwhile, other regional markets have rallied as investors find high yields and soaring stock prices. Even in Thailand, where the economy has stalled amid months of political turmoil capped by a military coup, stocks have held up relatively well.
In Vietnam, local money managers have turned especially skittish, selling around $80 million of local shares in the month through Tuesday, compared with net buying of roughly the same amount by foreigners, according to data from Ho Chi Minh Securities Co.
"Domestic investors clearly panicked," said Johan Kruimer, the brokerage's managing director for institutional clients. Still, "foreigners took the opportunity to step in at the lower levels."
A Vietnamese government crackdown on investors' borrowing to buy securities prompted a sharp selloff in April.
The selloff accelerated May 8—the benchmark fell 5.9% that day—one day after Vietnam released video footage showing Chinese vessels ramming into and firing water cannons at Vietnamese vessels near an oil rig that a Chinese state energy company had placed in contested waters off Vietnam's coast.
The tensions sparked anti-Chinese protests in Vietnam, some of which turned violent on May 13-14, leaving at least three Chinese nationals dead and hundreds of foreign-owned factories damaged. Beijing condemned the violence and dispatched transportation to evacuate thousands of its citizens.