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Foreign Investors Confident in Vietnam (04/11)
04/11/2011 - 21 Lượt xem
A number of participants that came from domestic and foreign financial institutions believed that high inflation, increased interest rates and the devaluation of the Vietnamese dong had concerned foreign investors in Vietnam. However, some leading investment funds that have been operating here in Vietnam believed that Vietnam was only facing short-term difficulties. They said that they were still looking for good businesses from some potential industries.
VinaCapital managing director Andy Ho said that the securities market's liquidity is not good but since early this year VinaCapital has successfully withdrawn capital from some units and reached a 3.5-5 time profit rate.
Asian Development Bank (ADB) in Vietnam director Tomoyuki Kimura emphasized that Vietnam is still an attractive destination for foreign investors because many state-owned enterprises in the country have plans for transforming into joint stock companies. This transformation will provide opportunities for foreign and private investors to involve development investment, including investment under the mode of public-private partnership (PPP) in infrastructure construction, in Vietnam, he said.
He said that infrastructure connectivity between nations in the Greater Mekong Sub-region (GMS) will create more favorable conditions for investors. There will be nine overland corridors linking GMS countries, while telecommunications infrastructure will be established to pave the way for investors to do good business. Tomoyuki Kimura assessed that roads connecting Ho Chi Minh City with Phnom Penh in Cambodia have improved considerably shortening the time to travel from Ho Chi Minh City to Phnom Penh and vice versa by 30 percent.
Hana Dang from BankInvest said that the investment fund has poured more capital in Vietnam over the last four years and has succeeded in this regard. Pham Thi Huong Giang from Mekong Capital said that she believed in Vietnam's long-term growth and that Mekong Capital's investment portfolio has reached a net growth of 50 percent over the past three years.
Investment funds participating in the summit assessed that investment in Vietnam is still lower than that in other countries in the region. Srisant Chitvaranund from Aureos Capital (Thailand) said that compared to other ASEAN (Association of Southeast Asian Nations) countries, Vietnam has a long 'runway' for development. State-owned enterprises' transformation into joint stock companies in Vietnam will be a good opportunity for investors and investment funds to pour capital into the country, Srisant Chitvaranund said.
Be patient and wait for market signals
Bolat Duisenov from an investment fund in Kazakhstan assessed that the Vietnamese market is still potential for investment in real estate and consumer goods production. Vietnamese people store foreign currency and gold to spend when good economic signals appear and that will create opportunities for investors, he said.
VinaCapital managing director Andy Ho said that Vietnam is one of developing markets and it is expected to still grow well in the next five to 15 years.
Yip Hoong Mun, the deputy director of the Capitaland Co., Ltd, said that the Vietnamese real estate market's output is expected to be considerable as the population and accommodation demand in the country are still high. Yet, people residing in apartment buildings just account for a small percentage of all housing users in Vietnam (the rate is 85 percent in Singapore and 50 percent in Hong Kong) so investors should choose a market segment suitable to them, he added.
Acquisition and mergence will be a priority of investment funds in the coming time. PXP (VN) director Kevin Snowball said that many foreign investors are just viewing the Vietnamese market because the market still has macroscopic problems such as high inflation and interest rates apart from other problems like regulations on controlling foreign holdings in joint stock companies, and the small, low-liquidity market. The early bird catches the worm so it would be late for investors to catch good opportunities if they waited for macroeconomic factors to become stable and the VN-Index to increase again, he said. There have been good signals, he added.
Srisant Chitvaranund from Aureos Capital (Thailand) said that the flood situation in Thailand caused Japanese investors to speed up the implementation of their plans for moving their factories from Thailand to Vietnam. The moving should have been implemented in the next three to four years but losses caused by floods made the investors make faster decisions and even decide to move their factories faster, he said. They hired logistics companies to make plans for moving, he added.
Sharing experience with those who intend to invest in Vietnam, Alec Loh from the SP Setia BHD Group said that it is important to enter a joint venture with good, prestigious local partner(s) to be assisted by these partners in legal procedure fulfillment.
Deputy Minister of Planning and Investment Dang Huy Dong said that since early 2011 the Government has had many efforts to maintain macroeconomic stability, tame inflation and improve state investment efficiency to assure an attractive investment environment. Vietnam will qualitatively improve rather than increase quantitatively foreign investment in the country especially that in infrastructure, high and clean technology applying projects, export production and support industry, he said./.
Source: VEN.
