Tuesday, 18 Jun 2019

New foreign investment wave forecast to flow into Vietnam

Updated at Friday, 05 Oct 2018, 12:21
The Hanoitimes - Vietnam is shining bright on foreign funds` radar.
Vietnam expects to receive a large foreign investments flowing into its markets in the near future after many big institutional investors have recently come to the country to explore investment opportunities.
A close source, which declined to be named, revealed that among the investors, one is out of the world’s Top 5 largest management funds with total assets under its management reaching up to US$2.5 trillion. The investment size of the investor is many times bigger than that of other peers who used to invest in Vietnam’s stock market.

Warburg Pincus invested over US$370 million in Techcombank last year
Warburg Pincus invested over US$370 million in Techcombank last year
This strong interest of foreign investors in the Vietnamese market is the same as seen in 2017 when they prepared to pour a large amount of capital in the country, the source said, adding he expected to see the same inflow to the country in the near future.
After showing high interest in the Vietnamese stock market through having many meetings with local competent authorities in 2017, many foreign funds, including world’s leading ones such as KKR and Warburg Pincus, invested heavily in Vietnam. Warburg Pincus invested more than US$370 million in Vietnam Technological and Commercial Joint Stock Bank (Techcombank) while KKR also injected US$250 million in Masan Group.
Such interest pushed foreign investors to net purchase VND46.7 trillion (US$2.05 billion) in the Vietnamese stock market in 2017, making it gain a 10-year high and become the third fastest-growing market globally. The investors then continued making net purchase of over VND40.5 trillion (US$1.74 billion) in the market in the first six months of this year.
According to the source, recent interest from many investors, especially big and well-known ones, showed that Vietnam has become more appealing in the eyes of foreign investors, who highly appreciated the growth potential of the Vietnamese stock market, besides paying interest in legal procedures for money transfer, investment regulations and the exchange rate stability in the country.
Market gets support
Vietnam-based fund management and securities companies also said that they have received more interests from foreign investors in recently.
Nguyen Duc Hai, deputy general director fund management company MB Capital, said that his company has recently worked with Japanese investors, who hold strong interests in Vietnam’s stock market.
MB Capital is also discussing with several foreign investors to cooperate with them and find new investment opportunities in the Vietnamese market, Hai said.  
Besides, Ho Chi Minh Securities Company also said that many foreign investors are very interested in Vietnamese firms so that it expects a large amount of capital to pour in the firms through M&A deals next time.
Vietnamese companies, which are doing business effectively with good revenue and profit growth and transparent governance, will have many opportunities to attract the capital inflows, it said.
Notably, experts said that a recent decision to add Vietnam onto FTSE Russell’s watch list for a possible future reclassification by the UK-based data service provider will also have positive impacts on the foreign inflows to the country.
Analysts at BIDV Securities Co (BSC) recently said in a report that the action of FTSE Russell will help enhance investor confidence and their short-term trading strategies may be changed to prepare for the portfolio shake-ups of exchange-traded funds (ETFs).
Le Hai Tra, who is in charge of the Ho Chi Minh Stock Exchange, believed that FTSE Russell’s action will make foreign investors focus more on both Vietnam’s stock market and Vietnamese firms, forecasting new capital sources will flow in the market to seize potential opportunities before it is upgraded officially.
Minh Tam
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