The Hanoitimes - In addition to public investment funds, it is essential for Vietnam to attract foreign capital for socio-economic development.
Vietnam needs some US$18 – 20 billion per year for infrastructure development, according to Deputy Prime Minister Vuong Dinh Hue.
In addition to public investment funds, it is essential for Vietnam to attract foreign capital for socio-economic development, Hue said in a meeting with Korea Financial Investment Association (KOFIA) and the Federation of Korean Industries (FKI) on June 20.
Overview of the meeting between Deputy PM Vuong Dinh Hue and KOFIA's members. Source: VGP.
Hue urged South Korean companies in Vietnam to continue expanding their businesses, and encourage new investors in the fields of economy, social and infrastructure development.
Currently, South Korea is Vietnam’s largest ODA donor and third-largest trade partner, Hue said.
Meanwhile, Vietnam continues to maintain its high economic growth rate at 6.8 – 7% per year and a low inflation rate, enhancing investors' perception of a stable business environment.
In the context of ongoing trade friction among major economies, Hue expected a shift in global investment flow, which could potentially impact both Vietnam and South Korea, but is also an opportunity for greater cooperation between the two countries.
According to Hue, Vietnam remains an attractive investment destination, both in terms of foreign direct and indirect investment. As of the end of 2018, the country’s stock market capitalization reached over 80% of GDP, meeting the target set by the government two years in advance.
Taking into account the corporate and government bond markets, the combined capitalization has topped 110% of GDP.
Additionally, the Securities Law is expected to be approved by the National Assembly at the end of this year, serving as a major factor to continue attracting foreign investment.
Hue referred to new products that are going to be introduced in the market, such as covered warrants, as well as the merger of Hanoi and Ho Chi Minh City stock exchanges.
Hue noted Vietnam would open its financial market at a faster pace.
Moreover, the country’s stock market would offer non-voting shares to ensure the rights of foreign investors, Hue added.
Jo Young Won, president of KOFIA, said the relations between the two countries have been growing strongly, and South Korea is Vietnam’s largest investor.
As of May 2019, South Korean financial funds have poured US$3.5 billion in Vietnam, a 13-fold increase compared to 2015.
Jo pointed to recent forecast that Vietnam’s economy would soon exceed that of Singapore, and hoped South Korean companies to contribute a big part in this progress.
Meanwhile, Chang Soo Huh, president of FKI, said Vietnam is South Korea’s top partner in its “New Southern Policy”.