“Americans have increased their investment in Vietnam to make up 50 per cent of the total indirect investment in the country,” said Mr James Riedel, senior expert of the Vietnam-US Trade Agreement Implementation Project (Star Vietnam).
The statistics show that the Americans are increasing their indirect investments in Vietnam through foreign investment funds. The investment has reached almost US$1 billion with the enforcement of Vietnam-US Trade Agreement in mid-2006.
Finance groups such as Merrill Lynch, JP Morgan and Citigroup have been granted transaction serials to officially participate in the Vietnamese securities market. Smaller investors, meanwhile, approach the Vietnamese securities market through investment funds.
Investment funds with American capital operating in Vietnam include Indochina Capital, with US$100 million in 2005 (45 per cent owned by American investors). Vietnam Partners, together with Vietnam Development Investment Bank, established an investment fund of US$100 million (30 per cent by American investors). Dragon Capital is operating an indirect investment of US$600 million (30 per cent by American investors). Meanwhile the venture investment fund IDG, with entirely American capital, is investing in dozens of Vietnamese companies and will increase capital to US$1 billion in the coming years.
According to Mr James Riedel, American investors often buy stocks of Vietnamese companies in the securities market. While Mr Steve Parker, senior economist of Star Vietnam, said foreign investors of big organizations now pay more attention to the Vietnamese capital market. One third to one half of the total investment is from American investors.
Experts said the increase of American indirect investment in Vietnam is due to the improvement of the legal framework and trade, including Vietnam’s Law on Securities. Expected economic growth and the equitization of State-owned enterprises have also encouraged the indirect investment.
Mr Riedel believes American indirect investment will increase with the official participation of American investment banks and big investors.
However, the representative of Star Vietnam also warned that while the inflow of foreign investment seems to be based on firm economic factors, it may cause instability due to hoarding and conflict between local and foreign investors, affecting the financial system and the economy as a whole.
Quynh Anh
Vietnamese
