Chance for Vietnamese Enterprises to Mobilise International Capital

A representative from Credit Suisse Bank assessed that chances for Vietnamese enterprises to mobilise international capital were increasing at a recent conference on Vietnam International Bond Issuance in Hanoi. Credit Suisse guaranteed the Vietnamese government’s bond. The Ministry of Finance, the Bank for Investment and Development of Vietnam (BIDV) and Credit Suisse Bank jointly held the conference.

 

Deputy Minister of Finance, Ms. Le Thi Bang Tam said that after the success of the first issuance of the international government bond in October 2005, Vietnam has attracted great attention from international investors, which opened a new channel of capital mobilisation for the Vietnamese government and enterprises. This is a new solution to a recent condition that inner capital cannot fulfil demands; official funding has decreased while the economy’s demand for capital are emerging particularly in order to develop the energy, coal, mineral ores, construction materials, sea transportation, and infrastructure development industries.

 

Currently, there are 3 forms of international bond issuance. Firstly, the Government issues international bonds then selects an enterprise to invest in as in the case of Vinashin; second, enterprises issue the bond and the government takes the role of guarantor; third, enterprises do it all by themselves. According to analyses, the first and second forms are suitable for Vietnamese enterprises because the government has obtained admitted ability and confidence index without the complicated process of contacting with confidence index evaluating company implement of popularising and lobbying with investors.

 

The timing of the issuance is decisive. According to Credit Suisse’s representative, the time is now favourable for Vietnamese enterprises to mobilise international capital. Vietnam is the country with a stable socio-politic-economic situation, considerable growth and a high confidence index. The demand and intentions of international investors for Vietnamese bonds is also high while the US long-term interest rate is estimated to remain stable. Credit Suisse advised that Vietnamese enterprises should not miss this chance.

 

BIDV also said that international capital market has very potential for Vietnamese enterprises. BIDV has services that can assist enterprises from the beginning step of building a bond issuance strategy to managing capital sources for international issuance.