Vietnam is expected to receive the third massive foreign indirect investment (FII) inflow via various channels including investment funds, in the forthcoming time, particularly after the country enters the World Trade Organization (WTO).
Dominic Scriven, manager of the British Dragon Capital Fund, believed that Vietnam can lure some US$500 million in FII, equaling to one third of total FII that the country has attracted so far.
The country saw the first FII inflow in early 1990s when some foreign investment funds such as Vietnam Lazard Fund, Templeton Vietnam and Beta Fund with total registered capital of some US$700 million were set up in Vietnam.
However after the Asian economic crisis in 1997, Vietnam witnessed exodus of almost all investment funds except the Vietnam Enterprise Investment Fund (VEIL) managed by Dragon Capital
With the entry of the Mekong Enterprise Fund with registered capital of US$18.5 million, the second FII wave resumed since 2002 when foreign investors found big business opportunities from the equitisation of Vietnamese state owned enterprises (SOEs).
Since then, Vietnam has homed over 10 funds more with total capital of more than US$1 billion including the newest fund, US$112-million Vietnam Holding Fund.
Many people are viewing Vietnam as a growing economy which is highly appreciated regarding its competitiveness capacity, investment opportunities as well as integration, SOE reforms and cleaning up the banking and finance system of Vietnam.
Nguyen Quang Vinh, director of Bao Viet Securities Joint Stock Company (BVSC) said many foreign investment funds are planning to pump their capital into Vietnam while adding that new funds will have far bigger scales compared to old fellows such as Dragon Capital, Mekong Capital and VinaCapital.
For example, the first fund of Vietnam Holdings has combined capital of up to US$120 million. KYPMG of South Korea is mulling a US$40 million fund and another US$80 million fund. Meanwhile, VinaCapital has raised some US$300 million since its establishment in 2003.
PPF of Czech, said Vinh, schemed to register initial capital some US$50-60 million which is expected to scale up if PPF sees bigger investment opportunities in Vietnam while another fund of Israel also planned to inject capital in Vietnam.
Additionally, many investment management funds who have operated in Vietnam for years are also planning to open their second or third funds to mobilize more capital.
Together with the establishment of investment funds in Vietnam, some foreign investors have recently poured much money into Vietnam stock market.
The Securities Custody Center under the State Securities Committee every month issues trading codes to some 40-50 foreign investors, Vinh said. An individual foreign investor opens a trading account via BVSC with average capital of some US$300,000-500,000.
In order to woo more FII, Scriven said, Vietnam has to scale up the financial market through developing the stock market and combining the SOE equitisation with listing shares on the stock market. “The country also needs to build a transparent and healthy market as well as perfects the legal system,” added he.
VNA
Vietnamese
