Vietnam’s investment environment is now recognized as the most attractive in Asia, a report from the second annual Vietnam Investment Forum said.
At the two-day conference in Hanoi, 1,100 representatives from 36 countries gathered to exchange experience and discuss Vietnam’s economy, macroeconomic prospects, and the opportunities and challenges of the post-WTO period.
Vietnam attracts foreign investors with the most stable political environment in the world, said John Shrimpton, cofounder and director of Dragon Capital fund management company.
Vietnam, with a relatively complete legal framework for the capital market, is certain to offer investment opportunities to foreigners in the coming time, he said, adding Dragon Capital has so far invested US$2 billion in local operations.
Michael Geoghegan, CEO of HSBC Holding Plc highly appreciated Vietnam’s high annual economic growth rate of 8 per cent. Vietnam is emerging as a leading garment and textile, coffee and seafood exporter. Vietnam’s population is young, with improving skills.
To maintain a sustainable economic growth rate, Vietnam should focus on developing the capital market, human resources and completing the legal framework, Michael said.
However, the ASEAN country needs to pay attention to developing transport networks and accelerate the application of advanced science and technology, he added.
Jean-Pierr Bernard, regional head of BNP Paribas in south-east Asia and India, reiterated that Vietnam should focus on developing infrastructure and meeting growing capital demand.
Vietnam’s bond market has significant growth potential, given the value of bond trading equivalent to 8 per cent to 9 per cent of GDP, a low rate compared with other countries, Jean-Pierr Bernard said.
Vietnam’s government needs to take supportive measures to reduce domestic businesses’ dependence on bank loans and foreign investments.
Meanwhile, Vu Van Ninh, Finance Minister, said Vietnam will continue reforming its economy, improving the business environment and building up the capital market, as the country needs to mobilize US$140 billion for development investment in the 2006-2010 period.
The combined market capitalization of listed companies on Vietnam’s stock market is US$14 billion, equivalent to 22.4 per cent of the country’s gross domestic product, while market value of the domestic bond market is US$8 billion.
Speeding up the process of selling shares in state-owned enterprises, including large commercial banks, will be key to attracting more foreign investors to the country, Ninh said.
About 550 state-owned enterprises will sell shares valued at US$7 billion to the public from the second quarter, and foreign investors can buy up to a 49 per cent stake in those companies, Ninh noted.
Le Thi Bang Tam, chairman of State Capital Investment Corporation said, in 2006 Vietnam’s capital and financial markets made remarkable achievements. SCIC is mandated to hold 420 state-owned enterprises with total book value of VND3.4 trillion, accounting for 35-40 per cent of total enterprise value.
Of which, dozens are listed on the stock market, Tam said. (The People, Labor, Young People, Government’s Website)
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