Investment promotion conference held in US

Investment promotion conference held in US:

Investors excited with messages from Vietnam

Over 100 international investors attended a conference to promote investment into Vietnam, which was held in New York and chaired by Finance Minister Dinh Tien Dung on July 1st 2015. At the conference, messages of the Vietnamese government on improvement of investment environment and attraction of foreign investors as well as looking for strategic investors by big Vietnamese enterprises like SCIC, Vinatex, BIDV, Vinacomin, ... brought a good impression to American investors. A Vietnam full of potentials and friendliness, which wants to develop comprehensive and profound partnerships in finance, is what left in the mind of attending investors.

Vietnam welcomes US investment

Chairing the conference named “My Vietnam - Your investment Destination”, Finance Minister Dinh Tien Dung conveyed a message on a dynamic and reformed economy, which is willing to receive foreign investment capital, especially from the US.

Minister Dung says the Vietnamese Government recognizes and highly values the role and presence of US financial groups and investors in Vietnam. However, indirect US investment into Vietnam is still at a modest level compared with the potential of both US investors and Vietnam’s capital absorption capability.

Specifically, in terms of direct investment, the US is having 729 projects in Vietnam with total value of USD 11 billion, ranked 7th among 101 direct investors in Vietnam. The average size of each US FDI project is about USD 15.35 million, higher than an average value of an FDI project in Vietnam (USD14.3 million).

Finance Minister Dinh Tien Dung spoke to US investors

A number of big US financial groups are already present in the Vietnamese capital market. The number of US investors so far in this market is recorded at 995, including 565 institutional investors and 430 individual ones.

In terms of volume, US investors are holding more than 5 million bonds, over 8,500 fund shares and over 1 billion corporate shares. The total market value of Vietnamese securities held by US investors is about USD 1.6 billion, according to Vietnam Securities Depository.

In terms of trade, Vietnam’s exports to the US in 2014 reached nearly USD 29 billion, 36 times higher than in 2000, making it the biggest ASEAN exporter to the US market, and is expected to further increase.

The above figures and events reflect US investors’ interest in, contribution to and significant role in Vietnam’s financial market and economy.

However, the Vietnamese Finance Minister considered indirect US investment into Vietnam to be still modest. He shared his desire to open a practical dialogue channel to help Vietnamese enterprises and US investors understand more about Vietnam, the Vietnamese government’s reform efforts, to improve US investors’confidence in the Vietnamese market’s growth potential.

Opportunities from ownership room extension and SOE equitization

The US investors paid most attention to the stories of further opening of foreign ownership limitation and SOE equitization progress. Only 03 days before the conference, the Vietnamese Government issued Decree 60/2015/NĐ-CP on further opening the foreign ownership cap in public companies. Accordingly, except for some restricted and conditional business lines, foreign investors can have unlimited ownership under the country’s WTO commitment.

Chairman of State Securities Commission Vu Bang says the above-mentioned progress reflects the Vietnamese government’s appreciation of US investors and Vietnam’s strong determination to reform itself and integrate into world economy, also to attract foreign investment capital.

Regarding the SOE equitization process, state capital divestment and corporate restructuring in Vietnam, SCIC CEO Lai Van Dao says SCIC is currently haveing nearly 300 portfolio companies subject to divestment. In parallel, the Prime Minister already decided to transfer state shareholdings in 20 economic groups and general corporations to SCIC, including big groups such as Vinatex. After the transfer, SCIC will carry out restructuring of these entities, so as to increase the state capital efficiency or to divest state capital under the Prime Minister’s decision.

“In line with the decision to increase foreign ownership room to 100% as indicated in Decree 60 just issued by the Government, I very much hope US investors will be interested in buying state shares in companies under SCIC’s portfolio, as well as co-investing with SCIC in a variety of projects in Vietnam”, said Mr. Dao. He also revealed that some opportunities were worth considering for US investors.

To be more specific, SCIC is currently planning to divest its shares in Vinaconex, one of the biggest corporations in Vietnam in the construction business, with the estimated divestment value of nearly VND 3,000 billion. Concurrently, SCIC will divest its hodlings in some hotel and tourism businesses, which are also worth considering for US investors.

SCIC CEO Lai Van Dao (4th from the left) spoke at the conference

"Together with further ownership room opening, SCIC will propose to the government on considerable divestments of state shares in some big economic groups and general corporations. Upone Prime Minister’s approval, we will update US investors on the relevant details”, said Mr. Dao.

BIDV and Vinacomin also shared their desire to attract large investors.

Messages from the Vietnamese government and the openness and market-oriented mind of Vietnamese businesses created good impression for US investors. James V. Calvano from Vanguard investment fund said he didn’t think the conference would give out such wonderful messages.

“Vietnam is far from the US geographically, but we will surely go to Vietnam to feel more about the opportunities there and to make connection with Vanguard’s investors”, said James.

Merrion Financial Group Risk Management Director Joel W. Miller says he feel the openness of the Government of Vietnam at the conference. Investors not only discussed with the Finance Minister, SSC Chairman but also received a lot of information on tax policy, investment procedures, Vietnamese enterprises’demand for capital. “We are very much impressed and will surely study more details of opportunities in Vietnam”, said Joel.

Source: Securities Investment Magazine