Investors in VN face ‘challenges, chances’

CA - Viet Nam ’s investment and investment-management needs will change as it pursues its next five-year development plan as a middle-income country, experts have said at a conference that opened here yesterday

Business leaders, senior Government officials as well as bankers attending the two-day conference, the fourth Alternative Investments Viet Nam, spoke of challenges and opportunities that the new stage of growth will offer investors.

In his keynote address, the Asian Development Bank Country Director for Viet Nam, Auymi Konishi, said the country’s draft socio-economic development plan for the 2011-15 period calls for total investments worth US$350 billion.

“ Viet Nam needs to maintain macroeconomic stability to sustain robust growth and continue moving up on the technological ladder towards higher added value,” he said.

Rapid economic growth had to be accompanied by sharp declines in poverty, he added.

For ongoing and planned projects, the country should mobilise sufficient financial resources to meet investment needs, he said, stressing the importance of applying the public-private-partnership model to infrastructure development.

The economy faces the challenge of increased competition in the energy sector and this has to be met with diversification of energy supply including renewable energy imports and production, higher production efficiency and energy conservation.

Viet Nam is one of Asia’s fastest growing economies with GDP growth averaging 7.4 per cent during the 1989-2008 period. The global crisis and its impacts had seen GDP growth moderated to 6.2 per cent in 2008 and 5.3 per cent in 2009.

Poverty incidence has declined from 58.1 per cent in 1993 to 12.1 per cent in 2009, and the economy has rapidly recovered from the global crisis with a growth of 6.7 per cent slated for this year, Konishi noted.

Maximising returns

The conference gave foreign and domestic investors the opportunity to equip themselves with knowledge and the best practices to maximise investment returns in one of Asia’s hottest markets.

They discussed yesterday the need to maintain realistic expectations between investors and the firms they invest in, the importance of creating value through corporate culture and corporate governance as well as evaluating sustainable fund raising and exit strategies for private equity investments in the country.

Other topics covered yesterday included investment opportunities in the SMEs sector as well as the consumer goods and retail market.

David Lyons, country head and managing director of Jones Lang LaSalle Viet Nam, said investors were still not sure about which assets to invest in or the regulatory framework for investments in each asset class.

“Insights into these will give investors a greater understanding of the exciting and dynamic investment opportunities that exist in Viet Nam today,” he said.

Johan Nyvene, chief executive officer of HCM City Securities Corporation, pointed out recent trends among equity investors. “They have a positive outlook for the Vietnamese economy over the next 12 months. Viet Nam is still considered an attractive investment destination,” he said.

He said sentiment towards Viet Nam institutional investors has improved steadily. There has been increasing number of foreign investment funds announcing fund raising for Viet Nam or raising their investment allocation for the country, Nyvene noted.

Investors continue to show their interest in growth assets with a long-term view. They are also interested in distress assets but they find it very difficult to identify sustainable investment opportunities in this segment, he added.