Foreign investors form strategic partnerships
HA NOI (VNS) — Foreign investors carried out several large value transactions last year through negotiations, aiming to become strategic partners of Vietnamese joint stock companies.
In December, Thailand Siam Cement Group purchased 85 per cent of brick producer Prime Group with a value of around US$250 million. More recently, investment fund Kohlberg Kravis Roberts spent $200 million to increase its ownership in Masan Group's (MSN) subsidiary Masan Consumer. Although the transaction was announced in January, it was prepared months earlier.
"Large purchases outside of the stock exchange are increasing," HCM City Securities Co deputy director Trinh Hoai Giang told Dau tu chung khoan.
The domestic and international markets were ripe for carrying out the transactions, he said.
"Foreign investors become strategic partners of Vietnamese enterprises to control their financial situation, import and export activities and other important areas rather than directly operating the companies," he added.
Meanwhile, they were hunting for businesses with industry advantages, long-term growth potential and market expansion opportunities.
Promising sectors included the food industry, natural rubber and pharmaceuticals.
"Foreign companies who have invested or are looking for investment opportunities in Viet Nam are quite diverse," Giang said. "However, the majority come from Asia, particularly Japan, South Korea, Singapore and Thailand."
Foreign investors have seen many opportunities in the Vietnamese market since the Government took drastic steps to bring the economy towards long-term stability.
In addition, the stock market was being reformed, which would open up more chances for foreign players.
"In particular, the most important factor to foreign investors is that Vietnamese shares are cheap," Giang said.
In the past year, the average ratio of price to earnings (PE) of stock markets in the region was more than 15, while it was only 8-9 in Viet Nam.
Some domestic enterprises had positive business performance and as much development potential as other firms in the region, while share prices were quite attractive. — VNS