HCM CITY — Results from the seventh bi-annual Private Equity report conducted by Grant Thornton Viet Nam in the second quarter showed that 34 per cent of respondents reported positive business sentiment, double the figure compared to six months earlier.
The report's findings on sentiment toward the private equity sector in the last 12 months were analysed from opinions of a number of decision-makers based in Viet Nam or those having a significant focus on the country.
The figure, however, was still lower compared to 81 per cent in the second quarter in 2010, 65 per cent in the fourth quarter in 2010 and 53 per cent in the second quarter last year. The neutral response rate of 39 per cent and negative response rate of 27 per cent reflect that much of private equity remains apprehensive.
Investment attractiveness, as a result of an increase in the positive outlook for the economy, improved to 56 per cent in this quarter, from 39 per cent in the fourth quarter of 2011. Of that 56 per cent, 3 per cent consider Viet Nam as extremely attractive compared to other investment destinations, and 53 per cent see it as more attractive than others, compared to 1 and 38 per cent, respectively, in the fourth quarter last year.
For those considering an additional market for investment, Myanmar was seen by 62 per cent of respondents the most attractive investment destination in the region neighbouring Viet Nam.
The report states that many local small- and medium-sized enterprises have been struggling with the tough economic environment for some time and many will not be able to survive without additional capital being introduced.
As a result, 58 per cent expect distressed assets to be investment opportunities in Viet Nam. The figure was 61 per cent in the fourth quarter and 28 per cent in the second quarter of 2011.
Secondary buyout deals (46 per cent) overtook private or family businesses as the biggest source of deals, increasing from 31 per cent in the previous survey, probably reflecting the fact that several funds are approaching their exit phase.
In terms of investment obstacles in Viet Nam, corruption was considered by 83 per cent of respondents as a concern when investing in the country. — VNS