HCM CITY — Việt Nam is an emerging market for financial investment with favourable conditions created by new policies and fresh impetus given to the equitisation of State-owned enterprises, senior officials said at a conference yesterday.
The seminar was titled Vietnam – Korea Capital Markets and Investment Co-operation Prospects.
Vũ Bằng, chairman of the State Securities Commission, reaffirmed that the country’s first derivatives market will become operational by the end of this year, with products including covered warrants and GDK (Generalised Derivative Kernel).
He also said a new regulation later this year will clarify provisions of Decree 60 issued last June on increasing the cap for foreign stakeholding in local companies up to 100 per cent.
The time taken for trading registration will be reduced, State ownership in enterprises lowered to serve strategic partners and restructuring of institutions in securities business sector persisted with, he said.
Improvements will also made to listing and issuance criteria, corporate governance and transparency, he added.
Meanwhile Dominic Scriven, executive chairman of the investment fund management firm Dragon Capital, said he considers Việt Nam the best emerging market for investment as it is experiencing accelerating growth while other emerging markets are slowing.
Other factors that he cited included the country’s large quality, economical labour force (two-thirds of its population of 93 million and labour costs at just 35 per cent of China), increasing middle class segment and improved productivity.
He said that productivity has been the ultimate driver of the country’s GDP and its gains are ongoing.
“The gains derive from heavy investment in manufacturing and infrastructure… and accumulating productivity gains are turning Việt Nam into a modern economy,” he said.
The country’s free trading agreement with the ERU, its major export market and its membership of the Trans Pacific Partnership will facilitate export growth once they take effect.
He said the price on earnings ratio could come down to 11.1, from 12.7 in 2015 and 2014, and 13 in 2013.
In 2016-2017, big companies like SATRA Corp., MobiFone, Vietnam Engine and Agriculture and the Vietnam Cement Group are likely to be equitized, offering opportunities for foreign investors.
Nguyễn Quang Thuân, CEO of StoxPlus Corporation, backed Scriven, saying reforms to currently prevailing State ownership in many industries will create a lot of investment opportunities.
The State Capital Investment Corporation’s divestment plan in 2015-2016 will also attract investor interest, the conference heard.
Among companies subjected to divesture include Vietnam Construction and Import – Export JSC (State current ownership at almost 58 per cent of its chartered capital of VNĐ4.417 trillion or almost US$200 million) and Quảng Ninh Thermal Power JSC (11.4 per cent of VNĐ4.5 trillion).
Kim Soo-Ho, the Korean General Consul in HCM City, said Việt Nam, as a labour/consumer market of 100 million people, has the potential to benefit the most when investors pull out of China (a JETRO survey shows Japan’s businesses in China and Thailand hope to shift their manufacturing bases to Việt Nam).
The Government’s determination to attract investment is a positive factor, he added. — VNS