UK investors concerned about Vietnamese market institutions

June 07, 2019 - 07:45
The three biggest concerns for UK investors when investing in Việt Nam were labour, State influence over the market and infrastructure.


Minister of Finance Đinh Tiến Dũng addresses the Việt Nam Investment Conference in London on July 4. — Photo

HÀ NỘI —The three biggest concerns for UK investors when investing in Việt Nam were labour, market institutions and infrastructure.

Dominic Scriven, CEO and co-founder of Dragon Capital investment fund made the statement during an interview with Người Đồng Hành online newspaper in London on Thursday during the Việt Nam Investment Conference, chaired by Minister of Finance Đinh Tiến Dũng.

 Dũng is leading a delegation from the finance ministry and the State Securities Commission of Việt Nam (SSC) on a trip to the UK from July 2-8.

The conference was co-organised by the Vietnamese Ministry of Finance to create a dialogue between Vietnamese policymakers and UK businesses, helping them understand the Vietnamese market and its potential.

The event was packed, which, according to Scriven, which showed the deep interest of UK investors in the Vietnamese market.

Attending the event were leading enterprises from Việt Nam such as Việt Nam Oil and Gas Group, MobiFone Telecommunications Corporation, national airline Vietnam Airlines and the Việt Nam Bank for Agriculture and Rural Development (Agribank).

The conference also attracted 200 firms in the UK, including well-known investment funds such as Ashmore, HSBC AM, JP Morgan, Swiss Re Group, RBC Global Asset Management and Amundi Asset Management.

UK investors wished to learn more thoroughly about the opportunities, challenges, investment environment and regulations of the Vietnamese market.

Vietnamese enterprises’ wish to list abroad is difficult to achieve as there are many differences in the Vietnamese accounting standards and international standards, according to Scriven.

Scriven did express optimism about Việt Nam’s indirect investment market and said the financial market of Việt Nam was very attractive, adding that Việt Nam was on track in developing the capital market.

"Việt Nam is not a market for short-term investment, but for middle- and long-term investors," he added.

As of June 20 this year, the UK had 365 valid projects in Việt Nam with total capital of US$3.61 billion, ranking 15th out of 132 countries and territories investing in Việt Nam.

British investment in Việt Nam focuses mainly on manufacturing and processing, with 116 projects and total capital of $1.38 billion, accounting for 38.3 per cent of total investment. Real estate ranked second with $884.7 million, accounting for 24.5 per cent of total investment capital and the mining sector was third with $701.4 million, 19.4 per cent of total investment.

In the financial market, British investors have 30 per cent of all the foreign accounts in the market.

The total value of indirect foreign investment in the securities market has been rising. Since 2016, foreign investors have net bought $1.98 billion per year on average.

During the period, the total value of indirect investment in the securities market from UK investors reached $944 million, focusing on fund certificates, stocks and bonds.

Addressing the event, Vietnamese Minister of Finance Đinh Tiến Dũng said the UK was an important partner of Việt Nam, while Việt Nam was also a major partner of the UK in Southeast Asia.

"Việt Nam has strong growth and stable politics," he said, adding that the country had reformed its economy, equitised State-owned enterprises and developed the securities market.

He added that the Vietnamese Government had completed mechanisms and policies to promote the reform of the State-owned sector, towards ensuring an open and transparent market.

Dũng said Việt Nam had great financial demand in all fields such as capital market development, securities, insurance, infrastructure development and State-owned enterprises restructuring.

The London financial market had maintained high growth with strong capacity of capital mobilisation, which was suitable for Việt Nam’s demand, he said.

Chairman of the State Securities Commission Trần Văn Dũng expressed his hope that after the event, indirect investment from the UK in Viet Nam would rise, prompting the development of the domestic securities market.

William Russell, Alderman for the Ward of Bread Street in the City of London, said that in 2020, he would lead a fintech delegation to visit Việt Nam.

Meanwhile, UK Ambassador to Việt Nam Gareth Ward said that in the first seven months of this year, the visits of Vietnamese Minister of Education and Training Phùng Xuân Nhạ and Finance Minister Dũng to the UK were good signals for strong future co-operation between the two countries.

CEO of Prudential Việt Nam Clive Baker said Việt Nam was a promising market, noting that the insurance market in Việt Nam had expanded 25 per cent per year, with abundant development spaces. — VNS