Foreign investors bet big on Vietnamese firms
The number of foreign investors, who contribute capital or acquire shares in Vietnamese firms, is surging rapidly, given by the firms’ high growth prospects and the government’s effective actions in improving the country’s business and investment environment.
Figures from the Foreign Investment Agency under the Ministry of Planning and Investment showed that foreign investors spent US$5.7 billion on 5,275 deals to contribute capital or acquire shares of Vietnamese firms in the first nine months of the year, up a whopping 36.8 percent year-on-year.
The surge was notable as the country saw only 2,182 FDI new projects valued at US$14.1 billion to be licensed in the period, down 3 percent year-on-year.
Nguyen Noi, deputy director of the Foreign Investment Agency, said the amount of capital contribution and share purchase of foreign investors in Vietnamese firms is actually much higher than the figure announced.
One of the latest deals with big value this year was SK Group’s US$474 million acquisition of a 9.45 percent stake in Masan Group Corporation last month. The acquisition made the South Korean group the largest foreign shareholder in the Vietnamese conglomerate, whose principal businesses include food and beverages, financial services and natural resources.
According to Woncheol Park, representative director of SK Group’s South East Asia Investment, SK Group decided to become Masan’s largest foreign shareholders as it has huge respect for Masan’s management team and admire the company’s track record of building successful businesses over the years.
“Their businesses are just starting to reflect true growth potential and we are backing Masan to grow their consumer wallet share by five times to US$100 per consumer per annum,” Park said, adding that the two sides will actively work together to identify strategic opportunities to expand into attractive categories in Vietnam.
Park also believed this is the first of many investments of SK Group with Masan and that this partnership will be a win-win for both groups.
Investment wave forecast
According to experts, foreign investors have paid their attention to capital contribution and share purchase in Vietnamese firms as they see the firms have high growth prospects while the government is making great efforts to improve the country’s business and investment environment to support firms.
Besides, foreign players also prefer this investment form as it can help them rapidly step in the Vietnamese market. Advantage of the investment form is that investors do not have to wait for licenses. In addition, they can start working immediately without having to spend time for learning and researching the market.
Experts forecast that such foreign investment inflow will continue spiraling upward in the coming time.
Andy Ho, managing director and chief investment officer of VinaCapital, said Vietnam has a lot of great businesses to invest in and the economy is stable and growing. Therefore, a lot of foreign investors still want to invest in Vietnamese firms.
Sharing the same view, Jiun Park, senior deputy managing director at the Korea Trade Investment Promotion Agency, revealed that many South Korean small and medium-sized firms have enquired about the process capital contribution or share purchase in Vietnamese firms. Park called this “the third wave of investments from South Korea”, following the first wave conducted by conglomerates in labor-intensive industries and the second one by consumer goods companies.
A characteristic of the third wave is strategic alliances between South Korean and Vietnamese companies, Park said, adding that the South Korean partner can provide modern technology, while the Vietnamese side can help with brand presence, market share and product distribution in Vietnam.
- FDI in Vietnam – Where is the Investment Going? (12/08/2019)
- HCM City solicits investment in infrastructure (30/07/2019)
- Vietnam - Japan Business Matching Symposium 2019 (29/07/2019)
- RoK’s rural development group to invest in smart farming in Vietnam (15/07/2019)
- FDI reaches record level in four months (08/07/2019)
- Powering 220 kV Southern Sai Gon - Urban District 8 transmission line (27/06/2019)
- EVFTA Press Release - Official Announcement from the EU (26/06/2019)
- PM calls on Korean investors to expand operations in Vietnam (12/11/2018)
- E-commerce golden pass for logistics (12/11/2018)
- Hoa Phu Industrial Park - The destination of success (12/11/2018)
- Long Thanh airport’s feasibility study approved (12/11/2018)
- Renewable energy projects spur foreign investment surge (02/11/2018)
- New innovation centre to provide grounds for Vietnam 4.0 (02/11/2018)
- National Assembly set to ratify historic trade deal (02/11/2018)
- Overseas financiers outline obstacles (02/11/2018)
- Moody’s upgrades ratings on Vietnamese banks (01/11/2018)
- Foreign investors expand networks in Vietnam (01/11/2018)
- Altus Capital funded to invest in distressed Southeast Asian companies (01/11/2018)
- More FDI to reach southern region (01/11/2018)
- Foreign fashion giants set footprint in Vietnam through M&A (31/10/2018)
- [EuroCham Webinar] Decision 13 – Final FIT for Renewable Energy in Vietnam (23/04/2020)
- THE SITUATION OF ATRACTTING FOREIGN INVESTMENT IN THE FIRST 3 MONTHS OF 2020 (19/04/2020)
- Key infrastructure projects calling for investment in HCMC (08/07/2019)
- Bac Ninh licenses 116 FDI projects in seven months (22/08/2018)
- Binh Phuoc licenses 24 projects worth $1 billion (22/08/2018)
- Hue targets $56mil in investment this year (15/08/2018)
- Hanoi seeks approval for Vingroup’s $300 million IT park (31/07/2018)
- List of Project Calling For Investment in Lam Dong Province in 2018 (31/07/2018)
- Kien Giang calls for investment in 12 resort projects (31/07/2018)
- Decree amendments open paid TV firms to foreign investment (30/07/2018)
- Vietnam: Opportunities in the Waste-to-Energy Sector (24/07/2018)
- Can Tho City seeks investment for 54 projects worth $5.4 billion (20/07/2018)
- Hoa Lac High-tech Park aims for $1 billion investment in 2018 (19/07/2018)
- Large-scale undersea tunnel to be constructed next year (19/07/2018)
- THU THUA INDUSTRIAL ZONE (15/01/2020)
- Map of industrial parks in Vietnam (23/07/2019)
- 493 Projects Invested in Nghi Son Economic Zone and Industrial Zones (09/02/2018)
- Thai Binh Strives to Attract Investment Capital of VND 5000 billion in Industrial Parks and Economic Zones (07/02/2018)
- Vinh Phuc Adds 4 New FDI Projects in Industrial Zones (07/02/2018)
- Dung Quat EZ and Quang Ngai IPs Attracted 258 Projects with a Total Investment Capital of More Than US$ 11 Billion (30/01/2018)
- Solutions to attract Investment Capital into Industrial Parks in Bac Giang Province (19/01/2018)
- Nghi Son Economic Zone and Industrial Zones Received 66 new Investment Projects (08/01/2018)