Fresh opportunities for foreigners

HO CHI MINH CITY -- Over 100 Asian and European investors recently gathered in southern Vietnam's economic hub for a conference organized by VinaCapital Investment Management to review recent developments.

There was much to discuss given new free trade agreements, a resurgent property market, the stock index hitting its highest level since 2009, and the devaluation of China's yuan.

VinaCapital has $1.3 billion in assets, and runs three closed-end AIM (Alternative Investment Market) funds on the London Stock Exchange: VinaCapital Vietnam Opportunity Fund (VOF), VinaLand and Vietnam Infrastructure.

AIM, a London sub-market, allows smaller companies to float shares more flexibly than on the main market. The most profitable element in the VOF portfolio, VinaCapital's main fund, is private equity.

VOF will focus on the food and beverage industry and real estate in the coming year, but is also seeking opportunities in education, health care, media, logistics and agriculture, with both direct private investments and over the counter.

VinaCapital also launched Forum One -- VCG Partners Vietnam Fund (VVF) three months ago. It is Vietnam's largest fund compliant with undertakings for collective investments in transferable securities for marketing across the EU. According to VinaCapital, VVF is uniquely positioned to unlock value in listed Vietnamese companies for European and Asian investors.

"VVF is designed to meet the needs of today's investor, and is a direct reflection of [the] ongoing transformation strategy of VinaCapital," said Don Lam, VinaCapital chief executive and founding partner.

Vietnam has recently gained an edge over other Asian investment destinations with its low interest rates, mild inflation, improved infrastructure, friendlier investment policies and solid economic growth of about 6% over the past five years.

According to Deputy Finance Minister Truong Chi Trung, Vietnam's economy has been steadily integrating globally, which facilitates development and investment. More than 19,000 projects with foreign direct investment have been registered and are worth some $270 billion.

Developments such as the fruition of the Trans-Pacific Partnership will improve conditions for investors and open the way for a new wave of capital. Vietnam's stock exchange is relatively attractive with a price-earnings ratio of 11.1 compared to 22.5 in Indonesia, 20.1 in the Philippines and 17.1 in Thailand, according to VinaCapital.

Source: Nikkei Asian Review