Foreign investors show interest in Vietnam

VietNamNet Bridge – After two years of ignoring emerging markets due to the global crisis, foreign investors began paying attention to Vietnam again early this year as the global economy began to recover. As such, fund managers have sped up the mobilization of foreign capital for investment in Vietnam. 

New funds established

Vietnam Asset Management (VAM) combined with Hong Leong Asset Management opened a fund on March 23 for individual investors in Malaysia to invest in Vietnam. The fund manager expected to raise US$31 million in the first month but investors have registered up to 40% of the sum in the first week.
Nguyen Xuan Minh, CEO of VAM, said that the company’s second fund aimed to raise funds from individual investors who needed only US$300 to invest in Vietnam. He also said that after talking with investors in several Malaysian cities, he found that foreign investors including individuals were interested in the Vietnamese market, while early last year his suggestions to consider investing in Vietnam were refused.
Meanwhile, Chris Freund, managing partner of Mekong Capital – a fund manager in Vietnam for nine years – said the company was raising funds from overseas investors in the U.S., Europe, and Asia to set up a new fund named MEF III with an expected size of US$150 million. “The fund will generally target consumer-driven sectors that benefit from the growth in Vietnamese consumer demand and the adoption of international business practices in those sectors in Vietnam,” he said. 
Commenting on the foreign capital that would pour into Vietnam soon, Freund said, “While foreign investors appear to have shown more interest again in Vietnam recently, I would not go as far as saying that there is much new foreign capital flowing into the economy or stock market at this point”.
MBCapital, a local fund manager, is also in the process of meeting local and foreign investors to raise capital for its new fund. Nguyen Hai Ha, investment director of the company, said that the fund would hold about VND300 billion and expect to close and disburse in May or June this year. He also said that in general, all potential foreign and local investors approached by the fund had a positive view on the Vietnamese market in the long term.
According to the Hochiminh Stock Exchange, in the first three months of this year, net buying value of foreign investors at the bourse was about VND2.06 trillion, accounting for nearly 62% of their total net buying value in 2009.      

New sectors eyed

Besides consumer goods and banking, some new sectors like recycled energy, healthcare, and education have drawn attention from foreigners recently as well.
Dragon Capital plans to launch a fund investing in recycled energy, power saving, and sustainable development in April or May. Dominic Scriven, CEO of the fund manager, earlier told the Daily that the fund had capital from some countries’ governments. Although these sectors would take a long time to generate profit, it is a global trend, and Vietnam could not stand on the sidelines especially as the country faces its own environmental problems.  
Meanwhile, the MEF II fund run by Mekong Capital recently invested US$6 million in the Vietnam Australia International School (VAS). Freund said the education sector would experience strong growth in the near to mid-term future. “Vietnamese families will continue to want their children to enjoy first-class education in order to raise the next generation’s living standards… and demand for VAS’s schools is growing rapidly, which excites us,” he said.
He added that the fund would be open to exploring the education sector further, if there are opportunities that meet its criteria and do not conflict with its investment in VAS.   
Meanwhile, the investment director of MBCapital said that healthcare and education would be the company’s focus for the near future. “Given a young population and Vietnamese people’s increasing income, we think demand on high-quality healthcare and educational services will strongly increase in the country. We will take a part from the new fund to invest in these sectors if it has potential,” he said.

VietNamNet/SGT