UK investors concerned about Vietnamese market institutions

Friday, Jun 07, 2019 07:45

Minister of Finance Dinh Tien Dung addresses the Viet Nam Investment Conference in London on July 4. — Photo

The three biggest concerns for UK investors when investing in Viet 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 Nguoi Dong Hanh online newspaper in London on Thursday during the Viet Nam Investment Conference, chaired by Minister of Finance Dinh Tien Dung.

Dung is leading a delegation from the finance ministry and the State Securities Commission of Viet 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 Viet Nam such as Viet Nam Oil and Gas Group, MobiFone Telecommunications Corporation, national airline Vietnam Airlines and the Viet 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 Viet Nam’s indirect investment market and said the financial market of Viet Nam was very attractive, adding that Viet Nam was on track in developing the capital market.

"Viet 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 Viet Nam with total capital of US$3.61 billion, ranking 15th out of 132 countries and territories investing in Viet Nam.

British investment in Viet 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 Dinh Tien Dung said the UK was an important partner of Viet Nam, while Viet Nam was also a major partner of the UK in Southeast Asia.

"Viet 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.

Dung said Viet 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 Viet Nam’s demand, he said.

Chairman of the State Securities Commission Tran Van Dung 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 Viet Nam.

Meanwhile, UK Ambassador to Viet Nam Gareth Ward said that in the first seven months of this year, the visits of Vietnamese Minister of Education and Training Phung Xuan Nha and Finance Minister Dung to the UK were good signals for strong future co-operation between the two countries.

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

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