Foreign investors still show interest in Vietnamese market

VOV.VN - Despite the nation suffering an annual drop in foreign direct investment (FDI) during the four months of the year, foreign investors still signed major deals in the country and confirmed its ongoing investment appeal.

Early April saw the SK Group of the Republic of Korea announce the signing of an agreement with the Masan Group Corporation in order to acquire a 16.26% stake in VinCommerce, a Masan subsidiary, for a cash consideration of US$410 million.

Elsewhere, Sumitomo Mitsui Finance Group (SMFG) of Japan spent US$1.37 billion on 49% of FE Credit.

The two deals served to warm up the Vietnamese merger and acquisition (M&A) market, indicating that it remains attractive to investors, with foreign financiers still seeking to conduct valuable deals.

Throughout the reviewed period, FDI in the nation was not far below the figure recorded during the same period from last year. This is due to major projects being signed, including a US$3.1 billion gas-fuelled power plant in Long An province, the US$1.31 billion O Mon II thermal power project in Can Tho city, and the adding of US$750 million to the LG Display project in Hai Phong city.

The country attracted a total of US$12.25 billion worth of FDI throughout the reviewed period, equal to 99.3% of the figure from the same period last year, including US$8.5 billion which went on new projects.

According to Nakajima Takeo, chief representative of the Japan External Trade Organisation (JETRO) in Hanoi, its survey conducted on business trends indicates that the majority of firms think it will be difficult to expand production and business over the next one to two years. Despite this, they still consider the Vietnamese market to be a leading investment destination among ASEAN members.

Furthermore, a recent survey conducted by EuroCham shows that European firms based in Vietnam remain confident about local recovery, with its Business Climate Index (BCI) reaching 73.9 points.

When questioned about the prospects of the Vietnamese business environment over the next quarter, 67% anticipate it will be either “excellent” or “good”, a 12% increase compared to the previous quarter.

Moreover, business leaders continue to be optimistic about the prospects of their own companies. Indeed, more than two-thirds (68%) predict that orders and revenue will remain steady or increase over the coming three months, which is a 25% increase compared to the fourth quarter of 2020.

Alain Cany, president of EuroCham, attributes these results to confidence shown by European firms within the Vietnamese market due to enterprises not being significantly impacted by the COVID-19 pandemic.

However, amid fierce competition coming from other countries in terms of FDI attraction, experts believe that the country should work harder to win favour.

John Rockhold, vice chairman of Amcham, said that Vietnam should consider non-carbon facilitation, while Nguyen Hai Minh, vice president of EuroCham, believe that it requires more high-tech human resources in order to meet the various needs of investors.