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  Foreign Investment

Investors discuss Viet Nam’s potential

Investors with total aggregate funds of some US$1 trillion took part in a seminar yesterday organised to draw investment to Viet Nam, hosted by financial services firm Indochina Capital.

Some 60 representatives of major global commercial and investment banking groups, pension funds and fund management groups took part in the seminar.

"The seminar gathers a select but influential group of investors, including several of the largest global financial institutions and fund management companies," said Peter Ryder, Indochina’s managing director.

Johan Nyvene, HSBC’s corporate and institutional banking head gave participants an overview of the country’s economy, which posted an 8.4 per cent GDP growth rate last year. Export value reached more than $32 billion, up 22 per cent from 2004. Viet Nam also attracted $5.8 billion in foreign direct investment, up 38 per cent compared to 2004.

By the end of last year, 2,600 State-owned enterprises (SOEs) had been equitised, but some of the largest in the country are yet to undergo the process.

"This year, 500 joint stock State-invested enterprises of various sectors will be established and an additional 900 SOEs will be privatised," he said, adding that they would open various opportunities for investment.

Vietcombank, the flagship State-owned bank is currently positioning itself for the privatisation process.

"While local banks have been increasing capital to meet international standards, foreign banks are allowed to buy shares in local banks," said Nyvene.

According to Rick Mayo-Smith, managing director for Indochina Land, a real estate offshoot of Indochina Capital, the market offers several high potential opportunities for investment. Demand for high-grade condominiums will outpace supply for the foreseeable future with only 15,000 units to come on stream in Ha Noi, HCM City and Da Nang over the next 4-5 years.

The demand for quality retail and office space is also high, on new foreign investment projects, new businesses to Viet Nam, imminent WTO accession and local company expansion. The hospitality industry is also looking good, with last year’s tourist arrivals eclipsing 3.5 million, and forecasts of 10-15 per cent growth annually for the next five years. The country’s tourism industry is attractive globally as Viet Nam is rated highly in Asia concerning safety, culture and natural beauty.

Indochina Capital introduced its second real estate fund, Indochina Land 2 for participants at the seminar. The planned fund is expected to raise $150 - $200 million, to be launched in several months.

The first Indochina Land fund is now valued at around $45 million, with most of the money already invested in eight projects, including the Nam Hai Resort in Hoi An and the City Garden Apartments in HCM City.

Indochina Capital also plans to launch two other equity investment funds this year.
Over the past 15 years, Indochina Capital and its principals have invested almost $1 billion in 16 projects and companies listed on the stock market.

VNECONOMY - (24/04/2006)

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