Vietnam becomes a potential market attracting the attention of cash flows from the US, especially indirect investment flows through the stock market.
The capital flows from the US will fill into Vietnam
“The US capital is very much and they are looking for opportunities in other markets to invest”, Mr. Dang Thanh Tam, Chairman of the Board of Directors of Kinh Bac Urban Development Corporation – JSC (KBC – HoSE) talked to other investors at Talkshow. The topic “Following giant’s trace” was organized by Investmentnews last week.
As an enterprise accompanying the working delegation of the Prime Minister Pham Minh Chinh during his visit and work in the United States in mid-May, the Chairman of KBC said that Vietnamese market is the targeted place of the investment funds from the global most major economies. “Many great investment funds would like to meet the Prime Minister for policy advice and show their interest in Vietnam’s stock market,” said Mr. Tam.
Said Ms. Tran Khanh Hien, Director of Analysis Division, VNDirect Securities Company, the US indirect capital flow into Vietnam is relatively minor. In the past two years, in the context of the epidemic, foreign investors mostly net sold and this is the general trend of the markets in the region. In the first 4 months of the year, foreign investors began to return, including the US investors.
According to the statistics of the Ministry of Planning and Investment, the investment value of the US investors in Vietnam is about USD 22 million. “The presence of many US investment funds such as Warburg Pincus in Vietnam’s stock market and they have achieved success. This will be a premise for other investors to enter into Vietnam,” said Ms. Hien.
Especially, the State Securities Commission and New York Stock Exchange signed a cooperation agreement on supporting in market upgrading and building a mechanism for the investors to actively participate in the two stock markets so that experts who expect the US indirect investment capital flow will find Vietnamese market.
Said Mr. Dang Thanh Tam, Vietnam is an attractive destination, with good GDP growth, and enterprises’ business activities are gradually more methodical. When meeting with the US investors, Prime Minister Pham Minh Chinh also made a clear commitment that Vietnamese market would be further transparent and the government’s share with enterprises’ difficulties or investment funds into Vietnam.
Moreover, the Chairman of KBC shows that Vietnam’s credit rating with the US has been improved significantly. Therefore, there will be the great capital sources flowing into Vietnam, both directly and indirectly in the coming time. He expects that the capital flows from the US investors will be increased by at least USD 10 billion in the next 3 years.
Which industries will benefit?
Said Ms. Tran Thi Khanh Hien, in terms of each industry, machines, telephones, electronic components, textiles, footwear, and wooden furniture exports will benefit when the trade between Vietnam and the US grows. From the perspective of the stock market, Ms. Hien forecasts that the four industry groups are much cared.
The first is textile and garment. In the first quarter of 2022, the textile and garment industry gained the highest growth rate in the last 10 years when exporting to the US, specifically, the growth is 25%. Said some textile and garment enterprises contacted by VNDirect, most of them have received full orders for production from now until the end of the year to export to the US.
The second is furniture production. Currently, the United States accounts for more than 50% of Vietnam’s wooden furniture export percentage. In the first quarter of 2022, wooden furniture export to the US is also increased by 5%.
The third is seafood, mainly Pangasius bocourti. VNDirect found that there was some movements between exporting white fish from Russia. Currently, the demand for white fish will shift to Vietnam’s demand in Pangasius hypophthalmus and Pangasius bocourti.
Fourth is industrial park real estate, when the US FDI flows move to Vietnam. Evidencing Ms. Hien’s statement, Mr. Tam said that during the Prime Minister’s visit to the US, KBC signed a contract of USD 8 billion, nearly equal to the US total investment in Vietnam today.
Said Mr. Dang Thanh Tam, Vietnam's stock market is very attractive, although its scale is much smaller than the US market’s. Therefore, in order that enterprises are interested in investment, it is necessary to prepare very carefully, especially in terms of business activities and transparency of the matters. “I think that once the US investment fund is interested in, Vietnamese market will boom. The US investment funds told me that once they invest, they will make the great investment, because of the great cash flow," said Mr. Tam.
Source : Baodautu
