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Cash-starved firms should look to foreign money
With banks tightening credit, foreign investment was now domestic firms’ main hope for raising working capital, analysts said at a meeting held in Ho Chi Minh City Thursday.
DongA Bank deputy general director Nguyen Thi Kim Xuyen said banks only provide loans to companies in essential sectors like pharmaceuticals and gasoline and for importing agricultural machinery.
But their lending interest rates are high, at 21 percent per year, as the central bank battles galloping inflation.
Thien Viet Securities Company’s strategic consultant Spencer White said having foreign companies as partners would offer many benefits to Vietnamese firms and make state-owned firms’ equitization “more effective.”
“Portfolio investment pouring into Vietnam has always been US$7.5-7.8 billion per year in recent years,” White said.
“But the flow will become weak if the government does not speed up the equitization of state-run firms.”
Vietnam Investment Group director David Do said many Vietnamese companies’ profits were lower than that of their counterparts in neighboring countries because they were mostly small- or medium-sized.
So foreign investors would rely on companies’ potential to make decisions about investing in them, he said.
“Vietnam’s economy grew sharply for 10 years,” he said.
“I believe it will achieve steep growth again as every economy goes through cycles.”
But he said Vietnamese firms should achieve international standards if they want to attract foreign money
Thanhnien
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