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Funds still confident in local investments
Optimism in Viet Nam remains positive among portfolio investors for the next 12 months, according to a bi-annual survey released by auditing and consulting firm Grant Thornton Viet Nam on Monday.
"Private Equity in Viet Nam – Investment Sentiment and Outlook" which, in the second quarter, polled more than 800 decision-makers based in Viet Nam and those having a significant focus on the country, found that their outlook was generally positive with 53 per cent of respondents uholding a positive view.
It was, however, lower than in the fourth quarter of last year when the figure was around 65 per cent.
Trinh Kim Dung, Grant Thornton's senior manager for advisory services, said: "With continued strong domestic growth in Viet Nam, most investors still sit on the positive side of the fence.
"Many fund managers have been actively promoting their new funds to global investors, seeking fresh capital to underpin private-equity investment in the near term."
Though there was a slight drop in investor confidence since last year, 54 per cent of respondents indicated that Viet Nam remained more attractive than other investment destinations for funds.
This optimistic outlook was supported by the fact that 53 per cent of respondents planned to increase their investments in Viet Nam in the next 12 months.
Education returned to the top of the list of the most positive sectors for investment, replacing retail which led the previous survey.
There was a strong improvement in the attitude towards oil, gas, and natural resources as well as agriculture.
In the previous survey, oil, gas, natural resources, and agriculture were the least positive sectors.
On the other hand, transportation and logistics fell dramatically to become the least preferred sector.
Around 26 per cent of respondents said their preferred entry price would be at three or four times earnings multiples when making investments in Viet Nam, while 42 per cent believed that exit multiples would increase compared to current figures.
Consistent with recent surveys, red tape, corruption, infrastructure, and the legal system continued to be the main areas of complaint from investors in this country.
Seventy nine per cent considered corruption to be the most serious impediment to investment in Viet Nam.
"Over the past few years, Viet Nam's legislative framework has continued to evolve," Matthew Lourey, Grant Thornton's advisory services Director, said.
"However, transaction procedures and practices have not been simplified, partly due to contradictory regulatory releases, preventing the country from becoming a far more attractive investment destination than it currently is."
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