More Vietnam investment chances on the way back

"We hope that in the long-term, given the positive outlook of Vietnam's economy, recovery of the global economy, and policy makers determination to improve, Vietnam can offer foreign investors and VinaCapital superior returns," said Deputy Prime Minister Hoang Trung Hai at the two day conference.

He added that the conference aimed at discussing and reassessing fresh opportunities for Vietnam based on changes in the world economy.

Vietnam has effectively curbed inflation and GDP growth this year is estimated at 5.3 per cent and 2014 5.8 per cent. In the latest World Economic Forum's annual country competitiveness rankings, Vietnam rose five places to 70th of 148 for 2012-2013.

Regarding bad debts, Hai said the government was considering inviting foreign investors to buy but would first need to implement a sufficient legal framework.

The conference, attended by about 80 investors and economists, agreed that infrastructure development is an area of great potential for foreign investors and the government's advocacy of the public-private-partnership (PPP) model was making great headway.

In terms of tax, CIT (corporate income tax) will be cut by 3 per cent to 22 per cent in January 2014 and again by 2 per cent in 2016. The preferred tax rate stands at 20 per cent as of July and will go to 17 per cent in 2016.

The two-day conference included updates on Vietnam's capital markets from Ho Chi Minh City Securities Corp. managing director Fiachra Mac Cana, the real estate market by CBRE department head Dan Hayden, infrastructure by law firm VLT's senior advisor Luong Van Ly, and on investment in Myanmar by General Pacific Group economist Stewart Tong.

VinaCapital managing director Andy Ho said his firm planned to open a representative office in Myanmar.

The company's three London Stock Exchange-traded investment funds VinaCapital Vietnam Opportunity Fund (VOF), VinaLand (VNL), Vietnam Infrastructure Limited (VNL) total $1.5 billion in assets to date.

Vietnam's stock market has one of the best growth records in Asia in dollar figures, said Ho. In this respect the local stock market grew by more than 18 per cent this year through October and in the context of Dong, by 20 per cent. It is third in Asia, Australia, and New Zealand, only behind Japan and the Philippines. Commensurate with this growth, the VOF fund has seen much greater improvement than the other two funds, he added.

VOF currently manages $750 million and has paid capital gains of $150 million to its investors so far this year. Its NAV growth rate in the first three quarters was 15 per cent but its growth from investments in listed companies hit 28 per cent. "This 28 per cent increase shows the strength and potential of stock market investments," Ho said, adding that VOF would continue investing in education, healthcare, infrastructure, and agriculture.

When asked about the concerns of investors, he said inflation was a major issue but so-called slowing growth was not a problem as Vietnam maintains a high-growth rate compared to most countries around the world.