Vietnam allures Japanese investors

The Ministry of Finance’s conference on investment promotion into Vietnam held in Tokyo last week saw the participation of nearly 100 Japanese investors including SBI Holdings, Sumitomo Mitsui Asset Management, Sumitomo Life Insurance, Daiwa Securities, Misubishi, Knowledge, Mizuho, Recof, Normura Securities, Resona Bank, JP Morgan Securities and Aizawa Securities.

Japanese investors are eagerly anticipating Vietnam’s plans to boost the equitisation of its state-owned enterprises (SOEs), with Vietnam Airlines and Vinatex being the most coveted, said Tesuya Inoue, a Japanese participant at the conference.

Vietnam Airlines’ general director Nguyen Ngoc Minh said the national flag carrier had been valued by Morgan Stanley and Citi Group, and the valuation had been submitted to the government for approval.

“We have proposed that 25-30 per cent of Vietnam Airlines be sold to foreign investors, of which 20 per cent could be bought by a strategic investor. However, the final decision will be made by the government,” Minh said. “However, in the long term, the maximum 65 per cent government-held stake will gradually reduce to 51 per cent; a pattern likely to be seen in other major SOEs.”

Minh underscored that Vietnam Airlines would conduct its initial public offering (IPO) this October, and be listed on Vietnam’s stock market by late next year.

“We’re ready to work with foreign financial investors and airlines,” Minh added.

Garment giant Vinatex’s vice general director Pham Nguyen Hanh also said that Vinatex wanted to find three foreign strategic partners, including a financial investor and two investors who were operating in the garment and textile field, as part of its equitisation process.

Vinatex’s valuation had been completed and its IPO was slated for this July, Hanh said.

Vietnam Securities Depository chairwoman Phuong Hoang Lan Huong said about 6,700 Japanese individual investors and 140 Japanese organisations had investment accounts in Vietnam’s securities market, accounting for a huge 43 per cent of individual foreign investors and 6 per cent of total institutional foreign investors on Vietnam’s stock market.

Minister of Finance Dinh Tien Dung said to lure foreign investment, in addition to the revision of its Enterprise Law, Vietnam would increase foreign investor ownership caps in joint stock banks, while reducing the state’s ownership stake in state-run groups and corporations to a maximum 65 per cent.

The Vietnamese government was now focused on accelerating SOE equitisation to attract more private investment. Some 432 SOEs would be equitised during 2014-2015, he said.