Viet Nam draws interest from private equity

December 29, 2014 | 08:44

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Private equity investors are paying more attention to the Vietnamese market, readying additional resources in expectation of better long-term results, according to the Grant Thornton global private equity report for 2014 to 2015.

Retail is one of the most attractive sectors for private equity investment in Viet Nam. Investors pay much attention to the Vietnamese market and expect for better long-term results. - Photo vtv.vn

The report cited the 12th bi-annual survey conducted in the fourth quarter of 2014, with participation from decision-makers and investors working in private equity inside and outside Viet Nam.

In the survey, 72 per cent of voters responded with positive sentiments about the economy – the highest rate in two years.

Respondents intended to maintain or even increase investment fund allocation to Viet Nam in the next 12 months, with education, real estate, food and beverage, and retail seen as the most attractive sectors for investment.

While the role of market growth as a driver of value growth increased from 35 per cent to 43 per cent among respondents, performance improvement decreased from 49 per cent to 35 per cent, reflecting current market conditions.

When considering investing in a private Vietnamese company, transparency in business activities was considered the most important factor – as it was during the last survey – with 21 per cent of respondents choosing it.

Twenty per cent of respondents said they were most concerned about corporate governance in Viet Nam, and about 41 per cent believed the cost of debt will decrease in the next year.

Nevertheless, the economy is still facing many challenges, including slow reforms in the public sector, inadequate infrastructure, difficulties in obtaining debt financing, corruption, and complications with red tape and legislation.

About 5 per cent of respondents no longer see the country as a potential destination – compared with zero in the last survey.

According to the ASEAN Business Outlook Survey conducted by the American Chamber of Commerce in Singapore, the most attractive country for new business expansion is Indonesia, followed by Viet Nam and Myanmar.

VNS

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