Vietnam expects stronger foreign investment flow in CPTPP period

With CPTPP, Vietnam will have more opportunities to export farm produce

Can Van Luc, a finance expert, said that CPTPP will have a big impact on three business sectors in Vietnam, including trade, service and investment.

Japan, Australia and New Zealand have recently boosted investment in Vietnam, which is expected to increase in the time to come, especially from Australia and New Zealand. Regarding FPI, Luc said the stock market witnessed strong foreign cash flow in 2017 with foreign investors’ net purchases reaching $1.7 billion in the year.

This included $1 billion poured into stocks and $700 million into bonds, much higher than in 2016.

Luc said that FPI capital to Vietnam in 2018 would be increasing more sharply in 2018 thanks to the bright prospects of Vietnam’s macro-economy and the signing of CPTPP.

“I am sure the CPTPP will have positive impact on the market. However, it is difficult to quantify the amount of capital. I think the foreign investors’ net purchases will be $2.5-3 billion this year after reaching $1.7 billion last year,” Luc said.

The recently released report of the National Finance Supervisory Council (NFSC) showed that the Vietnamese stock market has recovered from the sharp fall in early February.

NFSC found that the net purchase of foreign investors since the beginning of the year reached $573 million ($542 million for stocks and $31 million for bonds). The net purchase volume in February was $151 million.

“In general, the FPI potential in 2018 are great thanks to good macroeconomic indicators, including the dong/dollar exchange rate, stable inflation rate and the predicted high GDP growth rate of 6.8 per cent in 2018. Of course, CPTPP also plays an important role,” the report said.

Local newspapers reported that South Korean enterprises have kicked off plans to expand investment in Vietnam in anticipation of South Korea’s possibility of joining CPTPP this year.

Lotte, for example, has announced a plan to scale up its business in Vietnam with a project on growing cocoa plants to export cocoa to South Korea and the project on building the EP factory in Dong Nai province to provide products to Samsung Vietnam.

It has kicked off the project on smart city in Thu Thiem urban area in Ho Chi Minh City and Lotte Mall Hanoi project. An analyst noted that projects announced by Lotte are in the fields of agriculture, retail, infrastructure and supporting industries, to which Vietnam encourages FDI.