Capital markets still have a lot of room for growth

(Baonghean) - As reported by Nghe An Newspaper, from July 1 to 6, the Vietnam - US Investment Promotion Conference took place in the world's largest financial center - New York City (USA). The presence of more than 160 international investors at the Investment Promotion Conference "My Vietnam - Your Investment Destination" shows the special interest of international investors in Vietnam - a friendly and potential market. At the same time, it also opens a new stage in promoting socio-economic development in Vietnam.

On this day 20 years ago, Vietnam and the United States announced the normalization of diplomatic relations, opening a new phase for cooperation and development between the two countries. Since then, the process of bilateral foreign exchange in various fields, especially in the financial field, has developed strongly and continuously in recent years. In 2013, during President Truong Tan Sang's state visit to the United States, the leaders of the two sides agreed to upgrade the bilateral relationship to a comprehensive partnership. This was an important continuation, deepening and expanding relations on the basis of existing cooperation results between the two countries.

In the capital market, many large US financial corporations have been present in Vietnam. The total number of US investors recorded to date is 995 investors (of which 565 are institutional investors and 430 are individual investors), accounting for a relatively large proportion of the total number of foreign investors who have been granted transaction codes. In terms of volume, US investors currently hold more than 5 million bonds, more than 8,500 fund certificates and more than 1 billion shares with a total value of more than 12 trillion VND on the Vietnamese stock market.

Hoang Quan Real Estate Company (Ho Chi Minh City) signed an economic contract worth 20 million USD right at the Vietnam - US Investment Promotion Conference.

The above facts and figures show that US investors have paid great attention, contributed and played a very important role in Vietnam's economy and finance. The Vietnamese government also recognizes and highly appreciates the role and presence of US financial corporations and investors in Vietnam. However, the current US indirect investment in Vietnam is still quite modest compared to the potential of US investors and the ability to absorb investment capital of the Vietnamese market. Thus, the capital market segment still has a lot of room for cooperation between the two countries and a lot of potential for US investors.

With only 729 investment projects in Vietnam, the total investment capital is about 11 billion USD, which are impressive figures in the reality of foreign investment in Vietnam. However, compared to the inherent potential, these figures do not fully reflect the potential for cooperation and trade investment between the two countries, which are increasingly strengthening comprehensive cooperation in accordance with the direction of the two countries' senior leaders. In particular, indirect investment capital is still very limited and needs to be unblocked at the government level.

According to Finance Minister Dinh Tien Dung, the current indirect investment of the United States in Vietnam is still quite modest compared to the potential of US investors as well as the ability to absorb investment capital of the Vietnamese market. This shows that the capital market segment still has a lot of room for cooperation between the two countries and a lot of potential for US investors. With a growth rate among the top 3 countries in Asia in the past 10 years (6.4%/year), the determination to develop the economy according to the market mechanism, at the same time moving towards a modern government through strong reform of administrative procedures, application of information technology in management and operation and commitment to promote international integration have helped Vietnam sign many free trade agreements (FTAs) with many large countries and regions such as the United States, EU, Japan, Korea and the upcoming Trans-Pacific Partnership (TPP) Agreement.. has opened up great opportunities for the Vietnamese economy and investors interested in Vietnam.

Standing in front of more than 160 US investors, US billionaire Wilbur L. Ross with assets of over 3 billion dollars, ranked 200th in the US, 600th globally, said that in his view, Vietnam is the safest country in the world, has and will continue to grow strongly and Vietnam is an interesting destination for investment capital from the US. Vietnam is in a period of strong transition in the ownership of state-owned enterprises between the Government and private investors. This is a rare and exciting opportunity for those who know how to seize it" - billionaire Wilbur said.

Welcoming investment capital from the US

The conference titled “My Vietnam – Your investment Destination” held in New York conveyed the message of a dynamic and innovative economy, eager and ready to welcome foreign capital flows, especially capital flows from the US for investment. In particular, the important “gift” that the Vietnamese Ministry of Finance brought to this conference was that the Vietnamese Government has decided to loosen the “room” for financial investment in the stock market and participate more deeply in the equitization process of state-owned enterprises. These are also the two specific contents that American investors are most interested in at the conference. Just 3 days before the Investment Promotion Conference in the US, the Government issued Decree No. 60/2015/ND-CP, which includes increasing the foreign ownership ratio in public companies, except for restricted areas, conditional business, foreign investors are allowed to own without restrictions according to WTO commitments.

According to Chairman of the State Securities Commission Vu Bang, this development shows that on the one hand, the Vietnamese Government highly appreciates US investors, on the other hand, it has demonstrated Vietnam's strong determination in innovation and international integration, including strongly welcoming foreign investment capital into Vietnam from this policy. In addition to room expansion, one of the requirements for a "primitive" market like Vietnam to upgrade to an emerging market is the convenience in accessing the market for foreign investors. To help investors access the market more easily, such as procedures for opening trading accounts, setting up derivative instruments..., the State Securities Commission also offers other solutions such as issuing a circular amending Circular 213/2012/TT-BTC guiding the activities of foreign investors on the stock market. Accordingly, administrative procedures will be reduced, and Circular 74/2012/TT-BTC will be revised to guide the removal of some obstacles for foreign investors when participating in the stock market, aiming to allow foreign investors to buy and sell the same type of securities on the same trading day.

In addition, the Ministry of Finance and the State Securities Commission have reviewed tax, fee and charge policies to encourage and attract domestic and foreign investors, such as pension fund products; reorganize markets (large company stock trading market; small and medium company stock trading market; upgrading the Upcom market for unlisted public companies) - Chairman Vu Bang said.

Speed ​​up the processCPH, welcoming investment capital

Regarding specific opportunities from the equitization process, divestment of state capital and restructuring of enterprises in Vietnam, sharing with US investors, SCIC General Director Lai Van Dao said that SCIC currently has nearly 300 enterprises that need to divest state capital, along with that the Prime Minister has just handed over 20 corporations and general companies to SCIC to manage state capital, including large corporations such as Vinatex, which will also be strongly restructured and divested by SCIC. "With the decision to open room up to 100% in Decree 60 that the Government has just issued, I really hope that US investors will be interested in buying back state capital in enterprises that SCIC is managing capital, and at the same time, US investors can join SCIC in other investment projects in Vietnam - General Director Lai Van Dao said.

For US investors, there are currently some opportunities worth considering, such as SCIC's desire to divest from Vietnam Construction Corporation (Vinaconex). This is the largest corporation in Vietnam in the construction sector, with an expected capital sale of over VND3,000 billion. Along with the room expansion policy, SCIC will report to the Prime Minister on the sale of a large amount of State capital in many large corporations and groups. When the Prime Minister gives permission, we will continue to inform US investors to attract the interest of capital flows here - General Director Lai Van Dao affirmed.

Also sharing with the American investors, General Director of Vietnam National Coal and Mineral Industries Group (Vinacomin) Dang Thanh Hai said that Vinacomin has a fairly large scale, only behind the Oil and Gas Group and the Electricity Group. Vinacomin's equity capital is about 2 billion USD, worthy of being one of the attractive investment locations - General Director Dang Thanh Hai said.

Openness, sincerity, determination and receptiveness are important moves of the Vietnamese Government to American investors at the conference. It is known that during the investment promotion period at the conference, many contracts were signed and many memorandums of understanding were established between Vietnamese enterprises and American investors.

Red River