Monday, January 20,2020 - 19:20 GMT+7  Việt Nam EngLish 

Vietnam expected to be attractive investment destination in 2020 

 Wednesday, January 15,2020

AsemconnectVietnam - According to a Japanese survey, Vietnam is expected to be the most promising Asian investment destination in 2020.

Vietnam has been tapped by Japanese firms as the most promising place in Asia to invest in 2020, with India and Southeast Asian countries dominating other top spots, according to Kyodo News.
In the survey, conducted online from November to December 2019 by NNA Japan Co., a Kyodo News group company, Vietnam received 42.1 percent of the 820 valid responses, based on factors such as its potential as a growing market and large supply of skilled, low-cost labor.

India was second at 12.2 percent, with expectations for its growing market and its potential as a doorway to the Middle East and Africa among the reasons cited.
Myanmar jumped three spots from the previous year to third place at 11.6 percent, while Indonesia was fourth at 6.6 percent.
China, which appears to have lost its appeal somewhat as an investment location due to concerns about its trade war with the United States and rising labor costs, ranked fifth at 5.1 percent.

Vietnamese stock market attractive for foreign investors
Foreign investors have poured around 36.4 billion USD into the Vietnamese stock market by the end of 2019, a rise of 11.6 percent from a year earlier, according to the State Securities Commission (SSC).
Foreign investors have poured around 36.4 billion USD into the Vietnamese stock market by the end of 2019, a rise of 11.6 percent from a year earlier, according to the State Securities Commission (SSC).
During the year, they net bought over 7.51 trillion VND (323 million USD) worth of stocks and fund certificates, and more than 13.73 trillion VND (591.5 million USD) worth of bonds.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) finished 2019 at 960.99 points, up 7.7 percent from the previous year, the highest growth recorded in the Southeast Asian region.
With 1,622 listed shares and fund certificates on HoSE and the Hanoi Stock Exchange, the scale of the stock market reached nearly 1,402 trillion VND (60.36 billion USD), picking up 16 percent as compared to the end of 2018.

The stock market capitalisation increased 10.7 percent against 2018 to reach over 4,384 trillion VND (188.73 billion USD). The value was equivalent to 79.2 percent of the country’s gross domestic product (GDP) in 2018, and 72.6 percent of the GDP in 2019.
Brokerages expect the stock market will lure more foreign capital in 2020.

Foreign trading activities are forecast to increase this year thanks to many supporting factors, especially exchange-traded funds (ETFs), according to Viet Dragon Securities Company (VDSC).
In the past two years, the E1VFVN30 ETF and VNM US ETF were the two main capital-attracting ETFs of the Vietnam stock market. It is likely that E1VFVN30 will continue to attract cash flow from its two key investors, Thailand and the Republic of Korea, because the interest rates in these two countries are at low levels after the two local central banks made rate cuts last year, VDSC said.

The HOSE introduce new indices that contain foreign-ownership-capped shares in November last year, including VNDiamond, VNFin Select and VNFin Lead. According to Saigon Securities Company, many large fund management organisations such as SSIAM, VFM and VinaCapital all plan to launch ETFs based on new indexes implemented by HOSE.
The stock market is forecast to boom in the near future as foreigners are now able to invest more in their preferred stocks, thus luring foreign capital inflows into the Vietnamese market.

SSI Fund Management Company (SSIAM) is completing procedures to launch SSIAM VNFin Lead ETF, simulating the movement of financial stocks. VietFund Management (VFM) is also preparing for the launch of its two new ETFs based on the VNDiamond index.
Market experts also forecast that foreign capital inflows could improve in 2020 thanks to a number of external factors, such as the cooling of US-China trade tensions and the divestment and equitisation process of State-owned enterprises in 2020.

FDI inflows poured into textile and fiber projects
The first 11 months of 2019 saw a large amount of capital injected into various textile, dyeing, and fiber projects across the nation, according to information released by the Vietnam Textile and Apparel Association (Vitas).
Throughout the reviewed period, the total foreign direct investment (FDI) being pumped into the textile and garment industry reached US$1.546 billion across 184 projects.
Hong Kong led the way in terms of FDI investment in the country’s textile and apparel industry with US$447 million, followed by Singapore (US$370 million), China (US$270 million), the Republic of Korea (US$165 million), and the Seychelles (US$103 million).

In addition to these nations, Vietnam’s textile and apparel industry also enjoyed US$61 million of total registered capital from Japanese investors, the United States with US$19 million, Taiwan with US$15 million, with a further US$100 million coming from other sources.
In terms of the localities receiving the largest capital in the textile and garment sector, Tay Ninh province tops the list with 16 projects capitalized at US$464 million. This is followed by Quang Nam that has 10 projects valued at US$107 million, Nghe An with three projects worth a total of US$210 million, and Thua Thien Hue with two projects worth US$213 million.

FDI inflows being put into the textile and apparel industry throughout last year saw surges in capital turn into various material projects.
This includes 90 textile projects worth US$1.245 billion, 24 dyeing projects valued at US$673.3 million, 109 garment projects with US$587.2 million of capital, 45 fiber projects with US$640.4 million, and three fiber production projects with a total registered capital of US$1.3 million.
CK
Source: VITIC/Vietnamplus.vn/VoV

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