VietNamNet Bridge - A series of large state-owned conglomerates are being equitized, and the state is moving ahead with the plan to divest its shares in profitable enterprises. Many family-run businesses are calling for investment. These trends point to Vietnam becoming a more attractive destination for financial investors.

As for the investment strategy of VOF, a fund managed by VinaCapital, Andy Ho, VOF CEO, said in the next six to eight months, VOF would pay more attention to family-run businesses and equitized state-owned enterprises.

Of the VOF investment portfolio (listed shares, OTC shares, real estate and capital market), over the last three years, the investments in private equities bring the highest profits (25.9 percent), followed by listed shares (15.7 percent) and OTC (12.7 percent).

Investors have every reason to believe they would have many opportunities in the next 12-14 months.

First, after the government promulgated Decree 60 allowing foreign investors to hold up to 100 percent of stakes in Vietnamese enterprises, nine companies, including Vinamilk, have announced the lifting of the ceiling foreign ownership ratio to 100 percent.

Second, the shares the state plans to put on sale are all good commodities – Vinamilk, Binh Minh Plastics, FPT, Tien Phong Plastics, Sabeco, MobiFone and Ben Thanh Group.

In principle, the lack of transparency is a problem of unlisted family-run companies. However, the risk in investments in these businesses is proportional to the profits investors can expect.

Nguyen Thi Thu, CEO of VVF (VCG Partners Vietnam Fund) belonging to VinaCapital, said both the Hanoi and HCM City bourses have market capitalization value of $69.5 billion in total. If the state-owned enterprises become equitized and list their shares, the additional value could be up to $10 billion.

Private sector

Analysts commented that foreign funds, both newly established or operational for a long time, would prioritize to invest in unlisted private enterprises, with the focus on family-run businesses.

In principle, the lack of transparency is a problem of unlisted family-run companies. However, the risk in investments in these businesses is proportional to the profits investors can expect.

The information about the IPOs of private enterprises has caught investors’ special attention. In an interview with Nikkei Asian Review, a representative of Vietjet Air said the private air carrier plans to have an IPO in 2016.

Established in 2007 and providing the first flight in 2011, Vietjet Air as of October 2016 had carried 30 million passengers. The number of passengers is expected to reach 15 million by the end of the year, an increase of 60 percent over last year, while turnover is predicted to be twice as much as VND11 trillion in 2015.

Novaland, a real estate developer, is also an attractive name for investors. Phan Le Hoa, Novaland’s Capital Market and Investment Relation director, said by the time of listing shares, slated for the year end, the company would complete the plan on mobilizing $200 million worth of capital from foreign financiers.


Thanh Mai