For nearly two years, as global crisis shook financial markets, foreign investors were hardly seen on Vietnam’s stock markets. Now they are back: fund management companies are mobilizing capital abroad to invest in Vietnam.
More foreign funds forming
Vietnam Asset Management (VAM) on March 23 joined forces with Hong Leong Fund Management (Malaysia) to set up an open fund, its second, which will invest in Vietnam’s stocks.
General Director Nguyen Xuan Minh says that the new fund targets individual investors; they need only $300 to open an account. The fund aims to raise $31 million in startup capital, and it has already taken in 40 percent of that amount from Malaysian investors in its first week.
Chris Freund, Managing Partner of Mekong Capital, says that his company is raising funds from the US, European and Asian markets for a new fund which will invest in private companies in Vietnam. “MEF III, will raise $150 million to invest in companies which may get benefit from economic growth,” Freund said.
Questioned about the potential capital flow into Vietnam’s stock market, the expat businessman said that foreign investors have increased their interest in Vietnam again recently. “I just can say that foreign capital is flowing into Vietnam from different sources at this moment,” he said.
A domestic fund management company, MBCapital, also confirmed that it is meeting domestic and foreign investors to raise a new fund. Nguyen Hai Ha, the firm’s Investment Director, said that the closed fund is expected to amass capital of 300 billion dong, and to begin investing in May or June.
“We have contacted some big investors. In general, they still have a positive outlook about Vietnam over the long term,” Ha said
On the HCM City Stock Exchange, foreign investors were net purchasers of 2.056 trillion dong (nearly $110 million) in equities during the first quarter of 2010, an amount equal to 62 percent of total net purchases by foreigners in all of 2009.
Dragon targets education, healthcare and green energy sectors
Foreign investors have always been interested such as consumer goods and banking. Now it seems that some other fields have become attractive to them, including renewable energy, healthcare services and education.
By the end of May, Dragon Capital plans to launch a fund which will focus on the renewable power sector, electricity saving and sustainable development in April or May. Dominic Scriven, the fund manager’s General Director, told Thoi bao Kinh te Saigon that the new fund will include capital contributions by some governments.
“Investment in these fields requires a patient, long-term view. This is a new tendency in the world. Vietnam must be a part of the world, especially when it is facing environment problems,” he said.
Meanwhile, Mekong Capital’s MEF II Fund has agreed to invest $6 million in the Vietnam-Australia School, a semi-international secondary school in HCM City. The manager of the fund said he believes that the education sector will see robust growth in medium term.
“High and growing demand to study at VAS has impressed us. We will continue investing in the education sector if we can find suitable opportunities,” he said
Ha of MBCapital says his company, too, is now specially interested in education and healthcare sectors. “With our young population and increasingly high incomes, we believe that the demand for high quality education and healthcare services will be very high in Vietnam,” Ha said. A part of the new MBC fund’s assets will be invested in these sectors if he can find suitable opportunities.