Augmenting foreign indirect investment is being heralded as a reason behind the heat-up of Viet Nam's fledgling stock market, with a number of foreign capital funds eyeing freshly-equitised State-owned enterprises or private companies.
By late 2006, over 20 foreign capital funds with a combined investment of 3 billion US$ have operated in Viet Nam. Economists forecast foreign investment continues fluxing in amidst a prospect that more major SOEs will become joint-stock companies and list their shares on the stock market floor.
The forecast came true at the beginning of 2007 when Jaccar, a leading French capital fund, poured money into the Hoang Anh Gia Lai Joint-Stock Company and the Southeast Asian Aureos Fund invested in the Truong Thanh Wood Processing Company in the southern province of Binh Duong.
The inauguration of the Private Equity New Markets (PNEM) fund's office and the establishment of the Viet Nam Holding were remarkable events in Viet Nam. PNEM has registered investment of 80mio US$ and the Viet Nam Holding, 112mio US$.
Foreign direct investment also saw a huge surge in 2006 with a record investment of 10.2 billion US$ registered and 4.1 billion US$ disbursed. The trend maintains in 2007 as over 1.5 billion US$ was registered in the first two months, representing an increase of 27% year on year.
In addition, a number of major projects are awaiting approval, including a 1 billion US$ scheme, from the Gamuda group of Malaysia, to build hotels, conference centres, luxury apartment and office buildings.
Taiwanese Foxcon group has also applied for a 5 billion US$ project to build two technological meccas to produce high-grade electronic appliances.
2006 also saw 1.8 billion USD in official development assistance (ODA) disbursed against the original plan of 1.75 billion USD.
The success has led to a recent record ODA commitment of 4.45 billion US$. International donors also pledged to help Viet Nam increase its per-capita incomes to the average level by 2010 and virtually become industrialised by 2020.
Source: VNA
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