The recent report by Merrill Lynch, which said that Vietnam did not deserve to be an investment address, has not had any impacts on the expectations of US investors in Vietnam’s stocks.
The report appeared at a time when the market was down and thought might ‘pour cold water’ on investors. But it has turned out to have had no considerable impact on US investors. The portfolio investment from the US keeps rising with more and more well-known investment funds coming to Vietnam.
Most recently, Heartland Funds announced a plan to cooperate with Lexington Langha, Vikoa Investment Consultant to set up an investment fund in Vietnam with capital directly sourced from US companies (not through third countries).
According to James Kim, a founder of Lexington Langha, the fund has the initial capital of $50-100mil, but it may be expanded if there are enough good investment opportunities.
Heartland Funds is a well-known fund in the US. It has been recognised as the leading fund in the first quarter of 2007, and Heartland Funds plans to take full advantage of its fame to make investment in the stock, real estate and capital markets in Vietnam.
Mr James said that many American investors wanted to join Vietnam’s market and they were awaiting the opportunities to inject money in.
In early July, IDG Venture, which has US-sourced capital, announced its investment in two more projects, the Goldsun Focus Media and Vega Software. It is expected that from now until the end of 2007, IDJ Venture will announce its investment in six to eight more projects.
Dragon Capital, the most long-standing fund management company in Vietnam, which is now managing $600mil worth of capital in Vietnam, has 30% of capital contribution sourced from US investors.
Indochina Land, which manages the real estate projects of the leading investment group Indochina Capital, last month signed a memorandum of understanding with Hoang Quan Group, the leading real estate group in Vietnam.
Indochina Land Holdings and Indochina Land Holdings 2 are both developing projects on apartments, offices, hotels and resorts for selling on the domestic market.
Several days ago, at a ceremony releasing the report reviewing the 5 years of the Vietnam-US Bilateral Trade Agreement (BTA), experts from the project on supporting the implementation of BTA, Star, said that US investors held from 1/3 to 1/2 of total foreign portfolio investment in Vietnam.
James Riedel, senior advisor to Star project, also said that US investors were interested in Vietnam’s market very much, and the opening of the service market in Vietnam had impacted their decisions.
Mr Riedel said that it was quite a normal thing that the market went up and down. The most important thing is that Vietnam needs to have a good system which can absorb the huge capital from foreigners, while avoiding crises.
Analysts said that Vietnam now had all the necessary conditions to attract US investors. However, American investors still want to learn about Vietnam from other US investors. Lexington Langha is an example. While following legal procedures to set up a fund in Vietnam, Mr James is now trying to make contact with several foreign funds in Vietnam like Vina Capital, Indochina Capital and Mekong Capital to discuss issues relating to investment in Vietnam.
Source: VNE
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