Private equity investors still keen on Vietnam

Vietnam remains an attractive destination for private equity investors, even in the current “challenging” global economic environment, according to a survey by consulting firm Grant Thornton Vietnam.

The “Private Equity-Vietnam Investment Environment and Outlook Survey” of 169 domestic and foreign businesses with private equity investments in Vietnam found most respondents held favorable views about investing in Vietnam.

Of the investors that took part in the March survey, 67 percent said they considered Vietnam a more attractive investment destination than any other country. Only 20 percent of respondents said Vietnam was less attractive than other countries.

The responses could be “interpreted as a strong vote of confidence in the Vietnamese economy or a complete lack of confidence in the rest of the globe,” Grant Thornton said in its April report, the first of a two-part series on Vietnam’s private equity sector.

Of the survey respondents with investments in more than one country, 42 percent said they planned to increase their investment in Vietnam. Only 8 percent said they planned to reduce investment in Vietnam.

The survey found 37 percent of the surveyed businesses had a negative view of economic conditions in Vietnam over the next 12 months while 36 percent were positive. The remaining 27 percent held a neutral view.

“Imports are down year-on-year, which may be interpreted as a positive sign for the economy,” said Grant Thornton Vietnam Managing Partner Ken Atkinson. “However once you look at the import component of most goods that are manufactured for export a different view could easily be formed.”

Some manufacturing export sectors, particularly the textile and clothing sector, rely on imported components to make their products. So the drop in imports could simply reflect a slowdown in manufacturing.

Vietnam’s economy grew at 6.2 percent in 2008, slower than the 8.4 percent posted in 2007.

Grant Thornton Vietnam is a member of the Grant Thornton International Ltd, an organization of independently owned and managed accounting and consulting firms. It started operating in Vietnam in 1993.

Source: Tuoi Tre

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