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Vietnam attracts investors in the face of economic uncertainty
Vietnam attracts investors in the face of economic uncertainty
19/12/19
Despite the slowdown in global deal-making due to ongoing worldwide economic uncertainty, Vietnam remains active in M&A in 2020, according to a new report by Baker McKenzie. |
| Landmark 81 in HCM City, the highest building in Vietnam__Photo courtesy of Vingroup |
For Vietnam, the forecast expects GDP growth may ease over the next 18 months, due to export growth trends declining amid lower Chinese import demand and increased global protectionism. Currently, Vietnam’s average annual GDP growth of 6.2 percent is higher than the global average of 2.8 percent.
Baker McKenzie expects cross-border acquisitions to dominate M&A deals in the coming years, as the country’s solid social economic fundamentals continue to attract overseas investors. “Vietnam remains active in M&A right now, due to positive market factors and confidence that help create business opportunities, as well as multilateral agreements that continue to prompt regulatory reform,” said Seck Yee Chung, who heads Baker McKenzie’s M&A practice in Vietnam.
Vietnam, Thailand and Indonesia were identified in the report as Asian countries that saw strong inbound activity in 2019. This year’s largest cross-border signed inbound deal in the country was the Republic of Korea's chips-to-energy conglomerate SK Group's USD-1-billion investment in Vingroup - Vietnam’s largest firm.
This was followed shortly by RoK-headquartered Hana Bank’s purchase of a 15 percent stake in the Bank for Investment and Development of Vietnam (BIDV) worth USD 850 million. The RoK is the largest source of foreign direct investment in Vietnam, as the latter has become a production base for major Korean multinationals such as Samsung and LG.
Despite continued interest from investors, Vietnam may experience a decline in M&A, as total transactions will dip from 2.6 billion USD in 2019 to USD 1.7 billion in 2020, a 35 percent decrease. In IPOs, the report did not post any estimates for 2019-2020.
Looking ahead, the report predicts that activity will pick up again post-2020, as Vietnam remains an attractive market.
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All comments [ 20 ]
Vietnam still a magnet for foreign investors amid global economic uncertainty
Vietnam will continue to attract foreign investors next year despite a slowdown in global dealmaking, given the ongoing global economic volatility and the risk of a global recession
the country’s solid socioeconomic fundamentals continue to attract overseas investors.
Vietnam remains active due to positive market factors and confidence that help create business opportunities as well as multilateral agreements that continue to prompt regulatory reform
The country was considered to have strong inbound activity this year.
the country will pick up again after 2020 as it remains an attractive market.
Attracting foreign direct investment (FDI) has always been a key part of Vietnam’s external economic affairs. Vietnam already has many comparative advantages and a strong investment climate, but we are working hard to become even more appealing to foreign investors.
We are doing so by vigorously renovating the business and investment climate – essential to restructuring the economy and raising national competitiveness.
Vietnam has been securing socio-political stability, and is known to be one of the most dynamic economies.
Vietnam is now in a period of golden population structure. It also has a favourable geographical location right at the heart of East Asia – home to a number of large and vibrant economies.
The government has been working hard on restructuring the economy and its model for growth, as well as enhancing national competitiveness.
To add new chapters to this success story, the Vietnamese government is continuing to revitalize its business and investment climate.
One way it is doing this is its work on three “strategic breakthroughs”: putting in place market economy institutions and a legal framework; building an advanced and integrated infrastructure, particularly transport; and developing a quality workforce. These should all be completed by 2020.
The government remains determined to fulfil its treaty obligations and promote the negotiation and conclusion of a new generation of free trade agreements.
the government is committed to ensuring a stable socio-political environment, protecting the legitimate rights and interests of investors, and creating an enabling environment for FDI enterprises in the country.
In the medium and long term, Vietnam will continue in its efforts to attract and efficiently use FDI inflows to advance socio-economic development.
The country will target “high quality” FDI inflows, focusing on FDI projects that use advanced and environmentally friendly technologies, and use natural resources in a sustainable way.
International forecasts suggest that as the world economy recovers, FDI flows are returning to dynamic economies.
Given the positive prospects for both global and regional economies, we are confident Vietnam will continue to find success in this area.
Vietnam is really a reliable investment destination
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