investment

Singapore and Vietnam are among top places for business expansion in Southeast Asia: UOB survey

 

Source :  Vnexpress, Ha Phuong   October 25, 2016 

Taking into account the main requirements by Asian enterprises:

main requirements

 

 

Vietnam only comes after Singapore in terms of attractiveness.

In the Southeast Asia region, Singapore tops the list of most favorable expansion destinations for Asian companies, with 32 percent of respondents saying they will invest more, followed by Vietnam, according to a recent survey by United Overseas Bank.

Approximately one in four companies will consider Vietnam because of the country’s stable political setting as well as the favorable economic conditions of low inflation and accommodative monetary policy.

Vietnam’s young and active workforce adds value to its attractiveness as an expansion destination. When it comes to labor cost, no country in the region except Myanmar can beat Vietnam.

Vietnam has become a magnet for investment even for investors from Southeast Asia. Malaysian, Thai and Singaporean companies are the keenest on Vietnam, with 38 percent, 35 percent and 29 percent respectively planning to pour more money in the next three to five years.

 

country rank

In the first nine months, the country has attracted $16.43 billion foreign investment, latest data from the government shows.

However, according to the survey, fewer firms are operating in Vietnam than originally anticipated in 2014. Meanwhile, in Malaysia and Singapore the number of running enterprises has exceeded the expectations.

There remain some obstacles affecting businesses in Vietnam such as corruption, red tape and the lack of a long-term strategy.

Asia’s rising importance continues unabated in the global economy. The region’s share of global economy has jumped from 18 percent in 1980 to 31 percent in 2015, and is forecast to reach 45 percent by 2030.

A total of 2,500 business leaders and key financial decision makers of Asian enterprises based in six regional countries and territories -- China, Hong Kong, Indonesia, Malaysia, Singapore and Thailand -- participated in the survey.

Vntrip.vn, Vietnam hotel booking startup raises $3mln in funding

 

Thanh Nien News, July 11, 2016 

 

vntrip

 

Vietnamese hotel booking startup Vntrip.vn has secured US$3 million in the first round of funding from Singapore-based private equity firm F&H Fund Management Pte Ltd.

With the funding, Vntrip is now valued at nearly VND300 billion ($13.2 million), according to news website VnExpress.

Le Dac Lam, its founder, was quoted as saying that the money would allow the company to improve and promote its business.

Founded in 2014, the website is a partner of Booking.com and provides booking services at more than 6,000 hotels in Vietnam and nearly 900,000 around the world. Its mobile application is now available.

F&H, founded by John Wu, former chief technology officer of Chinese e-commerce giant Alibaba, mainly invests in Asian startups in their early stages.

 

MnA2

 

Mekong Capital invests $6.9m in restaurant chain Wrap & Roll

 

Vietnamnews, July 14, 2016

 

HCM CITY – Mekong Capital yesterday announced that its Mekong Enterprise Fund III Ltd has invested US$6.9 million in restaurant chain Wrap & Roll.

 

wrapnroll

This is the first investment by the fund.

Established in 2006 by two entrepreneurial friends in their early 30’s, Wrap & Roll Joint Stock Company is now recognised as a pioneering food chain in Việt Nam with 11 restaurants in Hà Nội and HCM City and four franchise outlets in Singapore.

This year it plans to launch a new concept restaurant chain to address a different market segment.

Chad Ovel, a partner at Mekong Capital, said: “The company has built it with the application of best practices and systematic processes seen in large international restaurant chains, which provide a foundation for the company to continue to open new restaurants at a rapid rate.”

Mekong Capital not only sinks money into companies but also supports them with strategic consultancy in many areas like human resources, restructuring, management practices and corporate finance.

The $112-million Mekong Enterprise Fund III, launched last month, is a private-equity fund focusing on consumer-driven businesses in Việt Nam such as retail, restaurants, consumer products, and consumer services.

Vietnam 2035: A growing global middle class from 11% of the 90 million population market in 2015 to more than 50% in 2035

 

middle class

 

With Vietnam’s aspirations to be a modern and industrial nation moving toward becoming a prosperous, creative, equitable, and democratic society, five specific quantitative criteria were set forth in the joint Vietnam – World Bank report “Vietnam 2035” in relation to that objective:

§ A GDP per capita of at least $18,000 (in 2011 PPP) with a growth rate of 6% year
§ An urbanization of the Vietnamese population > 50%
§ A share of industry and services in GDP at more than 90% and in employment at more than 70%.
§ A private-sector share in GDP of at least 80%.
§ A score of at least 0.70 on the UN’s Human Development Index.

Such a realization which will not be straighforward, will require i) a strong-willed economic government with enhanced capacity and clear accountability by the State and ii) an acceleration of the needed transformations particularly in the building of a competitive and leading private sector and in the acquisition and transfer of technological and innovative capacity.

Vietnam however is well placed for the challenge:

§ with its political stability and the higher integration into world trade
§ having achieved a GDP per capita fastest growth rate (behind China only) over 1991-2014 . Continuing with the high growth pace to 2035 and so for more than a 50 year period, will create conditions for the country to reach the high come rank and avoid the risk of middle income trap,
§ with a large domestic market of 90 millions people, of which more than half is global middle class (note).

and so Vietnam is and should be clearly a country of first choice for your now and long term investments

Note:
Global middle class consumer is defined as consumer with a daily consumption of $15 a day or more in 2011 purchasing power parity (PPP) terms.

It is time for foreign SMEs to consider investments in Vietnam

 

stock

 

This is a right timing for foreign companies, particularly small and medium enterprises (SME) to consider an investment in Vietnam either to develop production capacity, build partnership or take part of the 90 million people domestic market. Effectively, with the lifting of most restrictions on foreign ownership of public/listed companies starting from September 2015 except in banking, securities and insurance industries, Vietnam is now a particularly attractive destination for foreign SMEs to invest in:

- Foreign companies may buy shares or take equity control of public or private companies without any restrictions except in some specific sectors. The sectors that are open to foreign investment without limi include real estate and providing services in tourism, entertainment, computing, research and development, information, leasing, transportation, construction, healthcare and trading (Update in December 2015 based on the government website dautunuocngoai.gov ).

- The country’s growth continue at high rate, about 6.5% in 2015, in a context of low inflation and further integration of Vietnam economy in the world trade through the set-up of Asean Economic Community end 2015, the coming signature of major free trade agreements with Europe (Vietnam-EU FTA) and with the 12 Pacific Rim countries (TPP).

- Vietnam's stronghold as a world manufacturing hub exploiting its key advantages (young, educated and technophile workforce, strategic location at the center of Asia manufacturing eco-system and particularly close to China, low total labor costs, welfare included (about 47% of China and 50% of Thailand) (1)

- The current relatively low average PER (about 12.4 times for HCM-Vietnam vs 19.8 times for Thailand and 21.9 for Philippines (see graph above and note 2), noting the good performance of Vietnam’s VN Index which tops in 2015 the MSCI South East Asia Index (+15% vs -12%) (3). Vietnam eyes by the way for a possible upgrade by Morgan Stanley from Frontier to Emerging market now most of the caps on stocks’ foreign ownership is being lifted.

- Vietnam’s government commits to improving the business climate and the ease of doing business in the country (ranked 78th by World Bank in June 2014 ) with the target to reach the average level of Asean-4 in 2016 : Singapore - 1st in June 2014 ranking, Malaysia - 18th, Thailand - 26th, Philippines - 95th.

ATTP Capital is ready to accompany your company in this development strategy.

Notes:
(1) China Briefing - June 3, 2014
(2) Barry Weisblatt -VP Bank Securities- April 24, 2015
(3) Bloomberg - August 9, 2015

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