VietNamNet Bridge – Foreign direct investment (FDI) keeps flowing to Vietnam, but investors are increasingly pouring more capital through M&As.
According to the General Statistics Office (GSO), FDI capital as of October 20 had reached $15.1 billion, an increase of 6.3 percent over the same period last year.
Also in the last 10 months, 5,342 deals with foreign investors making capital contributions and buying into Vietnamese enterprises, worth $6.3 billion, have been reported, an increase of 35.8 percent against the same period last year.
The processing and manufacturing industry attracted the most FDI with registered capital of $6.85 billion, accounting for 45.6 percent of total FDI capital. Meanwhile, the real estate sector attracted $5.1 billion, and other industries, $3 billion, or 20.4 percent.
The National Finance Supervisory Council reported that investment through M&A is a growing tendency among foreign investors because it has allowed them to shorten the time for procedures and grab opportunities brought by M&A.
Four countries are leading in Vietnam’s M&A market: Singapore, Thailand, South Korea and Japan.
In the real estate sector, there were a few huge deals, including the Japanese Sumitomo Corporation to develop a 272 hectare smart city capitalized at $4.1 billion. In addition, the deal of GIC pouring $1.3 billion into Vinhomes also caught attention from the public.
The US-based investment fund Warburg Pincus has teamed up with Becamex IDC to set up a joint venture with capital of $200 million. And Keppel Land from Singapore acquired the remaining 16 percent of Sowatco shares in the Saigon Centre project.
Meanwhile, Hong KongLand has become the strategic partner of CII, a well known HCMC-based infrastructure developer, and Alpha King has taken over Golden Hill Complex.
Analysts noted that foreign investors are seeking more land and Vietnamese partners to develop projects in different market segments, from industrial real estate to apartments and resorts.
Most recently, 14 multinational groups from Hong Kong, the US, Ireland, Germany and Thailand came to Vietnam to learn about the investment environment in Dong Nai province.
Vietnam, with a young population and growing middle class, is increasingly attractive to foreign investors.
MAF 2018 Report showed that more than 4,000 M&A deals were made in the last 10 years. The M&A market has been expanding with market scale in 2017 larger by 10 times than 2009.
The M&A value in 2018 is predicted to reach $6.9 billion with capital pouring into consumer manufacturing and real estate sectors.
A PwC survey on the threshold of the 26th APEC summit showed that 51 percent of business leaders in APEC plan to increase investments. The countries that are attracting the most investment are Vietnam, China, the US, Australia and Thailand.