Foreign investors remain upbeat about Vietnamese market

Despite the recent resurgence of the COVID-19 pandemic, the majority of foreign businesses remain optimistic for 2021 with some expansion plans.

FDI, investment, eurocham, FDI, investment, EuroCham
Foreign investors are seeing great prospects in Vietnam

Foreign investor Foxconn Singapore Pte., Ltd. has recently decided to pour an additional $23 million into the Fukang Technology Factory in the northern province of Bac Ninh, bringing the total investment capital of this project to $293 million. The project was granted investment licenses in mid-January.

Foxconn is recruiting 1,000 electronic assembly workers for its factories in Vietnam. Workers will work at the industrial parks (IP) of Dinh Tram, Quang Chau, and Van Trung in Bac Giang and Que Vo IP in Bac Ninh. Besides, the company is recruiting 14 supplier quality engineers.

According to Zhuo Xianhong, general director of Foxconn in Vietnam, the Taiwanese electronics contract manufacturer has invested $1.5 billion in Vietnam, including $900 million in the northern province of Bac Giang alone, creating jobs for over 35,000 local workers. It aims to pour an additional $700 million and create 10,000 jobs in the country this year.

The growing investment and recruitment activities are part of Foxconn’s plan to ramp up production in Vietnam. It also highlights the attractiveness of the local market to foreign investors despite the ongoing COVID-19 pandemic.

Uyen Ho, public affairs director of Intel Products Vietnam said that global companies have been present in Vietnam already. They will continue to consider Vietnam as a destination for expanding their businesses. The trend has been further reinforced by the government’s management of the COVID-19 pandemic.

She noted that big US companies, which already set up operations in Vietnam, are considering to expand business in the country. In January, Intel has announced to expand its investment by $475 million in Intel Products Vietnam (IPV). This takes Intel’s total investment in its Vietnam facility to $1.5 billion. Other high-tech companies are considering to invest in Vietnam following the examples of Intel and Samsung.

According to data by the Foreign Investment Agency under the Ministry of Planning and Investment, the foreign direct investment (FDI) capital into Vietnam reached $5.46 billion in January and February, equaling 84.4 per cent of the corresponding period from last year. Around 126 foreign projects were granted investment licences with a total registered capital of $3.31 billion, down 33.9 per cent on-year. Meanwhile, 115 existing projects adjusted their investment capital with a total additional sum of $1.61 billion, 2.5 times higher than the period last year.

Indeed, Vietnam has attracted some mega-projects in the first two months of 2021. The joint venture between Vietnam Trading Engineering Construction JSC (Vietracimex) and Marubeni Corporation from Japan officially received the investment registration certificate for the 1,050MW O Mon II thermal power plant with the preliminary capital of VND30.56 trillion ($1.33 billion).

LG Display Haiphong Co., Ltd. has been awarded the certificate to expand investment by $750 million. The LG project is located in Trang Due IP, Haiphong city. After the capital expansion, the project will have a total investment capital of $3.25 billion.

Other capital expansions were made by the Chinese radian tyre manufacturing project in Tay Ninh province which has added $312 million, Singapore’s Vietnam Kodi New Material Co., Ltd. adding $270 million (in Bac Giang); and China’s JA Solar PV Vietnam adding $210 million (in Bac Giang). 

FDI, investment, eurocham, FDI, investment, EuroCham
Vietnam is a magnet to foreign investors in the time of global health crisis

In the period, Japan is Vietnam’s largest foreign investor with a total investment capital of $1.64 billion, accounting for 30 per cent of the total. Singapore came second with $1.07 billion or 19.6 per cent while South Korea was third with $1.05 billion or 19.3 per cent, followed by mainland China, Hong Kong, and the US.

Commenting on the increasing Japanese investment, Hirai Shinji, chief representative of the Japan Trade Promotion Organization in Ho Chi Minh City, cited a recent survey of 905 Japanese companies about their business operation in Vietnam. Among them, 46.8 per cent of respondents or 400 Japanese companies have plans to increase its investment in the country in the next 1-2 years. They will focus investment on general products, high-value goods, sales, logistics, and research.

“Although the expansion plan is 17.1 per cent lower than last year, the figure remains high in the midst of the COVID-19 pandemic. Japanese companies are looking for new investment opportunities in line with the growing revenue in the local market (65.9 per cent), rising earnings from export (48.7 per cent) and Vietnam’s high economic growth and potential (44.1 per cent),” he said.

In addition, Japanese companies are also considering re-establishing some supply chains affected by the COVID-19 outbreak such as changing purchasing units or relocating manufacturing sites. Vietnam has begun to attract the attention of Japanese raw material suppliers and buyers.

“After changing purchasing units, around 18.8 per cent of surveyed respondents will choose Vietnamese suppliers, which is the highest rate in 20 countries in Asia. Meanwhile, approximately 18.1 per cent of Japanese firms will relocate manufacturing to Vietnam, which only trails behind Thailand with 20 per cent,” he added.

Similarly, European business leaders ended 2020 more optimistic about Vietnam’s trade and investment environment than at any point since the COVID-19 outbreak, according to the Business Climate Index (BCI) from the European Chamber of Commerce.

The BCI climbed 6 points in the fourth quarter of 2020 to reach 63.6 – ending 2020 on a high. In total, the index rose 37 points over the course of last year, after falling to a historic low in the first quarter with the initial outbreak of COVID-19. Since then, the BCI has maintained positive growth as Vietnam’s successful handling of the pandemic and implementation of the EU-Vietnam Free Trade Agreement (EVFTA) combined to improve confidence and boost business.

When asked about Vietnam’s economic prospects in the next quarter, 57 per cent of EuroCham members predicted “stabilisation and improvement” in the first three months of 2021. Compared to the 39 per cent in the third quarter of 2020, this is a rise in confidence of 18 percentage points.

Commenting on the BCI, EuroCham chairman Nicolas Audier said that, “Our latest BCI paints a positive picture of Vietnam’s business environment as we look ahead to 2021. The growth in confidence we have seen over the last 12 months is a testament to the government’s swift and effective handling of COVID-19, and creates a strong foundation for the next five years of Vietnam’s socio-economic growth.”

“Meanwhile, our members report a positive impact of the EVFTA since it entered into force six months ago. European business leaders are looking forward to the increased trade and investment that the agreement will bring, while also highlighting some of the issues which need to be addressed to ensure its smooth and successful implementation.”

Michael Kokalari, chief economist at VinaCapital stressed that the increase in investors’ confidence stems partly from the fact that the government has now repeatedly demonstrated its ability to handle COVID-19 without overly impacting the economy. This has also made consumers feel confident, so we expect the growth of Vietnam’s household consumption to rebound to around 8-9 per cent this year.

“Regarding the Vietnamese economy in 2021, we made a forecast at the end of last year that Vietnam’s GDP would grow by 6.5 per cent in 2021, and our forecast assumed that there would probably be some sporadic COVID-19 outbreaks this year – like the current one – but that such sporadic outbreaks would not overly impact the country’s economy this year,” he added.

 

By Thanh Van

News Related

OTHER NEWS

Online community takes on map mishap

UNIQLO has been focusing on sustainability in order to lure in new customers Immediately after calling for a fervent wave of boycott on social networks of Swedish fashion giant H&M, the Vietnamese online… Read more »

Expectations for Vietnam’s new path

Newly-elected Vietnamese leaders. Photo: VNA Ivo Sieber – Swiss Ambassador to Vietnam   Vietnam’s remarkable progress combined with Switzerland’s long-term engagement has resulted in a partnership that makes me proud to look back… Read more »

Mixed bag for first phase of CPTPP deal

After a slow start, the CPTPP is now hoped to benefit Vietnam more After two years of implementation, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has created some positive initial impacts,… Read more »

VinFast rumoured to be planning IPO in US

VinFast is working with advisers on the potential IPO in the US Newswire Bloomberg stated that local carmaker VinFast is working with advisers to carry out a potential offering that could take place… Read more »

Semiconductor crisis forces top-level action

Semiconductor crisis forces top-level action. Source: freepik.com The world’s semiconductor industry sales hit $40 billion for the month of January – a rise of 13.2 per cent on-year, revealed the Semiconductor Industry Association.… Read more »

Cross-border railway hopes remain stuck on the tracks

Cross-border railway hopes remain stuck on the tracks. Photo: freepik.com The blockage of the Suez Canal last month, the shortest shipping route between Europe and Asia, has once again urged Vietnamese agencies to… Read more »

E-motorbike startup Dat Bike wraps up $2.6 million funding led by Jungle Ventures

Dat Bike aims to conquer the 2-wheeler market of Southeast Asia The fresh funds will bankroll Dat Bike’s plans to scale its team, research and development, and customer-facing operations. These expansion plans come after… Read more »

MM Mega Market maintains position as two-way trade bridge between Vietnam and Thailand

Opening ceremony for the Songkran Festival, one of the activities to celebrate 45 years of Vietnam-Thailand diplomatic relations held recently by MM Mega Market Vietnam in Ho Chi Minh City Vietnam and Thailand… Read more »

FNF Lighthouse project connects four Vietnamese exporters with Europe

Enterprises are supported at the Lighthouse project “The Lighthouse project will strive to bring over 10 exporters of agricultural products from Vietnam to Poland within a year if nothing changes,” said Piotr Harasimowicz,… Read more »

Stocks of aviation industry have gone through the boom?

In addition to banking, securities and real estate stocks, the aviation industry group was also assessed to “sublimate” in the second quarter thanks to the controlled epidemic, Vietnam also began to study the… Read more »

Coming to IPO with valuation of $ 34 billion, Grab kicked off the ‘feast’ of Southeast Asian tech startups

Grab and Traveloka are preparing to go public in the coming months, kicking off the “reveal party” of Asian Internet companies. Bloomberg quoted a close source as saying that this week Grab will… Read more »

Finnish Fund increased its investment in HDBank

HDB is the bank share with the largest proportion in the portfolio In March, PYN Elite Fund made many major changes in its portfolio, including banking stock restructuring activities. Shares of VietinBank (HoSE:… Read more »

Securities judgment April 13: Testing benchmark of 1,250 points

Interlaced vibrations (Neutral) The VN-Index is forecasted to continue to rise and aim to challenge the resistance zone of 1,275-1,300 points in the short term. Market movements will have a strong differentiation between… Read more »

Dragon Capital buys 1.2 million more shares of steel giant Hoà Phát

HPG shares are being traded at VNĐ49,550 per share on the stock market, up 10 per cent since the end of March but almost flat in recent sessions. Photo Hoà Phát Group HÀ NỘI — Hanoi… Read more »

Touchstone Partners announces first close of inaugural fund for Vietnamese startups

Touchstone founders possess in-depth knowledge about startup and investment Touchstone is founded by Khanh Tran, former founding partner of VinaCapital Ventures – one of Vietnam’s leading investment management firms – and successful serial entrepreneur Tu… Read more »

H&M fighting to save fanbase after social media backlash

Fashion retailers like H&M have suffered from negative comments, photo Le Toan As a consequence of integrating the “nine-dash line” map into online shopping websites in the Chinese market, a great number of… Read more »

Wood exporters face array of obstructions

Wood exporters face array of obstructions, photo Le Toan Data from associations like VIFOREST, FPA Binh Dinh, HAWA, BIFA, and Forest Trends shows that Vietnam’s import value of timber and its products reached… Read more »

Many large stocks increased strongly, VN-Index increased nearly 10 points

11h07 The uptrend of VN-Index continued to widen, in which, VIC increased by 4.1% to 48,950 dong / share and was the key factor helping the trading on the market to be more… Read more »

Singapore's Draper Startup acquires Hatch Ventures Vietnam

Singapore’s Draper Startup has acquired Hatch Ventures Vietnam HATCH!, which offered training, business incubation, and investor matching, was founded in 2012 by US entrepreneur Aaron Everhart. HATCH! organised the HATCH! FAIR from 2012-2017,… Read more »

Foreign investors continuously hunted for STB shares

At the end of the session on April 9, the total volume of STB of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank, HoSE) reached 25 million shares, of which foreign investors net… Read more »

Schedule for closing dividend rights, bonus shares for the week of April 12 – April 16

11 companies closed dividend rights and bonus shares in the coming week. FPT Online pays the highest dividend at the rate of 200%. According to statistics, 11 companies announced the closing of dividend… Read more »

Recommended stocks April 12: PVS, ACV and DGW

VCSC: Recommended market relevance for PVS Viet Capital Securities Company (VCSC) said that Petrovietnam Technical Services Joint Stock Corporation (HNX: PVS) has just announced the AGM document with the goal of 2021 revenue… Read more »

Removing logistics barriers to unlock potential of Mekong Detla's agricultural exports

The workshop drew valuable feedback and ideas to remove the logistics challenges facing the Mekong Delta’s agricultural sector At the “Logistics leverage for the Mekong Delta agri-products” workshop held last week in the Mekong… Read more »

LG Electronics looking for buyer for smartphone plants

LG Electronics is looking to sell its smartphone plants. Source: Glassdoor After announcing to withdraw from the smartphone business, LG Electronics is closing down production plants in Haiphong (Vietnam), Taubate (Brazil), and Qingdao (China)… Read more »

Masan High-Tech Materials reports year full of advances

Masan High-Tech Materials reports year full of advances(source: masanresources.com) In his opening speech, Craig Richard Bradshaw, general director of Masan High-Tech Materials, shared: “In 2020, Masan High-Tech Materials completed the acquisition of H.C.… Read more »

Work on Quang Tri airport to begin in early September

Work will kick off on Quang Tri Airport in the central province of Quang Tri in September, according to local authorities. The construction is designed to have an investment of over VND8 trillion… Read more »

Huawei says HSBC agrees document access in Hong Kong court

Huawei says HSBC agrees document access in Hong Kong court (source: baodautu.vn) Chief financial officer Meng — whose father is the company’s founder and CEO Ren Zhengfei — has been in a two-year… Read more »

Dynamic duo team up in comprehensive collaboration

C.T Group and RSM Vietnam have signed an agreement to combine their internal strength and core values C.T Group, known as a youthful and dynamic company operating in various industries such as tourism,… Read more »

Brewing up change with modern strategy

During the most difficult period of 2020 that was plagued by COVID-19 and tough new local drink-driving rules, Neo Gim Siong Bennett, who is the general director of SABECO, kept the faith in… Read more »

Securities judgment April 12: There could be another derivative maturity week

April derivative maturity week (Neutral) Next week, the market is expected to continue moving in the direction of struggling with strong differentiation according to business results of each specific enterprise. VN-Index will continue… Read more »

Stock market from April 12-16: It is possible to regain a positive position

According to securities companies, cash flow has not shown signs of withdrawing from the market, is circulating among stock groups and helping to balance the market under short-term profit-taking pressure. (Source: kinhtechungkhoan.vn) The… Read more »

Foreign investors net buying of VND 2,400 billion in week of 5-9 / 4 due to sudden change in put-through transactions

Foreign investors on HoSE net sold 235 billion dong by matching method. VHM was bought the most by foreign investors with 2,320 billion dong, of which over 2,170 billion dong came from put-through… Read more »

Dragon Capital bought 1.2 million HPG shares

Dragon Capital group owns nearly 200 million HPG shares, equivalent to 9,900 billion dong. HPG shares closed on April 9 at the price of 49,550 dong / share, up 10% from the end… Read more »

Approving the policy of investment in infrastructure of Hoa Lu Industrial zone

Hoa Lu border-gate industrial park covers an area of ​​348.32 hectares in two communes Loc Tan, Loc Thanh (Loc Ninh district), with an investment of 1,119.29 billion dong, of which the investor’s capital… Read more »

Gender Lens Investing a treasure trove of economic momentum

If women’s economic empowerment is improved, Vietnam’s GDP gain $40 billion a year by 2025 At the event titled Gender Lens Investing in Practice – Driving Value for Investors in Vietnam, Australian Consul General… Read more »

First-quarter growth fairly impressive

  Pham The Anh- chief economist Institute for Economic and Policy Research Economic growth was below the expectations of Resolution 01, and it was not much higher than in the same period of… Read more »

Vietnam's beer production fell 14 per cent in 2020 

The VBA Congress discussed objectives for the next five years The Vietnam Beer Alcohol Beverage Association (VBA) on April 8 held the 2021-2025 Congress to review the 2020 performance and discuss new tasks… Read more »

PetroVietnam outperforms business targets in first quarter

PetroVietnam’s first-quarter online meeting connected different locations On April 7, 2021 PetroVietnam hosted a periodical online meeting with leaders of its member units to review production and business activities in March and the… Read more »

YSVN – Banking group can lead VN-Index towards region of 1,283 – 1,300 points in April

YSVN estimates that GDP in the second quarter will increase by 6.4% and for the whole year to increase by 6.57%. The VN-Index might continue its mid-term uptrend and move towards the zone… Read more »

Apple to pay $3.4-m over iPhone obsolescence in Chile

Apple to pay $3.4-m over iPhone obsolescence in Chile (Source: freepik.com) Apple is accused of having programmed a limited lifespan into some products to force users to replace their phones sooner than necessary,… Read more »

Long road ahead for buyout offer, Toshiba board chair warns

The logo of Japanese industrial group Toshiba is seen at the company’s headquarters in Tokyo on April 7, 2021.(Kazuhiro NOGI / AFP) CVC Capital Partners is reportedly considering a 30 percent premium over… Read more »

Robust growth trends projected for investment in healthcare

Robust growth trends projected for investment in healthcare. Source: freepik.com Kim Dental, Vietnam’s largest private dental care platform, has recently raised $24 million in a series B round. The investment was led by… Read more »

Data protection receives draft fillip

Minh Nguyen, senior associate of ACSV Legal The entry into force of the European Union’s General Data Protection Regulation (GDPR) in May 2018 was a wake-up call for companies in Vietnam which have… Read more »

Local mergers and acquisitions portray businesses’ confidence

Local mergers and acquisitions portray businesses’ confidence In January, seafood processing company Vinh Hoan Corporation scooped up 51.29 per cent stake in Sa Giang Import Export Corporation. The company spent nearly $15.2 million… Read more »

Growth indicators to ensure an optimistic scenario

Processing has been a key driver for strong recovery. Photo: Le Toan Deputy Minister of Planning and Investment Tran Quoc Phuong said, “The growth rate of the first quarter at 4.48 per cent… Read more »

Warrant market April 9, 2021: Continued adjustment?

The warrant market ended on April 8, 2021 with 49 stocks down, 11 stocks unchanged and 29 stocks increasing. Foreign investors turned to be net buyers again with a total net buying of… Read more »

25 occupations foreign investors do not have access to investment

Decree 31/2021 detailing and guiding a number of articles of the Investment Law has just been issued. In which, specifying a list of 25 occupations that foreign investors have not yet had access… Read more »

Market commentary on April 9: Cash flow remains in the market

Securities company Positive Neutral Negative AseanSC X BSC X BVSC  X MBS  X VDSC  X Shake can take place at high price zones (Asean Securities Company – AseanSC) The phenomenon of order congestion… Read more »

Many large-cap codes reversed, VN-Index dropped slightly

9:40 At the opening, VN-Index once increased by more than 4 points but then fell back. After 45 minutes of trading, the index officially reversed to decrease. Banking stocks were quite differentiated when… Read more »

Works on Hanoi-based Ecopark floating trade center to kick off in 2022

Work on a mega trade center on water is expected to begin in early next year in Ecopark, a housing development in the northern province of Hung Yen’s Van Giang district, with an… Read more »