Vietnam’s economic stability amidst COVID attracts foreign investment

foreign investment Vietnam
The national flag of Vietnam on a large number of shipping containers. Image by Everyonephoto | Bigstockphoto

Thai banks are setting up shop in Vietnam, reflecting an ongoing trend where major Asian financial institutions and international companies are beginning to look further into the country for growth opportunities.

In a recent report, Aurojyoti Bose, Lead Analyst at GlobalData, said that the acquisition of Vietnam’s SHB Finance by Bank of Ayudhya Thailand would help the former gain a strong foothold in the Vietnamese consumer finance market, which has maintained double-digit growth in the last four years.

Another Thai bank, Kasikornbank Pcl, announced in February 2021 that it plans to open a branch in Vietnam.

“Vietnam remains a prolific market in the ASEAN region. It was the best performing Southeast Asian country in 2020 without a single quarter of contraction despite the COVID-19 pandemic. Moreover, Vietnam is a manageable risk nation ranked 65th out of 136 nations in the GCRI Q4 2020. The country’s risk score was 42.8 out of 100 according to the GCRI, placing it in the manageable risk nations band,” Bose said.

With Southeast Asia becoming ever more important as a growing economic region, many international companies have begun looking at opportunities within the region. Vietnam is now being viewed as an attractive investment opportunity.

For the first three months of 2021, Vietnam recorded $4.1 billion in foreign direct investment (FDI), up 6.5% from a year earlier. Reuters highlighted that FDI is a key driver of Vietnam’s economic growth, with FDI pledges rising 18.5% from a year earlier to $10.13 billion in January to March.

Private equity (PE) investments are also gathering pace in the country, with funds increasingly focused on retail, healthcare, and education. Recently, Baring Private Equity Asia and Alibaba invested $400 million into the consumer retail arm of Masan, a large private Vietnamese conglomerate.

According to Ismael Pili of VinaCapital, Vietnam’s equity market is the best performing in Asia, up 25% year-to-date in June, on top of the 15% growth achieved in 2020 despite the pandemic.

Related article: Samsung to move major part of handset production to India from Vietnam

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