Vietnam
Vietnam: A lack of capital combined with improving fundamentals for long-term growth.
The global financial crisis significantly reduced capital inflows to Vietnam and thereby transformed the landscape of Vietnam’s capital markets, With the disappearance of “free money, domestic companies are left with the unenviable task of raising capital from a banking system that has reduced lending growth, local private equity funds that are out of money and underdeveloped equity and bend markets. With Vietnam’s government planning to restart the equitization process of many SOEs, there will be an increasing number of companies looking for capital in a constrained domestic market. Domestic companies will need to reassess their funding strategies and shift their focus to the capital markets and investors abroad
Despite the recent global economic weakness, investors recognize that Vietnam is one of the most promising areas to invest, due to:
Strang FDI historically-with FDR disbursement exceeding US$22.4 billion in 2022
Political and social stability-one-party government, with no strong religious history
Strong growth in GDP per capita from US$2,368 in 2013 to US$4,086 in 2022
Commitinent from Vietnamese government to supporting and reforming business environment for foreign investors and the private sector
Lower costs than China-companies diversify manufacturine and assembly from China to Vietnam
Ninety nine million individuals, predominantly under 40, exhibit exceptional literacy rates (96.1%) and trainability, comprising a workforce of over 70%, with more than 40% residing in major urban centers.
