Mr. Vu Bang, Chairman of the SSC, spoke with VET following the successful investment promotion trip to the US from July 1 to 5.
■ Why has the Ministry of Finance (MoF) and the State Securities Commission (SSC) chosen this time to conduct investment promotion activities?
The MoF and SSC have prepared a plan to conduct investment promotion conferences in major financial markets. The purpose is to publicize and explain Vietnam’s economic achievements and call for investment. MoF held the first conference in Japan and many Japanese investors then made both direct and indirect investments in Vietnam.
This time, MoF and SSC selected the US for an investment promotion conference due to it being the world’s largest market. The US was also selected because Vietnam - US relations have seen many positive results in the 20 years since the establishment of diplomatic relations. The conference’s main agenda was therefore building a comprehensive relationship in the financial sector.
In recent years Vietnam’s economic reform process has yielded solid results. In the securities sector, prior to this trip to the US the Prime Minister issued Decree No. 60 removing limits on foreign share ownership in publicly-listed companies. The Decree has been well received among US investors because they understand that Vietnam truly wants to bring in foreign capital and it demonstrates its commitment to opening up to the world.
■ How has the level of interest been among US investors in this investment promotion trip?
The investment promotion conference in New York was more successful than we expected, with a positive response coming from US investors.
I think US investors are very interested in Vietnam’s investment environment. Initially we expected the conference would have 80 representatives from major US enterprises but 160 people were in attendance, mostly large investors and funds.
Many said they would invest in Vietnam. I also believe they would invest in Vietnam when the State-owned enterprise (SOE) equitization process and mergers and acquisitions are strongly promoted. Of course, the extent of capital inflows will depend on many factors, in particular the reform of administrative procedures.
■ What issues were of interest to investors and which were most appreciated?
US investors appreciated the MoF presenting in detail the achievements of Vietnam’s economy, including innovation, reforms to the financial sector and banks, boosting the equitization of SOEs, the development of capital markets, and the prospects when Vietnam joins the Trans-Pacific Partnership (TPP). Explaining these achievements helped investors understand more about Vietnam’s economy.
In four speeches at the conference, US billionaires and representatives of investment funds acknowledged Vietnam’s economic achievements. A representative from the US-ASEAN Business Council said that Vietnam holds more advantages than Indonesia, while the US investors already in Vietnam said the country is emerging in the region.
■ The size of Vietnam’s stock market remains small compared to the demand among US investment funds. What does Vietnam need to do to actually become their investment destination?
At the conference we discussed the macro-economic outlook, the stock market, and the restructuring of SOEs and the banking sector. Investors said that the size of the stock market, at just 31 per cent of GDP, is too small compared to other markets in the region.
However, Vietnam is accelerating the equitization of SOEs and listings. The market size is therefore expected to increase sharply from 2015 to 2020. Decree No. 60 will give impetus to the stock market over the next five years in both capital and quality.
After 15 years the size of Vietnam’s stock market has increased from less than 1 per cent of GDP to 31 per cent of GDP and it is a fast growing market. With the solutions Vietnam has adopted, I think the aim of developing the size of the stock market to 60 per cent GDP will not be difficult.