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Foreign funds discuss strategies

In its effort to open financial markets and create a capital market, Viet Nam has attracted many foreign investors. Directors of three foreign investment funds spoke with Tuoi Tre (Youth) newspaper about their strategies this year.

Tran Thanh Tan, Director of Dragon Capital (DC):

Recently, our company has invested in many fields like bonds, banks, imports, exports and agricultural enterprises.

After investigating the Vietnamese market last year, we now hope to invest in some additional, attractive fields this year. These will most likely include energy and mineral exploitation.

Also, the equitisation of large State-run power plants has attracted many investors, including DC. While Viet Nam has a wealth of natural resources, it does not have enough money and technology to exploit them.

Recently, DC and foreign investors with the right technology are finding opportunities to invest in Viet Nam.

Our company decided to invest in these particular fields because we want to run stable investments over a long period of time. Moreover, the investment market in Viet Nam has widened and new electricity and mineral laws have been adopted as well, creating comfortable investment conditions.

Foreign investors have paid more attention to Viet Nam’s markets, especially toward improving its investment environment and making better laws.

We hope that this year we will continue to invest in Viet Nam by establishing a third fund at a total capital of US$100 million.

In the future, we hope to invest in power plant equitisation processes which will cost thousands of billions of Dong.

Don Lam, Director of Vina Capital Group which manages the Viet Nam Opportunity Fund:

Since 2003, our company has invested in more than 30 enterprises, including equitised enterprises and private enterprises, at a total capital of $25 million.

We expect to invest $25 to 30 million in some 10 to 20 enterprises this year, of which some projects will cost from $5 to 7 million.

However, we have met with some difficulties as a result of the regulations on the percentage of property foreign investors are allowed to own in Vietnamese businesses.

Recently, many foreign companies have earned the right to invest in some economic sectors, even sensitive sectors like banks, telecommunications, real-estate businesses and super markets.

So, the regulations on indirect foreign investment in domestic enterprises must be more open as well. This is mainly because investors are only interested in Viet Nam when the investment reaches a certain scale.

Nevertheless, we are planning to increase our total capital to $70 million this year.

Nguyen Bao Hoang, Director of IDG Ventures Viet Nam:

In my opinion, we need to do more to help Vietnamese enterprises become acquainted with the way investment funds operate and to understand the benefits of mutual co-operation.

We pay more attention to enterprises which operate in software development, mobile information, infrastructure, internet applications, medicine and biological technology.

We propose conducting seminars on venture investment every three months in Ha Noi and HCM City for all those who are interested in attracting investment.

By 2007, there will be 10 million telephones nation-wide. In addition, the software sector earned $120 million last year. These numbers bring us hope.

We have recognised many potential companies with creative ideals but it is still difficult to find the best partners.

Nevertheless, we still expect to disburse $20 million this year.

Source: VNS