VinaCapital seeking opportunities in equitised SOEs in 2017
What is VinaCapital’s plan for 2017?
We will continue investing in private companies. Specifically, we would like to buy shares in companies with a lot of potential, grow them, list them or find a partner to sell the equity to. Second, we are interested in investing in companies that are going to be equitised soon. We currently have $120 million in cash just looking for good investment opportunities of these types.
The Vietnamese stock market currently shows no clear trends. Why do you think this is so?
Investors are waiting to see how the policies of the new US President will play out. This is going to affect not only the Vietnamese stock market, but the world at large.
The new President may cut corporate income tax for US companies, which would boost profits. US stocks may become more attractive and the US stock market is going to rise in consequence.
He also encourages US companies to keep money in the US. So this money can be invested and create
jobs in the US, or be used to buy fund certificates.
If the policy to increase infrastructure investment in the US is realised, the US government may issue bonds to mobilise capital, increasing bond yields and appreciating the US dollar.
In this context, do you think 2017 will be a good year for the Vietnamese stock market?
We think that Vietnamese stocks are still at a 20-30 per cent discount compared to other countries in the region.
With the economy growing at 6.7 per cent a year and the demand for services including healthcare, education, clean food, infrastructure, and housing being still high, the growth potential for companies in these fields is still significant.
Looking at the stock market in the previous years, one can see that the biggest risk is is too high inflation. If the government can manage inflation then the risk is not big.
What do you think regulators should do to make the Vietnamese stock market more stable to withstand the unpredictability of foreign capital flows?
Besides many solutions to develop the market that other people named already, I want Vietnam to have retirement funds, just like developed markets. These funds will invest in the market and create stability and this will reduce dependence on foreign capital.
