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Vietnam Market: Foreign investors pour big money into listed companies

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VietNamNet Bridge – Within a short time, foreign institutions and enterprises have announced a series of huge investment deals in Vietnamese-listed companies.

US sweets manufacturer Mondelèz International spent VND7.846 trillion, or $370 million, to acquire 80 percent of Kinh Do Group’s sweets manufacturing section. This was the company’s biggest investment deal in Vietnam.

Sources said the deal is expected to be completed by the second quarter of 2015, while it is highly possible that Mondelèz International would buy the remaining 20 percent of stakes from Kinh Do one year later.

One week before the event, the US-based Global Emerging Markets (GEM) committed to invest VND1.7 trillion, or $80 million, in Hoang Anh Gia Lai Group. The US investor plans to buy 10 percent of Hoang Anh Gia Lai shares (HAG), mostly from existing shareholders.

The deal is expected to be wrapped up in three months.

Under the agreement signed between GEM and Hoang Anh Gia Lai, the former has the right to buy HAG, and if it can acquire 10 percent of HAG, it will have a seat at Hoang Anh Gia Lai’s board of directors. The investor has committed to help Hoang Anh Gia Lai list its shares on the US bourse.

On November 10, Mutual Fund Elite (Non-Ucits) announced the purchase of another 3.19 million MWG shares to become a big shareholder of The Gioi Di Dong, a large mobile phone distribution chain, with 7.7 million shares in hand.

On November 13, Amersham Industries Ltd and other foreign investors announced that their ownership ratio in the Vietnam-Japan Medical Equipment JSC had risen to 9.45 percent from 6.96 percent. The institution reportedly has invested in many securities and software firms which have listed shares on the HCM City bourse this year.

The Hoa Binh Construction and Real Estate JSC is reportedly being hunted by Japanese investors. The company late last year announced a plan to sell 15 million shares to strategic partners. The four investors the company is eyeing include Chip Eng Seng Corporation Ltd, PT. Nikklo Securities Indonesia, Japan Asia Investment Co., Ltd and the Development Bank of Japan (DBJ).

Nguyen Viet Duc, analysis director of the Saigon Hanoi Fund (SHF), said the strong foreign cash flow into Vietnamese listed companies is good news for the market and Vietnamese businesses. Cash flow would be even stronger in the time to come, he added.

However, the foreign capital has not been always welcomed. An analyst noted that Vietnamese short-term investors are happy about the foreign capital flow, because foreign investment will help push share prices up, which can bring them high profits.

Meanwhile, long-term investors do not want the presence of foreign investors in their companies, fearing that the companies may be swallowed up by foreign investors one day.

However, Dinh The Hien, a renowned financial analyst, said there was no need to worry about this, because it is inevitable in global integration.

Source: http://www.vietnambreakingnews.com/2014/11/foreign-investors-pour-big-money-into-listed-companies/

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