has been ranked second, only after Myanmar, in the Southeast Asian region regarding the level of investment attractiveness, according to Grant Thornton’s “Vietnam Private Equity Report 2016.”
Up to 86% respondents forecast that the level of investments will increase in the next 12 month.
Although the results were unchanged in comparison to that of Q2-2015, the number of participants citing “Significant increase” has risen from 7% to 11%.
“This positive outlook has been achieved from various improvements made recently, including the two legislative changes promoting private sector to participate in the government’s infrastructure projects and increased foreign ownership limits in listed companies, AEC
,” says the report.
The survey shows that a majority of respondents continued to have positive views on the Vietnamese economy in the next 12 months. However, the percentage of respondents with positive views declined 11 percentage points to 61% from six months earlier. 9% of surveyed people had negative views, up from 7% two quarters earlier.
The survey also found that a majority of participants expected to be “net buyers” rather than “net sellers” in 2016. However, the number of respondents replying that they would be “net buyers” was lower than that of the last survey.
Nevertheless, private equity investors expect more supply from SOE equitizations, and are awaiting “big names” such as Mobifone, Satra, Benthanh Group, Electricity of Vietnam (EVN), PetroVietnam, Vinacomin and Vinachem.
The results also indicate significant changes in the sources of transactions, where most of participants are expecting more transactions from “SOE’s equitization” rather than from “Private/Family owners.”
The Retail sector and the Food and Beverage (F&B) sector are currently considered the two most attractive industries for PE transactions.
Regarding the critical success factors, “Economic growth” and “Sector specific opportunities” continued to be the two key factors selected by 76% of respondents. On the other hand, “Difference in Valuation expectation” maintained its top position as the key deal breaker.