Financial sector seeking additional Japanese capital investment

09:31 | 21/09/2017 Finance - Banking

(VEN) - Indirect investment from Japan into Vietnam remains relatively modest compared to the potential of Japan and the ability to absorb investment capital sources of the Vietnamese market, Minister of Finance Dinh Tien Dung said.

financial sector seeking additional japanese capital investment

Dung made the statement on Monday at an August 21 conference in Tokyo co-hosted by Vietnam’s Ministry of Finance and Daiwa Corporation of Japan to promote financial investment in Vietnam. As many as 200 Japanese firms attended the event.

According to the Ministry of Finance, the conference was aimed to encourage Japanese insurance companies and investment funds to buy government bonds for Vietnam’s public debt restructuring.

As many as 122 countries and territories had invested in Vietnam until July. Japan ranked second among foreign investors with US$46.47 billion in foreign direct investment, accounting for 15 percent of total capital.

Dinh Tien Dung told participants that the Vietnamese government has identified human resources development, improvement of market economy institutions, and infrastructure development as three breakthrough areas, so the country’s demand for capital is huge, especially for investment sources accompanied with expertise and development experience.

About 44 state-owned enterprises were equitized this year and this figure will increase to 64 in 2018. Dinh Tien Dung expressed his hope that major Japanese financial corporations would invest indirectly in Vietnam, become strategic investors and bring capital and technologies to the country.

In addition to the process of economic restructuring and equitization of state-owned enterprises, the Vietnamese government is also focusing on development of the securities market. As of date, market capitalization has increased to more than US$112 billion, 29 percent more than the figure recorded at the end of 2016 and equal to 55.8 percent of Vietnam’s total GDP. Moreover, the bond market has become an important capital mobilization channel.

To attract more domestic and foreign investors, the government launched the derivatives market on August 10 on the Hanoi Stock Exchange with VN30-Index future contracts being the first product to debut. In addition, insurance products have been diversified as Vietnam prioritizes investment attraction in this sector.

A favorable investment environment is seen as a key factor to engage the interests of Japanese investors in the Vietnamese financial market. In fact, many Japanese investors have participated in the Vietnamese securities market through capital contributions to investment funds, such as Japan Asia MB Capital Fund, Dai-ichi Life Vietnam Fund and Vietnam-Japan Investment Fund with total capital of nearly US$53 million.

Duy Minh