In early July 2021, Vietnam reported a third wave of the coronavirus pandemic and that resulted in lockdowns, restrictions and disruption to supply chains and businesses shutdown. Vietnam was one of the few countries in South East Asia to report an economic growth during the pandemic.
It is expected Vietnam’s Fund Management Industry can be recovered from the Covid 19 pandemic. Although the Vietnamese authorities tried to regulate the sector, it was reported on International Investment the industry rose 20% year on year. According to the vice chairman of State Securities Commission (SSC) Pham Hong Son, the Vietnamese regulators plan to grow the industry by tightening the licensing process and setting up new and tough rules for new fund management companies “that would help Vietnamese fund management companies meet international standards and practices, and keep the local equity market developing in a sustainable and secure manner,” he said.
It is estimated that Vietnam Fund Management Activities combined managed assets of funds and energy companies as well as those owned by banks. Vietnam has a number of funds management companies with billions of dollars’ worth of assets under its management. For example, one of the biggest fund firm KIM Vietnam Growth Securities Master Investment Trust manage assets worth more than $850 million.
As I wrote about the Euro and Vietnam Free Trade Agreement (EVFTA) before, EVFTA would have a big impact on Vietnam’s economy. Vietnam signed a free trade agreement with the EU and this agreement will gradually reduce most tariffs, regulatory barriers, and red tape and promote should create opportunities for both sides to do business.
New venture fund companies have incorporated gradually in recent months despite the impact of the Covid19 pandemic in Vietnam. It was reported in February 2020 that Korean Investment Management acquired almost 99 percent of 2.5 million shares of Hung Viet Fund Management JSC (HVCapital). Vietnam’s State Securities Commission (SSC) approved this deal. Early September 2020, Nguyen Manh Dzung (Shark Dzung ) was into partnership with Le Hoang Uyen Vy to establish a new fund venture firm called Do Ventures with a total management fund of 50 million USD. “The Vietnamese consumer market is at a tipping point, and is poised for tech companies to launch innovative products. We are passionate about the opportunity to drive economic growth in the country at this critical moment, “said Manh Dzung, co-founder of Do Ventures.
Fund management firms like to invest in food entrepreneurs in Vietnam amid the Covid-19 pandemic. Food technology startups, such as making meat substitutes based on plant ingredients or other foods based on laboratory cultures, are appealing to venture capital firms. This trend was further strengthened during the epidemic period when consumer awareness of clean food increased. Green Monday Holdings, a company which makes pork substitutes made from vegetable ingredients and runs a chain of vegetarian food retailers in Hong Kong, said it had received $70 million from an investor group led by The Rise Fund and Swire Pacific.
Despite the negative impact of the Covid 19 pandemic, it was reported by a local newspaper the profit growth of top companies on Vietnam HOSE index was significant. As on 03/08/2021, there are 288 out of 378 companies reported trading profits in the second quarter of 2021. According to data from Rong Viet Securities Company (VDSC), the growth of the total profit after tax of these enterprises was 46.1% compared to the second quarter of 2020, opening up opportunities for investors and the fund industry.
Vietnam Fund Management Industry would be grown and entered into a new phrase in the next coming years if the pandemic was controlled in Vietnam, and the spotlight will shift to how potential investors can invest in this sector.
By Thoi Nguyen
Thoi Nguyen is a columnist. A graduate of the University of West London, he has written on developments in Vietnam and has also consulted for businesses and governments. He deals with all of his personal and professional businesses both in Vietnam and the UK. He can be reached by email (thoinet80@gmail.com), on Twitter (@thoigen) and Facebook (Nguyen Thoi).