Results from the seventh bi-annual Private Equity report conducted by
Grant Thornton Vietnam in the second quarter showed that 34 percent of
respondents reported positive business sentiment, double the figure
compared to six months earlier.
The report's findings on
sentiment toward the private equity sector in the last 12 months are
analysed from opinions of a number of decision-makers based in
Vietnam or those having a significant focus on the country.
The figure, however, was still lower compared to 81 percent in the
second quarter in 2010, 65 percent in the fourth quarter in 2010 and 53
percent in the second quarter last year. The neutral response rate of 39
percent and negative response rate of 27 percent reflect that much of
private equity remains apprehensive.
Investment
attractiveness, as a result of an increase in the positive outlook for
the economy, improved to 56 percent in this quarter, from 39 percent in
the fourth quarter of 2011. Of that 56 percent, 3 percent consider
Vietnam as extremely attractive compared to other investment
destinations, and 53 percent see it as more attractive than others,
compared to 1 and 38 percent, respectively, in the fourth quarter last
year.
For those considering an additional market for
investment, Myanmar was seen by 62 percent of respondents the most
attractive investment destination in the region neighbouring Vietnam .
The report states that many local small- and medium-sized
enterprises have been struggling with the tough economic environment
for some time and many will not be able to survive without additional
capital being introduced.
As a result, 58 percent expect
distressed assets to be investment opportunities in Vietnam . The
figure was 61 percent in the fourth quarter and 28 percent in the second
quarter of 2011.
Secondary buyout deals (46 percent)
overtook private or family businesses as the biggest source of deals,
increasing from 31 percent in the previous survey, probably reflecting
the fact that several funds are approaching their exit phase.
In terms of investment obstacles in Vietnam , corruption was
considered by 83 percent of respondents as a concern when investing in
the country.-VNA