Tien Hai industrial zone in northern Thai Binh province (Photo: viglaceraip.com) Hanoi (VNS/VNA) - Theincrease of foreign direct investment (FDI) in the first two months of the yearhas contributed to a better performance of listed industrial park developers.
According to the GeneralStatistics Office (GSO), FDI flowing into projects in Vietnam picked up 9.8 percentyear on year to a three-year high of 2.58 billion USD in January and February.
In the same period, foreigninvestors poured 8.47 billion USD into Vietnam in various channels, includingFDI projects.
Foreign investment reached 35.46billion USD in 2018, 2 percent lower than 2017 figure. That included 19.1billion USD worth of FDI projects.
Impressive numbers from thegovernment statistics agency indicated how attractive Vietnam is to foreigninvestors.
According to VietinbankSecurities JSC, as the US central bank Federal Reserve’s signal slower interestrate increases this year, and better trade talks between the US and China havemade foreign investors look to emerging markets, including Vietnam.
In 2019, FDI companies will bethe major driving force of the Vietnamese economy as the Government has goodrelations with other countries with Vietnam seen as an attractive option foroverseas firms.
A survey conducted in January byKyodo News showed 36 percent of targeted Japanese firms said Vietnam was thetop destination. Second was India (18 percent).
As a result, higher foreigninvestment means better opportunities for local industrial zone developers.
Since the beginning of the year,shares at industrial zone developers such as Viglacera (HNX: VGC), Kinh BacCity Development Holding Corp (HoSE: KBC) and Nam Tan Uyen Joint StockCorporation (UPCoM: NTC) have beaten the forecasts of analysts and investors.
Viglacera shares gained nearly 23percent since the beginning of the year. Shares of the other two companies roseabout 15.7 percent and 60 percent, respectively.
According to Rong Viet SecuritiesCorp (VDSC), Vietnam is an attractive destination for foreign investors as thecountry covers a highly strategic position in Asia-Pacific region.
“No industrial zone is locatedtoo far from the coast and all of them are connected with seaports by highwaysand expressways, which the Government is calling for more intense development,”VDSC said in a note.
In addition, improved businessclimate in Vietnam was another factor that had lured more foreign capital intothe country, the brokerage firm said.
A low-cost workforce remained acomparative advantage over other economies, VDSC added. Average labour costs inVietnam is 43 percent and 10 percent lower than in Thailand and Indonesia.
“The northern provinces andcities are favoured by foreign companies such as Samsung and LG who entered thecountry more than 10 years ago.” VDSC said.
Kinh Bac City Development HoldingCorp and Viglacera were forecast to benefit from north-based FDI companies andwould gain more as trade tensions between the US and China showed few signalsof cooling and technology groups were expanding their business and suppliernetwork, VDSC added.
Trade tensions also saw foreignsmall-and medium-sized enterprises (SMEs) move from Taiwan and China to thesouthern region, and that could help Nam Tan Uyen JSC earn higherprofits.-VNS/VNA
VNA
