White & Case: High-growth industries in Vietnam attract investors
Hanoi (VNA) - High-growth industries in Vietnam continue to attract
investor interest despite disruptions caused by COVID-19, according to White
& Case, an international law firm that serves companies, governments and
financial institutions based in the United States.
Vietnam’s mergers and acquisitions (M&A) activity is set for
another robust year following 2020’s potent performance, White & Case wrote in an article posted on its website.
In the first three quarters of this year, deals with disclosed value totalled 3 billion USD. 2021
is on track to overtake last year’s total figure of 3.9 billion USD as there
are three months left, it said.
According
to the article, deal volume last year reached a record high since 2006,
and this momentum continued into the first three quarters of this year with a total
of 41 deals announced, equal to that of 2021’s figure.
As
a result of these deals, the financial services sector attracted the highest
deal value across all sectors during the first three quarters of this year,
with a total of 1.5 billion USD in deals with disclosed values recorded.
While
financial services topped the value table, the industrials & chemicals
sector generated the most deals of any sector with a total of seven deals
announced during the first three quarters of the year.
Some
sizable deals have been recorded within the electronics space such as the Republic of Korea's Sunji Electronic’s 47.7 million USD acquisition of Bangjoo Hi-Tech, a
manufacturer of electronic components and circuit boards.
Despite
being affected by COVID-19, Vietnam continues to establish itself as a regional
hub for electronics production. The
country’s electronics exports have climbed from 47.3 billion USD in 2015 to
96.9 billion USD in 2019, ranking it 12th in the world.
A
total of 20 deals were announced in the first three quarters of 2021, just
three deals behind 2020’s record annual total. The healthy level of activity
displays growing confidence among local firms as they look to beef up their
capabilities and scale up operations.
The Asian Development Bank revised its
forecast for GDP growth for Vietnam from 6.7 percent to 3.8 percent in
September but the country’s economy still grow faster than the Southeast Asian
regional average of 3.1 percent.
According
to the article, the endurance of Vietnam’s dealmaking activity in the face of
the ongoing COVID disruption displays both market resilience and an enduring
appetite for local assets. Strong underlying fundamentals such as an educated,
low-cost workforce, a burgeoning middle class, and a stable political climate
will continue to make the country an attractive investment destination, it said.
High-growth
industries such as consumer finance, electronics and retail will continue to
attract attention from both strategic and private buyers, providing plenty of
opportunities for dealmaking in the final quarter of the year. The easing of
restrictions in October and the ongoing vaccination programme will only further
boost the country’s recovery, said the article./.