Vietnam, the land of terraced rice fields and exotic beaches is also garnering a reputation for being the next big manufacturing hub for electronic products and components. With a stable political scenario, an open FDI setup and an abundant workforce of skilled talents, Vietnam is fast becoming Asia’s most favourable destination for international investments. As a member of the Association of Southeast Asian Nations (ASEAN) and due to its strategic location in the South China Sea along with its proximity to China, Vietnam has the biggest potential to become the number one investment destination in Asia.
Vietnam has consistently delivered a favourable business climate after the COVID-19 restrictions have been lifted in the country. The Government of Vietnam has established a robust business ecosystem with free trade participation with most of the countries from EU, RCEP, CPTPP and many others. As per reports, Vietnam has recorded one of the highest investments in infrastructure in the Southeast Asian regions. Vietnam also benefits from the fact that more than half of its population is below 30.
A young population indicates that Vietnam is a hotbed for consumer goods and services sectors. The income levels in the urban areas are reportedly much higher than the national average, and education and skill development opportunities have also increased in recent years. Along with education, Vietnam offers one of the highest promises for Telecommunication, Information Technology, Power Generation, Transportation, Construction, Sustainable Technology, Aviation and Defense. Another reason for the stability in the growth trajectory is the involvement of state-owned enterprises in some of the core sectors while also encouraging foreign direct investments in them.
Destination for Maximum Returns
With over 3 airports and 34 seaports across the country, the Land of the Ascending Dragon has ensured maximum connectivity for every trade possible. As mentioned earlier, infrastructural investments are a key achievement of the Vietnamese government. Since 2022 itself, Vietnam has had a functional 1,100+ km highway system with connectivity to all major cities and even industrial parks and ports.
The Government of Vietnam has ensured low-cost labour, land and operations. With an abundance of raw materials such as minerals, oils and farm produce, manufacturers do not have to rely on imports as well. Many of the Asian electronic and global automotive giants prefer to set up their manufacturing bases in Vietnam because of the low operating costs. This is one of the reasons why Vietnam is one of the biggest exporters of electronic goods today. The government has also made tax policies, import & export policies, and land rental laws favourable for foreign companies.
Among the sectors, e-commerce, retail and tourism have seen an uptick in investments. The young population of the country is fueling the rapid growth of the sector. Several e-commerce platforms have reached a wide audience across Vietnam giving people access to online trade and market that was not possible earlier. The online ecosystem has also opened the vast possibilities of the online payment system. Vietnam has seen the growth of several digital wallet apps, which is bringing about a small revolution in the banking industry as well. Modernization and heavy investments in the transportation infrastructure have further aided the logistics sector.
The Tourism sector is also a goldmine for foreign investors as Vietnam is a land full of rich culture and landscape. The upgraded transport infrastructure has given this mainland in Southeast Asia a good image among travel enthusiasts.
Delving more on the online payment ecosystem, the financial technology is also booming with the State Bank of Vietnam reporting a jump in the number of new fintech solution providers in the country. Currently, the online economy of Vietnam ranks among the highest in Asia with a rapid expansion in the number of fintech companies.
Raising Capital, Growing Economy
The financial sector, especially the investment arm of the bank, plays a vital role in the development of a nation. They add liquidity to the market and as intermediaries, investment bankers have become very efficient today. The interest rates in investment banks have a major influence on commercial banks as well.
The capital market in Vietnam is bringing about huge disruptions in several sectors with several leading securities firms. World Business Outlook recently announced the Best Investment Bank in Vietnam for 2023. This award winner was chosen based on the longest experience in the widest sectors. The winner is an investment bank that has the most detailed knowledge of the industry, the competitive landscape, and in-depth industry analysis capabilities in Vietnam. The winner, VPS Securities Joint Stock Company (JSC), was given the title at a grand event in Mariott Marquis, Bangkok Thailand on November 25.
Established in 2006, VPS Securities has a portfolio that includes stock brokerage, financial services, investment banking and more. Its core interest lies in institutional brokerage, retail brokerage, wealth management and similar others. It has proven its expertise in capital arrangement, securities underwriting, mergers and acquisitions, business valuation, corporate restructuring and debt management. They also provide trading platforms and advisory services to individuals and institutional investors.
Image received from VPS Securities Team
At World Business Outlook Awards 2023, Thailand, Ms Ngoc Tran, Director of Investment Banking Services Department, spoke to us about her recent achievements and future ambitions
How does it feel to win the award for Best Investment Bank in Vietnam for 2023? What is the strategy behind your success?
It is a great honour for us to win the award for Best Investment Bank in Vietnam for 2023. We receive this award with a sense of pride, and humility, with the awareness that the journey of excellence is ongoing. This award is not just a reflection of our achievements but a reminder of the trust which our clients and partners have placed in us. The story behind this success is our unwavering commitment to exceeding their expectations not only in the past but also in the years to come.
What is the role of an investment bank like VPS Securities JSC in the economy of Vietnam?
Vietnam is turning out to be the best option for manufacturers who are looking for an alternative to China. This has led to a boom in foreign direct investments in the country. Therefore, the investment banks like VPS Securities JSC played a pivotal role in positioning Vietnam as the next foreign investment powerhouse in Asia. We strive to providing exceptional services as well as fostering a robust and dynamic environment for the investors.
What is in store for VPS Securities JSC in 2024? Please share a glimpse of what we should expect in 2024?
In 2024, we still embark on the journey of developing comprehensive customer-centric solutions via advancing our infrastructure and IT system and facilitating our quality services at the enterprise level. We are opening up opportunities for easy access (both on online and offline bases) to a diverse ecosystem of products and services, serving the various financial needs of customers. We focus on our human resource training and development and investing extensively into our 5-star rated working facilities to excel our staff experience in the long run. Being the one of the leaders in Vietnam financial markets, we always strive our best to continue the journey of relentless innovation and sustainable growth with the constant spirit of integrity and dedication.
Article by Ujal Nair
