Private report says business looks more positive

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Hanoi Times English - 29 month(s) ago 1 readings

The Hanoitimes - 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 Hanoitimes - 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

VNS

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