Singapore investments awaits in Vietnam as big fishes
In 2018, the Vietnamese economy climbed 7.1%, the fastest rate in the last 11 years. A recent report by DBS said that strong growth in private investments and its manufacturing industry, especially the electronics sector, as well as competitive salaries helped fuel the Southeast Asian country’s rise.
With that, let’s explore some Singapore-listed companies that have set up in Vietnam and could benefit from the country’s growth over the long term. The Vietnamese Ministry of Planning and Investment reported that Singapore with total registered investment capital hitting $48.4 billion up to February 2019, is the third largest foreign investor in Vietnam.
Among different sectors which have seen funding in Vietnam, Singaporean investors are big fishes in real estate development.
Singapore’s CapitaLand has been present in Vietnam for more than 20 years, with more than 8,600 residential units in 15 projects, 6,300 serviced apartments in 24 projects, two integrated developments, and a portfolio of around $1 billion across seven major cities in Vietnam.
According to CapitaLand Vietnam’s CEO Chen Lian Pang, Vietnam plays an important role in the corporation’s development strategy as the third-largest market for CapitaLand in Southeast Asia, after Singapore and Malaysia.
From the consumer segment, Thai Beverage Public Company Limited, Jardine Cycle & Carriage Ltd, and Fraser and Neave Limited are looking to capture more Vietnamese hearts. Thai Beverage owns a 53.59% stake in Saigon Beer Alcohol Beverage Joint Stock Corp (Sabeco). Sabeco owns famous beer brands such as Saigon Beer and 333 Beer in Vietnam, which is one of the largest beer markets in Asia.
Fraser and Neave (F&N) and Jardine Cycle & Carriage have stakes in Vinamilk, a leading dairy producer in Vietnam in terms of market share. Jardine Cycle & Carriage has a 10.62% stake in Vinamilk, while F&N holds a 20.01% stake as of 28 December 2018.
Recently, Forbes Vietnam ranked Vinamilk as 2019’s top brand in the country with a value of US$2.2 billion. This is the fourth consecutive year the dairy giant has stolen the top spot. Coming in third is Sabeco with US$486 million in brand value.
According to the Asian Development Bank, Vietnam is expected to grow by 6.8% and 6.7% in 2019 and 2020, respectively. The 2019 growth forecast is the second highest among the 10 Association of Southeast Asian Nations (ASEAN) member states. Singapore investments that want exposure to the fast-growing ASEAN economy can look to invest in the companies mentioned above and benefit from Vietnam’s tailwinds.
Source: Motley Fool, SCMP