Mark Mobius, emerging markets fund manager and chairman of US-based Franklin Templeton Investments, has pledged to earmark a whopping $3 billion investment in Vietnam, while the fund has so far spent $300 million in this Southeast Asian market.
Mobius did not give a clear timeline for the investment commitment as the fund was still looking at the state-owned enterprises equitisation of the Vietnamese government, and expected the process will be more drastically implemented to generate more appealing offers to investors, according to reports in local media.
Only by then, Franklin Templeton can pour the $3 billion commitment, or even more, into Vietnam, Mobius reportedly said.
The US fund has ventured some $270 million in Vietnam. However, according to the fund chairman, Vietnamese stock market is still too small for large investment portfolios. Currently, there is a limited number in terms of promising companies that may be eligible for the fund’s investments.
Franklin Templeton has purchased stocks of large businesses like PetroVietnam’s subsidiaries and Vinamilk, the country’s leading dairy company, but is not sure which sectors would be its future portfolios.
The size of the stock market in Vietnam is only a tenth of that in Thailand, where the fund has invested $3 billion.
Firstly, Mobius said, state companies need to be privatised. Meanwhile, the recent announcement from the government wealth fund, the State Capital Investment Corporation, to divest from large corporations is a big move, he added.
Franklin Templeton is making investments in around 60 countries around the world, and Vietnam ranks 30th in this list in terms of funding value. However, Mobius said, considering the investment opportunities, he would put Vietnam as the number one destination because the potential in this market is huge.
Vietnam’s GDP growth in 2014 was much better than some countries in the region. However, the growth rate of 5.9 per cent did not show the full potential of Vietnam, according to the veteran investor, who was positive that the figure will reach a higher rate in the coming years.
Beginning investment in Vietnam 1996, some $40 million from Franklin Templeton was poured into subsidiaries of Vietnam’s state-owned energy titan PetroVietnam. In April this year, the fund led a $15 million series C funding for one of the largest restaurant chain operators, Huy Vietnam Group Ltd, before financing Ho Chi Minh City-based Indo-Trans Logistics Corp with $15.8 million in September.
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