Education, real estate, food and beverage, and retail are the top four sectors that are most attractive to private investors, according to a survey on the private equity sector carried out in the 4th quarter of 2014 by auditing firm Grant Thornton Vietnam.
The education sector has been selected as the most attractive with 36 percent of respondents, a significant increase from 18 percent in the last survey.
With the coming into effect of the ASEAN Free Trade Area and the Mutual Recognition Agreement for the movement of labour, there is an anticipation of a growth in demand for private education from both local and foreign families, said Grant Thornton said the biannual report this week.
Tied in first place, real estate sector has begun to show more optimism as trading volumes have picked up, mostly in the low- and medium-end segments. Many foreign investors are increasingly positive about the prospect of the market, due to the recovery of the economy, the growing demand for housing from local citizens and foreigners following the housing legislation that have just passed by the Nation Assembly in November 2014.
Ranked third, food and beverage’s attractiveness has slightly decreased to 33 percent from 36 percent in the previous survey. After being selected as the most attractive sector at 52 percent in the 2nd quarter, retail falls to 4th position with 29 percent, reflecting a wait-and-see attitude by investors, as Vietnam is clearing the way for wholly foreign-owned retail companies at the beginning of 2015.
Several industrial giants have already expressed their interests in expanding their businesses to Vietnam. It is predicted that this industry will become a battle ground for “survival-of-the-fittest” starting from 2015. In this survey, 64 percent of respondents selected “more attractive” or "extremely attractive" when asked about Vietnam’s investment attractiveness, compared to 54 percent in the prior report.
“Less attractive” view reduced significantly from 26 percent in last survey to 10 percent, mainly due to the reduction in trade protection following the commitment schedule with the World Trade Organization (WTO) and Asian Free Trade Area (AFTA) at the beginning of 2015.
However, in terms of unattractive ranking, there are a portion of respondents who no longer see the country as a potential destination, 5 percent compared to nil in the last survey. According to the ASEAN Business Outlook Survey conducted by the American Chamber of Commerce in Singapore, the most attractive countries for new business expansion are Indonesia, followed by Vietnam, Myanmar. Malaysia placed fourth above Thailand.