Investing 30 Billion KRW Each in Two Domestic Asset Managers' Vietnam Funds
Vietnam and Indonesia Spotlighted Amid Rising China Economic Crisis
One of the major domestic investment institutions, the Korean National Police Mutual Aid Association, has made a large-scale investment in Vietnam funds. Amid growing concerns over the Chinese economy, investors are observed to be swiftly moving to alternative investment destinations.
According to the investment banking (IB) industry on the 23rd, the Korean National Police Mutual Aid Association recently invested a total of 60 billion won, with 30 billion won each in two Vietnam funds managed by domestic asset management companies. A source from the IB industry said, "Capital from the US, China, Japan, and Korea is all moving to Vietnam," adding, "As concerns about the Chinese economy, including the real estate sector, intensify and the Chinese economy deteriorates, funds are flocking to alternative investment destinations." He added, "Even China is investing funds in Vietnam to bypass the US for exports," and "Vietnam is currently a middle-income country with a per capita GDP in the 4,000-dollar range, but given the current intensification of US-China conflicts, it is expected to easily surpass 10,000 dollars within five years." As global capital pours into a country with a small economic scale, rapid growth is expected, and investors can easily anticipate profits in the process.
According to the Korea Securities Depository, from the beginning of this month to the 15th, the net purchase amount of Vietnamese stocks by domestic investors was $9,553,270 (approximately 12.75839 billion won). This is about 4.5 times the amount of $2,126,000 (approximately 2.83077 billion won) net purchased in July alone.
Vietnam has seen an increase in foreign direct investment (FDI) as global companies leaving China in response to the US-China trade dispute flock to the country. Vietnam's tourism industry and domestic market are also showing signs of recovery. High economic growth rates are another factor attracting funds. According to the Vietnam General Statistics Office, Vietnam recorded an economic growth rate of 8% last year. This year, it is expected to achieve an economic growth rate of 6.7 to 7.2%.
The US supply chain restructuring is predicted to be a great opportunity for Vietnam. Global companies are actively moving their production bases from China to Vietnam. The Vietnamese government has set a goal to achieve over 7% annual growth and a per capita national income of $7,500 by 2030, aiming to become a high-middle-income country. To achieve this plan, businesses with higher added value than simple assembly plants are needed, and significant capital investment is expected during the industrial facility construction process.
Indonesia is also considered another beneficiary country gaining from the US-China trade conflict. Due to the intensified de-China movement caused by the US-China conflict, countries close to China or rich in resources, such as Vietnam and Indonesia, are expected to become the 'Next China' as alternatives to China. Last year, foreign direct investment (FDI) in Indonesia surged by about 45% compared to the previous year, and the total investment amount also increased by 34%.
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