Vietnam state investment arm SCIC partners Thai Kasikornbank

Vietnam’s government investment arm SCIC, the state investor in the country’s biggest firm Vinamilk, has inked a deal with Thai Kasikorn Bank to unlock more investment opportunities in Vietnam. SCIC, or the State Capital Investment Corporation, said the collaboration will help woo foreign investors into the country as well as improve its investment climate through the exchange of expertise.

Thailand has accounted for significant investments into Vietnam, notably in the retail sector. TCC Holding and Central Group put a war chest to acquire retail assets in Vietnam over the past two years to secure top positions in this $118 billion market. SCIC last year sold 5.4 per cent of Vinamilk to Thai beverage firm F&N in a $500 million deal. F&N had been already a major shareholder at the dairy company with an 11 per cent interest.

Thai brewer Singha also played big with a $1.1 billion infusion into Masan Group’s units. Thai investors are also beefing up their direct investments. Direct investment and M&A capital from Thailand in Q1, 2017 were valued at $168 million, a surge of 20 times compared to the same period in 2016. Vietnam has been seen as a magnate for foreign investors thanks to its stable economic annual growth of some 6.5 per cent, blended with a rising middle class and improving infrastructure.

The total new committed FDI and M&A capital into the country in the first four month of this year reached $10.6 billion, in which share purchases accounted for $1.36 billion, according to the General Statistics Office. The SCIC represents the State ownership in shares of major local businesses, including Vinamilk, Hau Giang Pharmaceutical, Vietnam Construction and Import-Export JSC, tech firm FPT, insurer Bao Viet and Traphaco. In March, the sovereign wealth fund had also signed a similar agreement with Singapore property developer Keppel Land to promote investment opportunity in Vietnam.