New foreign investment approvals in Jan-Apr drop sharply

A view of downtown HCMC. The real estate sector recorded the second largest foreign investment in January-April.

HCMC – Total foreign investments pledged in the year’s first four months fell by a sharp 23.9% to US$8.06 billion, according to the Foreign Investment Agency.

Of the fresh foreign investment approvals in the period, pledges by existing and new projects declined significantly.

In particular, 883 new projects that had been approved in the year to April 20 had total registered capital of US$3.55 billion, a fall of nearly 24% against last year’s same period. Besides, 303 operational projects registered to adjust their investment capital up by US$2.24 billion, a year-on-year drop of 48.5%.

Regarding foreign indirect investment, the four-month period recorded 1,863 cases of foreign investors contributing funds or acquiring local shares with a combined value of US$2.26 billion, up 67% against the same period a year earlier. Of these, there were 1,087 cases of foreign investors increasing their paid-in capital of enterprises (US$1.56 billion) and 776 cases of stake acquisitions (US$703.5 million) which did not change chartered capital of enterprises.

It can be seen that investment capital of foreign investors tends to rise in M&A deals rather than direct investments.

Foreign direct investment (FDI) projects disbursed US$5.1 billion in January-April, rising by 6.3% year-on-year.

Regarding outbound shipments in the period, the FDI sector exported US$53.48 billion worth of products, including crude oil, up 18.9% year-on-year and equivalent to 72.5% of the country’s export turnover. Without crude oil, exports of the sector were US$52.81 billion.

Meanwhile, the FDI sector’s imports were US$42.31 billion, picking up 9.3% and accounting for 60.1% of total imports. This resulted in a trade surplus of US$11.17 billion with crude oil included and US$10.5 billion with crude oil excluded.

Of the 17 sectors foreign investors invested in, the processing-manufacturing sector attracted the highest amount of capital with US$4.52 billion (56.1% of total registered capital). It was followed by real estate with US$807.5 million (10%) and wholesale-retail with US$779 million (9.7%).

South Korea made up the biggest foreign investment amount among 82 countries and territories investing in Vietnam with US$2.32 billion (28.7%). Japan came second when investing some US$1.29 billion (16%) and Singapore third with US$808 million (10%).

Source: The Saigon Times