International investor interest grows in Vietnam's clean energy, semiconductor sectors

International investor interest in Vietnam’s priority sectors of semiconductors, AI and clean energy is showing robust growth, says Don Lam, founding partner and CEO of VinaCapital Group.

He was speaking Tuesday at the Investor Conference that VinaCapital organized in Ho Chi Minh City. 130 investors from five continents attended the event, an increase of more than 20% over last year, he said.

The investors were attracted to Vietnam for several reasons, including perceptions of a more stable market and increased confidence in its potential. In particular, they were keen on sectors like clean energy and semiconductor manufacturing, Don Lam said.

"Vietnam has a strategy to develop its semiconductor industry by 2030 and is actively seeking investment in this area. Investors here have expressed their interest and indicated they will conduct further research," he added.

Another sector drawing attention was data centers, Don Lam said, noting that a company from Singapore has expressed its desire to invest in Vietnam, contingent on the availability of clean energy.

"We're exploring ways to leverage this advantage to attract foreign companies. For instance, clean energy could be developed in the central region, but we need to assess the appropriate infrastructure."

He said many investors were particularly interested in renewable energy and development of the carbon credit market. Beyond capital investment, they also sought to connect Vietnam with the international community through technology transfer and knowledge sharing.

According to VinaCapital, about two-thirds of the conference attendees this time were investors looking to make indirect investment in Vietnamese companies. The remaining one-third were investors looking to make direct investment in data centers, AI, and semiconductor manufacturing.

Further interest rate reductions

Nguyen Hoai Thu, CEO of VinaCapital Securities Investment Fund, said at the conference that the US Federal Reserve's recent interest rate cuts have given the State Bank of Vietnam greater flexibility to manage inflation and exchange rates effectively.

While the average 12-month savings interest rate currently stood at 5% per year, Thu believed there was potential for further reductions.

"The Fed is expected to continue lowering interest rates several more times this year, which will create additional space for the State Bank to follow suit," Thu said.

She noted that foreign investors' net selling has gradually decreased. Data compiled by VinaCapital shows that in September, foreign investors net sold more than $100 million, down for the third consecutive month and about 17% of the peak tally in June.

"We think that foreign investors may return to the Vietnamese market to catch a new wave of price increases," Thu said.

On Vietnam's stock market upgrade, Thu said the country could attain “emerging market” status by 2025, which would officially take effect in 2026.

"With these positive factors, VinaCapital believes that foreign investors will return, and the stock market will show positive growth in the next 12 months, driven by profit growth," she added.