Vietnam’s Businesses Starving for Capital

American investors have an opportunity for attractive returns in Vietnam, whose small- and medium-sized businesses prioritize capital but confront lending rates as high as 27% at domestic banks.  Issuing stocks to raise capital also has become less attractive because of the prolonged downtrend in the public equity markets.

Last year $2.17 billion in corporate bonds were issued successfully, compared to $1.45 billion the previous year, but the bond market accounts for less than 9% of the economy compared to 52% in China and 200% in Japan.

US investors seem like logical candidates to team up with busineses in Vietnam because the two economies are, in a sense, mirror images of each other: Whereas the U.S. has high labor and material costs and capital in search of good investments, the opposite can be said of Vietnam.

More on Vietnam’s capital needs

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