HO CHI MINH CITY -- Global investors are seeing a slew of Vietnamese companies announcing initial public offerings and partnerships in the U.S. as Prime Minister Nguyen Xuan Phuc visits the country this week.
The U.S.'s withdrawal from the Trans-Pacific Partnership, the trade agreement under which communist-led Vietnam was supposed to have been a prime beneficiary, has prompted businesses to rush into the U.S. to access capital as well as technology.
The deal announcements are providing rousing background music to Phuc's official U.S. visit between May 29-31.
The chief executive of Vietjet Air, Nguyen Thi Phuong Thao, is expected to visit the New York Stock Exchange to study the possibility of a listing there in the near future. The Southeast Asian country's second biggest airline is also set to sign agreements for capital loans and engine purchases with U.S. partners.
Vietnam's first private low-cost airline said it had begun proceedings to list shares overseas, following a successful IPO at home in February.
FPT software, a subsidiary of Vietnam's leading information technology group FPT, will sign agreements with its U.S partners on the sidelines of the official summit meeting between Phuc and U.S. President Donald Trump on Wednesday. FPT is teaming up with U.S. partners with a focus on software and IT solution development.
Meanwhile, VNG, a Vietnamese online gaming startup, and Nasdaq Securities Exchange have signed a memorandum of understanding on VNG's initial public offering on the Nasdaq, marking the first Vietnamese technology company to tap New York's capital market.
Established in 2004, VNG has grown to be a leading internet and technology company in Vietnam, with more than 2,000 employees.
The company's products include the Zalo app, the second most popular social network in Vietnam after Facebook, with around 70 million accounts. VNG is expanding beyond Vietnam's borders after launching a trial of Zalo in Myanmar last year, attracting 2 million users there so far. The company also owns the Zing brand, which is the most popular online entertainment and news platform in Vietnam.
VNG's chairman and CEO Le Hong Minh said the decision to list on Nasdaq would inspire passion and high aspirations among startups at home.
Nasdaq will help VNG through the listing process, including meeting a strict set of requirements for a company from an emerging economy like Vietnam to list on the market. "It is the first step not only in supporting VNG but also supporting
entrepreneurship in general in Vietnam," said Robert H. McCooey Jr., a senior vice president of Nasdaq's listing services unit.
The Hanoi government has been encouraging local technology startups to expand globally, for example by making overseas market debuts. Meeting Nasdaq's representative was one of the first things on Phuc's agenda during his official U.S. visit. Though Vietnamese laws require local companies to list shares on the domestic market before going overseas, local experts believe Hanoi is willing to support local companies searching for capital to quickly move to international markets.
It is understood that the failure of the TPP has actually spurred Vietnamese companies to accelerate their ventures into the U.S. In the future, Vietnam will still need the U.S. market, as well as its capital and technology to achieve economic growth and fulfill development policy, according to Le Hong Hiep, an expert from the Institute of Southeast Asian studies (ISEAS) in Singapore.
Vietnam is one of several nations with huge trade imbalances with the U.S. that are being investigated by the Trump administration. The U.S. president has warned of a possible change in trade policy towards these economies.
However, after the White House withdrew from the TPP, Hanoi sought an alternative mechanism to maintain bilateral trade and economic cooperation between the two countries, besides enhancing their military partnership.
Bilateral trade between the two nations gained significant momentum after the signing of a U.S.-Vietnam Bilateral Trade Agreement in 2001. The U.S. emerged as Vietnam's biggest export market, worth $38.5 billion last year. The U.S. is also an important investor in Vietnam's development, ranking 8th among 116 countries. Foreign direct investment from the U.S was $10.2 billion as of April 2017, with 42.9% of that in the accommodation, food and drink sectors and 27.8% in manufacturing and processing.