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Intel chips in with some weighty experience (18/09/2008)

Sudheer Kumar Kuppam, Intel Capital’s APAC managing director, has surveyed a number of markets, including Vietnam. He talks with Vietnam Investment Review about the Vietnamese stock market’s Intel Capital potential and its plans for the near future.
 
What is the Vietnamese stock market’s role in your investment strategy in the Asia-Pacific region?

Vietnam’s stock market is a developing market which attracts Intel Capital’s attention. According to Intel Capital, Vietnam is a great potential market for investment. The government is creating good conditions for investment funds to operate in this market.

The rate of development of Vietnam’s economy is good for the explosion in investment.

I am here to affirm Intel Capital’s constant presence in the Vietnamese market. On this Vietnam visit, we will look for new investment opportunities, meet with government officials and discuss measures to speed up the equitisation-privatisation process for enterprises in Vietnam. We will also meet with other investment funds which have been investing in Vietnam so as to share a vision towards planning long-term investment strategies in this market.

What is the difference between Intel Capital and other investment funds in Vietnam?

Information technology is high on Intel Capital’s list of priorities. We pay special attention to mobile phone technology, consumer electronic products, Wimax, software, application solutions, game development programmes and IT services. Besides, we are only interested in a given stage of a company, especially a company in preparation for its IPO.

To attract capital from Intel Capital, what conditions do Vietnamese companies need to meet?

There are four main conditions. Firstly, enterprises must be operating at a profit, their products, services and markets are developing well. Secondly, they must ensure their management machine operates under fair and consistent conditions. Thirdly, companies must have a good operational environment, and fourthly the size of their capital must be at least $2 million.

Apart from finance, what other benefits does Intel Capital provide to companies which it will invest in Vietnam?

If Intel invests in a company, it means that Intel Capital adds the value of its trademark worth billions of dollars to that of the company in which Intel Capital invests, thus creating a marked difference between this company and its rivals in the market.

Also, Intel is able to connect all companies in the Fortune 500 group, helping investing companies to gain easy access to local companies through annual seminars and technology meeting days. This helps increase turnover and the number of customers. Intel will especially share IT product development strategies with companies in which Intel invests so that they can expand or contract operations quickly according to market trends.

As a strategic investor with FPT, what is your opinion about the fact that FPT’s share price recently fell? A source said that Intel Capital would sell its FPT shares. Is it true?
Intel’s investment principles do not permit me to comment on listed enterprises. But one of my tasks on this Vietnam visit is to help FPT to organise the ‘Technology Meeting Day’.

What is your investment strategy in Vietnam in the near future?

In the three years to come, we will invest in Vietnam at a rate of two enterprises per year, and there will be no limitations on investment capital. Intel Capital will invest an average of 20 per cent in the total capital of a listed company. In special cases, investment can reach 30-40 per cent of the company’s capital.

The VN Index is now decreasing continually, causing many companies to postpone their IPOs. Does this affect Intel Capital’s investment plans?

One of Intel Capital’s investment principles is not to sit around waiting for profits. In other words, ‘if you want to eat, you have to go to the kitchen and prepare food’. This is a good point in time for real investors like Intel Capital.

Intel Capital’s point of view is that a good enterprise with a good trademark, good products and services and good strategies and vision only needs a good partner to work together, then their IPO will be successful. We come here to achieve this objective.

Besides enterprises in preparation for IPO, will Intel plan to set up an investment fund in Vietnam?

We do not have any plans to establish any investment funds in any countries this year. At present, Intel Capital has a fund worth $250 million in India, another worth $200 million in China and another worth $400 million in Japan. In my opinion, setting up a fund does not mean concentrating more investment in a market. Intel Capital’s view is to seek opportunities in markets in which Intel Capital is present and implement investment plans as quickly as possible.

(Source: Vietnam Investment Network)


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