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Setting standards for mid-end apartments

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2017 witnessed an upward trend in the mid-end residential segment, which is forecasted to continue to grow in 2018.

According to the Ho Chi Minh City Department of Construction, a total of 37,502 apartments were rolled out in Vietnam’s business hub in 2017, of which the mid-end and affordable segments contributed 74.6 per cent. The mid-end segment accounted for 45.5 per cent with 19,509 units, an increase of 16.4 per cent year-on-year. Meanwhile, the affordable segment made up 29.1 per cent with 12,495 units, up 67.3 per cent year-on-year.

According to CBRE Vietnam, the Hanoi real estate market had 35,000 new apartments for sale in 2017. The mid-end and affordable segments dominate the market with 80 per cent of the new supply. In 2017, the market recorded 23,000 successful transactions, up 12 per cent against 2016.

“The residential housing market witnessed a shift in homebuyers’ preferences. Despite not being in prime locations, some projects have been snapped up by homebuyers due to their good investment value, improved design, and on-site amenities. In the first quarter of the launch, these projects recorded healthy take-up rates of over 70 per cent,” said Duong Thuy Dung, senior director of CBRE Vietnam.

She predicted that housing prices and absorption rates will rise across all segments in 2018, especially those built by prestigious developers in the mid-end segment with good quality, and full amenities. The mid-end segment carrying a price tag of VND1-2 billion ($44,000-88,100) per unit has been consistently leading the market due to high liquidity.

On the investment side, Bui Nguyet Nga, deputy director of Van Thai Land, said that the company focuses on the mid-end and affordable segments to serve the genuine demand of homebuyers. As they place high value on sharing benefits with customers, many of their mid-end and affordable projects have been welcomed by homebuyers when the market was sluggish in 2013-2014 and robust in 2016-2017.

Standards for mid-end apartments

According to Duong Duc Hien, director of Residential Sales at Savills Hanoi, the standards for mid-end apartments include location, scale, design, price, as well as handover requirements. The projects need not be located in the central business districts, as Tier 2 districts suffice.

“In the fourth quarter of 2017, over 50 per cent of the new supply was in the east of Hanoi from Khuat Duy Tien and To Huu streets to Thang Long Boulevard and Highway 32,” he said.

Luxury projects have their own swimming pools, smart parking, and a full suite of on-site amenities. Meanwhile, mid-end projects do not have top-notch amenities and sophisticated design. Development expenses will increase with more complex design details, so most mid-end projects are not built on innovative ideas.

With regards to handover requirements, Hien said that a typical apartment is composed of a bed room, living room, kitchen, and bathroom. However, high-end apartments are equipped with luxury bathroom fixtures from Kohler and TOTO, while a mid-end apartment has mid-range products.

Nguyen Hoai An, director of Professional Services at CBRE Vietnam’s Hanoi Branch, said that the difference between two segments lie in quality, the number of amenities, number and speed of elevators, number of units and storeys, as well as the brand of the on-site supermarket. The price of mid-end apartments ranges from VND20-30 million ($880-1,320) per square metre. Two-bedroom apartments are quite common with a living space of 60-70sq.m per unit, while three-bed room apartments are designed with a living space of 90-100sq.m.

A wave of investment

Real estate companies have been increasingly developing mid-end products to meet the robust demand in the market. Such projects are mainly located in the suburban area with low land prices and almost completed infrastructure connecting with radial lines and ring roads.

Notable developers in Hanoi include Hateco JSC with Hateco Apollo in South Tu Liem District and Hateco Hoang Mai in Hoang Mai District. Hanoi Export-Import JSC (Geleximco) has invested in An Binh City in North Tu Liem District, as well as Gemek Tower and Gemek Premium in Hoai Duc District. Lung Lo 5 Investment and Development JSC is also developing WestPoint in Hoai Duc District.

In Ho Chi Minh City, the wholly-owned South Korean company IDE Vietnam has injected VND1 trillion ($44 million) into the Green Town Binh Tan project housing 1,100 apartments with the starting price of VND16.5 million ($726) per sq.m.

Hwang Byung-Lak, chairman of IDE Vietnam, said that Vietnam has a young, growing population with an increasing demand for housing. Mid-end apartments are dominating the real estate market, making it ideal for Green Town Binh Tan.

He added that the company will commence the handover in the fourth quarter of 2018 with 1,100 apartments, 11,000sq.m of greenery, and a wide range of amenities like swimming pools, parks, and shopping malls. All apartments have new flooring with wood in the bedroom, imported wooden kitchen cabinets, bathroom fixtures, as well as hallway.

Staying on top in 2018

Hien from Savills Hanoi is upbeat about the outlook of the mid-end segment in 2018. He said that mid-end apartments will lead the market this year due to the high demand from medium-income earners. The mid-end segment is also an attractive property investment channel with healthy rental yield.

“Mid-end apartments are a preferable option for tenants who cannot afford to buy houses, which has been the trend driving the market in recent times,” said Hien.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said that the city will take steps to solve the imbalance in supply and demand, promoting healthy and sustainable development. This reflects a shift to affordable housing to meet the genuine demand of lower- and middle-income homebuyers in the market.

“The market for apartments carrying a price tag of less than VND2 billion ($88,100) is about to become the key segment and lead market liquidity,” Chau said.

Source: Duc Thanh

Vietnam-based enterprises turn to digital AGM?

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To match the global trend of digitalisation, Vietnam-based enterprises have been gradually switching to the new annual general meeting (AGM) management method which could save time as well as prove geographically ideal and cost-effective for participants, especially large enterprises.

Nguyen Thi Lien Ngoc, manager of investor relations at Mobile World Investment Group (MWG), disclosed that the firm’s upcoming AGM on March 16 will be live-streamed between Hanoi and Ho Chi Minh City with professional support from a third party specialised in modern technology.

Ngoc further added that Mobile World first implemented an online AGM in 2017, selecting a reputable technological services provider in order to ensure efficiency and minimise related costs.

Since 2011, Refrigeration Electrical Engineering Corporation (HSX: REE) has been hosting live-streamed AGMs connecting its two branches in Hanoi and Ho Chi Minh City where shareholders could observe the voting process at the other branch.

As usual, the firm has to spend one to two months to prepare its AGM every March. Specifically, a representative of Thien Nam Trading Import Export JSC (HSX: TNA) pointed out that the firm spent around 45 days to prepare for its AGMs.

He claimed online AGMs were far more effective as it is easier to countermand setbacks, such as physical invitations sent to shareholders going missing or date adjustments not being updated in time, which could occur to any firm’s AGM.

To date, one of the leading online solutions providers in catering digital AGMs is FPT Securities, a Vietnam-based financial institution which provides live and electronic voting platforms (semi-digitised AGMs).

In 2018, apart from FPTS, Securities Depository Center also supplies online services such as online meetings and electronic voting (e-voting) for Vietnam-based enterprises.

Source: Ngoc Nhi

Video: 10 Best Places To Visit In Vietnam in 2018

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10 Best Places To Visit In Vietnam in 2018,

By: World Top

Hanoi continues promoting image on CNN in 2018

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Hanoi will keep having its advertisements run on a major American news channel in 2018 as part of a large contract made two years ago, in a bid to attract more foreign visitors to the Vietnamese capital.

An official document by the Hanoi Department of Tourism said that the continuation conforms to a memorandum of cooperation and a $2 million agreement signed in 2016 by Hanoi and CNN, valid from 2017 through 2018.

On March 1, the department received a letter from CNN informing it of the broadcast schedule on CNN International of the advertisements, which are produced by the channel’s editorial staff and have the content checked by Hanoi.

The network is expected to show three 30-second advertisements of the city, namely Hanoi-Vietnam’s Heart, Hanoi-Cradle of Heritage and Hanoi-History, Culture and People.

They are broadcast in three periods, lasting from March 5 to December 23, on the CNN network covering the Asia-Pacific, Europe & the Middle East, North America and South Asia.

The minimum number of times of carrying the advertisements is 1,510.

One million dollars’ worth of advertising has been spent on the channel so far.

The remaining $1 million will be used to pay for promoting the image of Hanoi and its businesses, said Nguyen Duc Chung, chairman of the municipal People’s Committee.

The purpose is to draw international visitors to Hanoi and Vietnam, Chung added.

Source: Tuoi Tre News

Amazon opens door to Vietnam exports in herald of market entrance

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Amazon, the world’s largest Internet retailer by revenue and market capitalization, is set to officially open up its platform to exports from Vietnamese businesses this month, an insider told Tuoi Tre (Youth) newspaper.

Amazon’s head of sales in Singapore would be in Vietnam later this month for an e-commerce forum held in Hanoi and Ho Chi Minh City, where the executive is expected to sign a deal with the Vietnam E-Commerce Association (VECOM), a VECOM representative said on Tuesday.

The 2018 Vietnam Online Business Forum (VOBF 2018) will open in Hanoi on March 14, before moving to Ho Chi Minh City on March 16.

The Amazon sales executive will take to the stage at both events to outline the company’s analysis of Vietnam’s fast-growing e-commerce market, as well as its strategies in the Southeast Asian nation.

The upcoming deal, which was discussed at a meeting late last year between Amazon and VECOM, would open the door for Vietnam’s small and medium-sized enterprises to reach foreign markets through Amazon’s platform.

The move is seen as the company’s first step in wading into Vietnam’s ludicrous online retailing market, which reported a growth rate of 25 percent in 2017 and is showing no signs of slowing down, according to VECOM.

There are reportedly thousands of websites offering online shopping experience in the Southeast Asian country of 93 million people, which posted an average increase in revenue of 35 percent last year, VECOM said.

As online retailing blooms in Vietnam, delivery services also saw hiking growth rates of between 62 percent and 200 percent in 2017, the association added.

The entrance of Amazon into Vietnam is forecast to be warmly welcomed by local consumers, who have resorted to ordering via third parties or paid extra shipping fees to buy products sold on the platform.

Amazon’s Vietnam venture will not be entirely smooth sailing, economic experts predict, as the U.S. tech giant will face fierce competition from local powers and Chinese investors that have spearheaded the ‘foreign invasion’ into the market.

Chinese e-commerce giant JD.com recently poured US$44 million into Tiki, one of Vietnam’s first and largest Internet retailing platforms, to become a strategic shareholder at the company.

China’s Alibaba, the world’s top online retailer by total sales, has also spent nearly $1 billion taking over the control of the Southeast Asian business of German e-commerce company Lazada, including its operations in Vietnam.

Singapore’s Shopee and South Korea’s Lotte have announced their multimillion-dollar plans to remain in the race for a fair share of Vietnam’s e-commerce market as well.

Amazon’s chief executive and founder Jeff Bezos is the world’s first centi-billionaire, according to the latest Forbes rich list.

Bezos’ net worth has now surpassed the $112 billion mark, making him the only person on the ultra-wealthy list worth more than $100 billion.

Source: Tuoi Tre News

Global Accelerator Programme 2018 Ho Chi Minh Roadshow

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It’s that time of the year again. The largest startup accelerator in Southeast Asia is looking for you to join their next batch! An evolution of four successful regional accelerators by Malaysian Global Innovation & Creativity Centre (MaGIC), the Global Accelerator Programme (GAP) focuses on supporting and developing local and global startups. Through the 4-month programme, GAP aims to prepare startups with the knowledge and network to scale successfully in ASEAN.

Join MaGIC’s GAP team for a community sharing session.

Topics GAP team will be covering:

Benefits of joining GAP
Application tips and chances of getting into the programme

For more information on GAP’s 2018 Roadshow and programme details, please visit us at http://mymagic.my/gap/ or drop our team an email at gap.team@mymagic.my

Malaysian Global Innovation & Creativity Centre (MaGIC)’s award-winning Global Accelerator Programme has started accepting applications, and the portal will remain open until 26 March.

This year, for its second batch of participants, Global Accelerator Programme (GAP) will help equip 30 global startups with the necessary skills, knowledge, and network to break into ASEAN and become investment-ready in four months. The programme provides four months of mentoring; direct access to route-to-market partners such as Google, Malaysia Airlines, Maxis, Maybank, Media Prima and others; accommodation and flight reimbursements; marketing allowance and monthly stipend; 6 months professional visitor pass; and benefits worth over USD500,000 from Amazon Web Services, 123RF, Canva, GRAB, ipay88 and many more.

Last year GAP was ranked as one of the top ten most active accelerators in the world last year. It was also recognized as the “Best Accelerator Programme” by ASEAN Rice Bowl Startup Awards and Malaysia Rice Bowl Startup Awards in 2017.

In the coming month GAP will also be travelling to 18 cities to share more insights into the programme and how it will help startups scale their business in ASEAN. Click on the following link to find out when they will be coming to a city near you: http://mymagic.my/gap/.

Transaction is as easy as sending an emoji: a Happiness Saigon & VIB project

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The demand for online transaction is rising with the popularity of e-commerce. VIB introduces MyVIB-Social Keyboard: a app specially designed for easy and safe online money transfer via text messages.

Social Keyboard – a breakthrough in the future of online transaction.

As life is getting busier and schedules are getting tighter, online money transfer is gaining its popularity. However, the frustrations caused by errors and lengthy verifying process are among the concerns about the convenience and safety of this method.

With that insight, VIB introduces MyVIB – Social Keyboard to help clients cut the time for a transaction down to a single minute, with extremely simple steps. When clients chat on online social platforms (Facebook Messenger, Viber, Zalo, Whatsapp, WeChat, Twitter, Snapchat…) and at the same time, wish to make a money transfer directly to the other end, they can simply switch to the keyboard on the screen without opening any other app. It’s the same as switching to emoji keyboard.

Not only time-saving, Social Keyboard is also extremely safe with the innovative security technology. Every transaction is secured with a different OTP code, which is sent directly to the phone of the sender. The customer can rest assured that the money is where it should be.

According to Mr. Tran Nhat Minh, Vice President of VIB: “The online purchases made via e-commerce sites are accelerating at top speed in recent years. That’s why we are hoping MyVIB – Social Keyboard is not only a fun banking experience on smart devices for tech-savvy shoppers, but also an initiatives to slowly reduces the use of cash according to the Government’s direction.”

With MyVIB – Social Keyboard, online shopping has never been so handy and fun.

Social Keyboard – Transaction as easy as sending Emojis ad is developed and produced by Happiness Saigon, launched on VIB Fanpage on January 15, 2018.

Website: www.happiness-saigon.com
Facebook: https://www.facebook.com/happinesssaigon

For more information or appointment please contact: Alan Cerutti – alan@happiness-saigon.com

By Ngan Pham, Happiness Saigon

Bitcoin Price ‘More Likely To Hit $100’ Without Illicit Uses, Says Harvard Economist

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A Harvard economist told CNBC Tuesday, March 6 that Bitcoin is “more likely to be worth $100 than $100,000” by 2028.

Speaking to reporters during an edition of the network’s Squawk Box segment, professor and economist Kenneth Rogoff implied Bitcoin only had value because of its use in “money laundering and tax evasion.”

“I would see $100 as being a lot more likely than $100,000 ten years from now,” he said, continuing:

“Basically, if you take away the possibility of money laundering and tax evasion, [Bitcoin’s] actual uses as a transaction vehicle are very small.”

Rogoff joins a diminishing number of traditional finance figures still maintaining a firm anti-Bitcoin stance. Despite high-profile naysayers such as JPMorgan CEO Jamie Dimon U-turning on their negative opinions in recent months, others remain highly skeptical.

Last month, Berkshire Hathaway vice president Charlie Munger adopted a particularly harsh tone, telling the audience during an AGM speech that Bitcoin was “totally asinine” and that people investing in it “disgusted” him.

Despite mixed perspectives on price performance, the implication of Bitcoin in organized crime has come under more serious doubt this year. Despite Europol this month suggesting as much as $5.5 bln per year is laundered via cryptocurrency, Bitcoin in particular has lost favor with perpetrators, who allegedly prefer other more anonymous assets such as Monero.

Rogoff meanwhile appears alone in suggesting regulation will force the price of Bitcoin down, not up, while many industry commentators welcome regulatory moves as a step towards mainstream acceptance and adoption.

The European Commission, the EU’s executive arm, is set to reveal plans for a joint regulatory effort on fintech, including Blockchain, Reuters reported Monday, March 5.

A copy of a draft document seen by the publication, due for release “as soon as this week,” suggests a desire for EU regulators to adopt blanket rules governing issues such as crowdfunding and “[b]lockchain technology standards.”

This, Reuters suggests, forms part of a move to end the “patchwork” system of regulations currently in force across member states of the bloc.

“An EU framework would offer a European passport, and, at the same time, ensure the proper management of platforms and the protection of fund providers,” the draft reportedly states.

Unlike cryptocurrency, Blockchain treatment has become a central focus for the European Commission, which early last month unveiled

its dedicated EU Blockchain Observatory and Forum.

Billed as “one of the world’s most comprehensive repositories of blockchain experience and expertise,” the entity should function as a melting pot for various bodies to “discuss and develop new ideas and directions” involving Blockchain technology.

Meanwhile on the topic of cryptocurrency, the EU’s financial services chief Valdis Dombrovskis said during a Commission speech Feb. 26 that lawmakers “stand ready” to introduce regulation if necessary.

At the same time, the EU “must embrace the innovation” of Blockchain, he concluded.

Source: William Suberg

Vietnam’s FLC aims to buy 24 Airbus planes

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Vietnamese property developer FLC Group said on Tuesday it wants to buy 24 Airbus A321neo aircraft for its planned Bamboo Airways operation up until 2025, a deal potentially worth $3 billion.

The announcement signalled an increasingly ambitious plan to invest in Vietnam’s fast-growing aviation industry by FLC, which said last year in an interview with Reuters it plans to lease about seven aircraft by 2018 from Airbus.

Hanoi-based FLC, whose main businesses are housing, resorts and golfing, has not yet obtained a licence to operate an airline, and said in a statement it is waiting for the Vietnamese government to approve its application.

“After studying and carefully scrutinising the options, FLC Group and Bamboo Airways have decided to order 24 aircraft from Airbus…until 2025,” FLC chairman Trinh Van Quyet said in the statement.

“After operating and testing performance, we will calculate the options to cooperate further,” Quyet said.

FLC expects to buy a further 24 Airbus A321 long-range planes after the Vietnamese firm obtains an airline licence from the Vietnamese government, the firm said in a statement on its website after meeting Airbus representatives.

Vietnam currently has four airlines, including flag carrier Vietnam Airlines, budget operator Jetstar Pacific Airlines partly owned by Vietnam Airlines, budget carrier Vietjet Aviation and Vietnam Air Services Co.

“While waiting for the business licence application to be approved and the order to be confirmed, I propose FLC and Airbus sign a memorandum of understanding on the cooperation in buying 24 A321neo planes worth $3 billion,” Jean-Francois Laval, an Airbus executive vice president, was quoted in the FLC statement as saying.

FLC said it plans to operate international flights through Bamboo Airways to tourist spots in Vietnam including where FLC’s properties are placed, while it also plans domestic flights.

Vietnam’s airport capacity has been reaching its limits as more people in the nation of 90 million take flights and as the economy grows at among the fastest rates in Asia, prompting the government to be more hesitant in handing out airline licences.

Budget airlines VietJet Air posted an estimated jump of 75.9 percent in pre-tax profit last year, while Vietnam Airlines also reported a 26.7-percent increase in net profit in 2017. (Reporting by Mai Nguyen, editing by Louise Heavens and Adrian Croft).

Source: Reuters

Vietnam’s billionaire count doubles to 4 on Forbes’ rich list

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Chairmen of steel and automotive corporations are the latest Vietnamese to crack into Forbes’ list of world’s billionaires.

Vietnam has doubled its number of billionaires from last year to four in Forbes magazine’s recently released 2018 list of world’s richest people.

Pham Nhat Vuong, owner of real estate conglomerate Vingroup and Vietnam’s first billionaire, enjoyed his sixth consecutive appearance on the list, being the world’s 499th richest person this year. Vuong also retained his position as Vietnam’s richest man with a net worth of $4.3 billion, a $1.9 billion increase compared to last year.

CEO of budget carrier VietJet Air Nguyen Thi Phuong Thao also had her second appearance on the list as the 766th richest person in the world. Vietnam’s richest woman had an estimated net worth of $3.1 billion, nearly three times her wealth when she made her debut appearance last year with $1.2 billion.

Forbes magazine’s list this year also sees the debut appearance of two other Vietnamese: Tran Ba Duong, chairman of Truong Hai Auto Corporation (Thaco) and Tran Dinh Long, chairman of Hoa Phat Corporation.

Duong, 57, was ranked 1339th in the list with a net worth of $1.8 billion. He founded Thaco to sell cars in 1997 and the company later started assembling cars for foreign brands such as Kia, Mazda, Peugeot, as well as producing its own buses and trucks. Thaco became the biggest car company in Vietnam with a 32 percent share in the automobile market by 2016, according to Forbes.

Meanwhile Long, 57, was listed as world’s 1756th richest person with a net worth of $1.3 billion. He founded Hoa Phat as an equipment and parts distributor in Hanoi in 1992. The company is currently considered the biggest steelmaker in Vietnam, providing the market with office equipment, steel pipes and construction steel.

Vietnam’s fish sauce magnet Nguyen Dang Quang, who was named Vietnam’s third billionaire in January by Bloomberg Billionaires Index, didn’t make the Forbes list. Bloomberg estimated the chairman and founder of Masan Group’s total assets at $1.2 billion.

Topping the Forbes list this year was Amazon founder Jeff Bezos, who became world’s first centi-billionaire with a net worth of $112 billion, up $39.2 billion from 2017. Bill Gates, Microsoft’s co-founder and last year’s richest person, dropped to second place with a net worth of $90 billion.

Gates is followed by Berkshire Hathaway chief Warren Buffett ($84 billion), CEO and chairman of luxury goods empire LVMH Bernard Arnault ($72 billion) and Facebook creator Mark Zuckerberg ($71 billion) rounded out the top five.

This is the 32nd year Forbes magazine has compiled its list of world’s billionaires. This year’s list sees a record 2,208 billionaires with a combined wealth of $9.1 trillion, an 18 percent increase from last year.

The U.S. still had the most billionaires with 585, followed by China with 476.

Source: Ha Thu, Anh Tu

Waves of objections against Vietcombank’s service fee rise

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In early March, Vietcombank officially announced adjusting its service fee, especially fees for online bank transactions.

With over 10 million individual clients, Commercial Bank for Foreign Trade of Vietnam (Vietcombank) ran into great objections from the public, who grouped up on social networking sites like Facebook and online forums to protest the bank’s latest alteration of service fees.

The bank’s representative noted the new service fee would come along with countless benefits, such as new service options and partnerships with hundreds of goods and commodity providers which could in turn reduce online transaction times. However, these promises have not soothed the public.

Specifically, the bank’s service fee modification revolved around electronic banking transactions, such as internet and mobile banking, due to the rapidly growing number of online transfers.

Nguyen Tri Hieu, a Vietnamese finance-banking expert, highlighted that a commercial bank would rather gain revenue from its service performance and the credit segment than simply from the credit segment, which entirely matches the bank’s restructuring scheme as well as enhances its sustainable development.

Despite agreeing that a commercial bank has to charge clients after services rendered to alleviate dependence on credit, Hieu further added that the fees in Vietnam are fairly high in comparison to other banks in the region and even US-based commercial banks.

Bui Quang Tin, founder of the entrepreneurial school BizLight, pointed out that Vietcombank’s raising service fees should not be so much of a surprise since demand for banking services has been growing steadily over time, making it imperative for banks to invest into system security and transaction performance.

He further added that the bank’s service fee adjustment should result in stronger account security as well as less “savings-vanishing” incidents like the recent case at Eximbank.

Source: VIR

The quiet night glow of Bai Dinh pagoda

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Bai Dinh Pagoda in the northern province of Ninh Binh has been attracting many pilgrims during early days of the Lunar New Year due to its remarkable Buddhist architectural structures and for the tranquil atmosphere and stunning beauty at night.

Bai Dinh is Vietnam’s largest pagoda. It is open to 9pm daily for visitors and is accessible around the clock during the festival.

The highlight of Bai Dinh pagoda is the night time view of 13-storey Bao Thien tower. It costs VND50,000 for each visitor to go up to the tower by elevator.

Bai Dinh pagoda festival opens on the 6th day of the first lunar month and lasts until March. Visitors have the chance to discover giant bronze Buddha statues during the night time tour of the pagoda.

Tam The temple is the highest structure in the pagoda and is home to many giant Buddha statues.

Concluding the tour, visitors can enjoy coffee on the summit of Dinh Mountain while enjoying the cool and quiet ambience of Bai Dinh pagoda at night.

The quiet night glow of Bai Dinh pagoda (photo)

Source: VOV

Announcement: Moody’s: Vietnam banks’ 2017 results show widening divergence in asset quality and profitability performance

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Singapore, March 06, 2018 — Moody’s Investors Service says that the full-year 2017 results for the 14 Vietnamese banks that Moody’s rates show that asset quality improved moderately year-over-year. Profitability also improved, driven by robust macroeconomic conditions and growth in core income.

By contrast, capitalization deteriorated because of rapid asset growth and cash dividends. And, the banks’ funding profiles weakened mildly, as they increased their reliance on market-sensitive liabilities — mainly borrowings from other banks — to fund loan growth with cheap short-term funding sources.

“For 2018, we expect that the banks will continue to improve their asset quality and profitability, while capitalization will weaken,” says Eugene Tarzimanov, a Moody’s Vice President and Senior Credit Officer.
“But the credit profiles of banks with stronger capital buffers and lower asset risks will be further distanced from the other banks,” says Rebaca Tan, a Moody’s Analyst.
Moody’s analysis is contained in its just-released report titled “Banks — Vietnam: 2017 results show widening divergence in asset quality and profitability performance,” and is co-authored by Tarzimanov and Tan.

On asset quality in particular, Moody’s says that the improvement in 2017 versus 2016 was helped by problem asset recoveries and write-offs, as well as credit growth. The asset weighted-average problem loans ratio at the 14 rated banks fell to 5.7% at the end of 2017 from 6.7% the year before.

Notably, four banks fully wrote off Vietnam Asset Management Company bonds that they had received in exchange for problem assets, and Moody’s expects more such write-offs in 2018.

Problem loan coverage ratios also improved, although they are still at levels which are weak by international standards.

Moody’s says that the banks’ asset quality will improve further in 2018, due to recoveries, but rapid credit growth could mask asset risks.
With profitability, Moody’s points out that the banks’ asset weighted-average return on assets rose to 0.9% in 2017 from 0.7% in 2016. Profitability will continue to improve in 2018, on the back of the same factors that drove up profitability in the prior year; in particular, robust macroeconomic conditions and growth in core income.

As for capitalization, the asset weighted-average ratio of tangible common equity to total assets for the banks slipped to 5.5% in 2017 from 5.7% in 2016, pressured by declines at government-owned banks, in particular.
Nevertheless, some banks, such as Vietnam Prosperity Jt. Stock Commercial Bank (B2 stable, b3), Vietnam Technological and Commercial Joint Stock Bank (B2 stable, b2), and Ho Chi Minh City Development JSC Bank (B2 stable, b3), strengthened their capital bases through the sale of new shares.
Moody’s expects that more Vietnamese banks will increase capital by issuing new shares in 2018. But overall capitalization levels will remain under pressure over the next 12 months from credit growth and dividend payments.

Moody’s explains that in terms of funding, the banks’ funding profiles weakened moderately, as seen by the system-wide asset weighted-average loans-to-deposits climbing to 86% in 2017 from 85% in 2016. This trend could continue in 2018, because loan growth remains rapid.

Subscribers can access the report at
http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1114552

Source: Moody’s

Amazon set to wade into Vietnam’s fast-flowing e-commerce market

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The American giant is ready to sign a deal to open its platforms up to Vietnamese exports.

American e-commerce giant Amazon is set to join Vietnam’s fast-growing market this month by opening up its platforms to local small and medium enterprises.

A VnExpress source said the company is expected to sign a deal with the Vietnam E-Commerce Association at an e-commerce forum in Hanoi on March 14.

The deal was discussed at a meeting late last year between the association and Amazon, the world’s most valuable brand now worth $150 billion, according to Brand Finance Global Ranking.

Its development strategy will be revealed at the Vietnam Online Business Forum, which will be held first in Hanoi and then move to Ho Chi Minh City on March 16 and include discussions regarding online shopping trends, tax management and new technologies.

Vietnam’s e-commerce market grew by 25 percent last year and is expected to maintain its growth in the next three years, according to the association. Revenue from online retail is forecast to hit $10 billion by 2020, accounting for 5 percent of the country’s retail market.

The thriving market has attracted global giants.

Last November, Chinese e-commerce conglomerate Alibaba signed an agreement with the National Payment Corporation of Vietnam (NAPAS) that will allow Chinese tourists to use its online payment platform in Vietnam.

The deal came quickly after Alibaba founder Jack Ma visited Hanoi and spoke at a prominent e-payment forum. Alibaba made a regional expansion push in 2016 by spending $1 billion to buy a controlling stake in Singapore-based online retailer Lazada, which also operates in Malaysia, Indonesia, the Philippines, Thailand and Vietnam.

By Anh Tu, VNexpress