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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

Deputy PM hosts Sumitomo Mitsui Bank’s senior official

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Deputy Prime Minister Vuong Dinh Hue received in Hanoi on March 5 Shosuke Mori, head of the Sumitomo Mitsui Banking Corporation (SMBC)’s Asia Pacific Division, describing the bank as an effective credit channel and a gateway for foreign investors, including those from Japan, to enter Vietnam.

The SMBC, one of the largest and oldest banks in Japan, is pursuing the new “Asia-centric” strategy which seeks to strengthen its business in Asia and Vietnam is an important part of the strategy, Mori told the Deputy PM.

As the Government of Vietnam has been restructuring the local banking system, the SMBC wants to take part in that process by sustainably developing Eximbank and supporting other local banks’ reforms in the coming time, he said.

As a global bank, the SMBC expects its clients worldwide will invest in Vietnam and the bank hopes to contribute to the development of Vietnam’s banking industry with its new banking management system, he added.

Deputy PM Hue welcomed the presence of SMBC in Vietnam and the role it is playing to restructure Eximbank.

He noted that a new scheme for restructuring credit institutions was adopted to improve capacity of commercial banks and accelerate the resolution of non-performing loans.

Though the restructuring process has harvested some positive outcomes but many challenges are waiting ahead, Hue said.

The government is committed to continue improving local business climate and providing favourable conditions for both domestic and foreign investors, he stated, adding that it will do it best to support SMBC in Vietnam.

The SMBC has made present in Vietnam since 1994 with two branches in Hanoi and Ho Chi Minh City. Last year, both of its branches posted no non-performing loans and a total of 291.6 billion VND (over 12.8 million USD) in net profit.

It is also Eximbank’s strategic investor who currently holds 15 percent of the Vietnam-based bank’s charter capital.

Source: VNA

Hanoi to become a smart city by 2030

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Hanoi set the target to turn into a smart city by 2030 in accordance to the capital’s revised information and technology strategy in the 2016-2020 period.

Foundations established

Phan Lan Tu, director general of the Hanoi Department of Information and Communications, said that the four priority sectors chosen to build the smart city are health, education, transport, and tourism. Since 2017, all four of these sectors have been developed in combination with the development of e-government and administrative reforms to lay the foundations of a smart city.

Regarding urban transportation, Hanoi has applied iparking to search for parking lots and pay for parking through mobile devices. This application will soon be deployed in all districts of Hanoi. Hanoi’s digital traffic map will be deployed to provide information on traffic status and manage public passenger transport in the city.

Regarding education, electronic school reports and family-to-school contacts as well as an online enrollment system has been put in use by 2,700 schools and universities, with the participation of 250,000 families and 6.3 million page views. The rate of online applications at the three levels of primary, secondary, and high school hit 70.68 per cent.

Regarding health management, Hanoi is the first locality to implement e-documents in its health management system, with 900,000 records so far.

Besides, a database of 7.5 million people has been built to set up an application to serve people, enterprises, and city management.

Nguyen Duc Chung, Chairman of the Hanoi People’s Committee confirmed that becoming a smart city is the essential orientation of Hanoi.

Core elements of a smart city

Based on smart cities established over the world, experts have concluded the core tasks Hanoi needs to complete. First, the city needs to be built on modern information technology and communication (ICT) infrastructure utilising the Internet of Things. People will be connected to their houses, as well as equipment, traffic, and vehicles, among others. Thereby, it is necessary to set up modern infrastructure in transport, healthcare, and education.

Second, citizens the city boasts very low levels of unemployment and relatively high incomes. This is the most important element in building a smart city.

Third, they need dedicated expert teams to manage and operate the technical system of the new smart city.

As a result, the process of building Hanoi as a smart city will include three phases. The first phase (2016-2020) will form the infrastructural foundations and build smart applications on traffic, tourism, environmental management, and security.

The second phase (2020-2025), people will be the stage to take smart city solutions into operation, and form the digital economy. In the third phase (2025-2030), Hanoi will become a functioning smart city.

Challenges along the way

Hanoi is in a good position as it is easy to mobilise investment from domestic corporations such as Viettel, VNPT, FPT, and CMC, and foreign ones like Microsoft.

Various countries with experience in smart city development expressed a wish to co-operate with Hanoi in this sector.

At a meeting with leaders of Hanoi, Prime Minister Lee Hsien Loong said that Singapore wants to invest and develop hi-tech parks and software industrial zones in Hanoi, strengthening co-operation in smart city development. Singapore is ready to welcome officers from Hanoi in particular and Vietnam in general to participate in training courses in Singapore, especially at Lee Kuan Yew School of Public Policy.

Nearly 80 per cent of professors and associate professors, over 80 per cent of leading experts, and more than 35 per cent of universities and research institutes are working and located in Hanoi.

However, Hanoi still has to face many difficulties and challenges to become a smart city, such as ICT infrastructure, general technical infrastructure, traffic jams, water shortages, waterlogging, wastewater treatment, and environmental pollution.

Besides, Hoang Trung Hai, Secretary of the Hanoi Party Committee, said that it is very difficult to ensure enough qualified human resources for smart city development and operating the e-government. Technology, which is an important foundation of a smart city, will connect the government to businesses and people, but human resources are key.

Despite the difficulties and challenges ahead, Hanoi has prepared well for smart city development. The Hanoi People’s Council has just approved the resolution adjusting the city’s programme on applying information technology in the operations of Hanoi’s state agencies until 2020. The programme’s budget has been adjusted from VND1.252 trillion ($55.2 million) to VND3 trillion ($132 million) to develop e-government and socioeconomic sectors.

Hai also required to synchronously develop urban and rural infrastructure, promote administrative reforms, as well as improve the investment climate and quality of human resources.

Source: VIR

Vinacafe seeks restructuring plan

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After a long period of hesitation, the Vietnam National Coffee Corporation (Vinacafe) is being pushed towards equitisation once more by the Ministry of Agricultural and Rural Development (MARD).

During a meeting on Monday at Vinacafe’s headquarter, Deputy Minister Ha Cong Tuan said he was not completely confident about the company’s latest restructuring plan.

According to Vinacafe, the company has formulated and submitted to the MARD a reorganisation and modernisation scheme for the period 2017-2020, while waiting for the Prime Minister’s consideration and approval.

It proposes equitisation at the parent company (Vinacafe), including seven agricultural companies and three other auxiliary units, plus the equitisation of 18 other subsidiaries, dissolution of four and the possible splitting-up of one.

The said plan will be Vinacafe’s third approved scheme since 2012. But Tuan was doubtful it would sit well with the Government this time.
He also expressed the Government’s firm decision on getting Vinacafe listed on the stock exchange, regardless of any difficulties that may arise.

In 2017, the corporation managed to equitise five subsidiaries. Nonetheless, there remain unresolved issues for each one, ranging from unapproved land usage to financial troubles, significantly prolonging the evaluation period and delaying the ultimate listing deadline.

Deputy Minister Tuan said Vinacafe has made very slow progress in implementing the plan’s content, compared to other State-owned enterprises.

He questioned the reason why two previous installments of Vinacafe’s restructuring plan failed, whether for reasons of feasibility or capability, while asking the company to better define its production and business orientation.

The MARD has requested Vinacafe lessen their dependence on the existing 16,500 hectares of coffee plantation, and develop a vertically integrated chain of purchasing, processing, and export. But it seems like they have failed to grasp a larger market share.

Vinacafe set a 2018 revenue target of over VND3.8 trillion (US$169 million), with a revenue goal of VND96 billion ($4.27 million).

At the end of 2017, the corporation reported revenue of VND3.7 trillion ($164.8 million). However, net profit came to just over VND77 billion ($3.4 million), just 73 per cent of the yearly goal.

The reason for the decrease in profit is a significant drop in coffee prices during the first quarter of 2017, coupled with reduction in farming area, leading to decreased productivity and general profit.

Vinacafe has made promises to focus on intensive investment, increasing productivity, lowering prices while stabilising output, in the hope of increasing quantity, export turnover and achieving a better growth and efficiency targets than 2017’s.

According to figures released by the General Statistics Office, coffee exports in the first two months of 2018 are estimated at 336,000 tonnes, up by 17.6 per cent year-on-year.

The export value of coffee reached $652 million in the first two months of 2018, a slight increase of 0.8 per cent over the same period in 2017.

Source: VNS

Banks report huge profits, bank shares’ golden days return

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Investors, impressed by banks’ high profits, have been rushing to buy bank shares, pushing prices up.

In 2017 Vietnam commercial banks reported huge profits of trillions of dong. As expected, with advantage in huge assets, three state-owned banks were the most profitable banks in 2017.

Of these, Vietcombank was the most profitable with pre-tax profit of VND11.3 trillion, an increase of 32 percent compared with the same period in 2016.

The second position belonged to VietinBank which reported profit of VND9.206 trillion, an increase of 8.9 percent.

With profit of VND8.8 trillion, which means a 14 percent increase, BIDV is in the third position in the entire banking system.

Sacombank made the biggest leap in 2017 with profit increasing by 9.5 times to VND1.488 trillion.

As banks all have reported big profits, the bank share price increase was expected. The average price of the shares of 13 banks being traded at the Hanoi & HCMC Stock Exchanges and UpCom (not including Bac A Bank which put its shares into transactions on December 28, 2017) has increased by 60 percent.

Even NVB, the shares of National Citizen Bank, which were traded at prices below nominal value for many years, also saw strong rise with prices hitting ceiling levels at many trading sessions.

NVB price exceeded the VND10,000 threshold in mid-June. The price of the share later went down for some time in 2017, but it still increased sharply by 58 percent by the end of 2017.

Similarly, SHB of the Saigon – Hanoi Bank also sees steady rise. It had a bad beginning in 2017 when its price stayed at VND4,000 per share. However, the price had soared to VND9,300 per share by the end of 2017, or 97 percent within a year.

Other banks, Military Bank and Asia Commercial Bank, also saw impressive share price increases of 84 percent and 71 percent, respectively.

Can Van Luc, a renowned banking expert, commented that investors have realized the great growth potential of the banking sector and are trying to pour money into bank shares.

“The stock market is growing well, the restructuring of banks and bad debt settlement accelerated after the release of new resolutions,” he explained.

Le Xuan Nghia, an economist, also thinks the banking system now has opportunities for recovering.

In 2016, the ROE of the whole banking system was at around 7 percent, while the figure rose to 11 percent in 2017. At some banks, the ROE is 20 percent.

Source: VietNamNet

HCM City real estate: eastern, western parts of city are ‘hot spots’

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The eastern part of the city will still be hot in 2018, while infrastructure works in the western part will attract house and apartment buyers, analysts say.

Jones Lang Lasalle (JLL), which successfully arranged a deal between Hong Kong Land and CII, says that 2017 was an eventful year with many M&A deals in HCMC, especially projects in Thu Thiem new urban area.

In December 2017, Hong Kong Land and CII signed a contract on developing Thu Thiem River Park in 2018 after a period of negotiations.

Meanwhile, Phuc Khang Corp has announced it will develop a housing project in the Thu Thiem urban area, also in 2018. Keppel Land Vietnam is considering developing a housing project in Rach Chiec, next to Palm City. Dat Xanh Group, a Vietnamese developer, puts high hopes on the Gem Riverside project located in southern Rach Chiec.

Dat Xanh’s marketing director Vu Quoc Viet Nam said the project, with 12 blocks of B-class apartments and 3,000 products, will be a key project of the company. The sale will begin in the fourth quarter of 2018 after legal procedures are completed.

Assessing the HCMC apartment market in 2018, Nguyen Hoang, R&D director of DKRA Vietnam, said the projects in the eastern part of the city are driving the market partially because B-class apartments account for a large proportion (B- and C-class apartments always sell well). Good infrastructure conditions are another reason.

It is expected that many transport projects will connect with the central area of the city, helping to ease traffic jams. These include the HCMC-Long Thanh-Dau Giay highway, Thu Thiem 2 Bridge, a bridge that links Mai Chi Tho Boulevard and Kim Cuong Island and Nguyen Thi Dinh Road.

When asked which areas in HCMC would be ‘hot spots’ in the housing market in 2018, Trang Bui from JLL said that good infrastructure conditions would turn the eastern part of the city, with projects in districts 2 and 9, into attractive destinations.

The eastern part of the city has been driving the local market for several years. However, analysts say the projects in the western part will be surprisingly active this year.

Nguyen Hoang from DKRA Vietnam said in late 2017 the firm had to conduct a survey twice because some areas in the western part ‘suddenly’ showed supply and demand exceeding that in districts 2 and 9.

In 2016, the eastern part of the city led the market in terms of apartment supply with 35 percent of market share, while the western part was 22 percent. But in 2017, the figures were 43 percent and 24 percent, respectively.

Source: VietNamNet

Foreign car makers try to navigate new law in Vietnam after two-month hiatus

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Over 2,000 Honda cars will be the first batch of foreign-made autos to undergo the new checks this week.

Foreign car makers are looking at ways to obtain the documetation required by a new law in Vietnam to reopen automotive exports to the country.

Two months after Vietnam put in place a rule requiring stringent inspections of imported vehicles, around 2,000 Honda Motor passenger cars are slated to arrive in Vietnam from Thailand early this week, likely the first batch of foreign-made autos to undergo the new checks, according to Nikkei Asian Review.

Honda has obtained quality certification from Thai authorities, and the Vietnamese government has apparently accepted the documents.

The Indonesian government is also planning to change the vehicle type approval (VTA) certificates it issues in an effort to reopen automotive exports to Vietnam.

“With the VTA adjustment, Indonesian automotive exports are expected to return to the country,” the Jakarta Post quoted Indonesian Trade Ministry international trade director general, Oke Nuwan, as saying.

“The government will convey the change in the VTA certificate to the Vietnamese government to get an immediate response. Hopefully, there will soon be automotive exports to Vietnam,” said Oke.

A new decree issued by Vietnam designed to protect its own developing automotive industry forced Indonesia to stop exports of completely built-up (CBU) vehicles to the country this month, according to the Jakarta Post.

The decree stipulates that traders are only permitted to import automobiles if they can provide valid vehicle registration certificates issued by authorities from the countries of origin.

Original quality control certificates for each vehicle and letters of authorization regarding recalls of defective vehicles from the manufacturers are also required, along with copies of quality assurance certificates provided by the countries of origin.

Toru Kinoshita, chairman of the Vietnam Automobile Manufacturers Association (VAMA) and CEO of Toyota Vietnam, said the decree does not comply with international rules, putting the brakes on car imports in Vietnam.

The Ministry of Industry and Trade claims the regulation will protect consumers and create fair competition between local auto assemblers and CBU importers.

Vietnam imported just 30 cars with less than 9 seats in the first two months of 2018, falling from 5,430 units during the same period last year.

In total, the country imported 536 completely built units (CBUs) between January and February, according to the General Department of Vietnam Customs.

Vietnam looking to drive SOE stake sales forward in 2018

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The assets the government plans to sell will include leading companies in energy, power and petroleum.

Vietnam’s push to privatize state-owned enterprises (SOEs) is expected to move up a gear this year.

The government plans to sell 6.5 times more shares than it offered last year, Deputy Prime Minister Vuong Dinh Hue said in an interview with Bloomberg Television. The state raised VND135.6 trillion ($6 billion) from stake sales in 2017.

“We need more foreign investment but also want to lure good investors who can help our companies improve corporate governance,” Hue said. The assets the government plans to sell “will include leading companies in energy, power and petroleum,” he said.

The government has slated 181 state-owned companies to divest from and 64 more for broader share sales through initial public offerings (IPOs) in 2018. Altogether, the government has said it wants to sell stakes in at least 533 companies by 2020 through direct sales or IPOs.

This figure does not include dozens of companies that were on the 2017 list but were not put on the market last year. According to the latest publicly available government figures, Vietnam only managed 26 divestments in the first eight months of 2017 from a list of 135 companies. The target of 44 IPOs for last year was also missed, with only 38 IPOs completed by year-end, a government committee said.

Between mid-January and mid-February, IPOs of major SOEs, including refinery operator Binh Son, oil distributor PV Oil, power producer PV Power, rubber firm Vietnam Rubber Group (VRG), and power producer Genco 3, raised a total of around $800 million for the government.

To accelerate the privatization push, Vietnam issued a new regulation that took effect on January 1 to introduce a book building process, ease restrictions on strategic partnerships and tighten valuation procedures to minimize wrongdoings.

Book building allows companies to identify a range of prices and estimated demand from interested investors to give them a better indication of what IPO price to offer.

State-owned enterprises have so far mostly adopted the public auction method, which together with other restrictions has reduced appetite in even some of the more attractive state assets including dairy firm Vinamilk, Vietnam’s biggest firm by market value, according to Reuters.

The government has also eased restrictions on strategic partners, requiring them to be profitable for two years prior to acquisition, rather than three years, and reduced the lock-in period to three years from five years previously.

Vietnam has also set up a committee to oversee around VND5,000 trillion ($220 billion) worth of government assets in companies managed by different ministries, where vested interests have often played a major role in delaying privatization plans.

Major hurdles

However, despite these initiatives, the fundamental mismatch between the government’s rhetoric on market-based valuations and its fixation on raising as much revenue as possible will not significantly reduce the problem of dubious valuations over the medium term. Executives at SOEs would rather risk overvaluing their firms and blame the market if sales disappoint than be held responsible for losing state assets by undervaluing them, according to the Economist Intelligence Unit, the research and analysis division of The Economist Group.

Analysts have also pointed out some factors keeping investors away, which include the small volume of shares offered, a lack of detailed information disclosure, weak business performance and poor corporate governance.

“There are some risks and challenges remaining in the Vietnamese economy but the biggest challenge will be that we want to grow faster but also in a sustainable manner at a time when there are unpredictable movements in the world economies,” Hue said.

The economy, which posted a total trade value last year that was 1.93 times bigger than its GDP, is susceptible to global turbulence that can “quickly have a direct impact on Vietnam in terms of trade, investment, currency,” he added.

The benchmark VN-Index closed at 1,120 on February 28, up a staggering 14 percent from the beginning of the year, which was the biggest gain worldwide and nearly three times more than the Nasdaq.

The index currently stands at 70 percent higher than in January 2017, making the Vietnamese stock market one of the world’s best performing and most attractive.

Source: VnExpress

Vietnam utility places solar plant order with Japan’s JGC

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A Vietnamese electricity utility company has entered a deal for Japanese plant engineering company JGC to design and build a 50-megawatt solar power generation plant, JGC’s first to build such a plant overseas.

The order from Gia Lai Electricity is estimated at over 5 billion yen ($47.4 million), with the facility to be set up in Krong Pa district in southern Gia Lai Province by November.

It was Vietnam’s second deal to design and build a large solar plant since the government introduced a feed-in tariff program in March 2017. Competitors for the deal included Chinese and German companies.

Vietnam currently relies mainly on coal and hydroelectric power generation. The government aims to increase the proportion of renewable energy, raising total solar power generation to 12,000MW by 2030 — the equivalent of about 12 nuclear reactors — from nearly zero now.

JGC is known as a leading global builder of liquefied natural gas plants. But as crude oil prices began slumping in 2014, demand for new LNG facilities has shrunk. The company now seeks to use its know-how in design, procurement and construction of solar power plants built up in its home market to meet growing demand for solar energy in Southeast Asia.

It set up a unit responsible for infrastructure deals overseas last year, and aims to win about four solar plant orders a year on average, worth an annual total of about 20 billion yen, from countries such as the Philippines, Malaysia, Indonesia and others in the region.

Source: Nikkei

US aircraft carrier arrives in Vietnam on landmark visit

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A U.S. aircraft carrier arrived in Vietnam on Monday for the first time since the end of the Vietnam War, dramatically underscoring the growing strategic ties between the former foes at a time when China’s regional influence is rising.

The grey and imposing silhouette of the USS Carl Vinson could be seen on Monday morning from the cliff tops just outside the central Vietnamese city of Danang, where the 103,000-tonne carrier and two other U.S. ships begin a five-day visit.

“The visit marks an enormously significant milestone in our bilateral relations and demonstrates U.S. support for a strong, prosperous, and independent Vietnam,” Daniel Kritenbrink, the U.S. ambassador to Vietnam, said in a statement.

“Through hard work, mutual respect, and by continuing to address the past while we work towards a better future, we have gone from former enemies to close partners.”

The arrival of the Vinson marks the biggest U.S. military presence in Vietnam since 1975 – but it also illustrates Hanoi’s complex and evolving relationship with Beijing over the disputed South China Sea.

Vietnamese envoys had been working for months to ease the concerns of their giant Chinese neighbour over the visit and the prospect of broader security cooperation between Hanoi and Washington, according to diplomats and others familiar with the talks.

U.S. carriers frequently ply the South China Sea in a rising pattern of naval deployments, and are now routinely shadowed by Chinese naval vessels, naval officers in the region say.

China’s rapid construction and build-up of the land it holds in the disputed Spratly islands group has alarmed Vietnam and other regional governments as it seeks to enforce its claims to much of the disputed waterway, through which some $3 trillion in trade passes each year.

While some Chinese commentators have used the Vinson’s presence to demand an even greater Chinese military build-up in the South China Sea, official reaction from Beijing has been relatively muted since the stop was announced in January.

That announcement came during a two-day visit to Hanoi by U.S. Defense Secretary James Mattis and followed months of backroom military diplomacy between Hanoi and the Pentagon.

Although no U.S. aircraft carrier has been to Vietnam since the end of the war, other, smaller U.S. warships have made high-level visits as ties improved in recent years.

That includes a 2016 visit by submarine tender USS Frank Cable and guided-missile destroyer USS John S. McCain to Cam Ranh Bay, a crucial logistics complex during the Vietnam War.

A U.S. Navy band will play a concert in Danang during the Vinson’s visit, and sailors from the carrier are scheduled to spend time at a treatment centre for people who were exposed to Agent Orange chemicals during the war.

Source: Reuters