How foreigners use foreign currency accounts in Vietnam

I am a foreigner currently working in Vietnam, and have just obtained a temporary residence permit. As far as I know, foreigners being resident individuals are allowed to open foreign-currency accounts at a bank in Vietnam. So, am I regarded as a resident and how can foreigners use their foreign-currency accounts? Under Vietnamese law, you will be regarded a resident individual if satisfying one of the following conditions: First, you must be present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of your presence in Vietnam, of which the arrival date is counted as one day and the departure date is also counted as one day. These two dates will be determined based on the immigration management agency’s certifications on your passport (or laissez-passer) upon your arrival at, and departure from, Vietnam. In case you enter and leave Vietnam on the same day, this day is counted as one day of residence. Transactions at … [Read more...]

Global economic events cause CDS spread spikes

Sovereign credit default swap or CDS spreads measure the yield, not including their funding cost, that global investors require in order to take on the risk of investing in a country’s government bonds. CDS spreads can be impacted not only by events within a country but also by global events that make the country seem more or less risky relative to other investment destinations. Source: Bloomberg, VPBS collected The higher CDS spreads, the riskier investing in the country is. Whereas in the first half of the year, the CDS of Southeast Asian emerging countries fluctuated in a marginal band, during the third quarter the CDS of these countries increased sharply mainly due to the impacts from global events such as the Chinese economic slowdown and the US Federal Reserve’s (the Fed) likely upcoming decision to raise interest rates. By the end of the third quarter, Vietnam’s CDS spreads had risen by 93 basis points (bps) (note that one basis point equals 1/100 of one … [Read more...]

Interbank activity picks up pace during third quarter

After two quarters of decline, the interbank market traded actively during the third quarter, with total trading volume rising by 31 per cent compared to the second quarter and by 1.04 per cent compared to the same period last year, to reach VND1,332 trillion ($60.8 billion) for the quarter. The market was particularly active in August and September. Market volume increased by 14.3 per cent in August and then surged in September to reach VND506 trillion ($23.1 billion) for the month, up 15 per cent from August and 38.1 per cent year-on-year. Interbank market rates also increased quite strongly through most of the quarter and only fell slightly at the end of September. From the second quarter, interbank market rates rose strongly between the end of July and mid-August but fell slightly by the end of September. According to Bloomberg, interbank market rates were quoted as: overnight (2.2 percent, +10 points from the second quarter), one week (3.1 per cent, +30 points), two week (3.5 … [Read more...]

Commercial banks take an interest in seaports

VietNamNet Bridge - Why do many banks hold membership on seaport management boards? VietinBank and VPBank, as the strategic shareholders of the Saigon Port, have representatives that belong to the port developer’s board of directors and supervision board. Meanwhile, Vietcombank, BIDV and Agribank have announced their investments in seaports. The state has kicked off the process of withdrawing capital from nine large seaports. It will retain 51 percent of stake at four important ports of Hai Phong, Quang Ninh, Da Nang and Sai Gon, and hold 49 percent or take back all investment capital from the other ports in Can Tho, Nghe Tinh and Cam Ranh. Vinalines, the state owned shipping firm, which is still a big debtor after a long period of struggling with restructuring, has proposed that the State reduce the state’s ownership ratio at the Sai Gon and Hai Phong Ports to 20 percent, which is far below the proportion suggested by the Ministry of Transport. There are many … [Read more...]

Seasonal effect to boost real estate stocks in Q4

As of November 5, the real estate price index had decreased by 4.5 per cent during the previous 12 months, better than HNX-Index (-7.8 per cent) but slightly lower than VN-Index (+2.3 per cent). Data as of November 05, 2015. Source: Bloomberg, VPBS Home buyers still excited with the real estate market According to Savills’ preliminary statistics, apartment sales volume in Ho Chi Minh City was 5,220 units in the third quarter of 2015, up five per cent quarter-on-quarter (q-o-q) and 59 per cent year-on-year (y-o-y). The absorption rate in Ho Chi Minh City is at 17 per cent, down two per cent points q-o-q and y-o-y. The absorption rate has decreased due to the sharp increase in supply. In the third quarter, primary stock was 30,500 units, up 17 per cent q-o-q and 78 per cent y-o-y. Sales volume in Hanoi for the third quarter of 2015 was 6,650 sold units, up 44 per cent q-o-q. The absorption rate in Hanoi was 45 per cent, up 11 per cent points q-o-q and six per cent points … [Read more...]

Businesses hurry to divest bank shares

VietNamNet Bridge - About VND18 trillion worth of capital was still stuck in banks by the end of September 2015 which needs to be divested as per the government’s request, according to the Ministry of Finance (MOF). ''' 'As soon as EVN offered the sale of 81.5 million ABBank shares, six investors would buy 40 million shares at VND10,000 per share, equal to the face value. As such, EVN still needs to sell the remaining 41.5 million bank shares to fulfill the divestment as per the request by the government. The Debt & Asset Trading Company (DATC), governed by MOF, has announced the auction of 26,660 OCB shares at the starting price of 4,900 per share and 24,662 million SCB shares at VND4,100 per share. Some months ago, SJC, a gold, silver and gemstone company, successfully divested 25 million Eximbank shares, or 2 percent of the bank’s chartered capital. The shares were only sold after four auctions. Capital withdrawal stuck According to MOF, the … [Read more...]

Banking restructuring ramps up activities

The banking system is racing against time as its major restructuring enters its last phase. It devised a roadmap to restructure credit organisations at the end of 2011, and began implementing the regulations in February 2012. These were the earliest projects under the national economic overhaul. Following the blueprint, the system has yielded positive outcomes, but the overall pace remains slow and requires drastic moves to meet the deadline. Earlier this year, State Bank of Vietnam (SBV) Governor Nguyen Van Binh said several merger and acquisition (M&A) deals would take place, including some between healthy banks in order to expand their scale and boost their performance. In 2015, up to eight banks are expected to join the restructuring process, added Binh. Consequently, the SBV has taken over all shares in three cash-strapped commercial banks – the Ocean Bank, Vietnam Construction Bank (VNCB) and GPBank – for zero Vietnam dong each. The move was designed to … [Read more...]

Looking ahead to fourth quarter stock performance

During the third quarter, the VN-Index moved well below its long-term trend line. This would indicate that a recovery should be coming, but it may not happen right away. Based on market sentiment, earnings growth, and market multiples, we expect the market performance to continue to be fairly flat over the rest of the quarter. There continues to be a very strong negative correlation between the five-year government bond yield and the price-to-earnings (P/E) ratio of the VN-Index. The trend continued during the third quarter when rising bond yields were accompanied by a falling P/E ratio. We expect the five-year government bond yield to rise modestly during the fourth quarter. This would imply that the P/E ratios would, at best, remain flat. However, the government has recently reversed the provisions of Resolution 78 and will begin selling shorter term bonds again. This is likely to increase demand for government bonds from banks so that we could see lower yields in 2016’s … [Read more...]

FE CREDIT praised as Best Consumer Finance Company Vietnam 2015

VPBank Finance Company Limited's FE CREDIT brand honoured on September 30, 2015 with the "Best Consumer Finance Company Vietnam 2015" award by the Global Banking & Finance Review. The company is celebrating its 5th anniversary this year The Global Banking & Finance Review (GBAF) is a prestigious online and print magazine in the UK for the global finance community, with a readership of over three million people each year. It consolidates valuable, independent financial information for the use of strategic economic planners and leaders. GBAF granted the award to FE CREDIT on the basis of its business results and efforts in innovating and applying modern technology to its operations. In addition to this award, the 2015 report on the consumer finance market conducted by StoxPlus Corporation also indicates FE CREDIT as a market leader in terms of loans booked, and one of the financial companies with the simplest loan procedures and most competitive interest rates. 2015 marks an … [Read more...]

Stock market Q3 review

During the third quarter, both indices moved up, but then recorded declines for the period. Daily moves often seemed to be removed from any logical explanations, but there were a few main forces that drove the market during the quarter, including concerns over the value of the dong, driven by movements of the Chinese yuan, the possibility of a US interest rate hike, oil prices, the health of the banking system, and TPP negotiations. The weakening currency certainly affected equity markets. Coming into the third quarter, the dong was one of the best performing currencies in Southeast Asia, but had already been devalued against the dollar by 2 per cent this year, which was the limit for the year that had been set by the State Bank of Vietnam (SBV). Because of the strengthening dollar and the possibility of a Fed rate increase, most market participants believed there would be some further devaluation before the end of the year. However, the Fed did not raise rates at its July meeting, … [Read more...]

SBV continues net withdrawals

The State Bank of Vietnam (SBV) continued to withdraw quite strongly via the Open Market Operation (OMO) in the third quarter of 2015. Except for February and August, the SBV has made net withdrawals every month this year. The third quarter featured ample liquidity in the banking system despite strong credit growth at 10.78 per cent year to date and lower deposit growth of 8.88 per cent year to date through September. The high liquidity was due to a whopping VND35.3 trillion ($1.58 billion) in bonds and bills becoming due during the period, while banks have not been investing actively in government bonds (G-bonds). Banks are the main investors in the bond market. However, G-bond issuance fell 46.3 per cent in the third quarter compared to the same period last year, largely because the overall winning ratio of the quarter reached only 31.7 per cent. At the end of August, Tier 1 and 2 capital of the banking system rose by 10.2 per cent from the beginning of the year. Abundant … [Read more...]

VPBS receives third securities accolade for decade-long outstanding performance

VPBank Securities has been honoured by the Hanoi Stock Exchange for the third consecutive year as one of the best-performing securities firms. VPBS has received the renowned award for three consecutive years now The Hanoi Stock Exchange (HNX) recently announced the outcome of its programme to select the most outstanding members, including VPBS, for the 2005–2015 period. The member securities companies have made their contributions to the growth of the Vietnamese stock market in the 2005–2015 period. "With the honour of being recognised as one of the most outstanding securities firms, VPBS has opportunities to contribute to building and improving the development policies of the stock exchange derivatives market, which is slated for launch by the end of 2016," said the firm’s CEO Nguyen Lam Dung. "We will do our utmost to become well-prepared in terms of resources to connect with the infrastructure system of HNX and the Vietnam Securities Depository, striving to … [Read more...]

VPBank brings Kenny G to Vietnam

VPBank is bringing saxophonist Kenny G to Vietnam for the first time on October 13. The concert named Kenny G Live In Concert by VPBank, organised by VPBank and IB Group, is going to be held at 8pm at the National Convention Center. At the liveshow, Kenny G and the band are going to perform their greatest hits such as Going Home, Forever in Love, Havana, My Heart will Go On and Romeo and Juliet, as well as new pieces in the newest album Brazilian Nights, which was released in February of this year. "After the VPBank Concert 2014 with Richard Claydermann, we received many suggestions from our audience, many of which are customers and partners of VPBank, on bringing more famous musicians to Vietnam," said Tran Tuan Viet, director of PR and Marketing of VPBank. "It’s great to be trusted with this task, but it’s a lot of pressure too because the audience here has a taste for high quality," he said. "Bringing famous musicians to Vietnam is the way we thank you for your love … [Read more...]

Kenny G prepared to perform in Vietnam

(VOV) - Soon after arriving in Vietnam on October 12 afternoon, well-known American saxophonist Kenneth Bruce Gorelick, better known by his stage name Kenny G took part in a press conference on his one-night only concert at the JW Marriott Hanoi hotel. Addressing the audience, Kenny G expressed excitement about his visit to Hanoi as well as friendly people here. Kenny G is the biggest-selling instrumental musician of the modern era and one of the best-selling artists of all time, with global sales totaling more than 75 million records. His amazing show, ‘Kenny G Live in Concert by VPBank’, will take place on October 13 evening at the National Convention Center. Let’s hear a piece of music played by Kenny G at the press conference: … [Read more...]

Press digest – October 12

NA Standing Committee to discuss national electoral council The 13th National Assembly (NA) Standing Committee convened its 42nd session in Ha Noi on October 12, expected to give opinions about a national electoral council as well as the date for the NA and all-level People’s Council elections. During the meeting, the NA Standing Committee will also scrutinise nine bills, the implementation of the 2015 socio-economic development plan, the 2015 State budget, budget estimates and allocation for next year, the diversification of the terms of Government bonds, and the issuance of Government bonds in foreign markets. A Government report delivered after the opening ceremony showed that the country’s socio-economic situation continued recovering in the first nine months of 2015, with a number of encouraging outcomes and some challenges. The Cabinet has ensured sufficient macro-economic control. Numbers on economic growth, inflation, budget collection, overspending, import and … [Read more...]

Government bond yields expected to rise in fourth quarter

Both the primary and secondary government bond markets were fairly inactive in the third quarter. Significantly low demand for bonds caused yields to soar across all tenors over the three-month period. Source: HNX, VPBS collected Foreign investors exited Vietnamese fixed income markets during the quarter, mainly due to rising concerns of dong depreciation. Two factors fed these concerns. First, China’s economic slowdown affected emerging markets. The devaluation of the yuan by nearly five per cent over a three day period in August caused the State Bank of Vietnam (SBV) to devalue the dong by one per cent and increase the trading band from 1 to 3 per cent. Continuing weak macro data from China suggested the possibility that the yuan could decline further and other nations, like Vietnam, would need to follow suit. At the same time, rumours filled the market that the US Federal Reserve Bank (the Fed) would raise interest rates for the first time since the global credit crisis. … [Read more...]

VPBank divests subsidiaries in quest to find strategic partner

The Vietnam Prosperity Bank (VPBank) has announced its plan to sell stakes to a strategic partner and divesting two subsidiaries, namely VP Bank Securities Company (VPBS) and VP Bank Financial Companies (VPBFC). The moves are aimed to increase the mother bank’s chartered capital and improving the effectiveness of investment in the two subsidiaries. Up to 30 per cent of the current stakes will be sold to foreign financial institutions, which is equal to 20 per cent of VPBank’s new total chartered capital. The bank said that it had been seeking for new strategic investors over the past two years. Since 2013, when Singapore-based Overseas Chinese Banking Corporation Ltd. (OCBC) withdrew its investment from VPBank, not a single share has been sold. Pursuant to Vietnamese legislation, foreign strategic shareholders of Vietnamese commercial banks must have at least five years of operation in the banking sector and total assets of at least $20 billion a year before … [Read more...]

VPBank opens to foreign investors

Staff at a VP Bank branch. VPBank needs shareholders to approve their plan to sell the bank's stakes in several of its subsidiaries to foreign investors. — VNS Photo Viet Thanh HA NOI (VNS) — VPBank has asked shareholders to approve their plan to sell the bank's stakes in several of its subsidiaries to foreign investors, an atypical opportunity for foreigners interested in entering the market. Working with foreign investors is not a completely new venture for VPBank. After the Singapore-based Overseas Chinese Banking Corporation Limited (OCBC) withdrew its capital in 2013, the bank has had no foreign investors. VPBank's change of mind was announced on their website last week, along with details of the plan. The bank wants to offload 86.33 million shares or 89 per cent of its complete ownership of VPBank Securities Company (VPBS). The stock package is tentatively worth VND863.3 billion (US$38.37 million). VPBS was founded by VPBank in 2006 with a charter capital of … [Read more...]

Oil prospects give shares a lift

Investors at Bao Viet Securities Company. Domestic stock exchanges saw growth yesterday. — VNS Photo Viet Thanh HA NOI (VNS) — Shares continued to rally yesterday with oil and gas companies gaining value on the steady rise of global oil prices. On the HCM Stock Exchange, the VN-Index edged up 0.2 per cent to close the session at 588 points. The Index rose 1.2 per cent on Thursday. Meanwhile the HNX-Index on the Ha Noi Stock Exchange gained another 0.4 per cent to end yesterday's session at 80.8 points. Oil and gas stocks climbed strongly yesterday, propped up by bright prospects of global oil prices in the future. Large-cap oil shares like PV Gas (GAS), PetroVietnam Drilling and Wells Service (PVD), PetroVietnam Technical Services (PVS) and PetroVietnam Drilling Mud (PVC) increased between 1 per cent and 3 per cent. PVS was the biggest gainer with a 3.2 per cent rise. US crude oil, known as West Texas Intermediate oil (WTI), rebounded from the bottom in mid-August at … [Read more...]

New decree paves way for foreign enterprises to list on bourse

VietNamNet Bridge - Foreign invested enterprises now can more easily list their shares on Vietnamese stock markets under Decree 60 that allows foreign investors to hold up to 100 percent of stake in Vietnamese enterprises. The decree, which takes effect on September 1, allows foreign invested enterprises in Vietnam to list on Vietnamese bourses without having to renounce the controlling rights. For example, Unilever can let one of its subsidiaries to list shares on the bourse and sell 20 percent stake to other investors and still hold control over the company. It will take some more time to bring the policy into life, but this is an important step made by the government of Vietnam, Michel Tosto from Ban Viet Securities Company said in Asia Money. It is obvious that Decree 60 would help provide more new valuable commodities to the stock market, since there are many profitable foreign invested enterprises in Vietnam. Listing shares on the Vietnamese bourse will bring big benefits … [Read more...]