Central Bank offers helping hand to debt-laden Hoang Anh Gia Lai

The State Bank of Vietnam (SBV) has just sent a document to the prime minister requesting permission to reschedule the debts of troubled conglomerate Hoang Anh Gia Lai (HAG). The document, according to newswire TBKTSG Online, included a proposal to keep some of HAG’s debts at the current grades, to provide an extension of the repayment of the principal and the interest, and to decrease or forgive the interest for these debts, as well as a proposal that SBV refinance the lenders at 6-6.5 per cent per year. The prime minister is going to make the decision within a week. If the plan is approved, SBV and HAG’s lenders will meet to decide the specifics on how they are going to reschedule HAG’s debts. Keeping the debts in their current categories instead of downgrading them means that the banks’ bad debt ratio would not increase, while the company’s credit rating would remain the same. If the prime minister greenlights this plan, many people will ask why … [Read more...]

Property and insurance stocks lift VN Index

Vietnamese shares were mixed on the two local exchanges this morning, with property and insurance companies lifting the VN Index. Investors at the VPBank Securities Co. Local markets ended mixed this morning. - Photovpbank.com.vn The benchmark VN Index on the HCM Stock Exchange rose 0.7 per cent to close at 609.25 points, while the HNX Index on the Ha Noi Stock Exchange fell 0.1 per cent to end at 80.16 points. Property developers and insurance companies helped boost the markets, although brokerage firms prevented markets from gaining further. Vingroup JSC (VIC), FLC Group (FLC) and Phat Dat Real Estate Development JSC (PDR) lifted the property sector. VIC gained 1.9 per cent, FLC added 1.6 per cent and PDR edged up 0.7 per cent. In addition, Bao Viet Holdings (BVH) and BIDV Insurance Corp (BIC) provided good support to the insurance sector. These stocks jumped 3.4 per cent and 3.1 per cent, respectively. Other blue chips also contributed to the markets' gains, such as dairy … [Read more...]

VN-Index may continue climb in Q2

The VN-Index continues to move below the long-term growth trend (trend-line 1) and extend the medium-term trend (trend-line 3) which started in 2012, with the compound annual growth rate (CAGR) for the whole period at 12.8 per cent (as shown in the graph). To assess the market outlook of the VN-Index in the second quarter of 2016, we should start at its fundamental value. According to our latest updates, the total 12-month trailing net income of listed companies on the HSX at the end of March had risen by just 5.2 per cent year-on-year (y-o-y), much lower than the rate of 25.4 per cent recorded in 2015’s fourth quarter. This was due to the unexpected decline in the growth rate of the industrial and utilities sectors, which had been crucial to the growth of the VN-Index. Energy companies’ business results were also negatively affected by the poor performance of crude oil prices. The 12-month trailing earnings per share (EPS) growth of listed companies on the HSX was only … [Read more...]

Bond market issuance high in 2016

In order to comply with the 2016 socio-economic plan and meet the state budget for development and investment, regular expenditures, and debt repayment, the raising of capital through government bond channels continues to play an important role. By Hoang Thuy Luong Research Department VPBank Securities In 2016, the State Treasury (ST) plans to issue VND220 trillion ($9.89 billion) of bonds, focused mainly on five-year bonds (VND100 trillion, or $4.49 billion) and three-year bonds (VND66 trillion, or $2.97 billion). The Vietnam Bank for Social Policies (VBSP) plans to issue VND16 trillion ($719 million) of government-guaranteed bonds, while the issuance planned by the Vietnam Development Bank (VDB) is VND25 trillion ($1.12 billion). Issuance volume in the primary market remained high in the first quarter of 2016, after posting a record high volume in the fourth quarter of 2015. VND87.016 trillion ($3.91 billion) of government bonds were successfully mobilised in the primary … [Read more...]

Petroleum stocks back market rally

Kim Ngan A further increase in world oil prices supported a rise in petroleum stocks. GAS finished at its intraday high, up 4.8% at VND43,000 per share, and PVD climbed by 2.2% at VND23,000 per share. Almost all bank stocks stayed in the green. Overall, the VN30 basket saw 22 stocks edging up and two others skidding. Dau tu Chung khoan newspaper said POM, HPG and HSG of the steel sector added by 1.4-6.4% each. A number of mining firms like BGM, KSH, KSS and BAM rocketed to their ceiling prices, luring buyers. Speculative stock HAI fell 3.3% with 5.8 million shares traded after two straight sessions of gains, and took the lead in terms of volume on the southern exchange. After losing ground in eight consecutive sessions, TSC soared 7% to VND9,200 per share with over 2.3 million shares traded. In all, stock traders changed hands 120.9 million shares worth VND2.2 billion (US$99.8 million), nearly unchanged from the previous session. VIC made up a majority of put-through … [Read more...]

Regulations slow liberalisation plans

Interest rate liberalisation is an important part of financial reform, promoting safer and more efficient financial markets. It has three components: the introduction of market-driven, competitive deposit rates; the establishment of a legal structure that allows banks to default; and a deposit insurance scheme. Vietnam’s efforts to liberalise interest rates are facing a slowdown due to issues with current regulations Photo: Le Toan By Nguyen Thi Thuy Linh-Research Department VPBank Securities Company Allowing weak credit institutions (CIs) to go bankrupt would remove the implicit government guarantee on CIs, thereby creating for depositors a need for more accurate and insightful counterparty risk analysis, in addition to the details of benefits offered. As a counterbalance, a deposit insurance scheme would protect the interests of depositors, contribute to ensuring national financial system stability, and build a fair market for financial institutions of different scales and … [Read more...]

HAG borrows from multiple banks

Hong Phuc An employee feeds cows of Hoang Anh Gia Lai Joint Stock Co. Hoang Anh Gia Lai has borrowed from many banks to implement its projects in multiple sectors - PHOTO: HAGL The lenders include BIDV, VPBank, Sacombank, Eximbank, LaoVietBank, HDBank, Bac A Bank and Viet Capital Bank. According to the firm’s financial report for the fourth quarter of 2015, HAG’s total outstanding loans had amounted to VND32.6 trillion (US$1.4 billion) by end-2015, rising by 56% from a year earlier and accounting for 67.16% of its capital. Of the amount, short-term debt reached over VND12.79 trillion and long-term debt around VND19.85 trillion. Details about HAG’s loans were not shown in the quarterly report but its loans were mentioned in the consolidated financial report for the first half of 2015. According to the consolidated report, HAG had borrowed over VND1.5 trillion from BIDV by end-June 2015, over VND451 billion from LaoVietBank and VND119 billion from HDBank. … [Read more...]

China eyes global reserve currency status for yuan

China is Vietnam’s biggest trade parter, accounting for 10.3 per cent of its export value and 30.6 per cent of Vietnam’s total import value. In 2015, Vietnam recorded a trade deficit of $49.5 billion in bilateral trade with China. China ranks ninth among FDI partners, with a total accumulative registered capital of $9.98 billion accounting for 3.6 per cent of total registered FDI. The CNY still needs to clear a few hurdles to become the first international currency from a developing country By Nguyen Thi Thuy Linh - Research Department VPBank Securities Meanwhile, the International Monetary Fund (IMF) decided to add the CNY to its Special Drawing Rights currency basket, which will take effect in October this year, beside other currencies such as the USD, EUR, JPY, and GBP. The question is: should Vietnam increase CNY holdings in its foreign currency reserves? An international currency should possess three important cross-border functions: storing of value, medium of … [Read more...]

High Vietnam CDS may drive up bond yields

In the second half of the year, sovereign credit default swap spreads for Vietnam and three emerging Southeast Asian nations bounced back after dropping significantly in 2014 and remaining low during the first quarters of 2015. The credit default swap (CDS) of these countries increased mainly due to the interest rate hike by the US Federal Reserve (Fed), China’s economic slowdown, and the tumble of global crude oil prices. Higher CDS spreads mean that investing in the country is rated as riskier. For the first two quarters of 2015, the CDS of emerging markets seemed to move sideways, fluctuating little. These countries’ CDS spreads started to rise in August and reached a peak at the end of September before falling steadily. Compared with 2014, Vietnam’s CDS spreads rose by 89.96 bps, closing the year at 285, after reaching a two-year high at 302.5 in September. Similarly, the CDS of three other emerging Southeast Asian (SEA) nations also increased quite strongly. … [Read more...]

Banks to raise capital to meet Basel II standards

HA NOI (VNS) — Large local banks, which are chosen by the State Bank of Viet Nam (SBV) to apply Basel II governance standards, are trying to increase capital to meet the standards. Under the SBV's plan, ten commercial banks will officially apply international bank management standards in accordance with Basel II governance standards from this month. The selected banks are the biggest and most prestigious ones in Viet Nam, and they include the Bank for Investment and Development of Viet Nam (BIDV), Viet Nam Bank for Industry and Trade (VietinBank), Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank), and Viet Nam Technological and Commercial Joint Stock Bank (Techcombank), in addition to Southeast Asia Commercial Joint Stock Bank (ACB), Viet Nam Prosperity Bank (VPBank), Military Commercial Joint Stock Bank (MB), and Maritime Bank. The other banks were Sacombank and Viet Nam International Commercial Joint Stock Bank (VIB). The banks, which will pilot capital … [Read more...]

Interbank market rates remain high

Interbank market rates rose steeply from November to December 2015. They reached a two-year peak at five per cent per annum, and remained high till the end of the year at rates that were the same as the borrowing cost of reverse repos via open market operations. By Nguyen Thi Ngoc Anh - Research Department VPBank Securities The main reason for the surge in interbank market rates was the high demand for short-term capital at the end of the year, illustrated by consecutive injections of money by the central bank, with substantial amounts added to the banking system and a high trading volume in the interbank market. Substantial credit growth and exchange rate fluctuations were leading reasons for a rise in demand for short-term loans, and due to huge purchases of government bonds the need for short-term capital to make bond-purchase payments also increased. At the end of the year, the interbank market rates were quoted at: overnight (4.9 per cent), one week (5.0 per cent), two week … [Read more...]

Five-year bond yield seen rising this year

HA NOI (VNS) — Yields of Government bonds with terms five years or longer will likely rise this year, VPBank Securities said in a report yesterday. The research said the G-bond market experienced its most successful trading in the fourth quarter of 2015 with bonds sold at auction at between 70 and 90 per cent of. The Government mobilised VND131 trillion ($5.8 billion) in the quarter, thanks to the 3-year bond supply and newly launched products from the State Treasury in December such as long-term bonds and zero-coupon bonds that sold at 100 per cent. The research said the sale of G-bonds was still growing from 2014 with a total issuance of VND243 trillion ($10.8 billion), up 2.8 per cent in G-bonds and government-guaranteed bonds Despite good demand in the last quarter, the State Treasury, the largest G-bond issuer in Viet Nam, failed to meet their target for the year. The State Treasury issued VND196 trillion ($8.7 billion), completing 51.2 per cent of the year's target and a … [Read more...]

Five-year bond yield seen rising

Yields of Government bonds with terms five years or longer will likely rise this year, VPBank Securities said in a report yesterday. Yields of G-bonds with terms five years or longer will likely rise this year. - Photo motthegioi.com The research said the G-bond market experienced its most successful trading in the fourth quarter of 2015 with bonds sold at auction at between 70 and 90 per cent of. The Government mobilized VND131 trillion ($5.8 billion) in the quarter, thanks to the 3-year bond supply and newly launched products from the State Treasury in December such as long-term bonds and zero-coupon bonds that sold at 100 per cent. The research said the sale of G-bonds was still growing from 2014 with a total issuance of VND243 trillion ($10.8 billion), up 2.8 per cent in G-bonds and government-guaranteed bonds Despite good demand in the last quarter, the State Treasury, the largest G-bond issuer in Viet Nam, failed to meet their target for the year. The State Treasury issued … [Read more...]

Bond yields shaken in 2015 despite last quarter surge

In spite of disappointingly low issuance during the first three quarters of the year, total issuance volume in the last quarter of 2015 reached a two-year high of VND130,666 billion ($5.96 billion) due to the availability of short-term bonds and new products. However, even with this late surge, total issuance still failed to meet the annual target, fulfilling only 51 per cent of total planned volume for the year. Winning bond yields, after rising quite significantly in June, thereafter moved essentially sideways until the end of the year. Although the demand for government bonds and the liquidity of the market were both high at year-end, bond yields did not decline for three reasons: strong credit growth, exchange rate fluctuations, and a substantial supply of bonds in the primary market. The fourth quarter of 2015 is now notable as the most successful period in the history of Vietnam’s bond market. The winning rate of weekly bond auctions during the quarter was consistently … [Read more...]

VN shares extend two-day drop

Investors follow transactions at VPBank Securities in Ha Noi. Viet Nam authorities should watch closely moves made by China in its economy and currency in order to minimise their negative impact on Viet Nam's foreign exchange rate and stock market. — VNS Photo Truong Vi HA NOI (VNS) — Vietnamese shares yesterday extended losses on both local markets for a second day as investors remained cautious amid volatility in Chinese stock markets. The benchmark VN Index on the HCM Stock Exchange dropped 0.8 per cent to close at 569.94 points. The southern index has fallen 1.6 per cent during the last three days. The VN Index lost 1.3 per cent to finish at 78.43 points. The northern index has declined by 1.9 per cent in two days. "Investors remained cautious after Chinese stocks fell sharply and shut down on Monday," Sai Gon Ha Noi Securities Corporation (SHS) wrote in a report. Chinese shares fell 7 per cent on Monday and dropped further yesterday. Viet Nam authorities should … [Read more...]

Musicians to perform NYE shows

HCM City (VNS) — Three leading artists will perform at September 23 Park in downtown HCM City to count down New Year starting at 10.30pm today. VPBank Countdown, featuring electronic dance music (EDM), will see DJ Hoang Anh, named Viet Nam's top DJ for three consecutive years by EDM legend Tiesto, perform. Anh, also a producer for top singers like Dam Vinh Hung, Hong Ngoc, My Le, successfully combines EDM with the classical music of Mozart and Puccini. Also performing will be DJ SlimV, who has performed along with international DJs like Steve Aoki, Afrojack, and Armin and produced for some famous singers like Son Tung, Ho Ngoc Ha and Noo Phuoc Thinh. — VNS … [Read more...]

Facing TPP dairy deluge, Vietnam milk firms shift strategy to survive

Vietnam's fast-growing dairy companies are investing big in new markets as they brace for stepped-up competition at home from global giants on the prowl to take advantage of a Pacific trade pact. Domestic milk demand is soaring as household spending power increases in the country of 90 million people, boosting profits for dairy firms that are expanding quickly, but can meet only a third of the milk needs. That's leaving a void that giants like New Zealand's Fonterra and Canada's Saputo could fill with new products and lower prices once the U.S.-led Trans Pacific Partnership (TPP) comes into play, eliminating tariffs among 12 markets worth 40 percent of the global economy, and nearly three-fourths of Vietnam's dairy imports. It is the flip-side of the country's aggressive drive to outpace Southeast Asia in getting preferential access to the world's biggest markets for its swelling electronics, textiles, seafood and commodities output. Trade liberalisation would strengthen a … [Read more...]

Overseas Vietnamese investments important for development

Investments by overseas Vietnamese in Vietnam play an important role in the development of the domestic economy, said Ministry of Industry and Trade official Duong Phuong Thao. Thao made this announcement on December 27 at a meeting held by the State Committee for Overseas Vietnamese (SCOV) under the Ministry of Foreign Affairs in Hanoi. According to Thao, overseas Vietnamese have invested in 52 out of 62 provinces and cities in Vietnam. Also, they currently run about 3,600 businesses nationwide, with some 2,000 projects valued at a combined 8.6 billion USD. The projects concentrate in trading, tourism, construction and real estate fields, besides production of export goods, aquaculture and seafood processing. They bring in an average income of some 20 billion USD to the country annually. (Photo for illustration) Overseas Vietnamese enterprises and entrepreneurs have stakes in domestic banks, such as Techcombank and VPBank, and major property and tourism businesses, such as … [Read more...]

Overseas Vietnamese investments important for development: official

HA NOI (VNS) — Investments by overseas Vietnamese in Viet Nam play an important role in the development of the domestic economy, said Ministry of Industry and Trade official Duong Phuong Thao. Thao made this announcement yesterday at a meeting held by the State Committee for Overseas Vietnamese (SCOV) under the Ministry of Foreign Affairs in Ha Noi. According to Thao, overseas Vietnamese have invested in 52 out of 62 provinces and cities in Viet Nam. Also, they currently run about 3,600 businesses nationwide, with some 2,000 projects valued at a combined US$8.6 billion. The projects concentrate in trading, tourism, construction and real estate fields, besides production of export goods, aquaculture and seafood processing. They bring in an average income of some $20 billion to the country annually. Overseas Vietnamese enterprises and entrepreneurs have stakes in domestic banks, such as Techcombank and VPBank, and major property and tourism businesses, such as VinGroup and … [Read more...]

Credit growth expected near 20% next year

A branch office of VPBank in HCM City. The State Bank of Viet Nam targets national credit growth between 18 per cent and 20 per cent for next year. — VNA/VNS Photo Tran Viet HA NOI (VNS) — The State Bank of Viet Nam (SBV) yesterday targeted credit growth between 18 per cent and 20 per cent for next year, with possible adjustments depending on the actual situation. At a conference to review the performance of the banking industry in 2015 and prepare for next year, in Ha Noi yesterday, SBV Deputy Governor Nguyen Thi Hong said that the estimate was based on targets of the GDP and inflation approved by the National Assembly. The central bank would ensure an active and flexible monetary policy next year, in close co-ordination with fiscal and other macro policies, to meet the NA's targets of inflation at less than 5 per cent, and economic growth at roughly 6.7 per cent, Hong said. However, Hong said, the credit growth rate might be adjusted flexibly based on the actual … [Read more...]