Vietnam’s Macroeconomic Policies-Third Quarter 2018 under scrutiny
HCM City Securities Corp tops derivatives market share
HCM City Securities Corporation (HSC) had the biggest market share on the derivatives market in the third quarter of 2018, according to the Ha Noi Stock Exchange.
Of the 11 securities companies that are allowed to operate in the derivatives market, HSC held a 25.35 per cent market share.
HSC was followed by VNDirect Securities JSC (23.98 per cent), MB Securities JSC (15.88 per cent) and Saigon Securities Inc (15.40 per cent).
Other securities firms with less than 10 per cent market share included VPBank Securities JSC (9.87 per cent), BIDV Securities JSC (4.65 per cent) and Viet Capital Securities Co (2.84 per cent).
The three new securities companies whose operation on the derivatives market had been accepted earlier by the HNX were Viet Dragon Securities JSC, KIS Vietnam Securities Co and Vietcombank Securities Co Ltd.
Those three brokerage firms held market shares of 0.21 per cent, 0.43 per cent and 1.39 per cent, respectively.
Trading volume of the derivatives market fell for a second month to more than 1.55 million contracts in September, 14.87 per cent lower than August, HNX reported.
The market’s open interest dropped 4.6 per cent from one month earlier to 14,615 contracts at the end of last month, down from August number of 15,320 contracts.
The number of trading accounts rose 9.6 per cent over one month to more than 45,500 accounts at the end of September.
VinaCapital investors conference opens
More than 150 domestic and foreign investors are participating in VinaCapital’s 2018 Investor Conference in HCM City on October 11 and 12.
Speaking at a press conference held on the sidelines of the conference, Don Lam, co-founder and CEO of VinaCapital, said: “I am happy to welcome the record number of attendees to our conference. Many have attended in the past, but there are a number of new investors this year, underscoring Viet Nam’s continued and growing attractiveness among the international financial community.”
Among new investors are professional investors in emerging markets, he said.
Unlike many other foreign markets which experience strong fluctuations, the Vietnamese market is “sustainable” and many foreign investors agree that it has more room for growth and growing in a sustainable manner, he said.
Some others are interested in new sectors such as technology sector and the stock market, he said.
At the meeting, delegates heard updates from the managers of VinaCapital’s key funds, executives at companies operating in some of the country’s most promising sectors like technology, property, logistics, healthcare, banking, and manufacturing. Sean Maher, founder of Entext Economics, spoke about the potential leading role Vietnamese companies could play in the growing global digital economy.
The delegates also discussed the impacts of the depreciation of the Chinese yuan, a major concern among investors.
Talking about the prospect of the Vietnamese market, Andy Ho, VinaCapital’s chief investment officer, said strong economic growth and economic stability, growing size of the stock market and the listing of many new firms, divestment from listed State-owned companies, and the Government’s determination to reform the financial sector give Viet Nam a big advantage.
Viet Nam’s equity market last month was added to FTSE Russell’s secondary emerging watch list for a possible future reclassification from its current frontier market status, he said.
And it is also expected to be added to the watch list by Morgan Stanley Capital International (MSCI) for a possible upgrade from frontier to emerging market in the next one or two years, he said.
The trade war between the US and China would make foreign investors relocate their manufacturing facilities from China to Viet Nam, he said.
Foreign investment in Viet Nam has increased sharply in the past few years and this is expected to continue, he added.
This year’s conference also marks VinaCapital’s 15th anniversary.
It has invested over $4 billion in more than 100 companies and projects in the form of listed and private equity, venture capital and real estate development.
It built one of Viet Nam’s first wealth management businesses offering increasingly affluent Vietnamese investors alternative investment products. The business has assets of around $100 million under management.
Vietjet’s President and CEO honored at ASEAN Entrepreneurs Award 2018
President and CEO of Vietjet, Nguyen Thi Phuong Thao, has been honored as one of the two winners of the ASEAN Entrepreneurs Award 2018 for her significant contributions in bolstering economic and trade exchanges between the Republic of Korea (RoK) and ASEAN.
The awarding ceremony was co-organised by ASEAN – Korea Centre and Maekjung Media Group, one of the most influential media groups in the RoK, held in Seoul, the RoK, under the framework of the World Knowledge Forum.
Speaking at the awards ceremony, Lee Hyuk – Secretary General of ASEAN – Korea Centre said: “We are very delighted that President and CEO of Vietjet, Nguyen Thi Phuong Thao, was selected as one of the two winners of the ASEAN Entrepreneurs Award 2018. This is an acknowledgement of Vietjet’s high quality operations, its creative services and meaningful contributions during the past few years. I firmly believe that the award will serve as a springboard for Vietjet to promote its business and to expand its presence in the RoK and make more contribution to the economic and trade cooperation between ASEAN and the RoK.”
Since Vietjet commenced our debut flight connecting Vietnam and Korea in 2013, the fact that we have positively contributed to the development of travel and trade exchange between two countries is of great pride to us. As of 2017, the passenger turnover back and forth between the two countries reached more than five million passengers, a trifold increase compared to that of 2013. The number of airlines commencing routes in the network increased from 03 in 2013 to 10 in 2017. There are around 750 flights per week, 8 times higher than that of 2013. Vietjet itself carried more than two million passengers, many of whom were first – time flyers. Realising other’s flying dreams is our utmost happiness.”
The World Knowledge Forum is a forum that attracts the interest and participation of leading world political and business speakers.
Pepper in many Dong Nai areas reaches organic standards
About 3.5 million hectares of pepper grown in the southern province of Dong Nai recently received a certificate for organic farming standards of the German-based Certification of Environmental Standards (CERES).
The recognition is expected to offer new chances for exports and brand building of pepper of Vietnam.
The certified pepper areas are under the management of Lam San cooperative in the province’s Cam My district, said Director of the cooperative Nguyen Ngoc Luan.
From 2012, the cooperative started to produce pepper in accordance with organic standards. In the time to come, Lam San cooperative will transfer organic farming technique to farmers joining the production chain in a bid to expand areas cultivating pepper for exports.
Organic pepper produced on a large scale will enjoy more favorable conditions on its way to European countries and the US, and raise its value, as prices of organic farm produce are about 30 percent higher than those of others.
Lam San is the sole cooperative in Vietnam to export pepper directly to global markets, with an annual amount of 600 tonnes in of the past three years. Pepper produced by the cooperative has been shipped to European nations, including Germany and the Netherlands.
Germany-based CERES offers certification for organic farming and food processing. About 6,400 certificates have been granted to businesses and farms in 110 countries and territories.
French firms eye railway projects in Vietnam
A mission of the French Embassy in Vietnam led by Laurent Chopiton, Deputy Economic Counsellor, on October 8 worked with Vietnam Railways (VNR) on a possible cooperation in railway projects in the future.
According to Laurent Chopiton, a group of French businesses, specifically SNCF, will pay a working visit to VNR on October 23. In preparation, the French Embassy is looking for possibilities to boost cooperation between VNR and French firms.
VNR Chairman Vu Anh Minh said that the corporation will carry out several new projects in the coming months using VND7 trillion ($309.73 million) from the mid-term public investment fund.
Minh expressed his wish that the French Embassy will be a bridge between VNR and French businesses in its new projects.
What is more, the north-south high-speed railway project is expected to be submitted to the National Assembly in late 2019. “We hope French firms are interested and join this project,” said Minh.
The chairman also admitted that VNR is seeking funds from the French government for its projects on IT application, the modernisation of locomotives and carriages, and the purchase of spare parts.
Laurent Chopiton, in response, said that the French Embassy is willing to connect VNR with the French government and firms in VNR’s future projects.
According to VNR, the VND7 trillion ($309.73 million) is proposed to be used for four projects. The works include the upgrading of the Hanoi-Vinh section, the Vinh-Nha Trang section, the Nha Trang-Saigon section, and the upgrading of railway bridges and tunnels, as well as opening new stations.
VNR hopes that the projects will help increase its operational efficiency amid stiffening competition from aviation, road, and waterway.
Court opens Posco VST-Thanh Nam Group debt claim
A representative of The Hanoi People’s Procuracy said that Posco VST’s debt claim against Thanh Nam Group is grounded, but the final result will only be released by the Hanoi People’ Court today.
After two delays, the Hanoi People’ Court has just opened the debt claim of more than VND58 billion ($2.56 million) between Posco VST and Thanh Nam Group.
The lawsuit gained public attention because of its duration. The case was brought to the municipal court to be resolved, rather than the district court as prescribed by regulations.
At court, the two sides kept to their opinions. However, based on the submitted materials and documents provided by the two parties, a representative of the Hanoi People’s Procuracy said that Posco VST’s claim is correct.
According to the plaintiff, Posco VST and Thanh Nam Group signed a contract under which Posco VST was to supply stainless steel to Thanh Nam Group in 2010-2013. However, Thanh Nam Group could not meet the payment plan committed in a document released in December 2013 for a debt of more than VND58 billion.
“From January 2013 to July 2016, Thanh Nam not only once but 12 times admitted to owe Posco VST money. Only in September 2015, long after Posco VST sued, did Thanh Nam for the first propose Posco VST to compare the debts under each contract, each delivery, and each payment,” said Posco VST’s document.
Meanwhile, Thanh Nam believes that the debt is not correct because Posco VST several times issued invoices at the end of the month to contribute to the sales report of the parent company. The debt was assessed after the invoices issued by Posco VST, not based on the actual number of deliveries.
Posco VST confirmed that as one of Korea’s largest operating firms in Vietnam, they fully obey Vietnamese law. Posco VST is also concerned that if they fail to collect the debt, it will set a bad precedent for the company’s business.
The court’s conclusions will be published by VIR on October 10, 2018.
Vietnam Railways boosts cooperation with state-owned corporations
Vietnam Railways (VNR) and Dien Quang JSC on October 5 signed a cooperation agreement to tap into their advantages.
Under the cooperation, Dien Quang JSC will offer solutions and lighting products for VNR’s trains, railway stations, depots, offices, as well as other products meeting VNR’s specific requirements, with quality warranty and at reasonable price based on the market.
VNR will create the best conditions in terms of means of transport and warehouses to transport Dien Quang JSC’s products in a safe, convenient, and timely manner.
The two sides also agreed to cooperate in promoting each other’s trademarks.
“The cooperation will enable the two sides to tap into each other’s strengths. The cooperation should be concrete, conducted through contracts to ensure its efficiency,” said Vu Anh Minh, VNR Chairman. He also proposed the two firms to cooperate in research activities and technology application.
The agreement with Dien Quang JSC showed VNR’s determination to increase operational efficiency by strengthening cooperation with other state-owned corporations.
Last year, VNR signed a cooperation agreement with Vietnam National Petroleum Group (Petrolimex) to strengthen cooperation in investment and business activities in the future, and cooperated with Vietnam Post Corporation (VNPost) in logistics services. The country’s biggest train operator also inked a cooperation deal with Saigon Newport Corporation to build two inland container depots (ICDs) in Binh Duong province and Hanoi.
Vietnam CEO Forum 2018 to draw more than 1,000 entrepreneurs
More than 1,000 Chief Executive Officer (CEOs) will discuss opportunities and challenges of the fourth industrial revolution at the Vietnam CEO Forum 2018 to be held on October 24 in HCM City by the municipal Young Businesspeople Association (YBA-HCM).
The event will also draw around 10 speakers who are senior leaders from leading domestic and foreign companies such as Ernst & Young, Minh Long Ltd Company, VNG JSC, Phu Nhuan Jewelry JSC and Weezi Digital JSC. From their wealth and knowledge, aspiring entrepreneurs can hope that the information they share at the event will be very useful and practical to small and medium-sized enterprises.
This year event’s theme will focus on the fourth industrial revolution as Vietnam enters the digital economy era and witnesses the boom in highly advanced technologies such as Big Data, Internet of Things (IoT), Artificial Intelligence (AI), and Virtual reality (VR).
This is the sixth time such an event has been held. The annual forum aims to gather policymakers, economic experts and CEOs who will discuss issues that have an impact on Vietnamese businesses and the economy so as to develop economic policies and strategies in line with Vietnamese businesses and world trends.
Nghe An attracts 7.58 trillion VND in investment
The central province of Nghe An has so far this year granted investment licences to 82 projects with a total registered capital of 7.58 trillion VND (325 million USD), representing decreases in both number of projects and registered capital.
According to the provincial Department of Planning and Investment, the number of investment projects decreased 29.2 percent compared to the same period last year while total investment capital fell 40.08 percent year-on-year.
It admitted the slow implementation of many signed investment projects, adding that the province has withdrawn seven projects with slow progress.
In addition, most newly-licensed projects in Nghe An have a small scale and low registered capital, he said, citing 55 out of 80 projects registered an investment capital of 50 billion VND (2.1 million USD) each.
To solve this situation, the province will continue improving its investment climate, set specific investment attraction orientations for each sector, and offer incentives in terms of land, tax and labour to lure domestic and foreign investors, the department said.
Nghe An will resolutely address the slow and prolonged settlement of investment procedures for investors, it added.
Movements around Danang University Village after 20 years of quiet
Efforts are being accelerated to resume the construction of Danang University Village, which has been delayed for 21 years and is affecting the lives of hundreds of households at the project site.
Nguyen Quang Bay, an elderly man living in Ngu Hanh Son District’s Hoa Quy ward (at the project site), said, “I have been living here since I was a child, meaning I have spent nearly one third of my life waiting for the project to be realised, or my house be relocated for project’s execution, but there has been no progress. My house has been seriously degraded but I cannot repair or rebuild it because it belongs to the project area.”
Nguyen Be, another resident in the same ward, faces the same situation. Be’s one-floor house is in an even more critical condition as the ceiling leaks during rains and the building is seriously dilapidated but cannot be repaired or rebuilt.
“This situation has been standing for years now. This year, we intend to ask for permission to cover the roof with concrete to withstand the upcoming stormy season, but I am not sure whether my proposal will be approved,” he said.
Bay and Be’s concerns are shared by more than 500 households who are subject for relocation to free up land for the project.
In fact, the Danang University Village project, developed by Danang University, was approved by the government in 1997 to cover 300ha space and is worth more than VND8.6 trillion ($380 million) in total investment value.
190ha of this space will be in Dien Ban town’s Dien Ngoc ward in the central province of Quang Nam and the remaining 110ha in Ngu Hanh Son District’s Hoa Quy ward in Danang city.
Some of the main causes behind the project’s long delay are its sizable scope, which involves two localities (Quang Nam province and Danang city), diverse authorised agencies, and enormous investment value.
After more than 20 years, only three components of the project were completed, including the Vietnam-Korea Friendship Information Technology College, the Faculty of Medicine and Pharmacy, and the Faculty of Information Technology and Communications.
Some of the main causes behind the project’s long delay are its sizable scope, which involves two localities (Quang Nam province and Danang city), diverse authorised agencies, and enormous investment value.
Ngo Van Duong, deputy director of Danang University, has recently informed that under the government’s instructions, Danang University is conducting procedures to revise the project’s planning to match the new situation.
Accordingly, the space in Danang city will be reduced to 90ha from the initial 110ha (the acquisition of 25ha has been completed so far). The city has worked out the land acquisition and people’s relocation plans.
The space in Quang Nam province will reduced to 160ha from the initial 190ha due to difficulties in relocating crowded residential areas.
The largest difficulties, however, are related to investment capital. Duong said that the government has green-lighted the project to use state capital sourced from the medium-term development fund to fast-track the implementation of site clearance, build basic infrastructure, and raise several urgent components.
These activities will be finished by 2020. Especially, Danang University was allowed to access a World Bank loan valued at about $100 million to expedite the project.
“Our university is working with the World Bank on borrowing capital. If receiving the World Bank’s approval, by 2020, we will receive the money to execute the project’s main components. As for the capital sourced from the medium-term development fund, we have submitted the proposal to the Ministry of Planning and Investment which also needs to wait for the National Assembly’s approval. The project will be restarted right after we receive this important capital source,” Duong said.
Novaland appoints Savills Vietnam for official sale agency of Grand Manhattan
Novaland, one of the leading real estate developers has appointed Savills Vietnam for the official sale agent for its The Grand Manhattan, a luxury residential project located at the heart of Ho Chi Minh City.
Developed by Novaland and located in Ho Chi Minh City’s central business district, The Grand Manhattan offers excellent connectivity to other districts.
“With the lack of available land and the governments’ decision to not allow any new residential projects in District 1 and 3 until 2020, the project will benefit from strong demand from buyers looking to own in core areas of Ho Chi Minh City,” said Nguyen Phuc Bao Huy, sale director from Novaland.
According to Neil McGregor, managing director of Savills Vietnam, The Grand Manhattan, one of Novaland’s newest projects, is set to redefine the city skyline and be the premier choice for luxury housing.
“Well located in the heart of District 1, the project provides residents an easy commute to the heart of the CBDs and all the amenities the district has to offer,” McGregor said.
With over 25,000 units sold since 2009, Novaland has so far a strong reputation within the marketplace and the largest land bank of upcoming projects in Ho Chi Minh City. Along those some notable projects by Novaland include Madison, Saigon Royal, and Sunrise City View.
Vietjet holding super promotion
Vietjet Air is holding three super promotional days from October 10 to 12 during the “golden hours” of 12pm to 2pm (GMT+7), offering 700,000 promotional tickets priced from VND0 (excluding taxes and fees).
The promotional tickets are on international routes to Tokyo and Osaka (Japan), Seoul, Busan and Daegu (South Korea), Hong Kong, Kaohsiung, Taipei, Taichung and Tainan (Taiwan), Singapore, Bangkok, Phuket and Chiang Mai (Thailand), Kuala Lumpur, Yangon (Myanmar), and Siem Reap (Cambodia), with a flight period from November 1 to June 30, 2019. Flights on domestic Thai routes are from November 1 to March 30.
The promotional tickets are available at www.vietjetair.com (compatible with smartphones at https://m.vietjetair.com) and www.facebook.com/vietjetvietnam (just click the “Booking” tab). Payments can be made with debit and credit cards of Visa, MasterCard, AMEX, JCB, KCP, and any ATM card issued by 32 Vietnamese banks registered for internet banking.
Aiming to be a “Consumer Airline”, Vietjet is continually opening new routes, adding more aircraft to its fleet, investing in modern technology, and offering more added-on products and services to meet customer demand.
Vietjet is a pioneering airline loved by many for its exciting promotional and entertainment programs, especially during the festive season. With high-quality services, diverse ticket classes, and special low-fare tickets, Vietjet offers its passengers a flying experience on new aircraft with comfy seats, delicious hot meals, beautiful and friendly cabin crews, and other interesting added-on services.
It is the first airline in Vietnam to operate as a new-age airline with low-cost and diversified services to meet customer demand. It provides not only transport services but also uses the latest e-commerce technologies to offer a range of products and services to passengers. Vietjet is a member of the International Air Transport Association (IATA) and possesses IATA Operational Safety Audit (IOSA) certification.
It operates 60 A320 and A321 aircraft on more than 385 flights daily, carrying more than 60 million passengers to date on 95 routes to destinations in Vietnam and internationally, such as Japan, Hong Kong, Singapore, South Korea, Taiwan, China, Thailand, Myanmar, Malaysia, Cambodia, and elsewhere.
E-Mart to open first outlet in Hanoi
13,000 tons of dragon fruits exported to China a day
Vietnam exports an average of 13,000 tons of fresh dragon fruits to China a day through northern border gates, reported Mr. Hoang Trung, head of Plant Protection Department under the Ministry of Agriculture and Rural Development.
That data was synthesized from reports by plant quarantine divisions at Kim Thanh border gate in Lao Cai province, Thanh Thuy in Ha Giang, Tan Thanh in Lang Son and Mong Cai in Quang Ninh province.
The department has recently sent a delegation to survey dragon fruit export to China at norther border gates according to the ministry’s requirement, which has been made after information that dragon fruit price in southern and central regions dropped to VND1,000-2,000 a kilogram because Chinese traders have stopped buying.
According to Mr. Trung, China’s dragon fruit consumption demand is very high. Last year, Vietnam exported 1.5 million tons including 1.3 million tons to China.
Export volume reached 1.32 million tons in the first nine months this year. Of these, over one million tons were shipped through border gates in Lao Cai, Lang Son and Quang Ninh and 280,000 tons were exported by sea and air in HCMC.
Explaining the recent price drop in Binh Thuan, Tien Giang and Long An provinces, Mr. Le Son Tra, head of Plant Quarantine Division of the Plant Protection Department, said that there are many types of dragon fruits with different quality.
Those with low quality are paid only few thousands of dong a kilogram while eye catching and good quality type meeting export standards fetches VND20,000-25,000 a kilogram.
So the department rejected the information that China has stopped buying dragon fruit, saying the market has purchased up to 90 percent of Vietnamese dragon fruit.
Still the agency warned that Chinese Government has tightened import through border gates and improved standards on quarantine and food safety and origin tracking to Vietnamese fruits including dragon fruits.
Unofficial cross-border trade will be tightly controlled or even stopped so businesses should take the initiative in shifting to official export ways.
The Plant Protection Department admitted that China is now developing dragon fruit farming area in Guangxi and Hainan with the total area of 20,000 hectares. It is expected to reach 30,000 hectares early 2019. In addition, the country has hired land to for dragon fruit plantation in Laos and Cambodia. That will impact Vietnam’s dragon fruit export in the upcoming time.
The agency proposed the Ministry of Agriculture and Rural Development to assign Farm Produce Processing and Market Development Department to have detailed market research, collect more specific information about dragon fruit planting and consumption in China to assist Vietnamese farmers and businesses.
Moreover, the ministry should work with the Ministry of Foreign Affairs to boost negotiations with China to increase the number of border gates permitted to import Vietnamese fresh fruits including dragon fruits.
At a meeting in Hanoi on October 9, Minister of Agriculture and Rural Development Nguyen Xuan Cuong required authorized agencies to take the initiative in conducting market research and planning to prevent oversupply, bumper crop and price fall from recurring.
Khanh Hoa province sells out Nha Trang Port shares
The sold share value accounts for 6.4 percent of the chartered capital which the committee is holding at the port.
With the starting price of VND11,900 a share, the auction session was attended by two individuals and two organizations.
Investors registered to buy 4.7 million shares, triple the offered for sale number with the highest purchase price reaching VND18,600 a share and the lowest being VND11,900.
In the final, all of 1.57 million shares were sold to one organization and one individual with the average price of VND12,112 a share and earnings of VND19 billion ($814,000).
Businesses invited to attend Vietnam-China border trade fair
Deputy director of HCMC Department of Industry and Trade Nguyen Phuong Dong yesterday worked with Lao Cai province Department of Industry and Trade and Hekou district (China) on a coordination plan to invite businesses to attend the 18th Vietnam-China border trade fair.
The fair will take place from December 4-8 this year in Hekou, Yunnan province, expected to have 1,500 stalls. Of these, Chinese businesses will have 1,000 while Vietnamese will have 500 stalls.
They will showcase electronic items, electrical equipment, auto, machines, minerals, wooden products, seafood, clothes, footwear, farm produce and fruits.
The fair is part of key national trade promotion program hosted annually to introduce products which the two countries have strengths to help businesses seek partners and boost export.
Organization board plans to invite 600 Chinese and international partners and 1,200 businesses to attend the fair. The number of visitors is expected to hit 200,000.
Stating at the meeting, Mr. Nguyen Phuong Dong proposed the organization board to send detailed information about the fair to introduce to businesses and associations. HCMC is willing to bridge businesses to the event.
Vietnam’s Defense Ministry to speed up SOE equitization
The ministry has been requested to downsize its wholly-owned companies to 17 by end-2020.
Vietnam’s Ministry of National Defense will step up the equitization and divestment drive of state-owned enterprises (SOEs) under its umbrella to downsize its SOE portfolio to 17 by 2020 from 88, an official has said.
The ministry will sell shares in 29 wholly-owned companies until 2020 after completing equitization of 32 out of 38 firms scheduled for the 2013-2015 period, VnExpress cited Nguyen Van Duc, head of the ministry’s Propaganda Department, as saying at a press meeting on October 9.
Besides, the ministry has sold its entire holdings in 10 joint stock companies and is unloading shares in the remaining 11, Duc informed.
According to a prime minister-approved plan for 2020, the ministry will retain a 100% stake in 17 companies. It will have to equitize 29 companies that are dedicated to commerce, construction and service operations, divest stakes in 20 joint stock companies and consolidate other small ones.
The ministry has been under fire for years for sticking to its dual missions: national defense and carrying out economic activities. A protest wave took place last year when the ministry was blamed for renting a large reserve land plot adjacent to Tan Son Nhat International Airport to a golf course operator while the already overloaded airport was under great pressure to get expanded. The ministry then said it will hand over the idle land for the upgrade of the airport when needed.
A number of military officials have raised voice to defend that duality, arguing that the army is not assigned to implement purely economic activities, but a combination of economic and defense purposes is needed to fulfill its role.
Lackluster interest in Military Bank shares offered by Vietcombank
At a starting price of VND19,641 (US$0.84) apiece, Vietcombank is expected to book proceeds of VND116.5 billion (US$5.01 million), much lower than the bank`s initial expectation of at least VND1.04 trillion (US$44.52 million), local media reported.
Investors have registered to purchase a meager of 5.93 million out of 53.4 million shares of the Military Bank (MB) offered by Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), according to the Hanoi Stock Exchange (HNX).
Overall, ten investors, including five individuals and five organizations, expressed interest in buying the said amount of shares.
At a starting price of VND19,641 (US$0.84) apiece, Vietcombank is expected to book proceeds of VND116.5 billion (US$5.01 million), which is significantly lower than the bank’s initial expectation of at least VND1.04 trillion (US$44.52 million).
The auction is scheduled to be held on October 15 at the HNX.
At the annual general meeting in 2018, Nghiem Xuan Thanh, Vietcombank’s chairman, informed the bank’s intention of divesting capital in other banks where Vietcombank holds more than a 5% stake, including MB and Vietnam Export Import Commercial Bank (Eximbank).
The move is in line with the regulation on limiting cross holding. Under the regulation set by the State Bank of Vietnam (SBV), commercial banks are permitted to hold shares in a maximum of two other credit institutions, with the stake in each not exceeding 5%. The SBV requires banks to comply with its requirements before June 30 next year.
Vietcombank currently holds a 6.97% stake or 150.6 million shares in MB, and an 8.24% stake or 101.2 million shares in Eximbank.
The sale of MB shares is supposed to help Vietcombank reduce its holding at the bank to 4.5%, which, however, proves quite challenging with the lack of interest from investors.
At the close on October 9, MB’s share value stood at VND23,050 (US$0.99) per share, down from the peak of VND36,800 (US$1.58) recorded on March 21. However, the current trading price is still higher than the Vietcombank’s price on offer of VND19,641 (US$0.84) apiece.
Vietcombank previously divested its shares in a number of credit institutions, including SaigonBank, Cement Finance Company (CFC) and entire shareholding in Orient Commercial Bank (OCB) on September 6.
In the first six months of 2018, Vietcombank’s pre-tax profit reached VND8 trillion (US$349.4 million), up 53% year-on-year, according to the lender’s quarterly consolidated financial statement.
As of June 30, Vietcombank’s total assets were valued at VND977.6 trillion (US$42.7 billion), down 5.6% compared to the beginning of the year, mainly due to the bank’s reduction in deposits at the SBV and other credit institutions.
Vietnam state budget revenue up 13.7% in 9 months
Vietnam recorded a fiscal deficit of VND26.8 trillion (US$1.14 billion) in the nine months through September, widening from a deficit of VND1.7 trillion (US$72.69 million) recorded one month earlier.
Vietnam collected VND86.2 trillion (US$3.69 billion) in September for the state budget, accumulating a total of VND962.5 trillion (US$41.23 billion) in the first nine months, equivalent to 73% of the year’s estimate and up 13.7% year-on-year, stated the Ministry of Finance.
Of the total, collections from domestic taxes and fees in September reached VND64.6 trillion (US$2.76 billion), up VND2.1 trillion (US$89.95 billion) against the previous month.
This resulted in a total of VND763.6 trillion (US$32.71 billion) in the January – September period, equivalent to 69.5% of the estimate and up 14.3% year-on-year.
As many as 44 out of 63 provinces have had their budget revenue meet more than 75% of the year’s plan and 59 out of 63 provinces have reported higher revenue from a year earlier.
Revenue from crude oil in September stood at VND6.5 trillion (US$278.48 million), totaling VND48.1 trillion (US$2.06 billion) in the nine-month period, or 134% of the year’s estimate and up 42.5% year-on-year.
Besides, revenue from trade decreased to VND21.5 trillion (US$921.12 million) in September, down VND4.3 trillion (US$184.23 million) against the previous month, bringing the nine-month value to VND223 trillion (US$9.55 billion), or 78.8% of the year’s estimate and up 4.2% year-on-year.
Meanwhile, Vietnam’s state budget expenditures in September hit VND114.1 trillion (US$4.88 billion), reaching a total of VND989.3 trillion (US$42.38 billion) in the first three quarters of 2018, equivalent to 64.9% of the estimate and up 9.8% year-on-year.
This led to a fiscal deficit of VND26.8 trillion (US$1.14 billion) from the beginning of the year to the end of September, widening from the deficit of VND1.7 trillion (US$72.69 million) recorded one month earlier.
During the period, regular spending reached VND690.4 trillion (US$29.56 billion), equivalent to 73.4% of the estimate, up 5.3% year-on-year. Expenditure for development investment stood at VND203.6 trillion (US$8.71 billion) in nine months, equivalent to 50.9% and up 22.2%.
During the January – September period, the government set aside VND80.5 trillion (US$3.44 billion) for interest payment, equivalent to 71.5% of the estimate and up 6.8% year-on-year.
Helicopter Corporation to sell 20.3 million shares of MBLand Holdings
The Vietnam Helicopter Corporation (VNH) will auction 20.3 million of its shares in property developer MBLand Holdings with the beginning price of 12,366 each on October 26.
According to the Ha Noi Stock Exchange, VNH holds a 31 per cent stake in MBLand Holdings. VNH is expected to collect a minimum VND251 billion from the sale.
MBLand, formerly known as MB Real Estate JSC, was established on January 25, 2008 by two major shareholders, Military Commercial Joint Stock Bank (code: MBB) and VNH.
After nine years of establishment and development, MBLand Holdings now has an ownership capital of VND800 billion, total assets worth VND2 trillion and charter capital of VND653.7 billion.
MBLand Holdings has 18 shareholders, including 12 organisations and six individuals. The main shareholder of MBLand Holdings is MB Bank with the ownership ratio of over 65 per cent, or nearly 42.7 million shares.
In early 2017, it was said that the MB Bank had planned to divest from MBLand Holdings in order to satisfy the Government’s regulation that “banks are not allowed to trade real estate and establish subsidiaries operating in this field”, under the Law on Credit Institutions 2010.
However, MB Bank’s divestment plan has not yet been disclosed. In fact, MBLand’s financial resources for many years have been quite good thanks to the credit support from MB Bank.
MBLand operates mainly in the real estate sector. Some of the company’s projects are MB Grand Tower project and Golden Field project in Ha Noi, Resilient Field project in Cam Ranh and Grand Field project in Long Thanh District, Dong Nai Province.
As of June 30 this year, MBLand has total assets of over VND2.3 trillion. The ownership of foreign investors at MBLand Holdings is zero per cent as of September 19 (while the ownership limit is 49 per cent).
FE Credit raises charter capital to $313m
The charter capital of consumer finance company FE Credit, which accounts for some 50 per cent of Viet Nam’s consumer finance market share, surged sharply to nearly VND7.33 trillion (US$313 million) from the previous VND4.47 trillion.
It was released recently under a State Bank of Viet Nam decision on revising the charter capital of the consumer finance company in its business certificate.
With the capital hike, FE Credit’s charter capital accounts for up to 35 per cent of total charter capital of all 16 consumer finance companies in the country.
FE Credit’s capital hike came just a short time after its parent company VP Bank completed most of its capital hike approved at the bank’s 2018 annual general meeting of shareholders in April this year. By the end of last month, VP Bank completed the issue of nearly 33.7 million ESOP (employee stock ownership plan) shares, raising its charter capital to nearly VND25.3 trillion, up 61 per cent against the beginning of the year.
FE Credit’s profit rose by 16 per cent to VND1.58 trillion (US$67.23 million) in the first half of this year as the company decided to cut lending growth to focus more on tightening internal governance and selecting solvent customers in order to target safer and healthier development.
With the slowdown, FE Credit’s profit accounted for only 36 per cent of VP Bank’s total profit, down significantly from 50 per cent in the same period of last year.
Nguyen Duc Vinh, VP Bank’s general director, also affirmed that the bank was planning to keep the growth rate low and reduce FE Credit’s contribution to the bank’s consolidated profit.
FPT and Shinhan Bank co-operate in digital banking
Shinhan Bank, the largest commercial bank in South Korea, and Vietnamese technology group FPT signed a Memorandum of Understanding (MoU) on digital banking in Seoul on Thursday, aiming to leverage each other’s assets and capabilities to contribute to digitally transforming the banking and finance industry.
According to the MoU, both sides will join forces to develop and deliver information technology (IT) solutions such as digital banking and fintech.
With proven intensive experience in financial sector, Shinhan Bank will equip FPT with a wide range of in-depth knowledge and data regarding advanced digital banking system and competitive financial services in South Korea.
FPT, as the leading technology corporation with 30 years’ experience, will provide Shinhan Bank with comprehensive digital transformation solutions and a large pool of competent IT experts to improve the banking system and develop the technology foundation for new services.
“FPT has proven their outstanding technology capability and experience through strategic cooperation with both domestic and foreign enterprises in various sectors including e-commerce, banking and finance and digital payment,” said Lee Tae Kyung, Shinhan Bank’s global business development director.
“This agreement is among the most critical steps in the journey of becoming a leading digital transformation corporation in the world. With the experience of providing digital transformation services to world’s top corporations, FPT is more than ready to utilize our technology capability and resources to accompany Shinhan Bank on the journey of becoming a global leading digital bank,” said FPT Chairman Truong Gia Binh.
Joining forces, FPT and Shinhan Bank expect to leverage the banking system in the fourth industrial revolution with digital transformation solutions, thus benefiting not only the two companies, but also their customers worldwide.
FPT established their South Korea office to explore, develop and expand the opportunities to approach large Korean firms in technology strategy sectors in 2016. With the growth rate of 300 per cent per year, South Korea is becoming FPT’s strategic market.