Turmoil boost oil price

Sharp increases in capital contributions and share purchase

According to the Ministry of Planning and Investment (MPI), there were 1,321 valid projects invested in by Vietnamese enterprises abroad with a total registered capital of US$20.6 billion by the end of 2019. The disbursement of the investment capital was US$9.49 billion by the end of the same year.

Vietnamese enterprises have invested in 78 countries and territories across the world with the largest investments poured into Laos, Russia, Cambodia, Venezuela, and Myanmar. Enterprises invested in 18 key industries and sectors with the biggest capital running in the oil and gas industry, accounting for 38.4% of the total offshore investment capital.

About 15.3% of the investment capital was poured into agricultural, forestry and fishery sector while 12.8% of the capital was invested in telecommunications and information technology and 7.2% of the capital went into the hydroelectricity sector.

The number of small and medium-sized projects run by the private sector has increased over the years while the number of large-scale projects run by State-owned enterprises in the areas of oil and gas exploration and extraction, telecommunications, industrial crops and hydroelectricity has fallen sharply.

The volume of investment capital transferred abroad has tended to decrease since the 2015-2017 period due to a plummet in the number of large projects.

According to the MPI, accumulated profits transferred to Vietnam from abroad was approximately US$3 billion while the profit retained for reinvestment was about US$363.4 million. Nearly 10,000 Vietnamese workers have been sent abroad to work.

In addition, Vietnamese enterprises have established a significant amount of assets abroad including factories and production facilities worth billions of US dollars. These are favourable conditions for Vietnamese enterprises to expand their overseas investment and business activities in a context of deeper international economic integration.

Notably, investment abroad in 2019 was entirely implemented by the private sector with no projects conducted by State-owned enterprises. More and more large private corporations and domestic joint stock companies have invested in developed countries in order to expand their market and affirm their brands such as Vingroup, Vietjet, Thaco, T&T, Vinamilk, FPT, and others.

Investment forms are also diverse with an increasing number of investment projects in the form of capital contributions and share purchase in foreign enterprises.

Minister of Planning and Investment Nguyen Chi Dung said that there are Vietnamese enterprises that have spent US$3-5 million to buy shares of foreign enterprises that are now valued in the hundreds of millions of US dollars.

Major global changes due to the COVID-19 pandemic have led to a wave of mergers and acquisitions through capital contributions and share purchase at potential companies for very cheap prices. Vietnamese enterprises need to have big aspirations to participate in this market segment to accelerate the process of reaching out to the world and bringing greater value into the country.

To date, five Vietnamese enterprises have invested abroad with registered capital of over US$1 billion each including the Vietnam Oil and Gas Group (Petrovietnam), Military Industry and Telecoms Group (Viettel), Vietnam Rubber Group, Hoang Anh Gia Lai Group, and Long Thanh Golf Investment and Trading JSC.

Besides these impressive achievements, there remain inadequacies including legal risks, international lawsuits and disputes, slow progress of projects, and ineffective implementation of projects, among others.

According to experts, the change in the investment tendency of Vietnamese enterprises in recent years has been market-oriented and consistent with the process of trade and investment liberalisation and international economic integration.

There is large room and great potential in international markets, thus, the most important thing for offshore investment is to perfect mechanisms and policies and create more favourable conditions for private enterprises to easily invest their resources abroad in order to transfer the profits to Vietnam. Meanwhile, enterprises need to improve their governance capacity, their ability to grasp the market and sufficiently strong cash flows.

The amended Law on Investment which will take effect on January 1, 2021 has completed policies on investment abroad regarding clear updates of cases prohibited from investment abroad, conditions accompanied with investment abroad, lending abroad, reporting the process of State management agencies related to investment abroad, the use of profits from overseas projects to contribute to other projects abroad, and others.

To prevent risks in offshore investment activities, the MPI has proposed the Government assign relevant agencies to review and evaluate investment trends abroad in the areas of real estate and the investments of foreign investors in Vietnam abroad in order to devise timely solutions to problems arising.

In addition, Vietnam should boost negotiations and early signing of investment promotion and protection agreements with countries receiving large investment from Vietnam or with Vietnam’s potential partners to create a legal framework for safe and effective investment abroad.

The masterpiece was sold at Sotheby’s Auction House in Hong Kong last Sunday, but the identity of the buyer is not known.

It had been valued at $900,000-$1.2 million. At the auction, the reserve price was $500,000, but the bids kept rising until it went past $2.5 million, and cost $3.1 million after tax and fees.

‘Portrait of Mademoiselle Phuong’ by Mai Trung Thu. Photo courtesy of Sotheby’s.

The previous record of $1.36 million was held by Le Pho’s ‘ Young Girl With Peonies ’ last year.

Portrait of Mademoiselle Phuong is a 135.5×71 cm oil on canvas work done in 1930, which the auction house described as “…this masterpiece, beautifully rendered in the oil medium, is exceptionally rare as the artist devoted himself to painting in silk for most of his career.

“The beguiling portrait also captures Mai Thu’s deep admiration of its sitter, a noble lady rumored to be the artist’s love interest. Encapsulating his affections for Ms. Phuong, this work is special within Mai Thu’s oeuvre, as there are only two known works painted of this subject.”

The work was first exhibited at the École des Beaux-Arts de l’Indochine in Hanoi in 1930 and then at the 1931 Exposition Coloniale Internationale de Paris.

It was previously owned by Dothi Dumonteil, a Vietnamese woman who migrated to France as a child, and her husband Pierre Dumonteil, an art collector, until recently .

It appeared in the award-winning 1993 Vietnamese film, ‘The Scent of Green Papaya,’ directed by Tran Anh Hung, which went on to become Vietnam’s first ever entry for the foreign-language Oscar Award in 1994.

Thu was a famous modern art painter in the early years of the 20th century. He lived and worked most of his life in France.

Associated with silk paintings of women, children and everyday life in Vietnam, he was named along with Vu Cao Dam, Le Thi Luu and Le Pho as the four most prominent artists of the golden age of Vietnamese modern art.

A customer views products at a PNJ store in Ho Chi Minh City. Photo courtesy of PNJ.

At its annual general meeting Saturday, it also announced a revenue target of VND21 trillion, up 20 percent.

But Phu Hung Securities Corporation has forecast revenues of VND18.4 trillion and profits of VND1.09 trillion, explaining that the volatility in gold prices and consumers’ increasing preference for imported jewelry would keep numbers down.

BSC Securities expected the jewelry industry to recover this year, and forecast PNJ a 22 percent rise in profits to VND1.3 trillion on revenues of VND19.8 trillion (up 13 percent).

PNJ chairwoman Cao Thi Ngoc Dung said the targets are achievable since the pandemic would be contained this year and the economy would recover.

The company aims to open 40-45 stores in 2021 and buy machinery for its jewelry workshops.

Its CEO, Le Tri Thong, said demand for jewelry among young people in major cities is high, and this would boost the company’s revenues and profits. Smaller cities and rural areas too however show promise, he said.

Last year, revenues edged up 3 percent to VND17.5 trillion, but Thong pointed out though the growth was lower than the average of 32 percent in recent years, the fact that PNJ managed to grow its revenues amid the pandemic was a success for it.

It opened 29 stores and closed 36 existing ones in 2020, most of them were silver jewelry stores in shopping malls with modest business and high rentals.