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Robust growth trends projected for investment in healthcare

April 11, 2021 by vov.vn

Kim Dental, Vietnam’s largest private dental care platform, has recently raised US$24 million in a series B round. The investment was led by ABC World Asia, a private equity fund dedicated to investing across Asia, seeded by Temasek. Proceeds from the round, which saw the participation from existing backer Aura Private Equity, will support Kim Dental in expanding the delivery of affordable and reliable oral health services across Vietnam.

Kim Dental owns and operates a fast-growing network of 19 dental clinics across four cities. The clinics provide dental check-ups and treatments as well as more advanced orthodontics, prosthodontics, oral surgery, and implants. Kim Dental employs 120 dentists and dental surgeons, as well as over 600 clinical and operational staff serving over 23,000 patients per month. Kim Dental also operates a dental laboratory to support its clinic network with in-house production of crowns, dentures, and bridges.

Huynh Minh Viet, CFO of Kim Dental said, “With this successful round, we’re now well-positioned to expand our delivery of international quality dental care to the fast-growing communities across the country, thus improving community access and helping to elevate the standards of oral healthcare in Vietnam, so that we achieve more positive overall healthcare outcomes in our country.”

Meanwhile, SK Group is said to be mulling over an investment in Vietnam’s largest pharmacy retail chain, Pharmacity, with an expected value of up to US$90 million, according to Dealstreetasia.

Phamarcity is Vietnam’s largest pharmacy retailer with approximately 500 drugstores. The company has a plan to open its 1,000th store this year.

If the deal is concluded, it would make up SK Group’s second investment in Vietnam’s pharmacy and healthcare market. Last May, SK Investment III, a subsidiary of the Republic of Korea’s third-largest conglomerate SK Group, received 12.32 million shares of Imexpharm Corporation, equivalent to 24.9%.

Michael Han, head of SK Group’s Representative Office in Vietnam said, “There are dozens of industries and companies that we are trying to get to know better here, and healthcare happens to be one of them. It does not necessarily mean that an investment is imminent though.”

However, Han remains upbeat about Vietnam’s healthcare and pharmacy market. Historically, this sector’s growth has been backed by people’s growing concerns about the wellbeing of their family members, environmental factors, rising household income, and the high urbanisation rate – which leads to changes in lifestyles and a higher demand in personal healthcare.

“We believe that the robust growth will continue into the foreseeable future. We have seen a similar trend in the Republic of Korea over the last 20 years or so. In terms of market size, Vietnam is still at the emerging stage, with estimated total value of US$7 billion in 2019, growing at a robust pace of 8% from 2019-2024,” he said.

Meanwhile, a consortium led by Singapore’s state investor GIC Pte. Ltd. has agreed with Vietnam’s largest conglomerate Vingroup to buy a stake in its medical unit, Vinmec, for over US$200 million. However, Vingroup will remain the controlling shareholder of the unit after the deal, Vingroup said in statement last December.

Other funds like Vinacapital and Mekong Capital have seen the prospects of the market and decided to cash in on local healthcare and pharmaceuticals. Last August, VinaCapital invested in Thu Cuc International General Hospital by purchasing a 30% stake for US$26.7 million. In 2019, Mekong Capital also financed pharmacy chain Pharmacity out of its Mekong Enterprise Fund III.

Private equity investments in healthcare are on the rise. Nguyen Thi Vinh Ha, head of advisory at Grant Thornton Vietnam, cited the firm’s survey showing that healthcare is among the most attractive industries for investors, with its growth prospects coming from higher healthcare spending per capita.

“However, the shortage of qualified personnel and inadequate healthcare infrastructure results in a huge supply gap, and the increasing ageing speed of the Vietnamese population will further boost the healthcare demand,” Ha added.

Green growth strategy receives helping hand

April 7, 2021 by www.vir.com.vn

Green growth strategy receives helping hand

Clean energy is one of the focal points that the international community is encouraging Vietnam to implement in its National Green Growth Strategy for the 2021-2030 period, with a vision to 2050, and representatives of embassies and international organisations at the consultative conference organised by the Ministry of Planning and Investment (MPI) last week discussed opinions for this strategy.

Emphasing the importance of clean energy in the green growth process, British Ambassador to Vietnam Gareth Ward said, “This consultation is useful because Vietnam will be recovering faster from the pandemic than most countries and there’s a lot of supply chain relocation into Vietnam happening, which also means a lot of opportunities to do things differently. So, we very much welcome the national green growth strategy.”

Energy is a sector requiring great attention as it is also the major source of greenhouse gas (GHG) emissions.

“Vietnam has a very large potential in wind and solar, and the country could be much quicker in establishing a stable supply in time. I think there should be a particular focus in the strategy on attracting public investment into the grid’s resilience for renewable energy,” Ward said.

“Some international investors have expressed their interest to invest in the green energy sector,” he added. “So, green finance is a sector that Vietnam can develop with green bonds and investment funds, while simultaneously setting standards that will change the calculations of the banking system,” he added.

Ambassador of Spain to Vietnam María del Pilar Méndez Jiménez said, “I would encourage Vietnam very much to develop green energy because we are aware of how important energy, solar wind and water are. There are also Spanish companies that are willing to cooperate with Vietnam in this regard.”

The Politburo’s Resolution No.55-NQ/TW dated October 2, 2020 on the orientation of Vietnam’s National Energy Development Strategy until 2030 and outlook to 2045 already points towards cleaner and greener energy. The resolution states that renewable energy sources in the primary energy mix should sit somewhere between 15-20 per cent by 2030 and 25-30 per cent by 2045. The government also targets to reduce GHG emissions from energy activities by 15 and 20 per cent by 2030 and 2045, respectively.

A McKinsey study shows Vietnam has tremendous natural endowments, yet the country’s market for renewables remains in its infancy, with a grid scale of only about 200MW from solar and wind online.

“A successful renewables-led pathway includes building out the country’s wind and solar generation capabilities to 39GW and 61GW by 2030, respectively,” the study stated. “This would be five times more than Vietnam’s current energy plan and would need to be supplemented by natural gas and battery storage.”

International organisations have been working to help Vietnam promote energy. The GIZ Energy Support Programme is supporting the Vietnamese government in developing renewables by addressing barriers. GIZ works on several levels with the Ministry of Industry and Trade’s Electricity Regulatory Authority of Vietnam and other institutions to implement aspects of Vietnamese policies.

Along with the importance of energy development in realising the national green growth strategy, onlookers have pointed out there that shortcomings remain. British Ambassador Ward said, “All countries that are setting their targets not only need to look at growing renewables, they also need to look at the way to phase out coal and other brown energy sources.”

Though highly valuing the green growth strategy, Dong-bae Kim, Economic Minister-Counsellor of the South Korean Embassy in Hanoi also raised concerns over how it relates to the National Power Development Plan 8, especially in the power generation.

By Oanh Nguyen

Corporate bond rush heads for slowdown

April 10, 2021 by vietnamnet.vn

With Vietnamese regulators’ efforts to minimise the risks of corporate bonds’ mass issuance, the landscape is predicted to be cooled down compared to a frenzy of debt instruments in the previous period.

Corporate bond rush heads for slowdown.

According to fresh data from the Hanoi Stock Exchange, as of January 22, there were seven successful corporate bond private placements with a total value of $279 million and two public offerings of $70 million. The real estate sector accounted for $233.7 million, equivalent to 66.9 per cent of the total issued value.

Previously, over $17.82 billion of corporate bonds were issued last year, which increased by 38.5 per cent from end-2019 and 83.5 per cent from end-2018.

Albeit a decline in the last quarter of 2020’s issuance volume the real estate sector witnessed the largest corporate bond issuance volume in 2020 of over $6.09 billion, accounting for over 35 per cent of total issuance value at an average coupon rate of 10.52 per cent. The banking sector also made up for nearly 30 per cent, with an average coupon rate of 6.69 per cent, lower than 7.06 per cent in 2019. Some significant bond issuers included BIDV, VietinBank, HDBank, and TPBank.

The rush of corporate bond issuance has sought attention from yield-hunt investors in the face of ultra-low interest rates.

“Rising medium- and long-term capital demands to satisfy stricter regulations on credit safety limits and capital adequacy ratio in 2021 were putting much pressure on commercial banks to raise funds from bond issuance in late 2020,” explained Nguyen Tu Anh, director of the General Economic Department under the Central Party’s Economic Commission. “On the other hand, foreign investors have been closely engaged in the domestic debt market. In 2020, foreign investors were actively net buyers, expect only three months of slight net-selling, with a total net buying value of $179.7 million.”

However, the lack of transparency and independent credit rating agency makes the task of re-evaluating the debts much harder. According to Nguyen Hoang Duong, deputy director of the Banking and Finance Department under the Ministry of Finance (MoF), Decree No.153/2020/ND-CP dated December 31 on private offering and trading of corporate bonds in the domestic and international markets, stipulates that investors are responsible for their own investment decisions and risks.

As per Decree 153, corporate bonds for private offering shall be traded among professional securities investors only, except for cases of implementing judgment or decision of courts that have taken legal effect.

“The state cannot guarantee that issuers would fully pay interests and principal loans on time. Therefore, investors should be extra cautious of the legal framework, as well as dig deep into the full information of bonds they want to purchase. They would have to take responsibility for their own investment decisions and be willing to take risks when buying private bonds,” Duong said.

The MoF also cautioned investors to keep an eye on corporate bonds issued by companies that are members, subsidiaries, or affiliated firms of large corporations.

“Investors must pay close attention on the detailed information about stakeholders and organisational structure of the issuers. It is imperative to have a clear understanding of the companies’ financial health, their business activities, future outlook, and debt obligations. Specifically, do not just follow their parent companies’ reputation,” the MoF noted.

Bao Viet Securities Company added, “We believe that the demand for corporate bond issuance of domestic firms will also decrease, and insolvency risk may occur in a number of businesses in 2021. However, we believe that this risk is unlikely to spread and negatively affect the financial system.”

Nguyen Tu Anh of the General Economic Department cautioned, “Despite its rapid development in recent years, there are still several shortcomings hindering the industry. The scale of the Vietnamese corporate bond market still pales in comparison with regional peers. Furthermore, the secondary market has not been developed yet, and liquidity of corporate bonds after issuance is relatively low. An independent rating agency is still the major absent element.”

On a regional level, an improving global economic outlook and progress on pandemic vaccinations have pushed up bond yields in the emerging East Asia, including Vietnam. According to the Asian Development Bank (ADB), steady expansion in both the government and corporate bond segments supported the growth.

Specifically, government bonds grew 7.1 per cent from the previous quarter to $58.8 billion at the end of December, accounting for 82.8 per cent of the country’s total bond stock. Meanwhile, corporate bonds also sustained their growth momentum, increasing 13.6 per cent from the previous quarter and 169.5 per cent from a year earlier to $12.2 billion.

“Bond markets in emerging East Asia continued to grow, mobilising funding for the region’s sustainable recovery from the pandemic,” said ADB chief economist Yasuyuki Sawada. “Successful vaccination campaigns, accommodative monetary policy stances, and easing of restrictions are spurring on economic activity and shifting the recovery into higher gear.”

VIR

Thriving equity market helps boost business transparency

April 1, 2021 by en.vietnamplus.vn

Traders work at the trading floor of Sai Gon Securities Inc. (Photo: VNA)

Hanoi (VNS/VNA) – The development of the equity market will help promote the transparency and corporate governance of listed companies, especially public companies with State capital , an official has said.

The statement was made by Dang Quyet Tien , director of the finance ministry’s Corporate Finance Department, during a recent seminar in Hanoi.

“This will help boost the volume of transactions in the stock market, increasing the liquidity for State shareholders,” Tien said.

“There is a problem that has persisted for many years in most State-owned enterprises, which is the ineffectiveness in the management and use of State capital,” he said.

“The development of the equity market would help State-owned enterprises be less dependent on bank credit loans, diversifying forms of capital mobilisation.”

The Vietnamese stock market has seen remarkable development since its inception, but the rate of capital mobilisation via this market was still very low, said Nguyen Tu Anh, director of the General Economic Department under the Central Economic Committee.

“The diversification of products on the market is still poor, resulting in high volatility. At present, idle capital in the economy is quite large, the deposit interest rates of banks have decreased and the interest rates of Government bonds have dropped deeply, which are very favourable conditions to develop the stock market,” he said.

“Over the past 20 years, Vietnam’s stock market has made great progress, promoting its role as a capital mobilisation channel for the medium and long term. However, more efforts are still needed to achieve the upcoming development goals,” said Ta Thanh Binh, Director of Securities Market Development Department under the State Securities Commission.

“The status upgrade of the stock market needs efforts not only from the securities industry and the stock market regulators but also from the public enterprises themselves. This will be achieved only when the businesses prove their transparency, complying with the discipline of information disclosure, following international accounting standards (IFRS),” she said.

The new era required efforts to improve corporate governance, the professionalism of the investor community and the ability of regulators to operate the market, said Can Van Luc, senior advisor of the Bank for Investment and Development of Vietnam (BIDV).

“People and technology are two decisive elements for the future development of Vietnam’s capital market,” he said.

Before the inception of the stock market, businesses were totally dependent on banks regarding capital, said Nguyen Duc Hau, Deputy General Director of HAPACO Group, the first enterprise in the north listed on the stock market of Vietnam.

“Since the opening of the stock market, HAPACO and many other businesses have raised hundreds of trillion Vietnamese dong from public investors, thereby expanding investment, having new shareholders, partners and wide-scale markets,” he said.

“We began as a small company, with equity capital of only 10.8 billion VND at the time of equitisation, but now HAPACO has an equity of more than 1 trillion VND,” he said.

“The 4.0 era will change the way that investment banks, securities companies and investment funds interact with customers,” said Pham Tien Dung, Research Director of Bao Viet Securities Joint Stock Company.

“Robots will do a lot of computing work instead of humans in the future. The rise of automation in the financial industry has changed the speed and form of the stock market,” Dung said.

“The segments of retirement insurance, health insurance and property management will witness a great development in Vietnam’s capital market in the new decade,” he said.

After more than 20 years of establishment, the structure of the capital market has been clearly shaped, consisting of two main components, namely the stock market and the medium and long-term credit market.

In 2000, the market capitalisation of the stock market was only 986 billion VND, equivalent to 0.28 percent of GDP, and after two decades, its capitalisation has soared to an equivalent to 83 percent of GDP./.

VNA

Italian official: Vietnam, Italy could work on fields of shared interest

April 10, 2021 by en.qdnd.vn

In an interview recently granted to Vietnam News Agency correspondents in Rome, Di Stefano said in recent years, Vietnam has made a stride in history, which was the result of the Vietnamese leaders’ strategic vision.

The country has overcome difficulties during the Cold War and chosen the road of modernisation and multilateral integration with basic steps such as entry to the UN, ASEAN, the World Trade Organisation, and establishment of ties with regional organisations like the European Union as well as strategic partnership with many nations worldwide, including Italy, he said.

According to him, Vietnam’s opening of door to receive foreign investment, including those from Italy, has brought to Vietnam necessary resources in terms of investment, labour and technology for national construction.

Italy pays attention to Vietnam’s important role in the region and on international arena, he said, adding that the two nations have supported principles of a world order based on the respect of rules and the peaceful settlement of disputes, as well as shared a common wish to effectively promote multilateralism and sustainable development for all stakeholders.

He reiterated Italian President Sergio Mattarella’s congratulatory message sent to new State President Nguyen Xuan Phuc that Italy will grasp cooperation opportunities from the Vietnam – Italy strategic partnership established in 2013 and the Italy – ASEAN development partnership signed in 2020.

The COVID-19 pandemic showed that common issues must be settled via solidarity and cooperation, which inspired Italy in its role as G20 Chair and promptly the country to fund 116 million USD for the Access to COVID-19 Tools Accelerator (ACT-A) to offer equal access to vaccines worldwide, including Vietnam. He also hailed Vietnam for effectively coping with the pandemic thanks to its experience in dealing with SARS in 2003.

Commenting on the prospect of bilateral cooperation after the European Union – Vietnam Free Trade Agreement (EVFTA) took effect in August 2020, Di Stefano expressed his belief in growing Italy-Vietnam trade ties this year. He suggested that Vietnam and the EU continue pursuing the goal of trade liberalisation in a more balanced manner.

As many as 110 Italian firms are operating in Vietnam. Bilateral economic ties are growing, especially in traditional fields such as machinery, apparel, automobiles, farm produce, oil and gas.

The European nation also supports hi-tech investment in Vietnam in telecommunications, outer space, pharmaceuticals, architecture and design, renewable energy, and innovation industries, he said.

He also expressed his hope to visit Vietnam when conditions allow.

Source: VNA