Vietnam's leading human resource services provider Navigos Group has unveiled a plan to list on the local bourse by launching an initial public offering (IPO) by 2010 at the latest.
Jonah Levey, chief executive officer and founder of Navigos Group, said that an IPO would accelerate the company's growth as well as allow more investors to participate in the high growth potential in the human resource services sector in Vietnam.
Navigos Group, which is also the owner of Vietnam's popular job website VietnamWorks.com, has is-sued more than 10 million shares and plans to raise the number to 13 million to find more funds for business expansion.
"Demand for our services will continue to increase, and we can leverage our scale, track record and depth of knowledge to create better services for our clients. We continue to strengthen our leading position in the industry through our level of resource and reach into the top of talent pool," Levey said.
The investment community has shown interest in Navigos.
The institutional investor Indochina Capital acquired a 20% stake in the company in mid-2006 and since then the company's value has more than doubled as its share price has leapt from just US$0.01 to US$2.50 per share.
Levey credited the company's value increase to solid business performance and Vietnam's upbeat prospects. Navigos Group reports strong 2006 results and this is the fourth consecutive year the company has achieved a growth rate of over 100 percent in revenue.
Levey explained that revenue growth reflected the job creation boom in Vietnam.
"Over l00,000 people got a job through VietnamWorks.com and Navigos Group in 2006 and we expect the number will increase by four times this year," he said.
Source: Thanh Nien
Tuesday, March 27, 2007
State Bank of Vietnam sells treasury bills
The State Bank of Vietnam sold all of an offered VND700 billion (43.7 million US$) in one-year treasury bills at an auction.
The central bank sold the debt Monday to one commercial bank that attended the session at an annual interest rate of 3.74 percent, the executive said without naming the bank.
The central bank last sold VND700 billion of one-year paper to three commercial banks at an annual yield of 3.85% on March 12.
Source: Thanh Nien
Vinamilk starts brewery joint venture
A brewery with an annual production capacity of 100 million litres was inaugurated at the My Phuoc Industrial Zone No.2 in southern Binh Duong province on Mar. 26.
The joint venture between the Viet Nam Dairy Products Joint Stock Company (Vinamilk) and London-based SABMiller, the world's second largest brewer, will have an initial production capacity of 50 million litres per year.
The SABMiller Viet Nam, whose construction commenced in March 2006, was installed with a state-of-the-art production line from Germany under the supervision of more than one hundred European experts.
Under the deal between the two companies, Vinamilk and SABMiller each hold 50% interest in the 45mio US$ project.
Products of the joint venture, bearing the Zorok trademark, will take advantage of the extensive distribution network of Vinamilk, the market leader in milk and related products of Viet Nam with 75% market share, and the SABMiller's distribution network in more than 60 countries.
The joint venture between the Viet Nam Dairy Products Joint Stock Company (Vinamilk) and London-based SABMiller, the world's second largest brewer, will have an initial production capacity of 50 million litres per year.
The SABMiller Viet Nam, whose construction commenced in March 2006, was installed with a state-of-the-art production line from Germany under the supervision of more than one hundred European experts.
Under the deal between the two companies, Vinamilk and SABMiller each hold 50% interest in the 45mio US$ project.
Products of the joint venture, bearing the Zorok trademark, will take advantage of the extensive distribution network of Vinamilk, the market leader in milk and related products of Viet Nam with 75% market share, and the SABMiller's distribution network in more than 60 countries.
GDP growth hits record in first quarter
The country's gross domestic product (GDP) in the first quarter of the year is estimated to hit 7.7%, the highest level since 2001. GDP of 7.3% in the same period of 2005 was the highest previously.
The achievement is attributed to high growth rates of key economic sectors. Noteworthy are agro, forestry and fisheries (2.3%) and industry and construction (9.3%).
Industrial production value is estimated at 130 trillion VND (8.1 billion US$), a year-on-year increase of 16.6%.
Export turnover is estimated to reach 10.48 billion US$, 18% increase year-on-year. Crude oil still makes the largest contributions to the total export value, but decreases 14.6% in compared to the same period last year.
March consumer price index decreases 0.22%, pulling the figure of three months to a growth rate of 3.02%.
Source: VNA
The achievement is attributed to high growth rates of key economic sectors. Noteworthy are agro, forestry and fisheries (2.3%) and industry and construction (9.3%).
Industrial production value is estimated at 130 trillion VND (8.1 billion US$), a year-on-year increase of 16.6%.
Export turnover is estimated to reach 10.48 billion US$, 18% increase year-on-year. Crude oil still makes the largest contributions to the total export value, but decreases 14.6% in compared to the same period last year.
March consumer price index decreases 0.22%, pulling the figure of three months to a growth rate of 3.02%.
Source: VNA
Monday, March 26, 2007
Credit Suisse receives securities trading code
Vietnam’s stock market is becoming more and more attractive to foreign investors after Switzerland’s Credit Suisse, one of the world’s leading banks, became the latest foreign investor to join the market.
Lito Camacho, vice chairman of Credit Suisse Asia Pacific, said his bank received a securities trading code certificate from the Vietnam State Securities Commission (SSC) last week enabling it to trade equities, government and corporate bonds in Vietnam.
“We are delighted to have obtained a trading code to buy and sell domestic securities in Vietnam. This move further underpins Credit Suisse’s commitment to Vietnam,” Camacho said.
Credit Suisse’s Investment Banking business has appointed Saigon Securities Incorporation as its local broker for equities and ACB Securities Company for fixed income products, while its asset management business appointed Vietcombank Securities Company as the local broker.
Credit Suisse is among many foreign banks, financial institutions and investment funds to receive the certificate to trade domestic equities in Vietnam.
Every foreign investor wanting to trade securities on Vietnam’s Hanoi and Ho Chi Minh stock exchanges is required to obtain an SSC securities trading code.
Morgan Stanley, Vietnam Holdings and Merrill Lynch have already joined the market in Vietnam. Meanwhile, VinaCapital and Dragon Capital have pushed to set up additional investment funds to raise foreign capital.
Other foreign invested fund management companies, such as Hong Kong based- Nomura International, Singapore’s Blackhorse Asset Management Pte Ltd. and Korean Mirae Asset Maps Investment Management Co., Ltd, have set up representative offices in the country as well.
Vietnam’s stock market is predicted to attract a large influx of investment from global investors following the country’s entry into the World Trade Organization. There are now around 20 foreign invested funds with total capital of over $2 billion in Vietnam, according to the SSC.
Source: VEN
Lito Camacho, vice chairman of Credit Suisse Asia Pacific, said his bank received a securities trading code certificate from the Vietnam State Securities Commission (SSC) last week enabling it to trade equities, government and corporate bonds in Vietnam.
“We are delighted to have obtained a trading code to buy and sell domestic securities in Vietnam. This move further underpins Credit Suisse’s commitment to Vietnam,” Camacho said.
Credit Suisse’s Investment Banking business has appointed Saigon Securities Incorporation as its local broker for equities and ACB Securities Company for fixed income products, while its asset management business appointed Vietcombank Securities Company as the local broker.
Credit Suisse is among many foreign banks, financial institutions and investment funds to receive the certificate to trade domestic equities in Vietnam.
Every foreign investor wanting to trade securities on Vietnam’s Hanoi and Ho Chi Minh stock exchanges is required to obtain an SSC securities trading code.
Morgan Stanley, Vietnam Holdings and Merrill Lynch have already joined the market in Vietnam. Meanwhile, VinaCapital and Dragon Capital have pushed to set up additional investment funds to raise foreign capital.
Other foreign invested fund management companies, such as Hong Kong based- Nomura International, Singapore’s Blackhorse Asset Management Pte Ltd. and Korean Mirae Asset Maps Investment Management Co., Ltd, have set up representative offices in the country as well.
Vietnam’s stock market is predicted to attract a large influx of investment from global investors following the country’s entry into the World Trade Organization. There are now around 20 foreign invested funds with total capital of over $2 billion in Vietnam, according to the SSC.
Source: VEN
Nagakawa to list at Vietnamese stock market
The Japanese-invested electronic home appliance manufacturer, Nagakawa Vietnam, said it will increase its chartered capital this year and will join the stock market in 2008.
Nagakawa Vietnam will increase its chartered capital to 200 billion VND this year and to 1 trillion VND by 2010 to implement its project to build the Nagakawa Plaza in Ha Noi, General Director Nguyen Duc Kha said at a ceremony on Mar. 24 marking the company's five-year establishment.
Accordingly, Nagakawa Viet Nam will diversify its range of products and expand its markets to northern and Latin America alongside prioritising investment in finance and real estate .
Nagakawa Vietnam was established in 2002 as a joint venture between the Anh Vu International Economy Development Company and Japan’s Wako Group.
On Mar. 21, it completed the equitisation and became a joint stock company.
Its main products are air conditioners, fridges, washing machines, microwave ovens and vacuum cleaners.
Source: VNA
Nagakawa Vietnam will increase its chartered capital to 200 billion VND this year and to 1 trillion VND by 2010 to implement its project to build the Nagakawa Plaza in Ha Noi, General Director Nguyen Duc Kha said at a ceremony on Mar. 24 marking the company's five-year establishment.
Accordingly, Nagakawa Viet Nam will diversify its range of products and expand its markets to northern and Latin America alongside prioritising investment in finance and real estate .
Nagakawa Vietnam was established in 2002 as a joint venture between the Anh Vu International Economy Development Company and Japan’s Wako Group.
On Mar. 21, it completed the equitisation and became a joint stock company.
Its main products are air conditioners, fridges, washing machines, microwave ovens and vacuum cleaners.
Source: VNA
Sunday, March 25, 2007
Draft on equitising SOEs
The rapid growth in the stock market over the last few years may become even more frantic as the Government drafts a new policy on equitising large-scale State-owned enterprises (SOEs).
Lawmarkers are in the process of drafting a new decree to replace Decision 155/2004/QD-TTg, which thus far has focussed on equiptising smaller SOEs that do not control large chunks of State capital. The shift in focus to larger companies, especially those that are or plan to become private limited companies, could create a frenzy on the country’s two stock markets, says analysts.
Tran Tien Cuong, head of the Central Institute for Economic Management’s Enterprise Renewal and Research Board, says abolishing regulaltions on the size of SOEs that are eligible for equitisation is a great breakthrough for the securities market.
The prospect of larger State companies listing shares in the near future could make the market in general more attractive to investors, say analysts, especially considering officials are contemplating whether to loosen controls on certain sectors that control vital assets, like telecommunications.
The State, though, will continue to hold controlling shares in these SOEs, says Cuong.
According to the board assigned to draft the new SOE decree, easing controls on the telecommunications sector is due to regulations by the Ministry of Post and Telematics and international commitments, namely those under the World Trade Organisation agreement.
Analysts, though, are concerned that SOEs in the public service sector will not attract investors, due to poor financial results.
Cuong says there have been difficulties with public service sector enterprises as well as with their equiptisation processes.
If the State does not find a solution, there is a slim possibility the companies will be able to stablise their business activities and services, he says.
Lawmarkers are in the process of drafting a new decree to replace Decision 155/2004/QD-TTg, which thus far has focussed on equiptising smaller SOEs that do not control large chunks of State capital. The shift in focus to larger companies, especially those that are or plan to become private limited companies, could create a frenzy on the country’s two stock markets, says analysts.
Tran Tien Cuong, head of the Central Institute for Economic Management’s Enterprise Renewal and Research Board, says abolishing regulaltions on the size of SOEs that are eligible for equitisation is a great breakthrough for the securities market.
The prospect of larger State companies listing shares in the near future could make the market in general more attractive to investors, say analysts, especially considering officials are contemplating whether to loosen controls on certain sectors that control vital assets, like telecommunications.
The State, though, will continue to hold controlling shares in these SOEs, says Cuong.
According to the board assigned to draft the new SOE decree, easing controls on the telecommunications sector is due to regulations by the Ministry of Post and Telematics and international commitments, namely those under the World Trade Organisation agreement.
Analysts, though, are concerned that SOEs in the public service sector will not attract investors, due to poor financial results.
Cuong says there have been difficulties with public service sector enterprises as well as with their equiptisation processes.
If the State does not find a solution, there is a slim possibility the companies will be able to stablise their business activities and services, he says.
Saturday, March 24, 2007
Incombank shares to go to bourse
Next week, the Vietnam Industrial and Commercial Bank (Incombank) will give bidding documents to a restricted number of bidders under the agreement of the Prime Minister, said the bank’s General Director Pham Huy Hung.
According to Mr Hung, Incombank plans to conduct initial public offering (IPO) in the fourth quarter of 2007 and list its shares on the stock market.
Seven of ten international bidders have been selected for the limited tender, which is scheduled to last till May 2007.
Incombank is speeding up its preparations for equitisation to become one of the first state-owned commercial banks to perform IPO and list shares on the stock market.
Incombank and Australia’s onQ on March 21 signed an agreement to issue the first pre-paid Visa cards in Vietnam, called Bopo. This kind of card works like a Visa credit card, allowing card owners to purchase goods, withdraw money from ATMs, and pay online.
Incombank plans to issue this kind of card in the third quarter of 2007; firstly, the pre-paid tourist Bopo to serve tourists.
Source: VNE
According to Mr Hung, Incombank plans to conduct initial public offering (IPO) in the fourth quarter of 2007 and list its shares on the stock market.
Seven of ten international bidders have been selected for the limited tender, which is scheduled to last till May 2007.
Incombank is speeding up its preparations for equitisation to become one of the first state-owned commercial banks to perform IPO and list shares on the stock market.
Incombank and Australia’s onQ on March 21 signed an agreement to issue the first pre-paid Visa cards in Vietnam, called Bopo. This kind of card works like a Visa credit card, allowing card owners to purchase goods, withdraw money from ATMs, and pay online.
Incombank plans to issue this kind of card in the third quarter of 2007; firstly, the pre-paid tourist Bopo to serve tourists.
Source: VNE
Quantas to buy stake of Pacific Airlines
he State Capital Investment Corporation (SCIC) and the Australian Qantas are in the final stage of negotiations to sell the state owned shares in Pacific Airlines to the Australian air carrier, a source from SCIC said.The source said that the official contract on the sale of the stakes will be inked at the end of March or in the first quarter of April at the latest.
The source has declined to reveal the value of the contract and how many percentages the second biggest Australian air carrier will hold, however, he said that SCIC would retain the controlling stakes in Pacific Airlines.
The Australian air carrier began negotiating to buy a proportion of Pacific Airlines' shares in January 2007, which has been valued at 167mio Us$. It is said that Pacific Airlines would sell 30% of its shares to foreign investors, however, the figure has not been confirmed.
In addition to selling shares in Pacific Airlines, SCIC is also considering selling shares in other enterprises to which it makes capital contribution in order to provide more 'commodities' to the stock market.
In an interview given to the press agencies recently, Le Song Lai, Deputy Director General of SCIC said that in 2007, SCIC would have 22 more companies listed on the stock market.
In 2007, SCIC plans to withdraw VND227bil (14.18mio Us$) worth of capital from 50 enterprises. The majority of them are small enterprises which do not operate in important fields.
Source: VNE
The source has declined to reveal the value of the contract and how many percentages the second biggest Australian air carrier will hold, however, he said that SCIC would retain the controlling stakes in Pacific Airlines.
The Australian air carrier began negotiating to buy a proportion of Pacific Airlines' shares in January 2007, which has been valued at 167mio Us$. It is said that Pacific Airlines would sell 30% of its shares to foreign investors, however, the figure has not been confirmed.
In addition to selling shares in Pacific Airlines, SCIC is also considering selling shares in other enterprises to which it makes capital contribution in order to provide more 'commodities' to the stock market.
In an interview given to the press agencies recently, Le Song Lai, Deputy Director General of SCIC said that in 2007, SCIC would have 22 more companies listed on the stock market.
In 2007, SCIC plans to withdraw VND227bil (14.18mio Us$) worth of capital from 50 enterprises. The majority of them are small enterprises which do not operate in important fields.
Source: VNE
Indochina Capital to build recreational projects
A London-listed Indochina Capital affiliate has obtained two licenses to develop recreation projects at a total cost of US$118 million in central Danang city and Quang Nam Province.
On Friday, Danang authorities granted the investment certificate to Indochina Land Holdings (ILH) to develop an $80 million tourism complex in the coastal Ngu Hanh Son District.
The five-star coastal tourism complex covering 20ha-site will comprise of a 250-room hotel, a high-end 150-apartment block, a 40-villa area along with shopping malls and other recreation services.
Construction of the complex is expected to start by late this year and to complete in mid-2009.
Also yesterday, ILH received a license from the Quang Nam government to build a $38 million golf course in Dien Ban District.
The 18-hole golf course will be tailored and built by two US leading companies in golf recreation, Colin Montgomerie and IMG.
The frametime of the project was not given.
The company has now gone ahead with plans to set up a joint venture with a local company in Danang city to develop a wharf-commercial-tourism complex at an estimated cost of $25 million.
The complex will comprise of villas and high-end apartments along side Son Tra – Dien Ngoc beach for rent or sale, along with shopping malls and other facilities.
The ILH-invested $27 million Indochina River Towers comprising office-building, apartments and shopping mall is expected to finish early next year.
The Riverside Mall, a part of the Indochina River Towers project at Bach Dang Street, is set to open in November.
The three-story 6,600 sq.m facility will house clothing, cosmetics, footwear, home appliances and food retailers in some of the most expensive retail store space in the central region.
The tenant’s monthly rental cost will range from $15 to $55 per sq.m in the luxury shopping mall.
The parent company of ILH, Indochina Capital recently set up Indochina Capital Vietnam Holdings, valued at $500 million, listed with the ticker symbol ICV on the London Stock Exchange earlier this month.
Indochina Capital Vietnam Holdings, which is structured as a closed-end investment company, isn’t just investing in equities listed on the Ho Chi Minh stock exchange and over-the-counter stocks.
It will also look at private equity and potentially some derivatives and debt securities. And it can also invest in non-Vietnamese companies which have a material portion of their business or assets in Vietnam.
Source: Thanh Nien
On Friday, Danang authorities granted the investment certificate to Indochina Land Holdings (ILH) to develop an $80 million tourism complex in the coastal Ngu Hanh Son District.
The five-star coastal tourism complex covering 20ha-site will comprise of a 250-room hotel, a high-end 150-apartment block, a 40-villa area along with shopping malls and other recreation services.
Construction of the complex is expected to start by late this year and to complete in mid-2009.
Also yesterday, ILH received a license from the Quang Nam government to build a $38 million golf course in Dien Ban District.
The 18-hole golf course will be tailored and built by two US leading companies in golf recreation, Colin Montgomerie and IMG.
The frametime of the project was not given.
The company has now gone ahead with plans to set up a joint venture with a local company in Danang city to develop a wharf-commercial-tourism complex at an estimated cost of $25 million.
The complex will comprise of villas and high-end apartments along side Son Tra – Dien Ngoc beach for rent or sale, along with shopping malls and other facilities.
The ILH-invested $27 million Indochina River Towers comprising office-building, apartments and shopping mall is expected to finish early next year.
The Riverside Mall, a part of the Indochina River Towers project at Bach Dang Street, is set to open in November.
The three-story 6,600 sq.m facility will house clothing, cosmetics, footwear, home appliances and food retailers in some of the most expensive retail store space in the central region.
The tenant’s monthly rental cost will range from $15 to $55 per sq.m in the luxury shopping mall.
The parent company of ILH, Indochina Capital recently set up Indochina Capital Vietnam Holdings, valued at $500 million, listed with the ticker symbol ICV on the London Stock Exchange earlier this month.
Indochina Capital Vietnam Holdings, which is structured as a closed-end investment company, isn’t just investing in equities listed on the Ho Chi Minh stock exchange and over-the-counter stocks.
It will also look at private equity and potentially some derivatives and debt securities. And it can also invest in non-Vietnamese companies which have a material portion of their business or assets in Vietnam.
Source: Thanh Nien
Friday, March 23, 2007
Vietnam's FDI exceeds 2.5 billion US$
Viet Nam has in the first quarter of this year attracted more than 2.5 billion USD in foreign direct investment (FDI), a year-on-year increase of 22%, reported the Ministry of Planning and Investment.
According to the Foreign Investment Department, in March alone, the country licensed 71 FDI projects with a combined registered capital of 455 million USD and permitted 47 operational projects which added 432 million USD to their investment capital.
Up to 49% of the total capital of the first three months was poured into the service industry, 48% into industrial projects, and the remainder into the agro-forestry-fisheries sector.
The Republic of Korea emerged as the biggest investor in Viet Nam in the reviewed period with a total registered capital of 486 million USD, followed by Singapore with 476 million USD.
According to the department, the largest projects involve the construction of a 276 million USD resort in central Thua Thien-Hue province, a 220 million USD paper mill in southern Binh Duong province, a 165 million USD seaport in southern Ba Ria-Vung Tau province and a 100 million USD reservoir in northern Thai Nguyen province.
Source: VNA
According to the Foreign Investment Department, in March alone, the country licensed 71 FDI projects with a combined registered capital of 455 million USD and permitted 47 operational projects which added 432 million USD to their investment capital.
Up to 49% of the total capital of the first three months was poured into the service industry, 48% into industrial projects, and the remainder into the agro-forestry-fisheries sector.
The Republic of Korea emerged as the biggest investor in Viet Nam in the reviewed period with a total registered capital of 486 million USD, followed by Singapore with 476 million USD.
According to the department, the largest projects involve the construction of a 276 million USD resort in central Thua Thien-Hue province, a 220 million USD paper mill in southern Binh Duong province, a 165 million USD seaport in southern Ba Ria-Vung Tau province and a 100 million USD reservoir in northern Thai Nguyen province.
Source: VNA
Vietnam should sell more dollar debt: foreign fund managers
Vietnam should ease curbs on issue of foreign currency bonds to tap investor demand and cut funding costs, foreign fund managers have said.
Pacific Investment Management Co. and HSBC Holdings Plc. said the government needed to raise money to build power stations and roads as it targeted annual economic growth of 8.5% through the end of the decade.
The country of 85 million people has raised just 750 million US$ from a single issue of foreign currency bonds.
“Unfortunately there are processes you need to go through here to get to the point where you can issue bonds,'' Brian Baker, chief executive officer of Pimco Asia Ltd., told an interviewer on the sidelines of a Euromoney conference in Hanoi. “You've got a very attractive external market now.''
Two months after selling the country's first dollar- denominated security in October 2005, the government put in place regulations requiring companies to seek approval for issuing international bonds.
A pipeline of sales is starting to emerge and Vietnamese companies will sell at least $5 billion worth debt in the next decade, according to Jean-Pierre Bernard, head of Southeast Asia and India at BNP Paribas SA.
Electricity of Vietnam, the nation's monopoly power distributor, has got government approval to raise 500 million US$ from an overseas bond issue next year.
Vietnam Oil & Gas Group, a state-owned monopoly, said in January it might issue a foreign currency bond next year to build the country's second oil refinery. Vietnam Airlines Corp. said in December it was considering an international bond issue.
The existing 6.875% dollar bonds, maturing in January 2016, were sold to raise funds for the state-owned Vietnam Shipbuilding Industry Corp.’s projects including building shipyards in Haiphong city and neighboring Quang Ninh province.
The issue, managed by Credit Suisse Group, was more than six times oversubscribed.
“We did not get as much as we wanted,'' said Baker from the German-owned Pimco, which had $610.5 billion in assets at the end of March. “We would love to look at some other issues, especially from the government.''
The bonds have rallied to yield 1.25% age points more than similar-maturity U.S. treasuries, narrowing from 2.51%age points in June last year, according to Merrill Lynch & Co. The yield is 5.78%, compared with 5.95% for similar-maturity securities sold by Brazil's government, which has the same BB rating as Vietnam from Standard & Poor's.
Pension and life insurance investors as well as hedge funds are looking for investments globally as central banks have stopped increasing interest rates and on speculation the US Federal Reserve will lower borrowing costs as early as June.
“We know there is a lot of money out there, and that many foreign investors are willing to invest in Vietnam now,'' said Nguyen Thanh Do, head of external financing at Vietnam’s Ministry of Finance.
“But our biggest concern is to make sure that the proceeds [of bond issues] will be used in the most efficient way, and more importantly, to ensure our repayment ability.''
Companies needed to prove project feasibility and repayment ability and that funds would be used immediately, Nguyen said.
Money supply in the world's top economies is growing at an annual rate of 7.5%, according to estimates by Charles Dumas, managing director of Lombard Street Research Ltd. in London.
Vietnam's government “could raise billions of dollars in the international markets if it really wanted to,'' said Joshua Matthews, head of Vietnam debt capital markets at HSBC in Hong Kong. “There's just too much foreign money chasing too little debt.''
The Vietnamese dong has gained 0.3% this year to 16,014 per dollar. The Ho Chi Minh City Securities Trading Center's VN Index of stocks has gained 48% in 2007.
Vietnam, Southeast Asia's third most populous nation, may need to spend as much as $80 billion by 2025 on power generation, transmission, and distribution to prevent electricity shortages, Van Huong, director-general of the Ministry of Industry’s Department of Energy and Petroleum, said.
Baker said: “There are clearly needs down the road for growth and infrastructure development.''
Pimco's 97 billion US$ Total Return Fund is the largest mutual bond fund in the world. The company is a unit of Munich-based Allianz SE.
Demand for Vietnam's debt may improve further on expectations of higher credit ratings. S&P raised Vietnam's credit rating last year to two levels below investment grade, and Moody's Investors Service said last week it might increase the rating from Ba3, one level lower than S&P.
“There's a huge amount of money sloshing around in the world,'' Steve Targett, Melbourne-based head of institutional banking at Australia & New Zealand Banking Group Ltd., which opened a branch in Vietnam in 1993, said in an interview. “You'd think that regular issues of bonds would be sensible."
Source: Thanh Nien
Pacific Investment Management Co. and HSBC Holdings Plc. said the government needed to raise money to build power stations and roads as it targeted annual economic growth of 8.5% through the end of the decade.
The country of 85 million people has raised just 750 million US$ from a single issue of foreign currency bonds.
“Unfortunately there are processes you need to go through here to get to the point where you can issue bonds,'' Brian Baker, chief executive officer of Pimco Asia Ltd., told an interviewer on the sidelines of a Euromoney conference in Hanoi. “You've got a very attractive external market now.''
Two months after selling the country's first dollar- denominated security in October 2005, the government put in place regulations requiring companies to seek approval for issuing international bonds.
A pipeline of sales is starting to emerge and Vietnamese companies will sell at least $5 billion worth debt in the next decade, according to Jean-Pierre Bernard, head of Southeast Asia and India at BNP Paribas SA.
Electricity of Vietnam, the nation's monopoly power distributor, has got government approval to raise 500 million US$ from an overseas bond issue next year.
Vietnam Oil & Gas Group, a state-owned monopoly, said in January it might issue a foreign currency bond next year to build the country's second oil refinery. Vietnam Airlines Corp. said in December it was considering an international bond issue.
The existing 6.875% dollar bonds, maturing in January 2016, were sold to raise funds for the state-owned Vietnam Shipbuilding Industry Corp.’s projects including building shipyards in Haiphong city and neighboring Quang Ninh province.
The issue, managed by Credit Suisse Group, was more than six times oversubscribed.
“We did not get as much as we wanted,'' said Baker from the German-owned Pimco, which had $610.5 billion in assets at the end of March. “We would love to look at some other issues, especially from the government.''
The bonds have rallied to yield 1.25% age points more than similar-maturity U.S. treasuries, narrowing from 2.51%age points in June last year, according to Merrill Lynch & Co. The yield is 5.78%, compared with 5.95% for similar-maturity securities sold by Brazil's government, which has the same BB rating as Vietnam from Standard & Poor's.
Pension and life insurance investors as well as hedge funds are looking for investments globally as central banks have stopped increasing interest rates and on speculation the US Federal Reserve will lower borrowing costs as early as June.
“We know there is a lot of money out there, and that many foreign investors are willing to invest in Vietnam now,'' said Nguyen Thanh Do, head of external financing at Vietnam’s Ministry of Finance.
“But our biggest concern is to make sure that the proceeds [of bond issues] will be used in the most efficient way, and more importantly, to ensure our repayment ability.''
Companies needed to prove project feasibility and repayment ability and that funds would be used immediately, Nguyen said.
Money supply in the world's top economies is growing at an annual rate of 7.5%, according to estimates by Charles Dumas, managing director of Lombard Street Research Ltd. in London.
Vietnam's government “could raise billions of dollars in the international markets if it really wanted to,'' said Joshua Matthews, head of Vietnam debt capital markets at HSBC in Hong Kong. “There's just too much foreign money chasing too little debt.''
The Vietnamese dong has gained 0.3% this year to 16,014 per dollar. The Ho Chi Minh City Securities Trading Center's VN Index of stocks has gained 48% in 2007.
Vietnam, Southeast Asia's third most populous nation, may need to spend as much as $80 billion by 2025 on power generation, transmission, and distribution to prevent electricity shortages, Van Huong, director-general of the Ministry of Industry’s Department of Energy and Petroleum, said.
Baker said: “There are clearly needs down the road for growth and infrastructure development.''
Pimco's 97 billion US$ Total Return Fund is the largest mutual bond fund in the world. The company is a unit of Munich-based Allianz SE.
Demand for Vietnam's debt may improve further on expectations of higher credit ratings. S&P raised Vietnam's credit rating last year to two levels below investment grade, and Moody's Investors Service said last week it might increase the rating from Ba3, one level lower than S&P.
“There's a huge amount of money sloshing around in the world,'' Steve Targett, Melbourne-based head of institutional banking at Australia & New Zealand Banking Group Ltd., which opened a branch in Vietnam in 1993, said in an interview. “You'd think that regular issues of bonds would be sensible."
Source: Thanh Nien
Thursday, March 22, 2007
New oil field discovered off southern coast
The Thang Long Joint Operating Company (JOC) has struck oil at what it believes is a productive well in the Cuu Long Basin off southern Ba Ria – Vung Tau Province, the firm announced yesterday.
Well drilling tests were positive to a depth of between 2,640 and 2,700 meters, tested at an estimated rate of 5,000 barrels of oil per day (bopd).
Thang Long JOC said it would negotiate with the Hoang Long JOC for joint exploration of the field.
This was the second successful drilling well for Thang Long in that area this year, after the operator had announced significant oil rates found at the Hai Su Trang (HST) earlier this year.
The Thang Long Joint Operating Company was formed in 2005 between Talisman Vietnam, a wholly owned subsidiary of Canadian Talisman Energy Inc and PetroVietnam Exploration and Production Company (PVEP) to conduct all operations on that block.
Talisman holds a 60% working interest share in any commercial discoveries on the block with PetroVietnam affiliate PVEP holding the remaining 40 percent%.
Source: Thanh Nien
Well drilling tests were positive to a depth of between 2,640 and 2,700 meters, tested at an estimated rate of 5,000 barrels of oil per day (bopd).
Thang Long JOC said it would negotiate with the Hoang Long JOC for joint exploration of the field.
This was the second successful drilling well for Thang Long in that area this year, after the operator had announced significant oil rates found at the Hai Su Trang (HST) earlier this year.
The Thang Long Joint Operating Company was formed in 2005 between Talisman Vietnam, a wholly owned subsidiary of Canadian Talisman Energy Inc and PetroVietnam Exploration and Production Company (PVEP) to conduct all operations on that block.
Talisman holds a 60% working interest share in any commercial discoveries on the block with PetroVietnam affiliate PVEP holding the remaining 40 percent%.
Source: Thanh Nien
Hard competition from China for Vietnamese steel industry
Vietnam, which has been importing semifinished steel billet from China, could soon import finished steel from that country to make up a massive shortfall in billets that has sent production costs skyrocketing.
With domestic plants meeting only 50 percent of demand for semifinished steel of around four million tons per year, Vietnam imports large quantities from China. But China plans to increase billet prices to 500 US$ per ton soon.
If that happens Vietnamese steelmakers fear that steel prices will go over VND10 million (624 US$) per ton after having spiked to VND9.3 million last January from VND8.3 million earlier.
The Vietnam-based Italia Steel Company is already planning to buy 5,000 tons of finished steel from China.
But there is an outcry from Vietnamese steelmakers.
Hoang Anh Dung, marketing manager of the Vietnam Steel Company, warned the move would have grave consequences on the domestic steel industry and cause unhealthy competition.
He also expressed a fear that the Vietnamese steel industry could be gobbled up by its Chinese counterpart if more steel companies opted to import from China.
Dung also warned about the poor quality of steel products of dubious origin imported from China.
Source: Thanh Nien
With domestic plants meeting only 50 percent of demand for semifinished steel of around four million tons per year, Vietnam imports large quantities from China. But China plans to increase billet prices to 500 US$ per ton soon.
If that happens Vietnamese steelmakers fear that steel prices will go over VND10 million (624 US$) per ton after having spiked to VND9.3 million last January from VND8.3 million earlier.
The Vietnam-based Italia Steel Company is already planning to buy 5,000 tons of finished steel from China.
But there is an outcry from Vietnamese steelmakers.
Hoang Anh Dung, marketing manager of the Vietnam Steel Company, warned the move would have grave consequences on the domestic steel industry and cause unhealthy competition.
He also expressed a fear that the Vietnamese steel industry could be gobbled up by its Chinese counterpart if more steel companies opted to import from China.
Dung also warned about the poor quality of steel products of dubious origin imported from China.
Source: Thanh Nien
EVN set for Eurobond issue
Electricity of Vietnam (EVN) is set to issue overseas corporate bonds next year, expecting to raise 300mio to 500mio US$ off the first phase, said an executive of the utility.
The bonds would be sold on international markets to raise funds for giant power plants, Dinh Quang Tri, deputy general director said.
Although a timeframe for the issue was not announced, Tri added that the government had already approved the issue in principle.
The Hanoi-based utility, which dominates the electricity industry in booming Vietnam, was in the process of choosing a foreign consultant to audit and establish a credit rating for the company.
If the process runs as scheduled, EVN would be the country’s first issuer of overseas corporate bonds.
Along with preparation for the forthcoming issue of overseas corporate bonds, the group planned to issue VND8 trillion (502mio US$) worth of bonds in the second quarter of this year for infrastructure development.
Unlisted EVN had raised VND6 trillion (377mio US$) from domestic bonds last year, saying the proceeds went to the construction of major power plants, such as the 2.3 billion US$ Son La hydro power plant.
The group needs VND250 trillion (15.6 billion US$) for the 2006-2010 period to build power plants.
EVN has submitted a new plan to the government that states all affiliates would go public by the end of 2008, two years earlier than planned.
The move was promoted by recent successful shares auctions of select EVN subsidies on the local securities market, according to Tri.
Power demand in Vietnam's economy, the world's fastest growing one after China, is forecast to grow up to 17% per year, prompting the government to plan 60 additional plants by 2020.
Source: Thanh Nien
The bonds would be sold on international markets to raise funds for giant power plants, Dinh Quang Tri, deputy general director said.
Although a timeframe for the issue was not announced, Tri added that the government had already approved the issue in principle.
The Hanoi-based utility, which dominates the electricity industry in booming Vietnam, was in the process of choosing a foreign consultant to audit and establish a credit rating for the company.
If the process runs as scheduled, EVN would be the country’s first issuer of overseas corporate bonds.
Along with preparation for the forthcoming issue of overseas corporate bonds, the group planned to issue VND8 trillion (502mio US$) worth of bonds in the second quarter of this year for infrastructure development.
Unlisted EVN had raised VND6 trillion (377mio US$) from domestic bonds last year, saying the proceeds went to the construction of major power plants, such as the 2.3 billion US$ Son La hydro power plant.
The group needs VND250 trillion (15.6 billion US$) for the 2006-2010 period to build power plants.
EVN has submitted a new plan to the government that states all affiliates would go public by the end of 2008, two years earlier than planned.
The move was promoted by recent successful shares auctions of select EVN subsidies on the local securities market, according to Tri.
Power demand in Vietnam's economy, the world's fastest growing one after China, is forecast to grow up to 17% per year, prompting the government to plan 60 additional plants by 2020.
Source: Thanh Nien
Foreign banks to be licensed in line with WTO commitments
The Prime Minister has urged the State Bank of Viet Nam (SBV) to license World Trade Organisation member countries' banks operating in Viet Nam in line with governmental regulations and the country's international commitments.
Foreign banks are allowed to open representative offices, set up joint ventures or wholly foreign-owned banks in Viet Nam or buy shares from local joint-stock commercial banks.
Under a dispatch sent by the Government Office on Mar. 20, PM Nguyen Tan Dung also required the SBV to promptly implement essential tasks geared to further develop banking operations in a safe and sustainable manner in the context of international economic integration.
Accordingly, violations must be strictly and publicly punished in order to prevent corruption in the banking system, particularly in licensing the establishment of commercial banks, the opening of representative offices, the increase of chartered capital, and the purchase of shares of local commercial banks by foreign investors, the dispatch stated.
Source: VNA
Foreign banks are allowed to open representative offices, set up joint ventures or wholly foreign-owned banks in Viet Nam or buy shares from local joint-stock commercial banks.
Under a dispatch sent by the Government Office on Mar. 20, PM Nguyen Tan Dung also required the SBV to promptly implement essential tasks geared to further develop banking operations in a safe and sustainable manner in the context of international economic integration.
Accordingly, violations must be strictly and publicly punished in order to prevent corruption in the banking system, particularly in licensing the establishment of commercial banks, the opening of representative offices, the increase of chartered capital, and the purchase of shares of local commercial banks by foreign investors, the dispatch stated.
Source: VNA
SSC pledges to tighten OTC rules
Chairman of the State Securities Commission (SSC) Vu Bang has vowed to rein in rampant transactions on the OTC stock exchange as a measure to reduce risks emerging from this fledgling market.
The chief regulator made the pledge in his first on-line talk with the public on March 21 from the office of the electronic newspaper run by the Communist Party of Viet Nam (CPV), where he received about 1,100 questions.
He said he understood that the over-the-counter (OTC) stock market has been operating in the absence of regulations.
The market lacks transparent information, is exposed to high risks of fraudulence and face collapses, he admitted.
Bang made it clear that his agency is taking steps to reduce the scale of OTC transactions by ordering all public companies, including unlisted ones, to register their operations again, hold training and refresher courses for staff and list shareholders in public.
They are also asked to invite auditors and make public information on the auditing results and management work in line with the securities regulation, said the SSC chief.
He also unveiled new rules on punishments against violations, including deliberately avoiding registration and any failure to follow existing rules on deposit making and registration by public companies.
These efforts aim to reduce risks to payment in the OTC market, he emphasised.
The SSC will apply these rules to the transaction of unlisted shares and encourage investors to do transactions through securities companies, he added.
Deposit payments will be conducted through the securities deposit centre, thus gradually publicising OTC operations and attracting transactions onto the official market, he concluded.
Despite all these burning issues, Dao Duy Quat, Editor in chief of the CPV electronic newspaper, said the Viet Nam stock market has made a turning point in its development, catching interests of an increasing number of investors and CEOs of financial and banking institutions both at home and abroad
Source: VNA
The chief regulator made the pledge in his first on-line talk with the public on March 21 from the office of the electronic newspaper run by the Communist Party of Viet Nam (CPV), where he received about 1,100 questions.
He said he understood that the over-the-counter (OTC) stock market has been operating in the absence of regulations.
The market lacks transparent information, is exposed to high risks of fraudulence and face collapses, he admitted.
Bang made it clear that his agency is taking steps to reduce the scale of OTC transactions by ordering all public companies, including unlisted ones, to register their operations again, hold training and refresher courses for staff and list shareholders in public.
They are also asked to invite auditors and make public information on the auditing results and management work in line with the securities regulation, said the SSC chief.
He also unveiled new rules on punishments against violations, including deliberately avoiding registration and any failure to follow existing rules on deposit making and registration by public companies.
These efforts aim to reduce risks to payment in the OTC market, he emphasised.
The SSC will apply these rules to the transaction of unlisted shares and encourage investors to do transactions through securities companies, he added.
Deposit payments will be conducted through the securities deposit centre, thus gradually publicising OTC operations and attracting transactions onto the official market, he concluded.
Despite all these burning issues, Dao Duy Quat, Editor in chief of the CPV electronic newspaper, said the Viet Nam stock market has made a turning point in its development, catching interests of an increasing number of investors and CEOs of financial and banking institutions both at home and abroad
Source: VNA
Vietcombank plans IPO by August
State-owned Vietcombank, Vietnam’s second largest bank by assets is set to launch an initial public offering (IPO) by August and list on the stock market by October.
Vietcombank would begin selling shares to the public in July or August at the latest, said Vu Viet Ngoan, general director of the bank.
The bank has completed the final steps to prepare for the IPO, and the detailed plan will be submitted to the government late next month.
As planned, the bank will have two IPOs, the first in the country and the second in an overseas market next year.
The government will consult relevant agencies over four to five weeks and the plan is expected to get final approval in June.
After going public, the state will hold a 70% stake in the bank and the remaining 30% will go to investors via domestic and overseas IPOs.
The bank plans to launch an IPO in Hong Kong or Singapore next year, where stock exchanges have recognized Vietcombank as qualifying under their basic requirements, according to a top executive.
By the end of 2006, Vietcombank had assets of VND169.46 trillion ($10.06 billion), up 23.9% on year.
It made a net profit of VND2.47 trillion during the year, up 91.5% year on year, bank figures showed.
Vietcombank is one of the four state-run banks ordered by the government to offer shares to the public this year.
The other three including Vietnam's third-largest bank Incombank and the Mekong Delta Housing Development Bank and the Bank for Agriculture and Rural Development , will follow in 2008.
Currently, Vietnamese law allows foreigners to have a 30% maximum stake in its domestic banks.
Source: Thanh Nien
Vietcombank would begin selling shares to the public in July or August at the latest, said Vu Viet Ngoan, general director of the bank.
The bank has completed the final steps to prepare for the IPO, and the detailed plan will be submitted to the government late next month.
As planned, the bank will have two IPOs, the first in the country and the second in an overseas market next year.
The government will consult relevant agencies over four to five weeks and the plan is expected to get final approval in June.
After going public, the state will hold a 70% stake in the bank and the remaining 30% will go to investors via domestic and overseas IPOs.
The bank plans to launch an IPO in Hong Kong or Singapore next year, where stock exchanges have recognized Vietcombank as qualifying under their basic requirements, according to a top executive.
By the end of 2006, Vietcombank had assets of VND169.46 trillion ($10.06 billion), up 23.9% on year.
It made a net profit of VND2.47 trillion during the year, up 91.5% year on year, bank figures showed.
Vietcombank is one of the four state-run banks ordered by the government to offer shares to the public this year.
The other three including Vietnam's third-largest bank Incombank and the Mekong Delta Housing Development Bank and the Bank for Agriculture and Rural Development , will follow in 2008.
Currently, Vietnamese law allows foreigners to have a 30% maximum stake in its domestic banks.
Source: Thanh Nien
New Fitch rating for Vietnam
Fitch Ratings today affirmed the Long-term foreign and local currency Issuer Default ratings (IDRs) of Vietnam at 'BB-'and 'BB', respectively. At the same time, the agency also affirmed the Short-term foreign currency IDR at 'B' and the Country Ceiling at 'BB-' (BB minus). The Outlook on the ratings remains Stable.
Despite weak public finances and the need for further banking system reforms, Vietnam's improving external financial position and sustainable economic growth continue to support its sovereign ratings.
"Vietnam's rating strengths are based on the country's net external creditor status and declining gross external debt relative to GDP," said Vincent Ho, associate director of Fitch's Asia Sovereign Ratings team in Hong Kong.
"Continuous fiscal deficits, rising general government debt relative to GDP and the vulnerable banking system remain the major rating constraints," Ho added.
Vietnam's strong external sector performance has allowed for a steady accumulation of foreign exchange reserves.
Relative to reserves, the country's gross external financing requirement and international liquidity ratios are stronger than the 'BB' peer group median.
The increase in reserves has been driven mainly by private remittances and net foreign direct investment (FDI) inflows.
In addition, gross external debt fell to about 30 percent of GDP in 2006, which was the lowest for the past decade. For the first time, Vietnam became a net external creditor in 2006 and Fitch expects this to be sustained in the medium-term.
The country's "renovation" policy towards a market-based economy has proven to be a success. During 1996-2006, the average economic growth rate was 7.3 percent per annum, which was second only to China in the region.
Strong growth and the country's favorable investment climate have been attracting large FDI capital inflows. In 2006 FDI inflows were estimated at USD2.4 billion. With its accession to the WTO, Fitch believes Vietnam's external sector will continue to grow and strengthen its external financial position.
The transformation of the Development Assistance Fund into the Vietnam Development Bank and the introduction of sounder regulations have led to reductions in policy lending activities and the dominance of state-owned commercial banks (SOCBs).
For the system as a whole, non-performing loans relative to total loans have been falling. Even so, SOCBs still account for 75% of system assets, and limited foreign participation suggests the evolution towards a more internationally competitive banking system will take time. Fitch believes the equatization of the SOCBs could help to expedite the needed changes.
In addition to the weaknesses in the banking system, continuous general government fiscal deficits (including grants, off-budget investments and on-lending) and rising debt relative to GDP are major rating constraints.
Source: Thanh Nien
Wednesday, March 21, 2007
Money laundry on the stock exchange
Deputy Governor of the State Bank of Vietnam Phung Khac Ke affirmed that dirty money was being laundered in the stock market.
There are two sources of investment capital in the stock market: domestic and foreign sources. Mr Ke said that a proportion of the domestically invested capital comes from illegal sources, i.e. from corrupt affairs.
Recently, Government inspectors have announced the ratio of losses in capital construction works at 10% - a very big figure. Every year, Vietnam spends VND200tril (12.5bil US$) on capital construction works, and 10% of this amount, or VND20tril (1.25bil US$), is pocketed by corrupt officials. They try to launder the money by throwing the money onto the stock market.
Mr Ke has stressed that the flow of illegal capital sources is one of the reasons for the heating up of the stock market.
He said that money laundering through the stock market should be stopped right now. The most effective long-term solution is to prevent and reduce the loss proportions in capital construction projects, which will only be attained by drastic measures to fight corruption. The State Bank and commercial banks will help by improving payment services and make it easier for people to open accounts. In the long term, the Government has to apply measures to encourage people to make payments via banks, which will help control money flows.
Regarding loaning to securities investors, Mr Ke confirmed the figures about the total outstanding loans funding securities investment deals that newspapers have reported. He said that this figure represents a very small percentage of capital of commercial banks, and that this should not be considered a worry.
“In general it is unreasonable to say that banks have injected too much money in the stock market,” Mr Ke said.
He has also announced that the stock market will have new commodities soon, when state owned banks are equitised. These commodities, according to Mr Ke, will be ‘valuable commodities’ for two reasons. First, the bad debts of the banks had been settled by 2000. Second, the chartered capital of the banks has been raised in the recent past, making the banks more attractive in terms of brand names and financial capability.
Source: VNE
There are two sources of investment capital in the stock market: domestic and foreign sources. Mr Ke said that a proportion of the domestically invested capital comes from illegal sources, i.e. from corrupt affairs.
Recently, Government inspectors have announced the ratio of losses in capital construction works at 10% - a very big figure. Every year, Vietnam spends VND200tril (12.5bil US$) on capital construction works, and 10% of this amount, or VND20tril (1.25bil US$), is pocketed by corrupt officials. They try to launder the money by throwing the money onto the stock market.
Mr Ke has stressed that the flow of illegal capital sources is one of the reasons for the heating up of the stock market.
He said that money laundering through the stock market should be stopped right now. The most effective long-term solution is to prevent and reduce the loss proportions in capital construction projects, which will only be attained by drastic measures to fight corruption. The State Bank and commercial banks will help by improving payment services and make it easier for people to open accounts. In the long term, the Government has to apply measures to encourage people to make payments via banks, which will help control money flows.
Regarding loaning to securities investors, Mr Ke confirmed the figures about the total outstanding loans funding securities investment deals that newspapers have reported. He said that this figure represents a very small percentage of capital of commercial banks, and that this should not be considered a worry.
“In general it is unreasonable to say that banks have injected too much money in the stock market,” Mr Ke said.
He has also announced that the stock market will have new commodities soon, when state owned banks are equitised. These commodities, according to Mr Ke, will be ‘valuable commodities’ for two reasons. First, the bad debts of the banks had been settled by 2000. Second, the chartered capital of the banks has been raised in the recent past, making the banks more attractive in terms of brand names and financial capability.
Source: VNE
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