Sept 2013 Colliers Vietnam Investment Digest

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Read and follow the top economic indicators for Vietnam, M&A activity, and major developments in finance, banking, and legal. Published Monthly.

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Sept 2013 Colliers Vietnam Investment Digest

  1. 1. > Investment Brief Vietnam COLLIERS INTERNATIONAL September | 2013 Indicator Value Updated Source VN-Index +33.04% to 492.63 9/30 Bloomberg Inflation +4.63% ytd, +7.5% yoy 9/30 GSO Credit market +5.83% ytd 9/18 SBV Exp/Imp +15..7%/+15.5% ytd 9/24 GSO Deposit Rate 7% 9/30 SBV GDP +5.14% ytd 9/27 GSO Refinance Rate 7% 9/30 SBV Lending Rate 7-9% short, 9-11% long 9/21 SBV 10-year bond yield 8.84% 9/27 ADB FDI +36% yoy to $15b 9/30 FIA FDI Disbursement +6.4% yoy 9/30 FIA Energy Prices unchanged 9/30 EVN Retail Sales +13.7% yoy 9/1 GSO Deposits +11.74% -13.78% ytd 9/18 GSO, SBV M2 Money Supply +8.4% ytd 8/27 GSO PMI 49.4 9/1 HSBC Overnight Rate 2.77% 9/24 GSO VND-USD 21,117 9/30 Bloomberg Repurchase Rate 5.5% 8/7 Bloomberg Fitch B+ 8/27 Fitch Standard & Poors BB- 9/29 S&P Moody’s B2 9/29 Moody’s Colliers at a Glance : $2 billion Revenue : 62 Countries : 482 Offices : 13,500 Professionals : 5,100 Brokers Square Feet Managed : 1.12 billion : 78,000 Total Transactions Total Transaction Value : $71 billion Contact the Investments Team PETER DINNING General Director peter.dinning@colliers.com +84 903 322 344 Ho Chi Minh Office KYNAM DOAN Investment Manager kynam.doan@colliers.com +84 1223 128 032 Hanoi Office TUNG NGUYEN Investment Manager tung.nguyen@colliers.com +84 912 885 070 *Arrows indicate monthly trends **Data is accurate as reported by the source on the indicated date Colliers International | Accelerating success | www.colliers.com/vietnam
  2. 2. VIETNAM INVESTMENT BRIEF | SEPTEMBER 2013 Overview Economic indicators have been trending upwards in Q3... While many of the major economic indicators have been trending upwards in Q3, as seen in the table above, recovery has been slow. The next 6-9 months will set the tone for recovery as several important developments will resolve during this time: performance of the Vietnam Asset Management Company (VAMC), stability of the Dong, the Trans-Pacific Partnership (TPP) free trade agreement, and a framework to reform Vietnam into a market economy. Performance of the VAMC Agribank has sold US$118m to the VAMC, 3 other banks are in preparation: Navibank, Saigon Commercial JSB, an Saigon-Hanoi Commercial JSB... Agribank, the country’s largest lender, has signed the first debt-purchase contract with the VAMC, agreeing to sell US$118m. Three other banks have publicly announced preparation to sell bad debts to the VAMC: Navibank, Saigon Commercial Joint Stock Bank (SCB), and the Saigon-Hanoi Commercial Joint Stock Bank (SHB). The VAMC will issue special bonds that can be mortgaged to the State Bank for refinancing. However, the banks must set aside 20% of the bond’s face value per year as a risk provision. In effect, this structure simply extends five years of diminishing liquidity to help banks resolve or sell these bad debts. Market Economy PM Dung pledges reforms including strengthening oversight and increasing foreign ownership limits. Vietnam will treat SOEs equal to others including FOEs... Prime Minister Dung reaffirmed Vietnam’s pledge to further open the economy to external markets on the 27th of September in New York. Reforms include strengthening oversight and increasing foreign ownership limits in various industries including an increase from 30% to 49% ownership of local banks in the “near future.” PM Dung pledged that state-owned enterprises would be forced to operate in the market economy and Vietnam would “treat them equal to other enterprises.” While such a strong public stance is promising, concrete reforms likely will not appear in the short term. Stability of the Dong Government plans to devalue the Dong a further 2 percent... Prime Minister Dung also indicated that the government plans to devalue the Dong a further 2 percent before the end of the year despite the recent stability: foreign reserves account for over 2.5 times monthly import turnover, trade deficit is a manageable $578 million year to date, and the US economy is still in flux. The dollar has fallen recently due to weakening economic indicators and the impending partial shutdown of the US government, the first in 17 years. Colliers International | Accelerating success | www.colliers.com/vietnam
  3. 3. VIETNAM INVESTMENT BRIEF | SEPTEMBER 2013 Trans-Pacific Partnership Washington has agreed to include more Vietnamese garment products in the TPP agreement despite containing products from non-TPP countries... The US and Vietnam hope to conclude negotiations on the TPP by year’s end PM Dung promises a market economy... Minister Nguyen Tan Dung has pledged to reform Vietnam into a market and have made significant progress in September. Washington has agreed to include more Vietnamese garment products in the TPP agreement despite containing products from non-TPP countries such as China. In return, Prime economy. Foreign Direct Investment Up Sharply Pledged FDI has jumped 36%yoy to $15 bln, disbursed FDI up 6.4% to $8.62 bln... Pledged FDI has jumped 36% year over year to $15 bln according to the Foreign Investment Agency (Ministry of Planning and Investment). As of September 20th, there were 872 new investments with total registration capital of $9.3 bln, an increase of 34.9% yoy. In addition, there were 340 projects that registered an additional $5.7 bln in capital, an increase of 37.9% yoy. Total disbursed capital stands at $8.62 bln, an increase of 6.4% against the same period last year. M&A HD Bank + Dai A Bank > Development Bank HCMC... September 25th: Official approval of voluntary merger of HD bank (chartered capital of $238 mil) and Dai A Bank (chartered capital of $148 mil) to form the Development Bank HCMC with a share swap ratio of 1:1. September 10th: PetroVietnam Finance Corporation finalizes merger with Western Bank to form the new Vietnam Public Bank, or PVComBank and has a chartered capital of $426.42 mil. Other M&A deals in Q3 include the EXS Capital’s (JPN) $37 mil injection into Son Kim Land (VN) and CJ Group’s (Kor) pending $45.5 mil acquisition of Gemadept Tower from Gemadept (VN). Monthly investment brief General Director Peter.Dinning@colliers.com Investment Manager | HCMC KyNam.Doan@colliers.com Investment Manager | Hanoi Tung.Nguyen@colliers.com This brief is published monthly by Colliers Vietnam Investment Services, led by Peter Dinning and KyNam Doan. We advise an asset portfolio that focuses on appropriate returns to match diverse risk-return profiles. Our portfolio tracks a wide range of assets including land, developments, and incomeproducing properties across all market sectors - commercial, hotel, industrial, residential, and retail. Contact us to receive our other reports such as our Quarterly Research and Forecast Report or HCMC CBD Market Report. Colliers International | Accelerating success | www.colliers.com/vietnam
  4. 4. Colliers International Investment Services Colliers International is a world leader in connecting capital with real estate investment opportunities. We provide breadth and depth of services to both international and local investors, developers, and landowners. We manage a portfolio of opportunities that offer strong returns along a spectrum of well-understood levels of risk. This portfolio includes bare land, distressed developments, and incomeproducing properties across all market sectors - commercial, hotel, industrial, Colliers Vietnam is committed to residential, and retail. helping our clients make informed decisions - whether it's through Backed by an outstanding track record, investing, divesting, or holding - to wealth of knowledge and strong increase the value of their porfolios regional presence, our team is able to and achieve target liquidity, risk, and deliver the following services: returns. Acquisitions >> Identify & secure opportunities to help you achieve your porfolio targets >> Assist/Conduct negotiation of letter of intent through to settlement of contract >> Conduct Market and Financial Due Diligence as well as advise on best use of land COLLIERS INTERNATIONAL Ho Chi Minh Office 7F Bitexco Office Building 19-25 Nguyen Hue, District 1 Tel +84 (8) 3827 5665 Fax +84 (8) 3827 5667 Dispositions >> Execute marketing of asset through our strong network of relationships with institutional investors, banks, developers and high net worth individuals in Vietnam and throughout the Asia Pacific >> Conduct initial due diligence of interested parties prior to negotiation >> Assist/Conduct negotiation through to completion of divestment Hanoi Office 10F Capital Tower 109 Tran Hung Dao, Hoan Kiem District Tel +84 (4) 3941 3277 Fax +84 (4) 3941 3278 www.colliers.com/vietnam This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). ©2010. All rights reserved. Accelerating success

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