By Dominic Scriven of Dragon Capital
It has been a hard time for investors in Vietnam in recent years. Sky high inflation, lax lending to unproductive sectors – especially state-owned enterprises, a depreciating currency and high levels of non-performing loans have caused foreign investors to think twice about buying into the country.
However, on Sunday the Lunar New Year will be ushered in with spectacular fireworks, wonderful flower markets, family banquets and colourful celebrations. The coming Year of the Snake, the 6th animal in the Chinese zodiac, is commonly associated with focus and discipline. Both will be needed if the government intends to carry on its promise of economic reform. Continue reading »
By Jake Maxwell Watts and Nguyen Phuong Linh
Just when Vietnam’s weary investors were breathing a little easier amid improved economic data and an unexpected upturn in its stock markets, a long-simmering bank scandal burst back into the open with the arrest of another high-profile banker. Vietnam’s minister of public security announced on Wednesday that Pham Thanh Tan (pictured left), ex-chief of the state-owned Agribank, had been arrested for “irresponsibly causing serious consequences.” Continue reading »
Morgan Stanley has proposed an unlikely candidate to lead Indian equity markets to recovery – the country’s much-maligned public sector companies (PSUs).
Generally, investors are wary of government control and sectors such as utilities and electricity. But in a note to clients this week, analysts from the American bank set out three reasons why Indian PSUs may be set to rally. Continue reading »
If investors were asked to give a chunk of money directly to emerging market governments, most would refuse. But in the stampede towards low-cost, index linked investment in emerging markets, many will effectively end up doing just that, according to a report in Monday’s FTfm.
Arjun Divecha, chairman of GMO’s board and manager of three of its emerging markets funds, says GMO research shows that about 35 per cent of the constituents of the widely benchmarked MSCI emerging market index are companies that are owned or controlled governments and that these companies actually account for about 70 per cent of the earnings generated by that index. Continue reading »
By Valentina Romei and Rob Minto
Another month of disappointing China trade data: on Monday, overall Chinese exports increased just 2.7 per cent in August from a year earlier, and imports dropped 2.6 per cent. Export growth was higher than July’s worrying 1 per cent, but it’s still far from the double-digit growth that was once the norm.
So which companies are providing China’s exports, and where will growth come from in future? Chart of the week takes a look. Continue reading »
Moisés Naím on the A-list asks – what have Pemex, PDVSA and YPF got in common, other than being state-owned in countries rich in hydrocarbons? Their most surprising similarity is that during a period in which oil prices are booming, these three companies are declining.
Read more and find out why here. Continue reading »
Few companies embody the sheer size and ambition of the Chinese state-owned enterprise like Sinopec, China’s biggest oil and gas refiner. Not only is Sinopec one of the world’s biggest oil companies by asset size, it is also the single most acquisitive Chinese state-owned company, having invested more than $35bn in overseas deals since 2009.
But for Sinopec Group’s Hong Kong-listed subsidiary, which is majority-owned by Sinopec Group, the past year has not been smooth sailing. Continue reading »
Vietinbank, one of Vietnam’s biggest state-owned banks, will next week embark on a global roadshow to promote a dollar bond issue – a test of international investor appetite at a time of ongoing economic turbulence.
Can Vietinbank succeed where other state-owned companies have failed in trying to issue international bonds? Continue reading »
Vietnam’s Communist rulers have finally accepted, at least rhetorically, the need to restructure the large, inefficient state-owned enterprises (SOEs) that many economists believe are largely to blame for recent economic turbulence.
Now there are tentative signs that the government may be starting to walk the talk, trying to ensure that SOEs stop wasteful spending on karaoke bars, taxi companies and grandiose building projects. Continue reading »
Manmohan Singh, India’s prime minister, has lit a proverbial fire under the country’s big state-owned companies. He has ordered a $35bn wave of public sector investment – that he will personally oversee – to reverse a decline in the fast-growing economy’s growth rate.
But his top bureaucrats can do much more to get better value out of a state sector that represents a considerable chunk of the Bombay Stock Exchange’s market capitalisation. Continue reading »
Amid the raft of data released in China on Friday, as the country rushes toward the Chinese New Year holidays, one set of number went relatively unnoticed: the profits and revenues of state-owned enterprises (SOEs) during 2011.
While these numbers don’t get as much attention as the annual results of top individual SOEs (think Sinopec or Minmetals), they paint an interesting picture of the Chinese economy. Continue reading »
Jetstar, the low-cost arm of Australian flag carrier Qantas, has had a turbulent time in Vietnam, afflicted variously by a police investigation into senior executives and disputes over payments for fuel and the use of its brand, which have culminated in the need for a cash injection.
But things could be looking up: Jetstar is in advanced talks that would see it tie up with state-owned monolith Vietnam Airlines, according to three people familiar with the situation. Continue reading »
Anglo American has known for nearly a decade that this day might come. When it bought its southern Chilean assets in 2002, the company inherited an agreement with the Chilean government dating back to 1978 under which Codelco, the state-run copper company, has an option to buy 49 per cent of those assets.
The option runs until 2027 but Codelco only has a bite at it every three years. In 2009, the world financial crisis and plunging markets convinced Codelco that taking out debt to exercise the option was a very bad idea. But now things are looking much rosier as the window to exercise the option – January 2012 – comes round again. Continue reading »