Vietnam economy

By Gavin Bowring, Asean Confidential

It might seem odd to think of Cambodia as a haven of political stability. Labour unrest in Cambodia’s garment factories turned violent in January this year, while the country’s opposition party, the Cambodia National Rescue Party (CNRP), has boycotted Parliament for six straight months in protest of last year’s “flawed” general elections.

Nevertheless, in the space of a week, Cambodia has seen thousands of Chinese residents in Vietnam fleeing across the border as a result of escalating tension between China and its southern neighbour, Vietnam. Meanwhile, the recent military coup in Thailand led to implicit suggestions by the lawyer of former prime minister Thaksin Shinawatra that Cambodia might be willing to host his “government-in-exile”, though these suggestions have been denied by Cambodian Prime Minister Hun Sen. Continue reading »

Tight relationship

Russia and Vietnam signed a raft of economic agreements on Tuesday that will strengthen their strategic partnership and counter rising Chinese influence in southeast Asia.

The deals, signed during a visit by Vladimir Putin to Vietnam, will see Russia step up involvement in Vietnamese energy markets and help boost security in the country that has been a close Kremlin ally since Soviet times. “Vietnam has been a long-term, trustworthy partner for Russia and the political dialogue between the two countries is at a high level,” Putin told reporters after talks with Truong Tan Sang, his Vietnamese counterpart. Continue reading »

What sort of welcome should we give to the Vietnamese Asset Management Company, due to come into operation today? As beyondbrics wrote in May, its alternative title of ‘bad bank’ may be a big understatement. Now Fitch Ratings has weighed in with a report saying the VAMC is unlikely to solve the problems of Vietnam’s troubled banking system or, therefore, do much to help revive the country’s flagging economy. Continue reading »

On the face of it, positive news from Vietnam: growth for the second quarter was up 5 per cent, following 4.9 per cent in the previous quarter, according to the country’s statistical office.

Time to celebrate? Not quite. Continue reading »

With Vietnam’s economy still struggling and the IMF recently cutting its GDP forecast for this year to 5.2 per cent – anaemic by emerging market standards – the central bank on Friday cut interest rates for the eighth time since 2012.

But economists believe that rate cuts are unlikely to help Vietnam regain its spot as one of Asia’s hottest emerging markets without structural reforms to tackle the bad debts weighing down the banking sector and the wasteful state-owned companies distorting the economy. Continue reading »

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

In both the developing and industrialised worlds, economic growth rates, like bad news, can be entirely relative. Vietnam’s respectable-sounding GDP growth of 5.08 per cent in 2012 was in fact a painful fall from 5.9 per cent in 2011 and marked its slowest pace in 13 years. Will 2013 be any better? Continue reading »

While some investors have gone sour on Vietnam amid a string of financial upheavals, stock market slides and poor economic data, one group which seems more optimistic than ever is KKR – at least on Vietnam’s manufacturing sector and the market for pungent fish sauce, chilli and soya sauces, instant coffee and noodles.

The US buyout group on Tuesday agreed to invest a further $200m in one of Vietnam’s largest food companies, Masan Consumer. The deal amounts to the biggest single private equity investment in Vietnam and follows KKR’s initial investment of $159m in Masan Consumer in 2011. Continue reading »

As budget negotiations in Congress drag on towards the end of year deadline, questions are being asked about the global ripple of the US falling off the so-called fiscal cliff.

Should Asia investors be losing sleep over it? Continue reading »

Nguyen Tan Dung, Vietnam’s prime minister, must be breathing more easily.

On Monday, he apologised for economic mismanagement and cut his prediction for 2012 GDP growth to the bottom of the 5.2 to 5.7 per cent range initially forecast. Just three days later, a report by Ernst & Young on rapid-growth markets has labelled Vietnam a “rising star”, predicting the east Asian economy will grow by 6 per cent a year for the next quarter century. Continue reading »

By Ben Bland and Nguyen Phuong Linh

After the arrest last week of the founder and chief executive of one of Vietnam’s biggest private banks sent shockwaves through the nation, rumours swirled earlier this week about which tycoons might be next.

In a sign of the feverish atmosphere and the lack of trust in official information in Communist-ruled Vietnam, a number of leading businessmen felt obliged to appear in public to prove that they had not been thrown in jail. Continue reading »

Vietnamese shares bounced back on Friday, with bank stocks leading the way, as investors judged that the authorities were getting a grip on the scandal  surrounding Asia Commercial Bank after the arrest on Tuesday of one of its founders.

The Ho Chi Minh Stock Exchange’s VN Index rose nearly 2 per cent, even though the affair brought down another prominent business figure on Thursday when the bank’s chief executive Ly Xuan Hai resigned and joined Nguyen Duc Kien in police detention.

A lot is now riding on the ruling Communist Party’s ability to control events, limit the damage and suppress any disputes over the affair in its own leadership. Continue reading »

Vietnamese investors are still waiting to see the implications of Tuesday’s arrest of millionaire businessman Nguyen Duc Kien. And while they wait, they worry.

After a 4.7 per cent drop on Tuesday, the VN Index lost a further 1.6 per cent on Wednesday, pulled down by plunging shares in the banking sector.  Kien’s bank, Asia Commercial Joint Stock Bank, went limit down, falling 6.6 per cent, after the same limit-down loss on Tuesday. With a lot of concern in Ho Chi Minh City and Hanoi about the health of the banks,  the market may have further to fall. Continue reading »

Vietnam’s stock market fell nearly 5 per cent on Tuesday on the arrest of banking millionaire Nguyen Duc Kien, one of the best-known men in the country’s business elite.

Shares in Asia Commercial Joint Stock Bank, which he founded, plunged nearly 7 per cent dragging down other banking stocks in its wake, as investors struggled to grasp the implications of the shock news.

There could be more trouble on the way in Vietnamese banking, with the sector under intense financial pressure with credit contracting in response to government efforts to cool an over-heated economy – and bad loans mounting. Continue reading »

By Jonathan Pincus

In Vietnam, a new round of credit loosening by the central bank – made possible by a sharp plunge in inflation – has stirred hopes that the good times aren’t too far away. But restarting growth will not be that easy.

Consumer price inflation fell in May to less than 7 per cent year-on-year from a peak of 23 per cent last August. In response, the State Bank of Vietnam, the central bank, last week announced its fifth rate cut of the year, lowering its refinancing rate to 10 per cent. Earlier in June SBV cut the deposit rate ceiling from 12 to 9 per cent. Continue reading »