The bank is collecting feedback on its draft circular to replace the current version with stricter conditions for receiving short-term foreign loans to ensure a national debt limit. The draft will allow Vietnamese businesses to access short-term foreign loans for paying debt, but not for potentially risky purposes like trading stock and real estate. This is because once the stock and real estate market grows way above its intrinsic value, there would be a high chance of creating an asset bubble, causing economic instability. The central bank plans to ban the use of short-term foreign loans to buy projects or stakes in them, since mergers and acquisitions involve long-term investment and commitment. It also plans to ban companies using short-term foreign loans to acquire projects or stakes in projects, as mergers and acquisitions are long-term activities. Short-term loans could result in liquidity risks if used for medium- and long-term purposes, it explained. Companies may … [Read more...] about Central bank limits foreign loans for trading stock, real estate
Comptrollers handbook commercial real estate lending
Pham Viet Tuan-Associate, Indochine Counsel Many of the negative risks arise because of the complicated Vietnamese land laws, which prevent not only foreign investors but also local developers from developing projects. This article will give some hints on how they could properly tackle issues related to land in property project development through the contribution of land. In the Vietnamese real estate market, it is common for a property developer to have land but not the budget or experience/resources needed to develop the project. In this case, such developers might seek other ways to conduct their business plan. Some solutions may be to secure a loan facility from a bank; to cooperate with other developers who have experience/resources in the project development; or to call for financial aid from funds, and foreign/local investors or to issue bonds in the capital market. Each solution has its pros and cons. From a foreign perspective, project land is essential to project … [Read more...] about Making better decisions in real estate
Lenders reinforcing presence with bond issuance, Photo Shinhan Bank Vietnam Shinhan Bank Vietnam last week successfully issued bonds totalling VND2.8 trillion ($121.7 million), with a tenor of two years. CEO Kang Gew Won explained to VIR, “This is the first time that Shinhan Bank Vietnam has issued bonds in the Vietnamese market. This offering reinforces Shinhan Bank’s long-standing relationship with Vietnam. Our bank will use these proceeds from the bond sale to expand the bank’s credit activities, diversify its capital sources, serve its business objectives, and also ensure the bank’s long-term development.” On April 20, Shinhan Bank Vietnam also formally announced the use of the liquidity reserve ratio and net stable capital ratio in liquidity risk management, in accordance with Basel III standards. In recent times, the bank has been continuously assigned a BB rating by Standard & Poor’s, with a “Positive” outlook. Prior to Shinhan Bank, HSBC Vietnam became the … [Read more...] about Lenders reinforcing presence with bond issuance
"Even in the very tough environment we are seeing, our employees have maintained a high quality and reliable service for our customers and this is helping us deliver stellar performance year after year," said Jens Lottner, CEO of Techcombank. Last year, the bank continued to reduce costs while focusing on building deposits in its current accounts and savings accounts (CASA), which Lottner described as a "stable and cheap" source of funding. Techcombank’s CASA ratio, which reflects the percentage of the bank’s total deposits that are CASA, jumped from 46.1 percent in 2020 to 50.5 percent last year, on its way to the bank’s target of 55 percent by 2025. Techcombank’s net interest margin (NIM), a measure of the difference between the interest received by the bank and the amount paid out to lenders, also increased 69 basis points to 5.6 percent during the year. "Together, these improving metrics, along with our effective cost management, translated into an excellent profit before tax … [Read more...] about Techcombank eyes seat at top Southeast Asian banking table
Masan workers on a production line. MSN stocks hit ceiling prices on Thursday, backing market reversal. — Photo vietnambiz.vn As bulls and bears entered a tug-of-war, the benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) rose by 0.88 points, or 0.07 per cent, to 1,241.64 points. The market’s breadth stood considerably negative as advancers were dwarfed by decliners. Notably, 294 stocks advanced while 519 declined. The market’s liquidity was low with only 460 million stocks traded on the southern bourse, equivalent to around VND11.6 trillion (US$502 million). Buying forces were not strong enough to lift blue chips. The 30 biggest stock tracker VN30-Index lost 2.86 points, or 0.22 per cent, to end at 1,283.55 points. In the basket, decliners outnumbered advancers by 18 to eight. Among ten stocks propping up the market, Masan Group (MSN) was the largest gainer, hitting the ceiling prices. Other stocks that fueled market reversal included Duc Giang Chemicals (DGC), … [Read more...] about Market edges up slightly due to bull-bear tug of war
The sell-off in the Vietnamese stock markets has been consistent with what has been occurring in global markets. — Photo vov.vn The sell-off in the Vietnamese stock markets has been consistent with what has been occurring in global markets, though selling pressure was exacerbated by many new retail investors dealing with margin calls for the first time and a crackdown on firms that borrowed money to buy stocks. None of this is however likely to have much impact on Viet Nam’s economic growth or on the aggregate earnings of listed companies, Michael Kokalari, VinaCapital’s chief economist, assured. “In Q1 earnings surged by around 30 per cent year-on-year, and we expect the earnings of all of the companies listed on the Ha Noi and HCM stock exchanges to surge by nearly 30 per cent this year.” Viet Nam’s benchmark VN-Index sold off 11 per cent last week and was down 21 per cent in the year to date at the end of last week after being nearly flat until March end, he said. … [Read more...] about Why the stock market sell-off when VN’s economy is strong?
Low-income housing projects will be prioritised in major cities, particularly Hanoi and HCM City. Real estate giant Vinhomes has announced plans to build 500,000 social housing apartments priced below VND1 billion across the country over the next five year. In August this year, the firm will start its first project. Low-income housing projects will be prioritised in major cities, particularly Hanoi and HCM City Housing and Urban Development Corporation has recently started work on a social housing project in the northern province of Hanoi to offer 564 apartments priced at just VND380 million (USD16,521) each. Thanh Hoa provincial authorities have approved a low-income housing project in Thanh Hoa City which will provide up to 2,400 apartments. Meanwhile, Ninh Binh Province has agreed on a project to build 2,153 apartments at Gian Khau Industrial Park and neighbouring areas. Four low-income housing projects in the country were completed in the first … [Read more...] about More low-income housing projects to be carried out