[Round-up] Vietnam Economic Growth Slows, Malaysia Bank Sets up Unit

Tuan Minh

17:38 25/03/2016

BizLIVE - Vietnam’s economic growth slowed down in the first quarter of 2016. Malaysia’s Public Bank Bhd (PBB) has received the 100% foreign-owned bank license for a subsidiary in Vietnam.

[Round-up] Vietnam Economic Growth Slows, Malaysia Bank Sets up Unit

Vietnam’s economic growth slowed to 5.32% in the first quarter of 2016.

Public Bank Wins 100% Foreign-Owned Bank License in Vietnam
Malaysia’s Public Bank Bhd (PBB) has received the 100% foreign-owned bank license from the State Bank of Vietnam, the Vietnamese central bank, and will rename its existing joint-venture bank as Public Bank Vietnam Limited (PBVN).
The Malaysian bank received the approval in relation to its acquisition of the remaining 50% equity capital in VID Public Bank (VPB), the 50:50 joint venture bank with Bank for Investment and Development of Vietnam (BIDV).
Effective April 1, VPB will become a 100% wholly-owned subsidiary of PBB. PBVN has been granted a term of operations of 99 years.
Vietnam Posts Trade Surplus of $776 Million in Jan-Mar
Vietnam recorded a trade surplus of $776 million in the first three months of this year, equivalent to 2% of its total exports, the General Statistics Office (GSO) said.
Foreign-invested companies enjoyed a trade surplus of $4.83 billion in the period while domestic ones had a trade gap of $4.05 billion.
More Public, Private Firms Partner on Transportation
Vietnam is expected to attract a number of investors of transport infrastructure projects under the public-private partnership (PPP) model this year, according to the Vietnam News Agency (VNA).
The My Thuan-Can Tho expressway project in the Mekong Delta is one of the top of prospective PPP transport infrastructure projects in the number of interested and registered investors.
Another PPP highway project attracting investors’ attention is the building of Ring Road No. 3’s Tan Van-Nhon Trach elevated highway section in the southern province of Dong Nai.
HCM City’s Economy Grows 7.1% in Q1
Ho Chi Minh City’s gross regional domestic product (GRDP) reached 221.82 trillion dong ($10 billion) in the first quarter of this year, representing a growth rate of 7.1% from a year earlier, compared to 6.9% in the same period last year.
The city’s export turnover increased 7.8% year-on-year to $6.7 billion while import turnover rose 8.2% to $7.9 billion.
Foreign direct investment (FDI) approvals declined 62.2% year-on-year to $278 million in the three-month period.
Vietnam Seeks Private Funding for $721 Million Highway
Prime Minister Nguyen Tan Dung has approved a plan to attract private investment for a highway project in the Mekong Delta with an estimated cost of 16.34 trillion dong ($721 million), the government office has said.
Selected developers will build the six-lane road connecting Can Tho City and Vinh Long Province under a Build-Operate-Transfer (BOT) format.
Vietnam Cement Firms Face Stiff Competition
Domestic cement companies would face stiffer competition in consumption in markets at home and abroad in the future, experts were quoted by the VNA as saying.
At present, the total capacity of all cement factories in Vietnam is 81.5 million tons per year, according to the Ministry of Construction. This year, the local market is expected to consume between 75 million tons and 76 million tons of cement, leading to an oversupply.
MobiFone to Exit Banks on Privatization Plan
State-run mobile network operator MobiFone will unload its stakes in two partly-private banks next month, part of a plan to go public this year.
MobiFone plans to sell 33.4 million shares, equivalent to a 6.12% stake, in SeABank, on April 25, at a starting price of 9,600 dong ($0.43) each. It will also sell 14.28 million shares in TPBank through another auction on the same day, starting at 8,900 dong ($0.4) per share.
Foreign Firms Partake in Vietbuild 2016
Over 60 groups and companies from 16 countries including South Korea, Japan, the UK, Malaysia, Thailand, Germany, Singapore, the US, Indonesia, France and China are taking part in Vietbuild Home International Exhibition in Hanoi.
The event was also attended by 216 domestic firms and 171 joint ventures. As many as 1,350 booths displayed products and materials used in the fields of construction, real estate, architecture, interior and exterior decoration and solar energy systems.
Moody’s-rated Vietnamese banks are expected to see a further weakening in their capital buffers in 2016 as credit growth and provisioning expenses outpace the capacity for internal capital generation, Moody’s Investors Service has said in a report.
Banks also have few sources of external capital, given limited domestic resources and restrictions on foreign investments in banks. Foreign ownership is curbed at 30% in a bank, and most rated banks are at and close to the cap.
Vietnam’s gross domestic product (GDP) grew 5.46% in the first quarter this year, higher than the growth rate of the same period in 2012, 2013 and 2014, the GSO said at a press meeting on Friday.
The rate in Q1 2016, however, is lower than a 6.12% increase a year earlier and a 7.01% expansion in the last quarter of 2015, suggesting that the local economic growth slowing down, said the government-run office.
Vietnam’s consumer price index (CPI), a gauge of inflation, is likely to increase more than 5% this year, Vu Thi Thu Thuy, director of the GSO’s Price Statistics Department, said Thursday.
Among the cost-pushing factors, Ms. Thuy named heath services and education fees that will have their prices raised in July and September this year.
Vietnam’s foreign currency reserves have swelled to $40 billion currently thanks to a combination of macroeconomic policies, the Saigon Times newspaper cited a central bank official as saying.
The country’s balance of payments started to post a hefty surplus in 2012 and this trend continued into 2015, which has enabled the State Bank of Vietnam (SBV) to buy in large quantities of forex. “Vietnam’s forex reserves reached a record high of over $35 billion in 2015,” said the official.
South Korea-based companies put $888.6 million in fresh and existing investment projects in Vietnam in the year to March 20, enable the Northeast Asian country to top other investors here.
Singapore slid to the second position with $554 million, followed by Taiwan with $371 million, according to data of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.