Malaysia ranks 12th among Vietnam’s foreign investors in 2018

Malaysia ranked 12th among the countries and territories investing in Vietnam in 2018 with total registered capital hitting over 435 million USD, according to the Vietnamese trade office in Malaysia.

Last year, the country pumped nearly 255 million USD into 41 new investment projects in Vietnam by the end of 2018, while its investors added over 27 million USD in total to their capital at 13 existing projects.

Malaysian investors also spent some 153 million USD buying shares in Vietnamese companies. Malaysia’s accumulated investment in Vietnam as of December 20 reached over 12 billion USD in 586 projects, ranking 8th among 129 economies investing in the country.

Two-way trade value between Vietnam and Malaysia last year expanded more than 14 per cent on a yearly basis to about 11 billion USD. 

Improving efficiency of public investment

Public investment has been seen as an important area in the annual socio-economic development tasks. Therefore, in its Resolution No. 01/NQ-CP, issued at the beginning of the year, the Government has urged for the restructuring of investment, with a focus on public investment.

In addition, the removal of institutional knots to strengthen the mobilisation and effective use of social resources has also been requested, alongside strictly managing, avoiding loss and waste, and improving the efficiency of the use of public investment resources, considering this as one of the specific solutions in 2019 to drastically implement strategic breakthroughs, restructure the economy, renovate the growth model and enhance the quality of growth.

Since the Law on Public Investment took effect in 2015, the overdiversified investment “disease” has been put under control, contributing to gradually improving the efficiency of investment from the state budget. The investment structure has also changed, reducing the proportion of public investment capital in the total social investment capital and increasing the percentage of investment capital from the private and foreign-invested sectors. This means public investment will serve as the “bait capital”, leading other economic sectors to make their investments.

However, over recent years, the state of slow disbursement of public investment has yet to change remarkably. The state budget has money but cannot spend, while many key projects have to wait for capital. The Ministry of Planning and Investment’s statistics updated to January 2019 showed that among 66 out of 126 agencies having sent reports on the disbursement of public investment in 2018, only nine agencies posted a disbursement rate of over 90% of the annual plan. The disbursement rate was below 50% of the plan for many agencies, and there was a locality which even disbursed nothing in the past year. Public investment capital accounts for a relative proportion of total social investment. Therefore, slow disbursement of public investment will negatively impact the GDP growth. There are several causes for the limitations in public investment. The subjective cause is that legal institutions on public investment have yet to be really synchronised, unified and completed, and have yet to thoroughly address the overlapping situation. Also, there remains embarrassment in implementing the Law on Public Investment and the documents guiding the enforcement. In addition, the ministries, sectors and localities have yet to perform well in making preparations for the projects, dealing with land clearance, and observing the principles and criteria of allocating capital plans. Meanwhile, the quality of planning and forecasts remains limited, causing wastefulness and inefficiency in investment in some infrastructure projects.

The Government is submitting to the National Assembly for approval of the draft revised Law on Public Investment in an effort to remove difficulties and obstacles that are arising in reality. The Government has also requested the upholding of the roles and responsibilities of heads of ministries, sectors, localities and units in accelerating public investment disbursement; publicising the implementation results; strengthening orders of public services; and strictly implementing legal regulations on bidding, ensuring publicity and transparency and striving to increase the rate of selecting contractors online in the form of competitive offers and open bidding by at least 50% of the number of bidding packages and 15% of the total value of the packages. Strongly implementing the aforementioned solutions right from the beginning of 2019 will contribute to promoting disbursement as well as improving the efficiency of public investment.

First five-star hotel opens in Vinh Yen city

Located next to Dam Vac Lake, the center of the Nam Vinh Yen new urban area, and nearby the administrative center of Vinh Phuc province, DIC Star Hotels and Resorts Vinh Phuc is the first five-star hotel in the city of Vinh Yen. The first phase of DIC Star Hotels and Resort Vinh Phuc, the hotel, is now ready to welcome its first guests. The hotel is about 50 minutes by car from central Hanoi, 30 minutes from Noi Bai International Airport, and adjacent to Heron Lake Side, an 18-hole international-standard golf course.

Covering an area of over 25,000 sq m, DIC Star Hotel Vinh Phuc was designed by EPEL Architecture, a famous name in hotels and school design from France, and has charming exterior architecture with elliptical shapes and soft towel rings. The hotel consists of 205 rooms and villas, modern furniture, and windows and balconies with views overlooking Dam Vac Lake or Vinh Yen city.

The hotel will be an ideal destination for business guests as well as leisure travelers, with state-of-the-art facilities such as a four-season outdoor swimming pool, a gym, a luxurious restaurant serving diverse European and Asian cuisine, and a bar with inspiring music and a top-class drinks menu.

Its Binh Minh Restaurant has a capacity of 300 diners and features glass walls that allow visitors to admire panoramic landscape views. It serves daily buffet breakfast as well as à la carte dishes for lunch and dinner. The Dam Vac conference hall is the largest banquet room in Vinh Yen city and can accommodate up to 1,000 guests. Its flexible design allows conference holders to split the hall into three smaller conference rooms. Its mobile stage as well as the up-to-date audio and lighting equipment turn the hotel’s banquet space into an ideal venue for luxurious and cozy weddings and other celebrations. The Palm Tree Lobby Lounge is located on the first floor, with 100 seats and great views over the lake. The Sunset Bar, meanwhile, is on the rooftop and offers views of both the city and the lake.   

Mr. Hoang Hong Ha, General Manager of the hotel, said that “Pioneered, Trusted and Friendly” is the motto and goal of all staff at DIC Star Hotels & Resorts Vinh Phuc, in order to satisfy all guests. It is ready and looking forward to welcoming guests with the first-ever five-star service in Vinh Yen city.

REE issues fixed-rate bonds

Standard Chartered Bank Vietnam (SCB Vietnam) announced on January 29 it has successfully placed the Refrigeration Electrical Engineering Corporation (REE)’s inaugural $100-million (VND2.318 trillion) fixed-rate bonds. The issue was guaranteed by the Credit Guarantee and Investment Facility (CGIF), a trust fund of the Asian Development Bank rated AA internationally by S&P.

The fixed-rate bonds bear an interest rate of 7 per cent per annum with a ten-year maturity.

REE is a listed and diverse business group in Vietnam primarily operating in the fields of real estate development and management; mechanical and electrical engineering services; the manufacture, assembly, and sale of Reetech air conditioning systems; and power and water utility infrastructure. The company was one of the first to list on the Ho Chi Minh Stock Exchange and is among the 30 largest companies in terms of market cap.

SCB Vietnam’s expertise and capabilities to execute and distribute the deal enabled REE to achieve long-term fixed-rate funding at a competitive yield. Despite market volatility, bidding interest, especially in the longer tranche, remains strong. In view of the favorable pricing, the issuance strategy was adjusted by shifting the seven-year demand into the ten-year tranche.

This is the sixth time SCB Vietnam has acted as the bond issuance agent for a guaranteed VND-denominated corporate bond issue in Vietnam, reaffirming the bank as the bond issuance agent of choice when it comes to guaranteed local currency bond origination in the country.

“We are delighted to have CGIF onboard with us on our first bond issuance as we tap into the capital markets for fixed-rate long-term funding,” said Mr. Nguyen Ngoc Thai Binh, CFO of REE. “We see it as an important milestone as we continue to widen our funding options and sources in line with our business development and expansion needs.”

“We are pleased to support REE in this landmark transaction, which is a meaningful achievement for us as we celebrate our 115th anniversary of driving commerce and prosperity and serving our clients in Vietnam,” said Mr. Nirukt Sapru, CEO Vietnam and ASEAN & South Asia Cluster Markets at Standard Chartered Bank.

“The successful issue has contributed to deepening and developing Vietnam’s local capital markets, as it encourages more corporate issuers to consider the country’s bond market as a viable financing option.”

“CGIF is delighted to guarantee REE’s first fixed rate ten-year bullet bonds targeting institutional investors,” said Mr. Kiyoshi Nishimura, CEO of CGIF. “While REE’s previous bonds were placed with banks in traditional bank terms, such as floating rates and amortizing repayments, this ten-year guaranteed bond enables REE to tap into institutional investors’ funds with more suitable funding terms to the company.”

The rapid development of the VND corporate bond market since CGIF’s inaugural guarantee for VND bonds in 2014 is extremely encouraging. This transaction marks the eighth such bond CGIF has guaranteed in the VND corporate bond market totaling $532 million equivalent, and solidifies its role as a catalyst for strong bond market development in the country.

RMIT: Economic outlook positive

The government’s adoption of strong policy stability has contributed to building a prosperous Vietnam now and into 2019 and 2020, according to RMIT Vietnam.

“The government hasn’t made as many reforms as people have wanted, but caution has reduced the level of risk for such a young economic market,” said RMIT Vietnam’s Professor Ian Eddie.

Currently classified as a Frontier Market by the Morgen Stanley Composite Index, Vietnam’s growth is slowly shifting it towards Emerging Market. A move to an Emerging Market classification will mark an important economic transition in the ASEAN region for Vietnam, as it will attract more foreign capital from large international investments that will support the development of Vietnam’s economy.

“You can argue that Vietnam probably has the best prospects to move further up towards the level of economic standards in Thailand and Malaysia,” said Professor Eddie. “It has positioned itself well, reformed its financial system, has strong government stability, and, in terms of Emerging Markets, has one of the strongest currencies.”

Vietnam has very strong foreign investment, which has now exceeded more than 100 per cent of GDP. It’s in a unique position, as not many countries in the world have more FDI than GDP. The transition will depend on the government’s reform of State-owned enterprises.

“Reforms in market and securities will be critical to achieve Emerging Market status,” Professor Eddie commented. “It’s important for the government to close those gaps, in order to sustain future growth, maintain openness for foreign companies and workers to come, and continue supporting new business startups. Cities today really need to be the center for innovation and encourage new businesses.”

Supported by a strong government policy, the entrepreneurial spirit in the country is thriving, particularly in Ho Chi Minh City, which is home to half of all startups. Because of the natural entrepreneurial mindset and business capability, people have been able to adapt to Vietnam’s emerging venture capital industry.

“The Vietnamese are very good at starting businesses,” Professor Eddie noted. “I think the next generation of entrepreneurs is going to look for opportunities to scale up their small businesses to create sustainability, higher pay rates, and more opportunities for workers.”

Vietnam currently has a large export economy, and most exports are sourced from FDI. But if Vietnamese companies grow and build up their skills, they will be able to boost their internationalized ASEAN capabilities further.

He also argued that while all signs point to positive growth for Vietnam’s economy in 2019, there are two clear challenges facing the government over the next few years: sustaining strong economic growth in the face of a turbulent global economic environment, and managing inequality.

“The government also needs to retain a strong currency to ensure that capital inflows are positive, so that Vietnam has a trade surplus and a strong currency and doesn’t resort to excessive borrowing of international funds, which creates financial risk,” he said. “If Vietnam can do that it will be well placed as a beneficiary, particularly if the trade war between the US and China deepens in any way.”

Last year in the Global Wealth Index (Wealth-X), Vietnam was the third-fastest growing country in generating new dollar billionaires. What an amazing fact: not only are there many successful entrepreneurs here, they’re successful at a global level. But this is also an issue that the government needs to be well aware of - there is still a degree of poverty, and income equality is a major issue. Income equality is always a fundamental issue for economic stability. The more inequality in any country, the more likelihood you’re going to get social and political unrest.

Grab partners with McDonald's

Grab Vietnam has a strategic cooperation agreement with McDonald’s Vietnam to provide more exciting experiences and incentives as well as bring more value to customers when using the GrabFood service.

Grab users will receive special offers when ordering McDonald’s dishes on the GrabFood platform. With an average delivery time of just 25 minutes and a team of well-trained drivers, GrabFood commits that McDonald’s orders will be delivered to customers quickly and at a cheaper cost.

Grab’s Platinum members will also receive a 10 per cent discount on the total McDonald’s bill when exchanging five GrabRewards points.

Grab and McDonald’s Vietnam will exploit more utilities from the strategic partnership. Some programs exchanged by the two parties, such as using GrabExpress’s partner team, will help McDonald’s save costs and resources in transport.

The cooperation will also help Grab and McDonald’s attract more customers through taking advantage of a number of McDonald’s systems to become pick-up / drop-off locations and provide parking for Grab driver partners.

Grab and McDonald’s Vietnam have had other short-term cooperation activities, such as McDonald’s sponsoring International Women’s Day celebrations organized by Grab to congratulate female driver partners and female staff working at Grab, who received free McDonald’s coupons.

Southeast Asia’s leading O2O mobile platform, Grab officially launched its on-demand food delivery service, GrabFood, on October 2 in Hanoi, while in Ho Chi Minh City it was beta tested on May 10 and officially launched in June.

The launch not only marks an important milestone in Grab’s journey towards becoming the leading everyday super app that offers Vietnamese and Southeast Asian consumers the most essential daily services, but also reaffirms its commitment to long-term investment in Vietnam as a tech company.

The world’s leading fast-food retailer, McDonald’s, arrived in Vietnam in 2014 with a developmental licensee, a franchising model that is used in many markets around the world to grow the McDonald’s brand. After more than three years in Ho Chi Minh City, McDonald’s then opened its first restaurant in Hanoi, at 2 Hang Bai Street.

The McDonald’s chain in the country has been recording growth of nearly 40 per cent each year and now has 17 restaurants. The locations selected for its expansion are strategically located in the CBDs of Ho Chi Minh City and Hanoi, where there are a large number of potential customers.
Hanoi enjoys 7.3 percent rise in January’s exports

Hanoi’s export revenue in January reached 1.18 billion USD, up 1.3 percent over the previous month and 7.3 percent year on year, reported Bao Dau tu (Investment Review).

The State-owned sector in the city recorded 630 million USD in exports in the month, a rise of 0.8 percent month on month and 14 percent from the same period last year. Meanwhile, the revenue of the foreign-invested sector hit 552 million USD, up 1.8 percent over December 2018 and 0.6 percent year on year.

In the month, upturns were seen for most goods, including garment and textile, footwear, leather products, pottery and ceramic products, oil and gas and wood and wooden furniture.

However, three out of 12 goods groups of Hanoi suffered from drops in export revenue, namely farm produce, crystal products, and transport vehicles and their spare parts.

Vietnam named among world’s top 60 most innovative economies for first time

For the first time Vietnam has been named among the world’s top 60 most innovative countries in the 2019 Bloomberg Innovation Index. 

Vietnam was ranked 60th with score of 45.92, in which the country scored the lowest in “High-tech density” at 34 and the highest in “Productivity” at 59. 

Singapore (6th), Malaysia (26th), and Thailand (40th) were three other Southeast Asian nations named in the list this year in addition to Vietnam. 

The annual Bloomberg Innovation Index, in its seventh year, analyzes dozens of criteria using seven metrics, including research and development spending, manufacturing capability and concentration of high-tech public companies.

South Korea retained the global crown in 2019, though improvements by Germany in research and education brought Europe’s largest economy to near-parity in the annual ranking.

The US moved up to the eighth place, a year after cracks in education scores pushed it out of the top 10 for the first time.

In the Bloomberg Index, Germany almost caught six-time champion South Korea on the strength of added-value from manufacturing and research intensity, much of it built around industrial giants such as Volkswagen AG, Robert Bosch GmbH and Daimler AG. Although South Korea extended its winning streak, its lead narrowed in part because of lower scores in patent activity.

Sweden, the runner-up in 2018, fell to the seventh spot. Patent activity boosted the scores for China and Israel, which was a big winner by jumping five spots to the fifth overall. The Middle Eastern country surpassed Singapore, Sweden and Japan in the process.

The UK fell one spot to the 18th and lost out to China for the first time. China’s score reflects a dichotomy in the world’s second-largest economy: it ranked No. 2 in patent activity on the strength of R&D from Huawei Technologies Co. and BOE Technology Group, but still lags behind most innovative alums in overall productivity.

The United Arab Emirates made the highest debut in 46th place. Brazil rejoined the index in the 45th spot after not being ranked last year. Also among the new entrants are some of the world’s largest emerging economies: India, Mexico, Vietnam and Saudi Arabia. South Africa remains the only Sub-Saharan nation to be ranked.

The 2019 ranking process began with more than 200 economies. Each was scored on a 0-100 scale based on seven equally weighted categories. Nations that did not report data for at least six categories were eliminated, trimming the total list to 95. Bloomberg publishes the top 60 economies.

Vietnam trade per capita nearly triples in 2018

Vietnam's trade per capita in 2018 reached US$5,072, nearly triple the figure recorded in the 2015 – 2017 period of US$2,082 under the calculation of the World Trade Organization (WTO).  

In 2018, Vietnam posted record high trade turnover of US$480.17 billion, up over US$52 billion year-on-year, taking the combined value of Vietnam’s exports and imports to 196% of GDP. 

Following this result, Vietnam is expected to achieve higher ranks in WTO’s World Trade report in April, The country's exports and imports ranked 27th and 25th worldwide in the 2017 report. 

Moreover, Vietnam recorded overall trade growth rates at 13.2% and 11.1%, respectively, while 2018 was the third consecutive year that Vietnam posted a trade surplus. 

According to the General Department of Vietnam Customs (GDVC), the country’s trade surplus reached US$1.78 billion in 2016, US$2.11 billion in 2017 and US$6.8 billion in 2018.

In 2018, Vietnam recorded trade surpluses with 150 countries and territories, and trade deficits with other 85, according to GDVC. Asia remained Vietnam’s largest trade partner, in which exports accounted for 54% of the total and imports 80.3%, followed by America with exports accounting for 23.8% and imports 8.6%. 

Among Vietnam’s top 10 largest trading partners with over 72% of trade turnover, Vietnam recorded the highest trade turnover with China at US$106.7 billion, accounting for 22.2% of the former's total trade value. 

Smartphones remained Vietnam’s most valuable export products, reaching US$49.1 billion in exports or one fifth of the totals, while computers, electronics and parts were the most imported items to Vietnam with the value of US$42.2 billion, accounting for 17.8% of total imports. 

FDI companies made up 65.2% of Vietnam’s trade turnover in 2018, of which the sector’s exports accounted for 70.5% and imports nearly 60%. 

GDVC estimated that if Vietnam’s trade value increases by 5% year-on-year in 2019, the country could reach the US$500-billion mark in trade turnover in the fourth quarter of 2019. 

VND depreciation pressures predicted to be less pronounced in 2019: HSBC

In its recent report, British bank HSBC expected depreciation pressures on the Vietnamese dong (VND) to be less pronounced than in 2018 and adjusted its forecast for the USD/VND rate to VND23,550 (from VND23,800 earlier).

In 2018, the VND faced greater depreciation pressures from a weaker renminbi (RMB), heightened trade tensions between the US and China, and a stronger US dollar (USD). 

The depreciation pressures can be seen in the divergence between the unofficial and official VND exchange rates – with the former trading above the latter for most of 2018. 
However, this gap narrowed considerably after the RMB depreciation concerns subsided, stated HSBC.

External pressures have probably also been tempered by the VND’s relatively solid fundamentals. Growth has been strong at 7.08% year-on-year in 2018 and inflation has been reasonable at 3.5% year-on-year on an average basis. 

Despite global growth slowdown in 2019, Vietnam is expected to grow at 6.5% year-on-year whereas inflationary pressures are likely to remain benign and well below the State Bank of Vietnam’s (SBV)'s 4% ceiling at 3.4% year-on-year.

Meanwhile, Vietnam’s trade surplus rose to a record-high US$7.7 billion in 2018, US$5.6 billion more than in 2017, according to HSBC data. The trade outlook in 2019 should be supported by the implementations of the Comprehensive and Progressive for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam FTA. 

As for the capital account, the report noted that Vietnam’s equity market is the only one in the region (other than China) that received net inflows of US$1.9 billion in 2018.

Additionally, realized FDI inflows in 2018 was estimated at US$19.1 billion, up by 9.1% over 2017. Registered FDI had also shown signs of recovering in the final month of 2018. FDI is the primary source of capital inflows for Vietnam that helps the central bank build FX reserves. 

The uncertainties in US- China trade relations should accelerate the diversification of manufacturing production capacity from China to Vietnam. For example, China’s GoerTek, which assembles wireless earphones for Apple, lately suggested it intends to relocate some of its production to Vietnam. 

Additionally, a degree of stability in the VND is also important for foreign enterprises managing FX translation risks and planning future investments. The authorities have prudently stabilized the VND, even if it has meant FX reserves dipping to US$60 billion as of October 2018. That said, net reserves were still up by US$6 billion in 2018. 
​
It is expected that FX reserves could increase further in 2019. On January 2, the SBV raised its USD buying rate to VND23,200 (from VND22,700 earlier) and signaled its willingness to mop up foreign inflows. 

Overseas remittance to Vietnam reaches record high of US$18.9 billion in 2018

Remittances to Vietnam in 2018 reached US$18.9 billion, up 37% year-on-year from the US$13.81 billion recorded in 2017, Tuoi Tre News reported, citing an official.  

Of the total, Ho Chi Minh City received around US$5 billion and over 70% of the total remittances was poured into business and production, said Nguyen Thanh Phong, chairman of the Ho Chi Minh City People’s Committee, at a meeting with overseas Vietnamese on January 24. 

Over the past few years, the number of overseas Vietnamese residing in Vietnam has been increasing year-on-year. In 2018, over 420,000 came back to Vietnam through Tan San Nhat International Airport alone, Phong added. 

Overseas Vietnamese play a key role in the development of Ho Chi Minh City, Phong continued. 

As of present, Vietnam has issued business licenses for nearly 3,000 enterprises set up by overseas Vietnamese with a combined charter capital of VND45 trillion (US$1.93 billion). 

Moreover, over 30,000 young overseas Vietnamese go back to Vietnam to search for new business opportunities each year. 

At the meeting, Vice Chairman of the Vietnam Business Association of Overseas Vietnamese Peter Hong said the Vietnamese community abroad totaled 4.5 million. 

In addition to sending remittances to Vietnam, overseas Vietnamese have been directly involved in investments and businesses in homeland, Hong added. 

The remittances to the country go through four channels – commercial banks, economic institutions, customs or posts. About 72% of the remittances are transferred to Vietnam via commercial banks. 

Vietnam is amongst the top ten countries, second in ASEAN after the Philippines, in terms of inbound remittance flows in the world, with the volume being around 2.5% total global remittances in 2017, according to UNDP.

Annually, remittances accounted for 6-8% of annual GDP in the period 2006-2017 in Vietnam, much higher than for other developing countries (which averaged about 1-2% of GDP).

Such flows, along with foreign direct and indirect investment, and official development assistance are major sources of Vietnam’s foreign currency supply.​

In a meeting last December, Luong Thanh Nghi, deputy head of the State Committee for Overseas Vietnamese Affairs, said the remittances to Vietnam were expected to reach US$15.9 billion in 2018 in reference to a World Bank report. 

Property investment lending in Vietnam set to be tightened from 2019

The authority aims at directing capital flows towards manufacturing and business sectors and reducing capital flows into risky non-production sectors, including real estate, according to Bao Viet Securities Company (BVSC). 

Under this circumstance, quality of lending to real estate sector could be rigorously monitored from 2019. 

In 2019, credit growth target for banks is 14%, unchanged from the performance in 2018. Therefore, lending to real estate in 2019 could be relatively lower than in 2018, stated BVSC in its latest report. 

Moreover, the ceiling for short-term funds used for medium- and long-term lending is also tightened. Since early January 2019, banks have lowered the cap on short-term funds used for medium- and long-term lending to 40%. 

The internal non-performing loan (NPL) ratio must also be reduced to 2%, potential risk sectors will also be strictly monitored. The risk factor for real estate loans will increase from 150% to 200%. 

This source of lending will not only hinder the business of real estate enterprises but also individuals who borrow to buy home. Apparently, these policy changes of the authority are of great importance amid active trade of real estate sector in 2018. 

BVSC expected that real estate growth will suffer a slowdown from 193.2% in 2018 to 43.6% in 2019. 

Total outstanding credit in Vietnam’s banking system grew 14% in 2018 year-on-year, the lowest since 2014, according to the State Bank of Vietnam. However, the Vietnamese economy grew at a decade-high of 7.08% last year. 

TheBank.vn receives investment from CA Capital & Ncore

The SAMO Company has officially announced the completion of the first round of funding for TheBank.vn website on January 28, with investment from CyberAgent Capital and Ncore.

Though specific details were not disclosed, with this capital Thebank.vn plans to improve the customer experience, from applications for loans, cards, and insurance to the selection of financial products that meet their current needs.

TheBank.vn also plans to become a full stack solutions provider based on technologies in bid data, eKYC, Chatbot, and credit scoring.

Mr. Nguyen Dat, General Director of SAMO, said that one must understand the nature of customers to provide effective service, so quality connections are critical. “It is very easy for us to talk about potential, but to develop an online financial services company is not simple,” he added. “We have accumulated important experience in preparing for rapid and solid growth in our customer base.”

Mr. Dzung Nguyen, Head of the Vietnam and Thailand Office of CyberAgent Capital, said that with consumer behavior being increasingly based on technology and interest in experiential consumption over recent years, the potential for financial technology (fintech) companies is enormous. “The key now is extensive investment and the right implementation,” he noted.

Established and put into operation at the end of 2014, prior to this funding TheBank.vn has been the leading financial comparison app in Vietnam with the highest traffic and largest number of partners and consultants.

The company offers a platform to compare and evaluate products such as credit cards, unsecured loans, collateralized loans, savings interest rates, and life and non-life insurance products. It connects with and advises customers and provides financial product distribution packages for banks and insurance companies using modern technology.

After only four years of operations, TheBank.vn has recorded nearly 20 million visitors, served more than 1 million customers, classified and compared1,300 financial products, and has more than 24,000 active financial experts registered on its website who are available to interact with clients.

It has also become a digital partner of nearly 30 banks and financial institutions, such as Standard Chartered, HSBC, ANZ, Shinhan Bank, VPB, EVN Finance, and TPB Finance, and large insurance companies like Prudential, Manulife, Chubblife, and Liberty.

In the face of the Industry 4.0 wave, especially in Asia - a hotspot for fintech and insurtech (insurance technology) - funding to companies like TheBank.vn demonstrates the continued development of Vietnam’s digital financial market that benefits users.

According to TheBank.vn, Vietnam’s sizeable untapped market is its most attractive feature, with 41 per cent of Vietnamese adults not yet using banking services and only 8 per cent of the population having life insurance.

In the past two or three years, a rise in the emerging middle class has been seen not only in Vietnam’s major cities but also in key provinces, which create growth momentum for the whole market.

Credit cards and consumer loans are where banks are aggressively competing for market share, while insurance holds potential for future development. The market is growing at an average annual rate of 15-20 per cent, while the life insurance market size and consumer loans are expected to increase by 40 per cent by 2020, to $14 billion.

HSC records highest results ever in FY2018

The Ho Chi Minh City Securities Corporation (HSC) has released its financial statements for the fourth quarter of 2018 and cumulative FY2018.

Revenue at the end of the fourth quarter reached VND402 billion ($17.3 million) and pre-tax profit VND89 billion ($3.8 million), down 40 per cent and 62 per cent, respectively, compared to the same period last year.

Cumulative net revenue for FY2018 was VND1.7 trillion ($73.3 million), up 23 per cent and representing 81 per cent of the 2018 target. Cumulative after-tax profit was VND675 billion ($29.1 million), an increase of 22 per cent and representing 83 per cent of the target approved at its annual general meeting last April.

Though reaching just 83 per cent of the FY2018 target, HSC recorded its highest business results ever, with net profit of VND675 billion ($29.1 million), which translates into an ROE of 23 per cent.

All business lines continued to grow. Brokerage again contributed a large portion of the revenue structure while other contributors saw positive changes. Cumulative brokerage revenue in FY2018 was VND759 billion ($32.7 million), up 26 per cent against last year and accounting for 45 per cent of total revenue.

Cumulative margin lending revenue in FY2018 reached VND523 billion ($22.5 million), an increase of 19 per cent and accounting for 31 per cent of the total revenue. Cumulative proprietary trading revenue in FY2018 rose slightly, to VND278 billion ($12 million). Cumulative corporate finance advisory revenue rose a substantial 164 per cent to VND119 billion ($5.1 million), thanks to the successful completion of several major deals. 

Earnings per share in FY2018 was VND5,214, up 22 per cent from VND4,289 in FY2017. Return on average assets (ROAA) and return on average equity (ROAE) reached 11.3 per cent and 23.1 per cent, respectively, compared to 10.8 per cent and 21.4 per cent last year.

Hoa Phat’s steel export surges in 2018

Hoa Phat Corporation announced on January 29 that its steel products are now available in 14 countries with a total export volume of nearly 240,000 tonnes in 2018, up 50.97 percent annually.

Steel pipes recorded a surge of nearly 70 percent annually. 

Its total revenue hit 56.5 trillion VND (2.4 billion USD), up 21 percent from 2017. Notably, its post-tax profit rose to an all time high of 8.6 trillion VND, surpassing its target by 7 percent year-on-year. 

In the fourth quarter, the corporation earned about 14.5 trillion VND in revenue and 1.76 trillion VND in post-tax profit. 

Construction steel, steel pipes, and plated metal sheets made up 85 percent of its revenue and post-tax profit. Hoa Phat sold a record of more than 3.16 million tonnes of steel, up 5.3 percent from 2017, including 2.37 million tonnes of construction steel and 654,000 tonnes of steel pipe. 

Construction steel accounted for 23.8 percent of the market share, and steel pipes, 27.5 percent. 

Interior decor, refrigeration appliances, and construction equipment all maintained stable growth. 

In real estate, Hoa Phat handed over a majority of the apartments in Mandarin Garden 2 and 70 Nguyen Duc Canh projects since the end of last year, and actively started a project on Pho Noi urban area in the northern province of Hung Yen. 

As regards to agriculture, the corporation has reaped achievements in clean and high-tech agriculture. Its revenue expanded by over 40 percent from 2017. 

With such positive results, Hoa Phat contributed more than 6.3 trillion VND to the State budget, up 32 percent from 2017.