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Challenges and opportunities from Covid-19 for Vietnam’s M&A market

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Low interest rates could open up new opportunities for investors to take advantage of the cheap capital to buy shares and acquire new assets via M&A deals.

Despite the fact that M&A activity in Vietnam has been stagnant due to Covid-19, in the long term, this could help the market get ready for a booming period in the future.

Challenges and opportunities from Covid-19 for Vietnam's M&A market
 BIDV-KEB Hana Bank remains the biggest M&A deal in Vietnam in 2019. 

Nevertheless, Vietnam’s M&A market still recorded major deals in the first nine months of this year.

Top of the list were deals related to Vietnam’s leading privately-run conglomerate Masan Group in the acquisitions of VinCommerce, Net Detergent (NETCO), and 3F, among others. Specifically, Masan acquired the network of supermarkets and convenience stores from Vingroup’s retail arm VinCommerce. In the first six months of this year, Masan closed 151 Vinmart stores that were deemed ineffective and opened 45 new ones.

Later, Masan spent around US$28 million to acquire a 60% stake of NETCO, which currently holds 1.5% of the market share in the laundry segment, and US$26.43 million for a 51% stake of 3F Vietnam company – a poultry integrator.

BIDV’s sale of over 603.3 million shares to KEB Hana Bank with a total value of nearly VND20.3 trillion (US$875 million) last November was the biggest M&A deal in Vietnam in 2019. After the deal, BIDV has the highest registered capital among banks in Vietnam and eased its pressure to meet the capital adequacy ratio (CAR) under the Basel II standards.

In June, a consortium led by private equity firm KKR completed acquiring a 6% stake worth US$650 million of Vinhomes, a subsidiary of conglomerate Vingroup.

Besides these major deals, there were still some notable ones amid the Covid-19 pandemic, including Stark Corp acquiring Thipha Cables & Dovina, Sumitomo Life buying shares of Bao Viet Holdings, Danh Khoi Holdings taking over Sun Frontier or Aozora bank buying a stake of OCB bank. 

Opportunities remain

In 2019, the number of M&A value reached US$7.2 billion, representing a decline of 5.3% against the previous year. In 2020, due to the Covid-19, the figure may further decrease to US$3.5 billion, or down 51.4% year-on-year.

A senior executive at an auditing firm suggested most investors are cautious about pursuing a large deal at this time, except for fields that suffer limited Covid-19 impacts or are considered of low risk, namely healthcare or consumer goods.

Financial expert Nguyen Le Ngoc Hoan said opportunities still remain, especially from investors in countries having multilateral or bilateral trade deal with Vietnam.

Mr. Hoan referred to Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank)’s announcement on September 25 regarding the signing of an agreement on convertible bond issuance and strategic cooperation with DEG, a development financial institution under German state-owned development bank – KfW.

This shows European investors are looking for potential deals in Vietnam, noted Mr. Hoan. Meanwhile, the fact that the State Bank of Vietnam and central banks around the world are keeping low policy rates could open up new opportunities for investors to take advantage of the cheap capital to buy shares and acquire new assets via M&A deals, commented Mr. Hoan. Hanoitimes  

Nguyen Tung – Hoang Quyet

Source: https://vietnamnet.vn/en/business/challenges-and-opportunities-from-covid-19-for-vietnam-m-a-market-690316.html

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MoMo e-wallet adds travel feature to app

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The e-wallet of MoMo launched the travel feature on its application to help its users to buy tickets of air, train and cars quickly. — Photo courtesy of the firm

HÀ NỘI — E-wallet firm MoMo e-wallet has launched the travel feature on its application to help users buy tickets for air, train and car transport.

According to the firm, the new feature helps users choose the itinerary, cost and time, adding the smart search engine will help them choose the best route and time with a different estimated price for each means of transport.

Nguyễn Bá Diệp, co-founder and vice president of the firm, said: “The new feature is to help stimulate domestic tourism, especially local travel in such a difficult time of COVID-19.”

After nearly four months of testing the feature, the system has recorded significant development with more than 100,000 monthly regular users and a double increase in the number of transactions in the third quarter of 2020 compared to the second quarter. —

Source: https://vietnamnews.vn/economy/817825/momo-e-wallet-adds-travel-feature-to-app.html

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South Korean firms in Việt Nam can reap FTAs benefits

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A teleconference, themed “Việt Nam-Korea Investment Connection”, was co-organised Wednesday in Hà Nội by the Việt Nam Trade Promotion Agency, the Department of Asia-Africa Markets from the Ministry of Industry and Trade and the South Korea Trade-Investment Promotion Agency (KOTRA). — VNA/ Photo Linh Anh

HÀ NỘI — South Koreans investing in Việt Nam can capitalise on preferential treatment under free trade agreements (FTAs) that Việt Nam has signed to boost exports, one top official said.

Vũ Việt Nga, Deputy Head of East Asia Division under the Department of Asia-Africa Markets from the Ministry of Industry and Trade, was speaking during a teleconference held in Hà Nội on Wednesday.

Themed “Việt Nam-Korea Investment Connection”, the event was co-organised by the Việt Nam Trade Promotion Agency, the Department of Asia-Africa Markets from the Ministry of Industry and Trade and the South Korea Trade-Investment Promotion Agency (KOTRA), with the aim to introduce and update information about investment opportunities and trends of South Korean enterprises in Việt Nam, as well as introducing investment environment in localities.

Việt Nam has signed 14 free trade agreements, which are ATIGA, RCEP, CPTPP, ASEAN-India, ASEAN-Australia-New Zealand, ASEAN-South Korea, ASEAN-China, ASEAN-Japan, ASEAN-Hong Kong, Việt Nam-Chile, Việt Nam-Japan, Việt Nam-South Korea, Việt Nam- Eurasian Economic Union and Việt Nam-EU, said Nga.

“In the 2016-20 period, most tariff lines under the FTAs have entered the period of being deeply cut or completely removed,” she told Việt Nam News.

“Foreign enterprises, including South Korean firms, can make full use of much-touted benefits of those FTAs to increase export revenue as well as expand export markets, she said.

“But to be able to enjoy preferential tariffs under FTAs, the products must meet requirements under the rules of origin.”

Goods eligible for preferential treatment under FTAs have to meet general or product-specific rules of origin, and have appropriate documentation, known as the certificate of origin (C/O).

Each FTA has its own certificate of origin form, she said.

“Việt Nam has a safe and stable investment environment, fast and sustainable economic growth as well as young and low-cost human resources. The country has done a good job in controlling COVID-19.

“To attract foreign investment, Việt Nam has continuously reformed and simplified administrative procedures and policies, offering a large number of incentives in corporate income tax and import tax,” she said.

According to statistics in 2019, the whole country has 326 industrial parks and 17 coastal economic zones concentrated in big cities such as Hà Nội, HCM City, Bắc Ninh, Đồng Nai, Bình Dương, Long An, Bà Rịa-Vũng Tàu, Cần Thơ, Đà Nẵng.

Nga added: “The road traffic system has been upgraded and expanded, highways are better developed to make trade between provinces and economic regions easier, as well as facilitating the transport of raw materials.

“In addition, with 49 seaports, 8 airports and 23 border gates, Việt Nam is currently an international cargo transhipment hub in the Asia-Pacific region.” 

Since establishing diplomatic relations in 1992, Việt Nam and South Korea have strongly developed in all fields of politics, defense, security, economy and culture, said Hoàng Minh Chiến, deputy director of the Ministry of Industry and Trade’s Việt Nam Trade Promotion Agency (Vietrade).

“The strategic co-operation partnership is tightened closer with the signing of the Việt Nam-South Korea Free Trade Agreement (VKFTA) on May 5, 2015,” Chiến said. 

“Under the trade deal, the two sides had given each other many incentives in goods, services and investment, creating the driving force for growth in trade and investment co-operation.”

As of October this year, the total registered capital of South Korean businesses in Việt Nam reached US$70.4 billion with 8,900 projects. This year, South Korea has been pouring into 530 projects in Việt Nam a total capital investment of $3.4 billion, said Lee Jong Seob, President of the Korea Trade-Investment Promotion Agency (KOTRA) in Southeast Asia-Oceania cum General Director of KOTRA in Hà Nội.

Even amid the COVID-19 pandemic, the number of South Korean expats working in Việt Nam has reached 10,000, which expressed the readiness of South Korean businesses when investing in Việt Nam, he said. —

Source: https://vietnamnews.vn/economy/817805/south-korean-firms-in-viet-nam-can-reap-ftas-benefits.html

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Stocks climbs on strong money flow, gold surpasses VNĐ55 million

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Gold trading at a shop in Hà Nội. Gold prices surpassed VNĐ55 million ($2,371) per tael on Wednesday. — VNA/ Photo Trần Việt

HÀ NỘI — Large caps accelerated in Wednesday’s afternoon trade, helping lift the VN-Index which slipped in the morning due to big divergence in key industries.

On the Hồ Chí Minh Stock Exchange, the VN-Index increased 0.54 per cent to close the session at 1,014.32 points.

Liquidity continued to rise with 684.5 million shares worth VNĐ14.3 trillion (US$616.4 million) traded, up 17.3 per cent in volume and 22.2 per cent in value compared to Tuesday’s figures.

Especially on Wednesday, 160 million shares of Development Investment Construction JSC (DIG) worth VNĐ3.44 trillion changed hands through a put-through deal.

The market breadth was positive with the number of gaining stocks outnumbering the losing ones by 229-202. Another 89 closed flat.

“Strong money is flowing in the stock market to seek the best profits. There is no change in market trend to falter this money flow,” said Bảo Nguyễn, a stock analyst at Viet Dragon Securities Co, in a daily report.

However, he said although the market was strong, it was not spreading to all sectors, with most of the money flow focused on key industries.

Sixteen of the top 30 largest shares by market value and liquidity advanced on Wednesday and 12 declined.

Many heavyweight stocks grew strongly in the afternoon session, including PV Power (POW) which hit the ceiling of a 10-per-cent growth; Vinhomes (VHM), sugar maker Thành Thành Công-Biên Hòa Co (SBT), Techcombank (TCB) and Military Bank (MBB), each climbing by more than 2 per cent.

Vietcombank (VCB), Vietjet (VJC), brewer Sabeco (SAB), Saigon Securities Inc (SSI) and Khang Điền House Trading and Investment (KDH) increased by more than 1 per cent.

According to BIDV Securities Co (BSC), the VN-Index is forecast to continually fluctuate around 1,000 points in several sessions but still experience a wide divergence among stock sectors.

“Capital starts to flow into the sectors that have yet to rise significantly to seek profit,” said BSC’s analyst Trần Xuân Bách in a daily report.

On the Hà Nội Stock Exchange, the HNX-Index increased 1.25 per cent to close the session at 150.8 points.

Nearly 70 million shares worth more than VNĐ1 trillion were traded here.

Gold climbs

Gold prices kept rising this morning with retail prices surpassing VNĐ55 million ($2,371) per tael. A tael is equivalent to 1.2 ounces.

Saigon Jewelry Co listed their buying/selling prices of SJC gold at VNĐ54.45 million and VNĐ55.1 million per tael, respectively, up VNĐ880,000 per tael against Tuesday’s closing prices.

Prices of SJC gold brand at Bao Tin Minh Chau Jewelry (BTMC) and Doji also increased strongly, trading around VNĐ54.45 million for buying and VNĐ54.95 million for selling at BTMC and VNĐ54.4 million and VNĐ54.05 million at Doji. —

Source: https://vietnamnews.vn/economy/817877/stocks-climbs-on-strong-money-flow-gold-surpasses-vnd55-million.html

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