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M&A activities signal promising fortunes

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Although merger and acquisition levels dropped in 2020 across Vietnam, the prospect for such activities remain bright for next year as overseas investors look to local businesses in order to improve market access.

1513 p8 ma activities signal promising fortunes

M&A activities signal promising fortunes. 

Herbert Yum, research manager at London-based market research company Euromonitor International, told VIR that Vietnam is one of the most attractive markets in Asia-Pacific. Based on the group’s merger and acquisition (M&A) Investment Index, high GDP growth and manufacturing output both indicate market growth. Along with production activities in mining, manufacturing, electricity, and water, the combined factors are making Vietnam one of the most robust M&A markets in the world.

The Vietnamese government announcement of removal of the 49 per cent foreign ownership cap on listed companies in 2018 released a strong signal to international financiers. Such a move is opening business opportunities and releasing a strong signal to capital flow in the region, with companies seeking fast-growing economies willing to link up with capitalised western economies, according to Yum.

While macroeconomic factors light up the Vietnamese market, microeconomic factors associated with the relatively young population, expected fast-growing spending power, and rapidly improving social status is expected to support the growth of economies in the longer-term, he added. “Hence, the Vietnamese market is expected to be one of the most attractive markets for foreign investors’ hot money,” Yum said.

According to data from the Vietnamese General Statistics Office, for the full year of 2019 the total value of stake acquisitions by foreign investors hit $15.5 billion, up 56.4 per cent on-year.

In the first nine months of 2020, a total of 5,172 cases were involved in foreign investors’ capital contribution and stake acquisition, valued at $5.7 billion, down 44.9 per cent on-year.

From January to September, between Japan and Vietnam there were 19 transactions publicly announced. The interest from Japanese investors towards Vietnam continues to be strong in the pandemic situation.

Some notable transactions in the first period include Mitsubishi Corporation and Nomura Real Estate jointly acquiring 80 per cent in the second phase of the Grand Park project of Vingroup. Aozora Bank Ltd. also purchased a 15 per cent stake in Vietnam’s Orient Commercial Joint Stock Bank.

World Mode Holdings Co., Ltd, a Tokyo-based total solutions company specialised in fashion and cosmetics, acquired People Link JSC, a leading human resources company. Japan’s listed real estate group Haseko purchased a 36 per cent stake in construction company Ecoba, while Tokyo-based ASKA Pharmaceutical Company received a 24.9 per cent stake in domestic counterpart Ha Tay.

Masataka Sam Yoshida, head of the Cross-border Division and CEO of Vietnam RECOF Corporation, told VIR that Southeast Asia is a promising destination for M&A globally, and among various countries in this region, Vietnam is the most attractive country to enter for foreign investors. It is also considered one of the most successful nations in responding to COVID-19.

While other countries experienced negative growth rate in the first nine months of 2020, Vietnam’s GDP increased 2.12 per cent. The rate is forecast to be still positive at 2.5 per cent for the whole year 2020 and expected to rebound to 6.7 per cent in 2021.

In addition, the EU-Vietnam Free Trade Agreement will also contribute to the future growth of the economy.

“The above factors support the positive outlook of Vietnam’s M&A market in the coming years,” Yoshida said, noting that the slowdown of M&A activities will continue due to entry restrictions over the last six months. The M&A process generally takes from six months to over a year to complete, and recently-announced M&A transactions were initiated before the pandemic situation arose.

“We recognise that many transactions are still on hold due to restrictions. Recently Vietnam has lifted 14-day quarantine for investors entering the country for less than 14 days and we expect Vietnam’s M&A activities will grow robustly in 2021 if the pandemic is controlled this year,” he said.

South Korean investors are also active in Vietnam’s M&A scene. Some remarkable deals in the first nine months of 2020 include SK Investment III, a subsidiary of SK Group, which received more than 12 million shares, equivalent to nearly 25 per cent of Imexpharm Corporation’s stocks. SK Lubricants also acquired a 49 per cent stake in Mekong Petrochemical JSC for ₩50 billion ($42.1 million).

Lotte Chemical, a unit of Lotte Group, has also acquired Vietnamese high-tech material company VinaPolytech. Most recently, GS Caltex spent VND39 billion (nearly $1.7 million) picking up a 16.7 per cent stake in VI Automotive Service, a parent company of VietWash. VIR

Thanh Van

Source: https://vietnamnet.vn/en/business/m-a-activities-signal-promising-fortunes-681544.html

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Foxconn unit receives business license for $270 mln Vietnam plant

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Foxconn unit receives business license for $270 mln Vietnam plant

A motorcyclist rides past the logo of Foxconn, the trading name of Hon Hai Precision Industry, in Taipei, Taiwan March 30, 2018. Photo by Reuters/Tyrone Siu.


The FuKang Technology Company, a Foxconn unit, received a business license Monday to build a plant to produce laptops and tablets in northern Vietnam.

The plant will be located in the Quang Chau Industrial Park in the northern province of Bac Giang and will annually produce eight million units, the government said in a statement on its website.

The Taiwanese electronics contract manufacturer has so far invested $1.5 billion in Vietnam and created jobs for more than 35,000 workers and the company, formally known as the Hon Hai Precision Industry Co., plans to raise its investment by $700 million and recruit 10,000 more local workers this year, the government said.

Last week Foxconn was also looking into investing $1.3 billion in Thanh Hoa Province, 160 km south of Hanoi.

Last year, the company produced the first batch of display screens at its $26-million factory in the northern Quang Ninh Province.

Foxconn, a major assembler of Apple products, including the iPhone, and the world’s largest contract manufacturer, came to Vietnam in 2007, and has been operating mainly in the northern provinces of Bac Ninh, Bac Giang and Vinh Phuc, making computers and other electronic products and car parts.

It has said that Vietnam is its largest manufacturing hub in Southeast Asia.

Source: https://e.vnexpress.net/news/business/companies/foxconn-unit-receives-business-license-for-270-mln-vietnam-plant-4222816.html

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VN-Index inches down in week’s opening session

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VN-Index inches down in week’s opening session

An investor points at stock prices on a laptop at a brokerage in Ho Chi Minh City. Photo by VnExpress/Quynh Tran.


The VN-Index edged down 0.19 percent to 1,191.94 points after struggling to stay in the green throughout the trading day.

The Ho Chi Minh Stock Exchange (HoSE), on which the VN-Index is based, was predominantly green despite closing in the red, with 273 stocks gaining and 201 losing. Total trading volume fell slightly over the previous session to VND17.76 trillion ($767.14 million).

Blue chips were the main drag this session, with the VN30-Index for the stock market’s largest caps plunging 0.75 percent.

Private banks did not do well this session. EIB of Eximbank shed 2.5 percent, STB of Sacombank 2.4 percent, HDB of HDBank 2.3 percent, VPB of VPBank 2.1 percent, and TCB of Techcombank, 1.8 percent.

State-owned banks did slightly better. Among Vietnam’s three biggest lenders by assets, CTG of VietinBank dropped 2.3 percent and BID of BIDV went down 0.4 percent while VCB of Vietcombank edged up 0.1 percent. MBB of mid-sized Military Bank fell 2.1 percent.

All real estate stocks ended in the red. NVL of Novaland shed 1.1 percent, KDH of Khang Dien House, 1 percent, TCH of Hoang Huy Group, 0.9 percent and VHM of giant Vinhomes 0.5 percent.

Other major losing tickers this session included SSI of top brokerage SSI Securities Corporation, down 1.8 percent, GAS of energy giant PetroVietnam Gas and MWG of electronics retailer Mobile World, both down 1.1 percent, and VIC of private conglomerate Vingroup, 0.8 percent.

Topping gains for the sixth session was ROS of construction firm FLC Faros, up 6.9 percent, hitting its ceiling price again. Despite this, ROS closed at VND3,740, far below its VND12,600 IPO in 2016 and a high of VND178,000 in late 2017.

The ticker has been plummeting since early 2018 as a result of increasingly poor business performance, and is now the smallest capped ticker on the VN30.

It was followed by SBT of agricultural exporter TTC-Sugar, up 5 percent, POW of electricity generator PetroVietnam Power, 2.8 percent, MSN of food conglomerate Masan Group, 2.3 percent, and VRE of mall operator Vincom Retail, up 1.8 percent.

The HNX-Index for the Hanoi Stock Exchange, home to mid-and small-caps, surged 2.23 percent, while the UPCoM-Index for the Unlisted Companies Market slipped 0.11 percent.

Foreign investors were net sellers to the tune of around VND620 billion on all three bourses, with the net selling focused mostly on HPG of steelmaker Hoa Phat Group (up 0.2 percent), SSI of SSI Securities Corporation and VHM of Vinhomes.

Source: https://e.vnexpress.net/news/business/economy/vn-index-inches-down-in-week-s-opening-session-4221149.html

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Winners of HCMC Brand Award to be announced Thursday

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A poster of the HCMC Brand Awards, which will be held on January 21 – PHOTO: COURTESY OF ORGANIZER

HCMC – The HCMC Department of Industry and Trade and The Saigon Times Group will co-organize the HCMC Brand Award at the GEM Center in District 1 on Thursday, January 21, aimed at honoring enterprises in the city for their efforts in building their brands.

Since the launch of the HCMC Brand Award on December 1 last year, as many as 64 firms have registered to participate in the awards.

These applicants were required not to violate ownership rights nor show acts of trade fraud, while working on building their brands for at least two years.

The winners will be evaluated and selected by experts in brand building and customers based on the following criteria: efficiency in brand building, innovation, creativity, the quality and safety of products and corporate social responsibility.

Earlier at the launch ceremony, Bui Ta Hoang Vu, director of the HCMC Department of Industry and Trade, said the HCMC Brand Award would help raise the awareness of businesses operating in the city over the importance of building their brands and encourage them to accelerate innovation, creativity and sustainable development.

Besides, the awards are expected to help them reach out to the global market.

Source: https://english.thesaigontimes.vn/80240/winners-of-hcmc-brand-award-to-be-announced-thursday.html

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