A deal of that size would mark one of the largest real estate transactions in Southeast Asia in the last few years.

The talks come as Vietnam’s property sector is struggling with a cash crunch following an anti-graft campaign launched by the government last year.

Discussions between CapitaLand, majority owned by Singapore state investor Temasek Holdings, and Vinhomes, which has a market value of $8 billion – have taken place for some projects owned by Vinhomes, four sources told Reuters.

Vinhomes, Vietnam’s biggest real estate developer by market capitalization, is part of Vingroup, the country’s largest conglomerate.

One of the sources said CapitaLand is considering buying part of Vinhomes’ Ocean Park 3 project, a 294-hectare resort city style development near the Vietnamese capital city of Hanoi, or another project in the northern city of Haiphong.

The value of the deal was still being negotiated, the person said, adding the talks reached advanced stage.

The sources declined to be identified due to the sensitivity of the matter.

When contacted by Reuters, CapitaLand Development did not directly comment on any potential deal with Vinhomes but said: “Vietnam is one of CapitaLand Development’s core markets. We constantly evaluate investment opportunities to grow our presence in the country.”

CapitaLand Development, part of CapitaLand Group – which has a presence in 40 countries – develops retail, office, residential, business parks and data centres among other businesses. It already has a portfolio of residential projects, including luxury condominiums, in four cities in Vietnam.

Vingroup declined to comment on any discussions with CapitaLand, but said that as a listed company it would disclose information if any transactions happen.

Vingroup, which is involved in real estate, automobiles and retail, is investing billions of dollars to develop VinFast, its fledgling electric vehicle car maker.

Vinhomes develops and owns residential and commercial real estate projects in Vietnam, a country which has a population of 100 million and was Asia’s fastest growing economy last year.

The economy expanded by 8% last year, the fastest pace in 25 years, backed by strong retail sales and exports, but is facing headwinds from a global slowdown.

A property crisis that started last year, sparked by problems at one of the country’s largest property groups No Va Land, has battered investor confidence as authorities arrested high-level individuals and overhauled the country’s bond sector.

Vinhomes was spun off and listed on the local stock exchange in 2018.

Vinhomes’ net profit dropped 26% to 29 trillion dong ($1.23 billion) in 2022 from a year earlier, while total revenue declined 27% to 62 trillion dong.

Shares of Vinhomes have lost 10% so far this year, after tumbling 40% in 2022 as the property crisis deepened.

Source: Reuters

Prudential Vietnam’s pre-tax operating profits increased gradually through the years, from $199 million in 2018 to $237 million in 2019, $270 million in 2020, and $317 million in 2021.

A company’s operating profit is its total earnings from its core business functions, excluding the deduction of interest and taxes.

Meanwhile, the annual premium equivalent of the life insurer moved up in tandem with the operating profit, rising from $195 million in 2018 to $217 million in 2019, $236 million in 2020, $242 million in 2021, and $298 million in 2022.

The report highlighted other optimistic results in the Southeast Asian country, including a market share of 15%, up two percentage points year-on-year, and 1.9 million customers.

The giant also noted that Vietnam has high potential for the insurance sector, given a huge population approaching 100 million, low insurance penetration rate of 1.6%, and average health and protection gap of $1,251. 

On a global scale, Prudential recorded an adjusted operating profit of $3.38 billion in 2022, up 4.39% year-on-year. It earned a post-tax profit of $1 billion, down from $2.21 billion a year earlier.

Insurance premiums in Vietnam increased 15.1% year-on-year to VND251.31 trillion ($10.6 billion) in 2022, the Insurance Association of Vietnam reported. The revenue included VND68.20 trillion ($2.88 billion) from non-life insurers, and VND183.11 trillion ($7.72 billion) from life insurers.

Source: The Investor

Under the proposal, published by State Bank of Vietnam on its website, individual investors would be allowed to hold up to 3% of the shares of a credit institution, down from 5% currently.

The limit for institutional shareholders, like investment or pension funds, would be reduced to 10% from the current 15%, but the draft proposal did not specify how long investors would be given to reduce their holdings to comply with the lower cap.

Currently, the combined stake of foreign investors in a bank cannot exceed 30%, while the cap for stakes in companies in many other sectors is set at 49%.

The central bank’s move to change the ownership limits follows several cases of fraud, including one that led to a run on a bank that a prominent real estate tycoon controlled through nominees and his own small holding.

In February, police in Vietnam opened an investigation into transactions made by foreign investors concerning listed domestic lender Eximbank (EIB.HM) as it suspected the share value had been manipulated, according to documents seen by Reuters and sources. The outcome of that probe is unclear.

The central bank said its proposed changes would reduce risks of market manipulation.

A Bangkok-based fund manager who declined to be named as he was not authorised to talk to media, said the lower cap would impact foreign investors more as their holdings were more often closer to the current maximum.

Foreign investors have repeatedly called for the caps on ownership to be raised, and they are often cited as a reason why Vietnam is still classified by index managers as a risky frontier market, depriving it of billions of dollars of investment.

Despite being an open economy that relies on foreign direct investment in its industries and whose exports are as much as its gross domestic product, Vietnam has for years limited foreigners access to its equity market.

The central bank also proposed a reduction to the maximum that a bank can lend to a single borrower, lowering it to 10% of the bank’s equity from 15% currently.

Analysts said tighter caps on banks’ stake holders and borrowing could exacerbate liquidity challenges in Vietnam, at a time when the country’s property developers are under pressure.

Earlier this month authorities approved regulatory changes in order to help developers by extending bond maturities and allowing debtors to pay back in assets.

The central bank also cut interest rates this week to spur growth and reduce pressure on debtors.

Source: Reuters