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2Jul/150

Ministry looks to short-term G-bonds

 Last update 10:47 | 02/07/2015

 

The Ministry of Finance plans to ask the National Assembly for permission to focus on the issue of five-year Government bonds instead of those with longer terms as originally planned.

 

 

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Ha Noi Stock Exchange staff conduct check-ups on and supervise G-bond auctions. Only VND82 trillion (US$3.83 billion) in G-bonds above a five-year term were issued in the first half of the year, down 26 per cent against the same period last year.

 

A report in the Dau tu (Investment) newspaper said the move stemmed low demand for bonds that have terms longer than five years, which has hindered capital mobilisation for the State Budget.

Statistics compiled by the ministry shows that just VND82 trillion (US$3.83 billion) worth of G-bonds with terms exceeding five years were issued in the first half of the year, down 26 per cent against the same period last year.

The ministry said if its proposal is approved, it would also help enhance the management of public debt, ensuring that it does not exceed the permitted 65 per cent of the GDP.

The ministry's proposal also asks the Government to initiate more measures to boost long-term borrowing at home and abroad to be able to balance the State budget.

According to Resolution 78/2014/QH13 issued by the National Assembly last year, from 2015, the Government can only issue long-term bonds with terms of more than five years. The resolution also prohibits short-term borrowings to offset overspending.

The resolution was passed in the context of widespread concerns over rising public debt. The National Assembly decided that it is necessary to tighten Government borrowing.

However, the measure has made it very difficult for the finance ministry to mobilise capital for State spending. Many G-bond issues have failed this year, and analysts have attributed this to the lack of short-term bonds for investors to choose from.

The Thoi bao kinh te Sai Gon (Sai Gon Times) newspaper recently quoted economists as saying that the measure was ‘quite unreasonable'. They said that it was the finance ministry's job to calculate how much money the State Budget needs and how much to borrow. It was also the ministry's brief to define the terms of government bonds that have to be issued to optimise use of borrowed funds.

The newspaper quoted finance expert Le Hong Giang as saying issuing bonds with different terms of maturity not only helps optimise the use of borrowed money but also facilitates the creation of interest rate curves and improved efficiency of monetary policies.

The report cited another finance expert, Huynh The Du, as saying G-bonds with different terms can serve as important instruments for the Government to regulate the financial market.

Read more: http://dongtalk.com/forums/index.php/topic/34503-ministry-looks-to-short-term-g-bonds/#ixzz3ekiYGAvO

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2Jul/150

Insiders skeptical over throwaway prices of US chicken imports in Vietnam

UPDATED : 07/01/2015 11:24 GMT + 7

 

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Consumers choose chicken at a supermarket in Ho Chi Minh City.
Tuoi Tre

 

With chicken products imported from the U.S. fetching much lower prices in Vietnam than their home country, insiders of the Vietnamese poultry industry have cast doubt on the honesty of the importers.

Vietnam imported nearly US$54 million worth of chicken products in the first five months of this year, equaling 52 percent of the full-year imports in 2014, according to customs data.

The U.S. market accounted for 65 percent of the five-month import value, or $34.8 million, and American chicken is the cheapest among Vietnam’s poultry meat suppliers.

While frozen chicken wings from Brazil and Argentina are imported at $1.9 and $2.1 a kg, respectively, the rate is only $1 a kg for the U.S. products, according to customs figures.

Chicken legs are shipped from the U.S. at only $0.9 a kg, compared to $2.1 a kg from Lithuania.

The $0.9, or roughly VND20,000, price is “as cheap as vegetables,” which no local meat suppliers are able to compete with, according to the director of a poultry company in the southern Vietnamese province of Dong Nai.

“Even by selling at a loss, we will never be able to compete with the imported products,” the director told Tuoi Tre (Youth) newspaper, speaking on condition of anonymity.

 

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Comparison of prices in VND of different chicken parts between domestic (right) and imported products. Photo: Tuoi Tre

 

The cheap, easy to preserve imported chicken meat has thus become the favorite of local eateries and facilities that supply meals for factories, schools and hospitals, exacerbating the hardship of the local poultry sector.

But the biggest mystery to local industry insiders is how the chicken can be cheaper when imported to Vietnam than it is in the U.S.

“I’ve been to some supermarkets in the U.S., where chicken legs fetch $1.5-2 a pound, or VND60,000-80,000 a kg,” said Phi Long, a chicken farm owner in the southern province of Dong Nai, who recently returned from a U.S. trip.

“But the products are imported at only VND16,000 a kg, and on sale at VND19,000, which is incredible.”

Nguyen Van Ngoc, deputy chairman of the Animal Husbandry Association in southeastern Vietnam, said the import rates of U.S. chicken must be equal to the cost prices to raise the poultry domestically.

“But the imported products now fetch abnormally cheap prices,” he said.

Ngoc thus called on local authorities to verify whether the cheap products are “those that are near or exceed expiration dates and therefore are sold at dirt cheap prices to Vietnamese importers.”

Le Ba Lich, chairman of the Animal Husbandry Association of Vietnam, also said it is unreasonable that U.S. chicken legs are priced at less than a dollar in Vietnam.

“We cannot rule out the possibility of trade fraud in the importation of the products,” he said.

“The importers might have bought nearly-expired products at throwaway prices and altered their labels before selling them to [Vietnamese] consumers.”

Lich added that a bird flu outbreak has hit the U.S. since the end of last year, so poultry companies there might also want to empty their unsold stocks at cheap prices.

“I have no idea why Vietnam still licenses the import of chicken legs and wings in large quantities despite the serious bird flu outbreak,” he said.

“Vietnam only suspended imports on May 1, but products whose contracts had been signed prior to that point are still arriving.”

 

Read more: http://dongtalk.com/forums/index.php/topic/34510-insiders-skeptical-over-throwaway-prices-of-us-chicken-imports-in-vietnam/#ixzz3ekhks8Yn

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2Jul/150

BIDV increases charter capital to $1.44b after MHB merger

Last update 10:53 | 02/07/2015

 

The bank for Development and Investment of Viet Nam (BIDV) officially announced a 12 per cent rise in its registered capital from VND28.11 trillion (US$1.30 billion) to VND31.48 trillion ($1.44 billion).

 

 

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The increase in registered capital follows after its merger with State-owned Mekong Housing Bank (MHB).

On April 25, the State Bank of Viet Nam issued Decision No.589/QD-NHNN on the merger. On the same day, the State Security Commission allowed the bank to issue 336.9 million shares, with a combined value of VND3.369 trillion ($160.43 million), to complete the merger, with every share of MHB converted into a share of the development bank.

BIDV Chairman Tran Bac Ha told a news conference in Ha Noi yesterday that after a month of merger, the bank's operation has been functioning efficiently.

Ha said they can sell stakes to foreign strategic partners next year as the country will surely integrate further into the world economy.

It will sell a 15-20 per cent stake to one of the long-term foreign investors in the banking sector and 10 per cent to another overseas investor, while state-ownership will be maintained at 65 per cent.

He added that the selling of stakes will have to follow a plan, which is approved by the Government, and should ensure benefits for the State as well as businesses.

The chairman refused to divulge the name of any foreign investor with whom they have been in talks with due to a confidentiality clause, and noted that it will depend on the performances of Viet Nam's stock market and its shares.

BIDV made its initial public offering (IPO) in 2011 and listed in HCM City Stock Exchange in 2012. However, the IPO fell into economic crises, affecting the prices of BIDV shares that never reached desired levels.

It has been one of the reasons that the consultancy firm suggested selling their stakes to foreign investors.

During the first half of the year, the economy recovered and GDP was expected to surpass 6.2 per cent.

"Based on these factors, BIDV will complete the selling of its stakes in 2016 for the maximum price as its share prices have been on an increasing trend," he remarked.

Last year, its total assets grew 17.4 per cent year-on-year to about VND45 trillion ($2.14 billion) and pre-tax profits reached VND162 billion ($7.71 million), reflecting a year-on-year increase of 14 per cent.

Its deposits jumped 14.4 per cent to more than VND37 trillion ($1.76 billion) and outstanding loans grew by 13.8 per cent to VND30.60 trillion ($1.46 billion) in 2014, with the bad debt ratio pegged at 2.72 per cent at the end of the year.

This year, the bank has targeted growth rates at 16.5 per cent for deposits and 16 per cent for lending and will control its bad debt ratio below 2.5 per cent. It also expects to earn VND7.5 trillion ($357.14 million) in gross profits and pay dividends at 9 per cent.

Read more: http://dongtalk.com/forums/index.php/topic/34502-bidv-increases-charter-capital-to-144b-after-mhb-merger/#ixzz3ekhLgmwi

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1Jul/150

Will the TPP spur another wave of US investment?

Last update 07:50 | 30/06/2015

 

Trade between Vietnam and the US has grown exponentially under a bilateral trade pact that went into force in late 2001 and totalled nearly US$11,035 billion as the end of February this year.

 

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The US is also Vietnam's largest trade partner lagging just behind China, according to the Ministry of Planning and Investment.

However a large number of trade barriers remain between the two countries and many believe these barriers could be eliminated under the proposed Trans-Pacific Partnership (TPP) agreement, which would group Vietnam, the US and ten other nations in a free trade bloc.

There are also those who have suggested that if and when the TPP is approved and comes into full force it would spark a wave of new foreign direct investment (FDI) into Vietnam by US businesses.

Recently, a reporter put the question as to whether the TPP would trigger an acceleration of FDI to into Vietnam to Dr Le Xuan Sang, deputy director of the Vietnam Institute of Economics.

Dr Sang responded by saying that in theory the TPP could help to increase the strength of investment between Vietnam and the US as well as other participating members of the bloc.

However, an increase in investment doesn’t necessarily follow Dr Sang said as the investment decision would depend on a variety of factors the foreign investor would take into consideration.

“A careful analysis would have to be undertaken by the investor to evaluate the business investment environment of Vietnam and the potential benefits the investor could obtain from operating in the country,” Dr Sang said.

In general, foreign investors consider a variety of factors when investing abroad, which include improving their competitiveness, openness to regional and international trade, regulatory environment and the business climate.

Vietnam scores high on competitiveness because of its promising young labour forces with relatively high literacy rates, producing a workforce with the requisite drive and skills for unskilled and factory labor.

As Vietnam is blessed with good geopgraphics it also gets high marks on market openness to regional and international trade. Of critical importance is an investor’s ability to sell its products and services to both local and foreign markets and Vietnam is often viewed by investors as the gateway to Asia.

Investors also look at the regulatory environment or in other words look to see whether a national government enacts and enforces rules and policies aimed at favoring state entities at the expense of privately held firms.

As for business climate, the sheer size of Vietnam’s population and consumer market of 90 million, and the prospects for growth that result from this size is appealing to investors and makes Vietnam an attractive destination for FDI.

In addition, Dr Sang said a prime consideration is the stability of the people in power, the decision makers and whether or not they will stay the same. Vietnam scores high on this criterion, particularly when compared to other countries in the region.

They also evaluate from an internal stratiegic perspective the risk of putting all their eggs or too many of their eggs in one basket.

With a thriving consumer market of 90 million, a track record of healthy trade and stable growth – it is no wonder that Vietnam has in the past attracted a lion’s share of the worlds FDI.

However, Dr Sang couldn’t say whether or not, with any degree of certainty, the TPP would or would not result in a new wave of FDI flowing into Vietnam.

Finally, he mentioned that because Vietnam’s legal framework for business is incomplete with weak enforcement for oversight the nation runs the risk of appealing to investors who are not socially responsible.

An incomplete legal framework and lax prosecution for transgressions for violating laws such as transfer pricing or polluting the environment has a certain ‘attractive’ appeal for FDI from the wrong type of investor, Dr Sang said.

Read more: http://dongtalk.com/forums/index.php/topic/33802-will-the-tpp-spur-another-wave-of-us-investment/#ixzz3earpVSeC

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1Jul/150

Red flag rising over Vietnam-China illegal cross-border trade

Last update 10:08 | 30/06/2015
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Over the past few years, there has been an ever widening disparity between the import-export statistics released by Vietnamese and Chinese trade officials, specifically as it relates to cross border trade.

There is general agreement that the root cause of the variances are attributable to the difficult to measure informal cross border trade, which has sparked heated debate among National Assembly (NA) members at the current ongoing session in Hanoi.

In general, Vietnam’s estimates of exports to and imports from China have been consistently and significantly lower than those estimated by their counterparts on the Chinese side of the border.

As one specific example, for calendar year 2014, Vietnam trade officials estimated that imports from China were US$20 billion less than the figure Chinese officials recorded.

Specifically, for 2014 the General Statistics Office (GSO) estimated that Vietnam imported US$43.9 billion of products from China, while Chinese officials put the figure closer to US$63.8 billion.

“At this point it is important to point out that no one is exactly sure what the true figure is,” said Le Thi Minh Thuy, director of the GSO’s Trade and Service Statistics Department.

However, if for the purpose of argument one were to assume China’s figures were more accurate— that would mean Vietnam’s trade deficit with China could be as much as US$20 billion higher that Vietnam reported for just last year alone.

There is no dispute that the difference in the trade statistics across the borderlines fundamentally results from the informal trade across the border and the inherent difficulties in measuring the volume of it.

“It is also possible that Chinese officials simply have better controls in place to monitor the value of trade, but there is no basis at this point for assuming the Chinese figures are any more accurate than Vietnam’s” Thuy said.

Thuy added that it is also likely some Vietnamese businesses have been ‘cooking the books’ and reporting lower values on shipments coming into the country to avoid payment of import duties levied by the government.

It has generally been accepted that for years that there has been organized illegal trading and smuggling across the border at some level for which Vietnamese authorities cannot control, Thuy said.

Some NA members cited the case of Dong Dang in the Cao Loc district of Lang Son province as circumstantial evidence their suspicions that the so called ‘underground economy’ may be more severe than thought.

Dong Dang collected just VND1.1 billion in duties pertaining to cross border trade for the first nine months of 2014, which on its face is unreasonably low and doesn’t pass muster, they argue.

They suggest the actual taxes should have been substantially higher because most every truckload of product crossing the border carries a cargo with a value estimated in the billions of Vietnam dong.

Therefore they submit the actual tax collections are far too low and a further investigation is warranted to determine the exact cause of the problem, rectify it and if necessary prosecute those who have engaged in criminal conduct, if any.

“It’s very difficult for Vietnamese authorities to keep an exact tally on trade as everyday a lot of cigarettes and other products are smuggled across the border, said Vu Vinh Phu, a trade expert.

Additionally much of the trade across the border is done without properly completed bills of lading, Phu underscored, which makes it virtually impossible for border guards to get an accurate measure of the value of shipments.

Representatives from the GSO in turn proffered several reasons for the conflicting trade statistics and said they could have resulted from such things as mistake, simple math errors, misunderstandings, illegal trading, fraud and corruption.

Currently, Vietnam has 62 border gates, including 29 with China in seven northern provinces and more than 40 sub-border gates and over 160 paths, 30% of which are between Vietnam and China, they said.

Monitoring import-export activities through all main and sub border gates poses a daunting challenge for even the most diligent and dedicated of the nation’s management agencies.

It has been common knowledge for many years that informal cross border trading has been ongoing at some level but it has generally been perceived as always somewhat inconsequential.

However it is now becoming increasingly clear that the current level could be considered highly organized criminal conduct carrying with it a host of negative consequences for the national economy.

It is imperative that the government take remedial action to get the situation under control, said Economist Le Dang Doanh or exports stand a great chance of being blocked by China, which could have devastating consequences for the national economy.

Read more: http://dongtalk.com/forums/index.php/topic/33799-red-flag-rising-over-vietnam-china-illegal-cross-border-trade/#ixzz3earOknmc

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30Jun/150

Casino race heats up again

Last update 10:00 | 30/06/2015

 

VietNamNet Bridge - The race for licenses for casino projects, which stopped short because of arguments about whether to allow Vietnamese to enter casinos, has kicked off again as the government has turned a green light on a new entertainment complex.

 

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The government has allowed the relocation of a tourism, service and entertainment complex with a casino from Da Chong in Bai Thom Commune to Bai Dai Eco-tourism area in Ganh Dau Commune, close to Vinpearl Phu Quoc Resort developed by Vingroup, a major real estate developer.

The information, which has stirred up the public, has heated up the race for casinos again.

The Prime Minister made the decision after approving the adjusted programming on Phu Quoc Island development by 2030.

Prior to that, Vietnamese agencies agreed that it would be better to relocate the entertainment complex project, because it would be easier to attract investments to the project next to Vinpearl Phu Quoc.

The Prime Minister’s nod, in analysts’ eyes, shows that the future of the Phu Quoc casino project is “very bright”.

The Phu Quoc casino project was approved in principle by the Communist Party’s Politburo a long time ago. However, it only got official approval from the Prime Minister in January 2015 with the investor specified.

The details of the project and the name of investor have not been made public. However, Dau Tu quoted its sources as saying that the investor is a big real estate group in Vietnam.

If this is the true, the ‘big real estate group”, together with Sun Group, also a big company in the field, will become the major players in casino development. One would run a casino in the south – Phu Quoc Island – and the other in the north – Van Don Economic Zone (EZ) in Quang Ninh province.

An official license has not been granted to Sun Group, but sources said the group, with its strong determination, is more likely to become the investor of the casino project in Van Don. The group is also reported gearing up in its preparation for the building of Van Don Airport.

If this occurs, casino projects would finally be offered to Vietnamese investors, though everyone believes that only foreign investors are financially capable and experienced enough to develop casinos.

Foreign investors have expressed their wish to develop casinos in Vietnam and visited the country to learn about opportunities. However, they have not come back and taken any further step to apply for projects.

Meanwhile, though having got a license, Chow Tai Fook from Hong Kong and SunCity from Macau, which have replaced Malaysian Genting Berhad, still have not kicked off the project.

Read more: http://dongtalk.com/forums/index.php/topic/33789-casino-race-heats-up-again/#ixzz3eapjFDIP

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15Jun/15Off

The ISPs take it all: No compensation for Vietnam’s snail-like Internet

UPDATED : 06/15/2015 13:23 GMT + 7

 

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Despite the recurrent cable problems that slow Internet speeds in Vietnam to a snail’s pace, subscribers always have to pay their bills fully and on time, while the service providers do not bother to consider compensating their customers.

Local Internet service providers (ISPs) are willing to suspend services over payments that are even one day late, but do nothing when they cannot ensure service quality, many readers have complained to Tuoi Tre (Youth) newspaper.

Internet users in Vietnam had to suffer snail-like speed between June 7 and 12, when the Asia – America Gateway (AAG), the submarine cable system that links Asia and the U.S., underwent major maintenance.

The Internet in Vietnam returned to normal on Saturday as the maintenance was finished ahead of schedule. The AAG system has suffered seven glitches since last year, with three in the year to date.

Even though the repairs caused troubles for many users, they still had to fully pay for Internet bills as the ISPs did nothing but ask for sympathy from subscribers because the incident was out of their control.

Khong Minh Tri, who works in District 7, Ho Chi Minh City, said the Internet maintenance left everyone at his company scratching their heads as their job relies heavily on online communication.

“We were unable to access the email service to read messages sent by our partners, while deadlines were drawing near,” Tri told Tuoi Tre.

“I’m not sure if the ISP will recompense us or not, but the company still has to pay employees for the working days when they almost did nothing.”

For those whose jobs cannot be done without the Internet, the snail-paced speed put them on the verge of dismissal for failing to fulfill their assigned tasks.

“I need the Internet to look up information, search images and communicate via email,” Tieu Quyen, who works for a media firm in District 2, said.

“But the slow Internet reduced my productivity by 50 percent and many of my colleagues now face lay-offs as they failed to meet targets.”

Luong Hai, an employee of a mobile phone firm in District 3, had to look for places with a “better Internet connection” than his workplace to get his tasks done.

“I could not access my Gmail, failed to get on Facebook to run ads and it was impossible to send my files to partners via the Internet,” he lamented. “So what was left to do?”

Hoang Huynh, director of a tech firm in Phu Nhuan District, said he was driven crazy by the poor Internet service.

“I was stressed waiting for the websites to load,” he said.

“We never pay the bill late but the ISPs just kept silent over the poor service they provide.”

'Force majeure'

Whenever the AAG system suffers an issue, all local Internet service providers just say they “sympathize with the damage caused tosubscribers by the unstable Internet quality.”

But they all dodged responsibility when asked if they would ever take any specific action, such as cutting fares, to compensate customers.

“The Internet cable incidents were caused by force majeure, which is unpredictable and unavoidable,” a representative of an ISP told Tuoi Tre.

He added that both the Internet firm and its subscribers had to suffer from the incidents.

“Customers had their work and communications affected, whereas the ISPs had to spend money on the repair jobs, and had their reputation affected too,” he said.

Lawyer Nguyen Van Hau, deputy chairman of the Ho Chi Minh City Lawyers Association, said that the ISPs will not be held responsible for damages caused by such unavoidable circumstances.

“But it is stipulated in the civil code that customers have the right to cut the price they pay for the service if its quality is not as committed in the contract,” he said.

“In this case, the speed and quality of the Internet [during the incidents] are worse than what the two parties agree to in the contract, which can be interpreted as violating the interest of consumers and the lack of responsibility of the ISPs.”

The lawyer added that Internet users can sympathize with the ISPs, but the firms themselves must have “fair treatment” for their customers.

“The ISPs should have exempted or reduced the service fares during the troubled Internet times, and apologized to customers,” Hau said.

 

Read more: http://dongtalk.com/forums/index.php/topic/29229-the-isps-take-it-all-no-compensation-for-vietnam%E2%80%99s-snail-like-internet/#ixzz3dA7ADjRG

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15Jun/15Off

US investors march toward Vietnam as more companies relocate factories

15/06/2015
VietNamNet Bridge - Major US investors are following through on their previous statements about relocating their production bases.  

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Intel, for example, is considering relocating its mainboard and microprocessor production bases from Kulim, Malaysia to Vietnam because of the lower labor costs in Vietnam.

Some months ago, the group said it would relocate a production line from Costa Rica to Vietnam.

The shows that the giant is taking action to speed up its investment activities in Vietnam, turning the country into an important global production base.

The US Ambassador to Vietnam Ted Osius said at an important event that the TPP (Trans Pacific Partnership agreement) would allow the US to become Vietnam’s No 1 investor and partner.

In late March, P&G started construction of its Gillette razor factory in the southern province of Binh Duong, capitalized at $100 million. The factory, expected to become operational in 12 months, will create 300 jobs.

P&G Vietnam’s CEO Emre Olcer said the group had considered other countries before deciding to set up a factory in Vietnam.

P&G brands in Vietnam have had steady two-digit growth rates, including Ariel, Pampers, Downy, Pantene to Tide and Head & Shoulders.

More and more US businesses have come to Vietnam to seek investment opportunities in recent years. They are attracted by the low labor costs, the large domestic market and news that the TPP agreement would be inked soon.

Twenty-two US businesses in 2013 came to Vietnam to learn about the business environment. Three groups of large conglomerates, including big players such as Boeing, Apple, AIG and Exxon Mobil, came in the first six months of 2014.

More recently, more than 30 US businesses, all members of the US-ASEAN Business Council, came to Vietnam to seek opportunities in the civil engineering sector.

Analysts said they see a new wave of US businesses leaving China for Vietnam, whcih could be a new world factory in the near future.

Microsoft has relocated its 39 production lines from its factories in Komarom, Hungary, Beijing and Guangdong in China and Reynosa in Mexico to Bac Ninh province of Vietnam, turning Vietnam into an important link in the group’s global supply chain.

Vu Minh Tri, Microsoft Vietnam’s CEO, said the group considers Vietnam a strategic market.

Intel, the largest chip manufacturer in the world, is fulfilling its commitment of investing $1 billion in Vietnam.

According to Intel Products Vietnam’s CEO Sherry Boger, SOC (system on a chip), used for tablets and smartphones has been made at the factory in Vietnam since January 2014.

Read more: http://dongtalk.com/forums/index.php/topic/29226-us-investors-march-toward-vietnam-as-more-companies-relocate-factories/#ixzz3dA6sURKe

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15Jun/15Off

Vietnam’s “chaebols”: Tran brothers rule Kinh Do Corp.

15/06/2015

VietNamNet Bridge - Brothers Tran Kim Thanh and Tran Le Nguyen have been at the two top posts in Kinh Do Corporation since the company’s establishment.

 

Kinh Do Corporation is a business group of Vietnam with an emphasis on food production, including baked goods, confections, snacks and soft drinks. The corporate group also includes companies in the fields of financial services, real estate and a retail bakery chain. Kinh Do Corporation manages a wide variety of brand names, distributes imported brand name snack and candy goods, and manufactures food for export from Vietnam. Main offices of the company are located in Ho Chi Minh City.

 

Absolute dominance

 

 

20150608152507-1.jpgBrothers Tran Kim Thanh and Tran Le Nguyen.

 

 

 

For over 20 years, brothers Tran Kim Thanh and Tran Le Nguyen’s positions at Kinh Do Corporation have not changed.

Thanh is still the corporation’s Chairman while his younger brother is the Vice Chair and Chief Executive Officer. Another brother of Thanh, Tran Quoc Nguyen, is a member of the management board.

Thanh and Nguyen’s wives – Mrs. Vuong Buu Linh and Mrs. Vuong Ngoc Xiem – are also members of the management board.

The dominance of the Tran family is more clearly as many other family members hold the positions of Vice CEO and chief accountant.

According to Kinh Do’s report in 2013, Chairman Tran Kim Thanh and his wife owned only 130,000 shares, accounting for 0.08%, and 80,000 shares or 0.05% of chartered capital but his brother Tran Le Nguyen had up to 14 million shares, corresponding to 8.35%. Nguyen’s wife also had 5.8 million shares or 3.45% of the chartered capital of Kinh Do. This woman is the corporation’s Vice CEO and a management board member.

Recently, Kinh Do’s business strategy changed.

The company has sold its shares to strategic investors or signed contracts worth hundreds of million of USD with new partners as PhinDeli, Vocarimex, and Saigon Vewong to enter into new business fields.

With the new policy, the Kinh Do "pie" will certainly be further divided. However, it is certain that the influence of the Tran family will not change.

The "big boat" is changing direction

 

 

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With more than 200,000 retail outlets and accounting for 30% of the market share, Kinh Do is the largest domestic confectionery producer in the country.

In 2013, it earned VND4,560 billion of turnover, 1.6 times over the total revenue of the three local confectionery producers ranking behind Kinh Do in the market - BIBICA, Huu Nghi and Hai Ha.

However, the ambition of brothers Tran Le Nguyen and Tran Kim Thanh is bigger as they are enter the food industry.

The plan to engage in coffee, instant noodles and cooking oil will need a lot of money. Therefore, cooperation with other giants may be a good choice for the Tran family.

In early 2014, Kinh Do issued 40 million shares to increase its chartered capital to VND2,000 billion, earning VND1,700 billion in cash, in order to serve the expansion strategy.

At the extraordinary shareholders' meeting in late 2014, Kinh Do approved the sale of 80% of its capital in confectionary segment and the remaining 20% may be sold within the next 12 months for foreign investors.

Specifically, Kinh Do sold 80% stake in confectionery segment to American partner Mondelez International Group, equivalent to $370 million.

Mondelēz International, Inc. is an American multinational confectionery, food and beverage conglomerate, employing around 107,000 people around the world. It comprises the global snack and food brands of the former Kraft Foods.

With this decision, Kinh Do withdrew from the confectionary market after 20 years.

Kinh Do immediately announced plans to use the money gained from the deal: spending nearly $25mil. to buy a 27-percent stake in the Vietnam Vegetable Oil Industry Corporation (Vocarimex).

The successful transaction brought Kinh Do's stake in Vocarimex from 24 percent to 51 per cent. Currently, Kinh Do has three representatives in Vocarimex's managerial board: Tran Kim Thanh, Tran Le Nguyen and Nguyen Thi Xuan Lieu. Thanh is the chairman of both companies.

In its initial public offering last July, Vocarimex sold 37.9 million shares at VND13.428 ($0.6) per share to five organisations and 42 individuals. At present, the State holds 36 per cent of the organization’s charter capital, while the corporation's staff holds 0.88 per cent. Meanwhile, two strategic shareholders, Kinh Do and VPBank Securities, hold 24 and 8 per cent respectively. The remaining 31.12 per cent stake belongs to other investors who bought shares in the corporation's initial public offering.

Data from Ban Viet Securities Company revealed that Vocarimex possesses 51 per cent of Tuong An Vegetable Oil JSC, 49 per cent of Nha Be Golden Hope Cooking Oil Company, 32 per cent of Cai Lan Vegetable Oil Company and 27 per cent of Tan Binh Vegetable Oil SJC.

Most recently, Kinh Do inked a cooperation deal with Saigon Vewong, a Taiwanese company specializing in the production of food.

Under the agreement signed in early May, the two sides will build a US$30 million plant at the Vietnam Singapore Industrial Park in the northern province of Bac Ninh to develop new noodle varieties and also produce Kinh Do's products.

Ve Wong now produces Kinh Do’s products at its HCM City plant, but its current capacity, which KDC refused to disclose, is not enough to meet demand.

Kinh Do executives said their first instant noodle products hit the market five months ago and had become very popular with consumers. The company will hold a 49 percent stake in the new plant and Saigon Ve Wong, 51 percent.

It will have a capacity of 6 million packets of noodles a year initially, when it will produce only instant noodle and spices, before doubling it in the second phase when it will also make instant porridge and other kinds of instant noodles like pho. It will make other instant foods in the third phase and sauces in the last.

Kinh Do said more plants would come up in other locations as part of its efforts to become one of the top three instant noodle producers in the country.

Saigon Ve Wong is known in Vietnam for many instant products it sells under the Aone brand name.

$1 = VND21,500

Tran Kim Thanh’s family started out in the 90s and built Kinh Do into the leading brand in the confectionary market of Vietnam. In 2013 this corporation earned turnover of more than VND4,500 billion and VND619 billion of profit. Kinh Do accounted for a large market share in almost all confectionery product lines, such as biscuits, cakes, bread and ice cream.

After listing the company on the stock market in 2005, Kinh Do joined hands with many partners, such as investing in Tribeco (2005) and Nutifood (2007) and acquiring Vinabico (2008). In 2012, Ezaki Glico (Japan) spent VND660 billion to buy a 10% stake in Kinh Do. However, not all deals were successful. Kinh Do accepted losses in Tribeco and Nitifood while the Japanese partner withdrew from Kinh Do. The most successful deal was the acquisition of Wall's ice cream factory of Unilever in 2003.

In the field of real estate, Kinh Do invested VND1,015 billion to own 50% of the project Lavenue Crown in HCM City. But after years, this 5-star complex has yet to kick off.

According to the management report in the first six months of 2014, Thanh’s family held approximately 26% stake in the company.

Apart from Kinh Do, Thanh and Nguyen are also members of the management board of Thien Long Company, as representatives of Kinh Do. Thien Long is a stationery company with the market value of more than VND1,400 billion.

Read more: http://dongtalk.com/forums/index.php/topic/29220-vietnam%E2%80%99s-%E2%80%9Cchaebols%E2%80%9D-tran-brothers-rule-kinh-do-corp/#ixzz3dA6PfTrf

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10Jun/15Off

HSBC to shed up to 50,000 jobs, slash investment bank

6/10/2015 9:42:29 AM

 

 

HSBC.jpg

 

HSBC will shed almost 50,000 jobs and take an ax to its investment bank, cutting the assets of Europe's biggest lender by a quarter in a bid to simplify and improve its sluggish performance.

 

The bank said on June 9 about half the staff cuts will come from the sale of businesses in Brazil and Turkey. The other half will come from cutting about 10% of the remaining 233,000 staff by consolidating IT and back office operations and closing branches. About 7,000-8,000 cuts are expected to be in Britain, or one in six UK staff.

The cuts will leave HSBC with about 208,000 full-time equivalent staff by 2017, down from 295,000 at the end of 2010 and 258,000 at the end of 2014, although the bank said it will be hiring in growth businesses and its compliance division.
The cuts are part of a second attempt by Chief Executive Stuart Gulliver to boost profits since he took the helm at the start of 2011. The previous effort was foiled by high compliance costs, fines, low interest rates and sluggish growth.
"Slaughtering the staff is not necessarily the solution unless management makes the bank considerably less complex," said James Antos, analyst at Mizuho Securities Asia.
HSBC shares in London opened 0.9% higher at 625 pence before slipping back to underperform both the FTSE 100 index .FTSE and European banking stocks .SX7P slightly.
HSBC said it will cut its assets on a risk adjusted basis (RWA) by US$290 billion by 2017. That will include a reduction of a third, or US$140 billion, in global banking and markets (GBM), its investment bank. That means GBM will account for less than a third of HSBC's balance sheet, down from 40% now.
Investors had been calling for more radical cuts at the investment bank, which Gulliver ran for five years but where returns have suffered in tough market conditions.
"The cuts provide significant headroom for the group to fund asset growth in Asia and absorb RWA inflation, whilst protecting its ability to pay a progressive dividend," said Gurpreet Singh Sahi, analyst at Goldman Sachs.
Cost savings
The bank lowered its target for return on equity to greater than 10% by 2017, down from a previous target of 12-15% by 2016. Gulliver said he will push through annual cost savings of up to US$5 billion by 2017. It will cost up to US$4.5 billion in the next three years to achieve the savings.
HSBC confirmed the planned sale of its businesses in Turkey and Brazil, adding it would keep a presence in the latter to serve corporate clients. It aims to overhaul underperforming businesses in Mexico and the United States to improve returns.
The bank said it was also targeting growth in Asia by expanding its insurance business and its presence in China's Pearl River Delta region.
Some analysts said the changes did not go as far as hoped, though others said the asset reduction plan was a substantial shift.
"The market is likely to respond positively on the move with investors having a much clearer idea of HSBC's direction going forward," said Steven Leung, a sales director at UOB Kay Hian in Hong Kong.
The bank also set out 11 criteria it will use to evaluate whether to move its headquarters from London to Asia, likely Hong Kong. They include factors such as economic growth, the tax system, government support for the growth of the banking system, long-term stability and an ability to attract good staff.
HSBC said it would complete the review of the possible move by the end of the year.
The bank also has to separate its British retail banking operation, which is to be based in Birmingham in central England. The "ring-fenced" bank will account for about two thirds of UK revenues, or US$11 billion, and will have some 26,000 staff, or 57% of the total in the United Kingdom.

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