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vietnam quarterly investment report

q4 2015

vietnam quarterly investment report q4 2015
vietnam quarterly investment report q4 2015
vietnam quarterly investment report q4 2015
vietnam quarterly investment report q4 2015
vietnam quarterly investment report q4 2015
vietnam quarterly investment report q4 2015
vietnam quarterly investment report q4 2015
vietnam quarterly investment report q4 2015

table of Contents

page

eXeCutive summary

3

eConomiC overvieW

4-8

KEY ECONOMIC

INDICATORS

4

MONETARY INDICATORS

5

EXTERNAL INDICATORS

6

leGal upDates

9

investment HiGHliGHts - neWs CoveraGe

10-12

list of fiGures

Figure 1 Vietnam GDP

4

Figure 2 Vietnam Consumer Price Index

4

Figure 3 Interest rate and Exchage rate in Vietnam

5

Figure 4 Outstanding debt of real estate

5

Figure 5 Government bond yield

5

Figure 6 Foreign Direct Investment

6

Figure 7 Exports and Imports in Vietnam

6

Figure 8 Index Performance of Vietnam

7

Figure 9 Bad debt in Vietnam

7

Figure 10 International tourist arrivals to Vietnam

7

list of tables

Table 1 Vietnam Retail Sales

4

Table 2 Macroeconomic Indicators

8

Cover paGe: A&B Tower, District 1, Ho Chi Minh City

Retail Sales 4 Table 2 Macroeconomic Indicators 8 Cover paGe: A&B Tower, District 1, Ho Chi

eXeCutive summary

It is forecasted by HSBC that Vietnam’s exports will grow by an average 10.1% annually from 2015 to 2030. FDI inflows have been very strong in recent years, helping Vietnam diversify its export base and gradually move into higher value sectors, most notably Information and Communication Technology (ICT) equipment. The sizable, young, growing and increasingly skilled workforce continues to attract manufacturers of low cost items and Vietnam is becoming increasing integrated into global trade. The Free Trade Agreements with Korea, EU and Trans-Pacific Partnership agreement (TPP) should provide impetus towards reform, most notably liberalizing some key protected sectors such as retail, banking, agriculture, etc. The government enacted Decree 60/ ND-CP 1 July 2015 to remove the 49% cap on foreign ownership in many sectors (though some key ones such as banking are still excluded).

(though some key ones such as banking are still excluded). The trade balance has been in

The trade balance has been in surplus. Risks remain quite high though, particularly while the outlook for global markets and trade is fragile. In particular, strong domestic demand may create inflation pressures, putting pressure on the interest rate.

vietnam’s strong points:

Positive economic prospects in terms of growth, despite the global economic crisis;

A young, low cost, rapidly growing and an increasing technologically qualified workforce;

Social and political stability;

A firm commitment to liberalize the economy and to introduce reforms based on the free market.

vietnam’s weak points:

Weak financial and institutional structures. Although being undergoing reforms, the financial sector is neither well regulated nor independent of the government; and unequal allocation of resources between State-Owned Enterprises (SOEs) and private sectors.

The lack of guarantees for property rights;

Transparency issues

Foreign investment is subject to an array of unclear regulations, which cannot be legally guaranteed. The judiciary is subject to political influence, and commercial cases often take years to be resolved. Despite this, the promotion of foreign investment is a large part of the country’s developmental strategy. Therefore, the government is continually improving its judicial system, creating more incentives and taxation policies for foreign investors and trying to respect its commitments with regard to the international community.

its commitments with regard to the international community. Trans Pacific Partnership map ©2016 Colliers International
its commitments with regard to the international community. Trans Pacific Partnership map ©2016 Colliers International
its commitments with regard to the international community. Trans Pacific Partnership map ©2016 Colliers International

Trans Pacific Partnership map

vietnam quarterly investment report q4 2015 | eConomiC overvieW

Key eConomiC inDiCators

GDp

After Vietnam started its transition into a market economy in 1986, a process called “Doi Moi”, economic growth has averaged 6.7% a year up to 2011. Due to the global financial crisis and inefficient allocation of resources to State-owned Enterprises (SOEs), Vietnam suffered a period of economic downturn and high inflation from 2011 to 2014. GDP in this period experienced the lowest growth rate, especially in 2012 at 5.25%. Q4 2015, Vietnam GDP grew 7.01%, which accelerate to 6.68% in 2015, the fastest growth rate since 2008. Growth was driven by the industrial and construction sectors, which contributed nearly half of the total output. Increases in export-oriented manufacturing output and continuing high foreign direct investment are providing further boost to the economy.

The service sector grew by 6.33% this year, industrial and construction witnessed a growth of 9.64% while agriculture recorded more modest growth at 2.41%. Data for the first half of 2015 shows domestic demand continuing to serve as the main driver of growth. Good economic recovery policies have situated the country as being highly regarded as an attractive destination for foreign direct investment. With recent progress on major Free trade agreements, GDP growth forecasts for Viet Nam are expected to be maintained at 6.7%-6.8% in 2016.

Cpi

Consumer price index (CPI) grew by 0.02% in December 2015 over the previous month. In general, CPI 2015 has gone up 0.63% y-o-y. Core inflation of 2015 grew by 2.05% compared with 2014.

Asian Development Bank (ADB) forecasts that Vietnam’s inflation will be around 4% in 2016 and HSBC’s predictions for Vietnam are 4.8% in 2016.

retail sales

Generally, in 2015, total retail sales of consumer goods and services were estimated to reach VND3,242.9 trillion (USD144.1 trillion). This is an increase of 9.5% y-o-y (if changes in price are excluded, the growth rate would be 8.3%). More specifically, retail sales of goods reached VND2,469.9 trillion (USD109.8 billion), which accounted for 76.2% of the total retail sales and a rise of 10.6% y-o-y.

Sales of accommodation and catering services gained VND372.2 trillion (USD16.5 trillion), which took 11.5% of the total sales and grew by 5.2% y-o-y; Travelling achieved VND30.4 trillion (USD1.35 trillion), which represented 0.9% and went up by 9.5% y-o-y; Remaining services attained 370.3 trillion which accounted for 11.4% and raised by 7% y-o-y.

Figure 1: Vietnam GDP GDP per capital (nominal) GDP growth rate 8 2500 7 2000
Figure 1: Vietnam GDP
GDP per capital (nominal)
GDP growth rate
8
2500
7
2000
6
5
1500
4
1000
3
2
500
1
0
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016 F.
%
USD/capita
2010 2011 2012 2013 2014 2015 2016 F. % USD/capita Source: World Bank | Colliers International

Source: World Bank | Colliers International Research

Figure 2: Vietnam Consumer Price Index 25 20 15 10 5 0 2005 2006 2007
Figure 2: Vietnam Consumer Price Index
25
20
15
10
5
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015 2016F
%

Source: General Statistics Office (GSO) | Colliers International Research

Table 1: Vietnam Retail Sales

 

total

proportion

Retail sales

2,245,502

76.2%

Accommodation and catering

337,767

11.5%

Travelling service

27,780

0.9%

Other services

335,093

11.4%

Source: GSO | Colliers International Research

vietnam quarterly investment report q4 2015 | eConomiC overvieW

monetary inDiCators

interest rate

In September, the State Bank of Vietnam (SBV) reduced interest rates on dollar deposits in order to stabilize the Vietnam dong and discourage hoarding of USD. The interest rate ceiling was reduced from 0.25% to zero for corporate deposits and from 0.75% to 0.25% for individual deposits.

exchange rate

Vietnam’s trade deficit occurring for the first time in three years and a high government fiscal deficit in 2015 are going to pile more pressure on Vietnam Dong in 2016. In addition, the nation’s exchange rate is affected by two external factors in 2016. Firstly, Fed’s policy of keeping USD stronger would reduce the demand of holding local currency in Vietnam; secondly, China‘s slow economic growth could lead the People’s Central Bank of China to devalue the Yuan further. This, in turn, may lead the State Bank of Vietnam (SBV) to change the rate USD/VND to prevent further trade deficit from China.

Credit Growth

Statistics from the SBV shows that at the end of Q3-2015, the banking system has increased credit to real estate industry 14.5% more than Q4-2014. Overall, as of 18/12/2015, credit growth of the whole banking system reached 17.02% y-o-y. This number is higher than credit growth rate of 14%-15% in the period 2012-2014 but much lower than 37% of 2009, when property prices reached its peak. Outstanding debts relating to real estate account for about VND 360,000 billion – an increase of 80% compared to the amount of VND 197,000 in 2012. According to estimation from Vietnam Banks Association, about 70% of capital investments in real estate are backed by bank credit and 65 % of collateral is in the form of property.

Government bond yield

As of 15 October 2015, local currency (LCY) bond yields in Vietnam fell for most tenors except for 3-year maturity bond. More specifically, the 1-year bond declined 13 basic points (bps), yields of 2-year and 5-year maturity bonds slightly went down 2 -7 bps while 3-year bond rose 14 bps. Because Fed posponed a hike on interest rate, investors regained confidence on VND leading to an increase in bond price. Also, SBV showed firm commitment on keeping VND exchange rate stable. As a result, yields on 1-year and 2-year bonds went down. However, expected inflation in future and government budget deficit went down contributed to the decrease of 3-year bond price so that yield on 3-year bond were up. At the end of September, Vietnam’s LCY bond market reached VND832 trillion (US$37 billion) (the number excludes bonds issuance through private placements to institutional investors) in which government bonds (treasury bonds, central bank bonds) dominate majority of the market, accounting for 98.7% while corporate bonds accounts for the rest 1.3%. The whole market has witnessed a decrease of 14.9% y-o-y in value. The treasury bonds only reached about 50% issuance target for 2015 while most corporates chose to borrow loans instead of issuing bonds. In October, the National Assembly approved Government proposals to raise USD$3 billion government bonds in foreign currency to refinance the national debt maturing in 2016 and 2017. The government is also allowed to issue bonds with maturities less than 5 years to fund fiscal shortfall as the demand for long-term bonds has declined significantly.

Figure 3: Interest rate and Exchage rate in Vietnam

Interst Rate Exchange Rate 14 24,000 13 22,000 12 20,000 11 10 18,000 9 16,000
Interst Rate
Exchange Rate
14
24,000
13
22,000
12
20,000
11
10
18,000
9
16,000
8
7
14,000
6
12,000
5
4
10,000
% per annum
VND/USD

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Asian Development Bank (ADB) | Colliers International Research

Figure 4: Oustanding debt of real estate

18 16 14 12 10 8 6 4 2 0 2005 2006 2007 2008 2009
18
16
14
12
10
8
6
4
2
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
3Q
2015
trillion USD

Source: World Bank | Colliers International Research

Figure 5: Government bond yield 18 16 14 12 10 8 6 % Aug-07 Dec-07
Figure 5: Government bond yield
18
16
14
12
10
8
6
%
Aug-07
Dec-07
Apr-08
Aug-08
Dec-08
Apr-09
Aug-09
Dec-09
Apr-10
Aug-10
Dec-10
Apr-11
Aug-11
Dec-11
Apr-12
Aug-12
Dec-12
Apr-13
Aug-13
Dec-13
Apr-14
Aug-14
Dec-14
Apr-15
Aug-15
Dec-15

Source: ADB | Colliers International Research

vietnam quarterly investment report q4 2015 | eConomiC overvieW

eXternal inDiCators

fDi

The country has long been an attractive FDI destination, particularly for investors from Japan, South Korea, Taiwan and Singapore where they can borrow at low interest rates. In 2015, FDI attracted 2013 newly licensed projects with the registered capital of US$15.58 billion, an increase of 26.8% in the number of projects and a decline of 0.4% in the capital from the similar period in 2014. At the same time, 692 projects from the previous years registered to raise US$6.67billion investment capital. Thus, the total registered capital of both newly and additionally financed projects reached US$22.67 billion, grew by 12.5% against the last year’s same period. Realized FDI capital in 12 months of this year was estimated to gain US$14.5 billion, up 17.4% from 2014’s similar period.

As of end of December, the manufacturing industry attracted the largest number of FDI projects with the registered capital of US$15.23 billion, accounting for 66.9% of the total registered capital while the real estate business attracted US$2.39 billion, accounting for 10.5%.

exports - imports

In 2015, export turnover was estimated to reach US$162.4 billion, increased by 8.1% from the same period last year, of which the domestic economic sector achieved US$47.3 billion, decreasing by 3.5%; the FDI sector (excluding crude oil) gained US$111.3 billion, growing by 18.5%. The United States was the biggest export market of Vietnam with export turnover of US$33.5 billion, a rise of 17% compared to 2014’s same period. Generally, in eleven months of this year, import turnovers reached an estimate of US$165.6 billion, up 12% over the last year’s similar period, of which the domestic economic sector gained US$67.6 billion, 6.3% increase; the FDI sector achieved US$98 billion, a rise of 16.4%. China was still Vietnam’s largest import market with estimated import turnover of US$49.3billion, a rise of 12.9% compared to the identical period last year.

Estimated trade deficit was US$3.2 billion, equaling 1.97% of export turnovers, of which the domestic economic sector had a trade deficit of US$20.3 billion; the FDI sector had a trade surplus of US$17.1 billion. Only trade deficit with China in 2015 was US$32.3 billion, sharply increased by 12.5% from the similar period in 2014. With a decrease in prices of crude oil and some agricultural commodities, 2015’s export turnovers could not achieve the proposed plan (up 10%), but the rate of trade deficit was estimated to reach the proposed plan at less than 5% of export turnovers.

Exports and imports are calculated at FOB prices (excluding US$9 billion transport fee and import goods’ insurance which are included in import of services) then trade baalance in 2015 is US$5.8 billion surplus. (decreased 44% in 2014)

Figure 6: Foreign Direct Investment

25 20 15 10 5 0 2005 2007 2008 2009 2010 2011 2012 2013 2014
25
20
15
10
5
0
2005
2007
2008
2009
2010
2011
2012
2013
2014
2015
billion USD

Source: GSO | Colliers International Research

Figure 7: Exports and Imports in Vietnam

billion USD

Exports Imports 180 160 140 120 100 80 60 40 20 0 2005 2006 2007
Exports
Imports
180
160
140
120
100
80
60
40
20
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Source: GSO | Colliers International Research

vietnam quarterly investment report q4 2015 | eConomiC overvieW

eXternal inDiCators

stock market

VN-Index ended at 579.03 points, equivalent to an increase 6.13% y-o-y. Hanoi index declined 3.46% to 79.96 points. As of 31/12/2015, market capitalization estimates at about $58 billion. Average trading volume reached 2,500 billion per trading day. There are 1.5 million investor accounts which are supported by 79 securities companies. Total value of foreigners’ purchase on stock market since the beginning of 2015 has accumulated to VND 2,929 billion (USD130.2 billion), equivalent to 264 million shares. This is a 15th year that overseas investors have positive net buying of Vietnamese shares. The Price/ Earnings ratio of listed companies is at about 11.2 times, versus to 14.3 for the MSCI Southeast Asia Index. Stocks in Vietnam are relatively cheap in comparison with that of other nations. For example, P/E of SET index (Thailand) is 16.46 and of JET index (Indonesia) is 25.95.

Decree 60/ND-CP 1 July 2015 lifted the limitation on companies’ share ownership allowing foreign investors to get more involved in a process of investment and management of local real estate assets. Government bond:

• issued: VND 233,825 billion

• term: 4.94 years in 2014 to 8.68 years in 2015

• average coupon rate: 6.35%/year

manufacturing purchasing manager index (pmi)

Manufacturing purchasing managers’ Index (PMI) rose back above the 50.0 neutral-mark, reaching 51.2 from 49.4 in November 2015. The rate of improvement business conditions is modest. Number of new orders and new export orders returned to grow. Stock of finished goods remained unchanged. Import buying went up the first time in four months in response to an increase in new business.

bad Debts

SBV announced that banking system’s bad debt has been lowered to below 2.9%. Yet, this result somehow contributed by the transfer of bad debts to a state-owned Vietnam Asset Management Company (VAMC) as well as the increase of bank credit supply.

As of October 2015, VAMC has exchanged its bonds for VND 226,000 billion of bad debts, yet VAMC has just been able to deal with 7% of the amount. According to the World Bank, VAMC process of dealing with bad debts faces difficulties due to a lack of detailed legal framework for dealing with illiquid assets and transfer of assets, confiscation of assets and selling asset below their book value.

international arrivals

Estimated number of international visitors to Vietnam reached 7,934.7 thousand arrivals, down 0.2% from the last year’ same period, of which visitors coming by airway, increased of 0.8%; by road: a decline of 6.5%; by sea: an increase of 27.5%.

In this year, visitors to Vietnam from Asia fell by 2.6% against the similar period last year. Visitors from Europe gained an estimate of 1,367 thousand arrivals, went down by 1.9% from the last year’s identical period. Visitors from America reached 647.7 thousand arrivals, rose 5% from the same period last year.

Figure 8: Index Performance of Vietnam

1000 900 800 700 600 500 400 300 200 100 0 2005 2006 2007 2008
1000
900
800
700
600
500
400
300
200
100
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
points

Source: Ho Chi Minh Stock Exchange | Colliers International Research

Figure 9: Bad debt in Vietnam

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2009 2010 2011 2012 2013
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2009
2010
2011
2012
2013
2014
2015
%

Source: ADB | Colliers International Research

Figure 10: International tourist arrivals to Vietnam

International tourist arrivals Average 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 thousand arrivals
International tourist arrivals
Average
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
thousand arrivals

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: GSO | Colliers International Research

vietnam quarterly investment report q4 2015 | eConomiC overvieW

Table 2: Macroeconomic Indicators 2012 2013 2014 2015 2016 F Q1 2016 F KEY ECONOMIC
Table 2: Macroeconomic Indicators
2012 2013
2014
2015 2016 F
Q1 2016 F
KEY ECONOMIC INDICATORS
GDP (%, y-o-y)
5.2
5.4
6.0
6.5
CPI (%, y-o-y)
9.1
6.6
4.1
0.63
Retail sales (trillion VND)
2,324.4
2,618
2,945.2
3,242.9
monetary inDiCators
Interest rate (%)
10.5
7.1
5.8
6.2
Exchange rate (USD/VND)
20,828
20,933
21,148
22.517
eXternal inDiCators
FDI (billion USD)
16.3
22.35
21.92
22.76
Export (billion USD)
114.5
132.1
150.2
162.4
Import (billion USD)
113.8
131.3
147.8
165.6
Stock market (VN-Index, points)
413
504
545
579
International arrivals (thousand arrivals)
6.85
7.57
7.96
7.94

Source: General Statistics Office, World Bank, Asian Development Bank, Colliers International Research

vietnam quarterly investment report q4 2015 | leGal upDate

Source:

quarterly investment report q4 2015 | leGal upDate Source: LNT’s practices are focused on assisting their

LNT’s practices are focused on assisting their client with their most complex legal matters in the following areas: Banking & Finance, Corporate, Dispute Resolution, Intellectual Property and Real Estate & Infrastructure. LNT regularly partner with Colliers to ensure Best in Class Real Estate Advisory Service’s. Mr. Thai Binh Tran heads LNT & Partners’ Real Estate & Infrastructure Practice Group, and brings with him more than 15 years of legal experience. Mr. Tran has advised Colliers’s clients on a wide variety of matters covering all aspects of the real estate industry, including project implementation, land use rights and property ownership-related matters, property acquisition transactions and taxation matters, and real estate project development procedures.

The major updates focus on the guidance provided in Decree 76/2015/ND-CP (Decree 76) issued in September and Decree 99/2015/ND-CP (Decree 99) in October that provide specific guidelines for the implementation of Law on Real Estate Business (LOREB) and Law on Residential Housing (LORH).

simplified procedures for Doing real estate business According to Decree 76, individuals who are engaged in real estate business at “small scale” are not required to set up entities for the business. “Small scale” is defined as doing business with properties owned by such individuals, or developed by such individuals with the total investment capital less than VND 20 billion (equivalent to US$ 870,000).

With regard to the establishment of a real estate business, a legal capital (minimum paid-up capital) of VND 20billion is required, however, a financial statement or bank acknowledgement certifying sufficient fund for the legal capital is no longer required as before. As such, the procedures for registration of the real estate business therefore are simplified and take less time than before.

sample Contracts for real estate business activities Decree 76 also provides sample contracts for real estate transactions such as: sale, lease of existing and under-construction properties; transfer, lease of land use rights; partly or wholly transfer of real estate development projects. Of note, it is not required that the parties have to follow exactly the sample contracts as it did before, but the transaction documents have to contain main terms as the sample contracts do.

further guidance for housing ownership by foreign individual Decree 99 clarifies eligible foreign buyers are those who have their valid passport affixed with an entry stamp by the immigration authority of Vietnam.

Foreign individuals may purchase either directly from developers or from other foreign individual or entity who owns residential housing in Vietnam. In later case, the ownership duration is the remaining term specified in the issued ownership certificate. However, if the foreign housing owner sells the residential housing to a Vietnamese, the Vietnamese will hold the indefinite ownership term over the property.

The foreign owners have to dispose the housing properties before the expiry of the ownership duration, otherwise the properties may belong to the State of Vietnam. However, there is also a possibility for foreign owners to extend the ownership duration by submitting the request to relevant authorities for consideration.

There is still a confusion or ambiguity under the regulations that although the LoH says that a foreign owner may lease its housing property and earn the rental, the LoREB says that foreign investors are only allowed to “lease real properties for sub-leasing”, and Decree 99 also strictly prohibits foreign individuals and/or entities from purchasing residential housing for the purpose of reselling business for profits. This must be further clarified to comfort the foreign homebuyers in owning residential properties in Vietnam.

Determination of restrictions in foreign housing ownership The LoH sets forth foreign buyers are not allowed to own properties in areas of national security and foreign ownership ratio in an apartment building must not over 30% or 250 landed houses in a ward scale (or 10% at maximum in a project that develops over 2500 houses).

Decree 99 requires the Ministry of National Defense and Ministry of Public Security to specify and inform such areas of national security to the local authorities for informing the developers.

As such, the provincial departments of construction (DOC) have to build an online portal where details (i) projects that foreigners are not permitted to own residential housing; (ii) the number of apartments in each building and/or the number of landed houses in a development project that foreign individuals/ entities are permitted to own; and (iii) the number of residential houses have been purchased by foreign individuals/entities in a project/building.

Prior to executing a contract, the sellers either by visiting the portal or by requesting DOC to provide detailed information must check whether or not their houses are subject to any restrictions on quantity or areas where foreign individuals can own residential houses. Failing to do so, the sellers must pay compensation for loss and damage to the foreign purchasers.

After the contract is executed, the seller must give a notice to DOC to inform the address of the sold property.

additional restrictions imposed on capital mobilized from homebuyers Pursuant to Decree 99, capital mobilization for a project must be conducted in the forms prescribed in the LORH only, and the raised capital is used for developing the property project only.

Capital mobilization by the way of “capital contribution agreements and being distributed with housing units” (as previously allowed to the extent of 20% of total units in a project) is no longer allowed.

Disclaimer: The legal update is prepared by LNT & Partners and should not be taken as an advice to a specific matter. Should a reader have any query or need further clarification, please feel free to contact Mr. Binh Tran, Partner of LNT, at binh.tran@lntpartners.com.

vietnam quarterly investment report q4 2015 | investment HiGHliGHts - neWs CoveraGe

prime minister Dung: equitization paying big dividends VOV News (english.vovnews.vn), 7 October 2015 Prime Minister Nguyen Tan Dung stated at a recent Global Investment Forum in Hanoi that the number of state owned enterprises (SOEs) has dropped by 90% from roughly 12,000 over the past two decades. The equitization process has created a friendlier business climate and has been a key factor behind the nation’s economic success over recent years. The plan to equitize SOEs and raise the ratio of foreign ownership has drawn positive review from foreign investors. The government’s steadfast dedication to augmenting the business environment and competitiveness has resulted in impressive outcomes in foreign investment attraction.

tpp helps small, medium businesses: experts Vietnam News, 8 October 2015 The Trans-Pacific Partnership deal (TPP) will offer more business opportunities for local small- and medium-sized enterprises (SMEs) although many challenges still remain. Diversification in the business sectors under TPP will create big opportunities for domestic enterprises, including SMEs during the process of seeking new local and overseas markets. To support private economic sector after joining TPP, the state should promote a renovation of economic growth models, restructuring local economies and improving business environment.

vietnam access to tpp markets to affect China exports Saigon Times Daily, 9 October 2015 The World Bank in Vietnam has projected that Vietnam’s exports would replace an increasing share of China to Trans-Pacific Partnership (TPP) markets when the comprehensive trade agreement comes into force. The TPP is expected to create opportunities for Vietnam to diversify trade and enhance market access to key export markets, especially the United States and Japan. This trend has already been ongoing even before the conclusion of TPP talks.

solid investment Vietnam Economic Times, 12 October 2015 When two long-awaited pieces of legislation the Law on Housing and the Law on Real Estate Business came into effect on July 1, industry insiders expected their significant impacts on marking an important step towards opening up Vietnam’s real estate market to overseas investment. The new law is believed to provide motivation to developers to kick off construction of second home products around the country. Although the second home market is still in the very early stages of development, the market in Vietnam can compete directly with those in the region such as Phuket and Bali, given their competitive price and better quality. Meanwhile, new launches of villa and condominiums in Phu Quoc and Da Nang are expected to attract foreign buyers in the short term.

foreign investors gear up with investments in vietnam’s property VOV News (english.vovnews.vn), 17 October 2015 As the market recovery has become clearer, multinational groups and foreign investment funds have begun to inject money into real estate projects, mostly in large ones, such as Diamond Island - Phase 2 (Kusto Home), Nam Hoi An Complex (Chow Tai Fook), Caye Sereno seaport (Jen Capital), etc. ASEAN is now an attractive destination for foreign investors, while Vietnam is particularly important thanks to its gateway position. The Vietnam market is heating up, supported by a series of new policies.

finnish fund investing in viet nam’s property market Vietnam News, 19 October 2015 PYN Elite Fund (Non-UCITS), managed by Finnish PYN Fund Management Ltd, has been actively buying shares in many real estate companies in Viet Nam with an eye to the future. Hoang Quan Consulting Trading-Service Real Estate Corp (HQC) last Thursday told HCM Stock Exchange that the fund had bought six million

shares in the company on October 89, raising its stakes in Viet Nam

to almost 22 million shares, equivalent to 8.34 per cent of its capital.

According to the fund manager Petri Heiskanen, PYN Elite fund has

defined Viet Nam as its core market for the period 2013-2020.

Golden property mine to be tapped soon Vietnam Business Forum, 9 November 2015

Sapa is a potential but untapped real estate market, according to professional investors and international experts. This is

a new “gold mine” that will bring huge profits for investors.

Infrastructure development and income growth are attributed

to the new investment wave for vacation property developments

in Sapa. The town is currently a much-interested real estate market. After infrastructure is completed, a series of large investment projects will be implemented to tap the local potential.

Ho tram strip gets us$50 mil. from Harbinger Capital Saigon Times Daily, 10 November 2015 U.S. investment fund Harbinger Capital has announced to inject an additional US$50 million into Ho Tram Strip, the 2,2km beachfront tourism development in Ba Ria - Vung Tau Province, raising the total

investment in the project to nearly US$1 billion. Additional capital is earmarked for several signature components, including construction

of the second building of The Grand, villas and condos, additional

leisure amenities in and around The Grand, as well as organization

of the Ho T ram Open golf tournament slated for early next month.

vietnam quarterly investment report q4 2015 | investment HiGHliGHts - neWs CoveraGe

foreign developers make beeline for vietnam’s property market VOV News (english.vovnews.vn), 10 November 2015 With large population, policy relaxation on foreign property ownership and deeper international integration, Vietnam is witnessing growing demand for housing in Vietnam. Vietnam’s participation in the Trans-Pacific Partnership agreement, which is expected to draw more investment into the country, especially from major importers of Vietnamese products like the US and Japan, has also attracted housing investors. The increasing housing demand should also come from one of Asia’s fastest rates of middle-class expansion, with the economy growing 6.28% in the first half of this year - the fastest pace since 2008. After the government’s efforts to clear up bad debts and ease restrictions on housing buyers, the residential property market has grown rapidly.

Da nang seeks foreign investors Vietnam News, 11 November 2015 Danang organised an investment promotion week for 15 members of the Japanese Business Association (Keidanren), and 120 other Japanese businesses, in Japan from November 9 to November 12. In a meeting with Kyohei Takahashi, Chairman of Showa Denko, and Kuniharu Nakamura, chairman of Sumitomo, chairman of the city’s People’s Committee Huynh Duc Tho said the city has offered investment from Japan in the high-tech, tourism and real estate sector. The central city was also committed to creating the most favourable conditions for Japanese businesses in the city in the future. The central city also hosted an investment promotion event in Berlin, Germany, this week calling investors from Europe in the tourism, high¬tech and information technology (IT), and software sectors.

saigon port redevelopment announced Vietnam Economic Times, 15 November 2015 Saigon Port Co. Ltd. will partner with Vingroup to develop a real estate project worth over VND11 trillion ($490 million) on the current site of the port after it is relocated in 2016. After equitization, Saigon Port will join forces with Vingroup to establish an urban development investment company called Ngoc Vien Dong to implement the project. With 26 per cent held by Saigon Port, Ngoc Vien Dong will develop a 32.1 ha residential area comprising 3,000 apartments, riverside villas, office buildings, commercial facilities, a boat terminal and schools.

Consortium awaits green-light Vietnam Investment Review, 30 November 2015 Despite a strong commitment to expediting a USD2.2 billion ¬Eco Smart city project in Ho Chi Minh City’s Thu Thiem new urban area, the foreign investment consortium led by South Korea’s retail giant Lotte Group and three other Japanese partners - Mitsubishi Corporation, Mitsubishi Estate Limited, and Toshiba Corporation, is still unsure as to whether or not they have been selected to move forward with the project. The project covers a 16.7 hectare area, with the aim of turning the space into a signature development consisting of trade centres, hotels, serviced apartments, office buildings, residential blocks and a 50-storey tower. Despite having deposited over $90 million in land use fees, the foreign consortium does not know if it will be granted development rights.

bitexco joins consortium to develop new urban area Saigon Times Daily, 4 December 2015 The government of HCMC has chosen a consortium comprising the

local firm Bitexco and Dubai-based Emaar Properties PJSC to develop

a new urban area worth VND30.7 trillion (US$1.36 billion) in Binh

Quoi-Thanh Da in Binh Thanh District. The project covers about 427 hectares in the entire Ward 28 of the district and excludes the Saigon River water surface. The VND30.7 trillion amount will be used for infrastructure development and compensation for affected households. The project will be carried out in three phases from 2016 to 2030.

property Giants stand ready for long-distance races Vietnam Business Forum, 7 December 2015 Professional property firms in southern Vietnam have actively outlined business strategies and plans to create opportunities, rather than sit by and wait for opportunities as earlier. Many property investors have announced their big investment projects in the last two months of this year, such as FLC Group in Hanoi, Bach Dat Company in Danang, Phuc Khang Corporation and Sacomreal in HCMC. Many property companies have well established their brand names and positions on the domestic market with effective meticulous business plans, including Him Lam, Novaland and Dai Quang Minh.

mortgages replace sacks of cash in vietnam as buyers seek loans Thanh Nien Online, 7 December 2015 Home loan surged 22 percent through August this year, marking

a shift in a country where it is common for buyers to plunk down sacks of cash for payment. Real estate loans, which account for about 8 percent of total bank lending, are contributing to

a property rebound of which residential sales almost double

this year. The bank estimated the country’s mortgage market is

growing approximately USD3 billion a year. However, the rapid popularity of mortgages, coupled with ample residential inventories,

is raising concerns about credit risks and real estate bubble.

flC approved to develop vnD1.6 trillion resort in quy nhon Saigon Times Daily, 8 December 2015 The government of Binh Dinh Province has given the approval for FLC Group Joint Stock Company’s eco-resort project worth VND1.6 trillion (US$71.2 million) in Quy Nhon City. Scheduled for completion in 2017, phase one of the two-phase project will include the luxury resort and tourism-related services in Hon Seo area. FLC plans to implement phase two until October 2018.

Besides FLC, Central provinces have recently attracted investment

to many tourism projects such as the mix-used project by Vingroup

with 300-key hotel, villas, entertainment center, golf course, restaurants and a cable car system in Hai Giang or the five-star hotel project Kim Cuc investment and construction in Quy Nhon City.

vietnam quarterly investment report q4 2015 | investment HiGHliGHts - neWs CoveraGe

vietnam a rising asian retail market Vietnam Economic Times, 10 December 2015 The upswing in FDI commitments and disbursements has buoyed economic growth and underlined Vietnam as a solid investment destination. As at the end of October, foreign companies generated USD95 billion in export revenue this year, an increase of 14.3 percent yearonyear and accounting for twothirds of Vietnam’s total export revenue. Foreign companies also recorded a trade surplus of USD12.9 billion, contributing to bridging the trade deficit. Foreign companies registered to invest $20.22 billion in Vietnam in the first eleven months of this year, up 16.7 per cent compared with the same period last year. One thing highlighting the success of FDI in Vietnam this year is the continual relocation of investments by multinational companies to the country. Samsung Electronics or Jabil Circuit are good examples for this trend. The wave of investment from multinational companies has encouraged others that previously left Vietnam to return.

back in favor Vietnam Economic Times, 12 December 2015 Since mid-2014 Vietnam’s residential market has been recovered, starting with the affordable segment. Many projects entering the market in 2015 have achieved high absorption rates. There is a strong growth in both demand and supply in the apartment sector. However, infrastructure is regarded as a major obstacle for Vietnam taking advantage of the opport unities from the TPP. The key drivers of Vietnam’s property market in 2015 have been economic recovery, controlled inflation and interest rates, rapidly improving infrastructure, the stimulus package to fund affordable housing and a more supportive legal framework. Foreign direct investment (FDI) in real estate has increased strongly since the beginning of this year. According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI) Vietnam’s property market attracted $1.81 billion in FDI to 19 new projects in the first nine months and seven existing projects increased their registered capital.

a piece of the action Vietnam Economic Times, 12 December 2015 Mergers and acquisitions in real estate are expected to boom in 2016 as foreign investors seek partners rather than do it alone. 2015 saw many foreign investors pouring capital into Vietnam’s real estate market. Foreign direct investment (FDI) into the country’s industrial park (IP) segment accounted for 67 per cent of the total capital of $11 billion and 59 per cent of the 1,400 projects in the nine-month period from January to September. Manufacturing will undoubtedly see a lot of foreign investment, as foreign companies with expertise in certain sectors look to take advantage of low labor costs and agreements like the TPP with their zero tariffs. Utilities and infrastructure will benefit from M&A deals as these areas need sustained investment to support Vietnam’s growth. However, foreign investors are eligible to buy shares in only a few real estate projects in Vietnam. Any project that can generate a good return will potentially be of interest but different foreign investors have different risk appetites.

a piece of the action Vietnam Economic Times, 12 December 2015 Mergers and acquisitions in real estate are expected to boom in 2016 as foreign investors seek partners rather than do it alone. 2015 saw many foreign investors pouring capital into Vietnam’s real estate market. Foreign direct investment (FDI) into the country’s industrial park (IP) segment accounted for 67 per cent of the total capital of $11 billion and 59 per cent of the 1,400 projects in the nine-month period from January to September. Manufacturing will undoubtedly see a lot of foreign investment, as foreign companies with expertise in certain sectors look to take advantage of low labor costs and agreements like the TPP with their zero tariffs. Utilities and infrastructure will benefit from M&A deals as these areas need sustained investment to support Vietnam’s growth. However, foreign investors are eligible to buy shares in only a few real estate projects in Vietnam. Any project that can generate a good return will potentially be of interest but different foreign investors have different risk appetites.

new Kids on the block Vietnam Economic Times, 12 December 2015 Recovery of the real estate market and potential opportunities created by agreements such as the TPP are attracting new foreign investors. Figures from the Foreign Investment Agency show that foreign investors committed to invest in 25 new property projects in the country this year, as at the end of October, outlaying $1.8 billion in the process and also registered to increase their capital by a total of $275 million in eight existing projects. Total foreign investment in the real estate market at this time is nearly double what it was a year ago. Singapore-based Genesis Global Capital, Hong Kong-based Gaw Capital Partners, Japanese fund management Creed Group are newcomers to Vietnam real estate market. The new wave of foreign investment has been a breath of fresh air for many struggling property projects.

Key resource Vietnam Economic Times, 12 December 2015 The upswing in FDI commitments and disbursements has buoyed economic growth and underlined Vietnam as a solid investment destination. As at the end of October, foreign companies generated USD95 billion in export revenue this year, an increase of 14.3 percent yearonyear and accounting for twothirds of Vietnam’s total export revenue. Foreign companies also recorded a trade surplus of USD12.9 billion, contributing to bridging the trade deficit. Foreign companies registered to invest $20.22 billion in Vietnam in the first eleven months of this year, up 16.7 per cent compared with the same period last year. One thing highlighting the success of FDI in Vietnam this year is the continual relocation of investments by multinational companies to the country. Samsung Electronics or Jabil Circuit are good examples for this trend. The wave of investment from multinational companies has encouraged others that previously left Vietnam to return.

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