Econ
Bloomberg: Vietnam growing in wealth
Thai billionaire Charoen Sirivadhanabhakdi`s investment in Saigon Beer Alcohol Beverage (Sabeco) is a reflection of the growing belief that Vietnam will see faster income gains than Indonesia or the Philippines, stated Bloomberg on March 12.
From fish sauce to dairy and beer, lumpy investment bets in Vietnam have typically been placed on the country's teeming working class and its growing propensity to consume, Bloomberg assessed.
Warburg Pincus has already been there and done that. The recent US$370-million investment of the firm in Techcombank puts Warburg on the ground floor of a new cycle of wealth creation.
Back in 2013, Vietnam was still scrambling to fix a massive bad-loan mess, amplified to no small extent by Vinashin, assessed Bloomberg. With its liabilities accounting for 4.5% of the nation's GDP, Vinashin had a chilling effect on sentiment.
However, Warburg and KKR & Co., which in early 2013 doubled down on noodle and fish-sauce maker Masan Consumer Corp., have been rewarded for their faith in Vietnam's revival. Warburg sold Vincom Retail JSC shares for a US$709 million in the country's largest initial public offering (IPO) to date.
The relationship with parent Vingroup JSC, a local real-estate heavyweight now moving into car manufacturing, meant getting an introduction to its banker, Techcombank, in which Masan is a large investor.
Techcombank was also ravaged by the brutal credit cycle of 2008-2012. However, after selling problem assets to the government, nonperforming assets are down to 1.6% of the total. That's a relatively clean balance sheet ahead of a planned public float.
The economy, Bloomberg assessed, is also very different today from the one that relied on exporting crude petroleum, rice, coffee, and footwear. Samsung Electronics Co. has plugged Vietnam into the global smartphone supply chain. The South Korean behemoth assembles 30% of its phones in the country. It wants to raise the number of local suppliers to 50 by 2020.
While the Trump administration's decision to pull the US out of the Trans-Pacific Partnership has dealt a blow, Vietnamese exports will still get a lift now that the remaining 11 countries in the proposed trade bloc have decided to move ahead with tariff elimination in the name of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Its young population makes Vietnam a strong contender to wrest a share of the Japanese-funded auto supply chain in aging Thailand, according to Bloomberg's view.
On the whole, the likes of Warburg and KKR are right to stay put and hope for more openness. The maximum stake allowed to any single entity in a Vietnamese bank is only 15%, while total foreign equity is capped at 30%.
Still, as Bloomberg concluded, getting one foot into the door is half the battle won. In the Philippines, good deals do not even reach PE desks-they get gobbled up by a small set of tycoons who want to control everything.
Vietnam is growing in wealth.
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Back in 2013, Vietnam was still scrambling to fix a massive bad-loan mess, amplified to no small extent by Vinashin, assessed Bloomberg. With its liabilities accounting for 4.5% of the nation's GDP, Vinashin had a chilling effect on sentiment.
However, Warburg and KKR & Co., which in early 2013 doubled down on noodle and fish-sauce maker Masan Consumer Corp., have been rewarded for their faith in Vietnam's revival. Warburg sold Vincom Retail JSC shares for a US$709 million in the country's largest initial public offering (IPO) to date.
The relationship with parent Vingroup JSC, a local real-estate heavyweight now moving into car manufacturing, meant getting an introduction to its banker, Techcombank, in which Masan is a large investor.
Techcombank was also ravaged by the brutal credit cycle of 2008-2012. However, after selling problem assets to the government, nonperforming assets are down to 1.6% of the total. That's a relatively clean balance sheet ahead of a planned public float.
The economy, Bloomberg assessed, is also very different today from the one that relied on exporting crude petroleum, rice, coffee, and footwear. Samsung Electronics Co. has plugged Vietnam into the global smartphone supply chain. The South Korean behemoth assembles 30% of its phones in the country. It wants to raise the number of local suppliers to 50 by 2020.
While the Trump administration's decision to pull the US out of the Trans-Pacific Partnership has dealt a blow, Vietnamese exports will still get a lift now that the remaining 11 countries in the proposed trade bloc have decided to move ahead with tariff elimination in the name of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Its young population makes Vietnam a strong contender to wrest a share of the Japanese-funded auto supply chain in aging Thailand, according to Bloomberg's view.
On the whole, the likes of Warburg and KKR are right to stay put and hope for more openness. The maximum stake allowed to any single entity in a Vietnamese bank is only 15%, while total foreign equity is capped at 30%.
Still, as Bloomberg concluded, getting one foot into the door is half the battle won. In the Philippines, good deals do not even reach PE desks-they get gobbled up by a small set of tycoons who want to control everything.
