100,000 Japanese Investors go to Vietnam

[shevaub]

The Vietnamese stock market has become an attractive destination for Japanese investors with 100,000 of them expected to open share trading accounts in Viet Nam in the next few years, said a representative of a Japan-based investment corporation.
Mr. Shigekazu Utsunomiya, General Director of the Japanese consultancy Million Millionaires Project Company (TMMP) told a Vietnamese newspaper that Japanese investors see Viet Nam as a "dawning" country with a young population and fast-growing economy.
"The Japanese economy has become much more sluggish since 1990 and the stock market is mature and no longer attractive to us. But in Viet Nam, the market is very new and continues to rise, so we will invest heavily in it," he said.
To help investors take advantage of Viet Nam's burgeoning stock market, many Japanese-based corporations have launched training courses and begun posting the latest information about the Vietnamese stock market on their websites.
Mr. Shigekazu explained, "Apart from the most popular website moneyvietnam, there are dozens more and at least three books on the market, all written in Japanese, about the Vietnamese stock market. That's why many Japanese are very clear-headed about Viet Nam's shares on their first visit to the country. Most of them aim at medium and long term investment and have clear portfolios."
He said the total trading volume of Vietnamese shares (roughly 2.5 trillion yen) is still modest compared with that of Japan (550-600 trillion yen), however, Japanese shareholders have high expectations for the market's future development.
According to Mr. Utsunomiya, there are currently 1,000 Japanese investors trading on the Ha Noi and Ho Chi Minh City bourses while 13 million people are trading on the Japanese stock market.

 

[shevaub]

Sumitomo proposes $3.8 bln for Vietnam power plant

Japan's Sumitomo Corp. has proposed investing $3.8 billion in a coal-fired power plant in Vietnam's south-central province of Khanh Hoa to meet soaring demand from industrial users there, state media said Monday.
The plant, which has a design capacity of 2,640 megawatts, would be completed by 2014 and use coal imported from Indonesia and Australia, the Dau Tu (Investment) newspaper reported, citing a business proposal submitted by Sumitomo.
Last week the government ordered the Ministry of Industry to work with Sumitomo Corp. to plan the project, which will be located in Van Phong Bay, near Khanh Hoa's tourist hub Nha Trang, the government said on its Web site chinhphu.vn
Hanoi plans to develop Van Phong Bay into a key international transhipment and container port to accommodate the country's fast-growing exports.

 

[shevaub]

Osaka reps seek business in HCM City

Representatives of 14 Japanese companies headquartered in Osaka are visiting the Ho Chi Minh City to seek business and investment opportunities.
During a meeting with 40 local companies on May 30, Juichi Okumo, representative of the International Bureau of Osaka, said the delegation's visit also aimed to strengthen ties between the two cities.
HCM City's transport system could be improved to enable foreign investors, particularly his countrymen, do business, he added.
Deputy chairwoman of the municipal People's Committee, Nguyen Thi Hong, said the city was creating favourable conditions for business and investment.
Accession to the World Trade Organisation has helped further promote economic relations between Viet Nam and Japan,ﾂ" she said.
Executives from Kodama Shoji, Nichiden, Taiyo, Shibaya, Okamoto Electronics, Ever-on, Hanwa Kokoki, Toa Musen Denki, Matsubara Wire Mesh, Shinyei Kaisi, Union, Office 2.0, and The Kiichi Tool Co. Ltd are part of the delegation.

 

[shevaub]

Viet Nam, Japan push up trade ties

A senior trade official has affirmed that Viet Nam would give favourable incentives for businesses from Japan in general and Fukuoka province in particular in order to step up trade.
Deputy Trade Minister Tran Duc Minh made the remark at a seminar held in Japan's Fukuoka province on June 4 to promote bilateral trade cooperation. He went on to say that trade between Viet Nam and Japan has increased rapidly to the point that 2006 revenues came close to 9.9 billion USD.
According to Deputy Director Matsuka from the Industry and Commerce Department of Fukuoka province, over the past three years, delegations of local entrepreneurs had visited Ha Noi and Ho Chi Minh City to scope out the trade potential and conduct market research that would continue this year.
After the seminar, organised by Viet Nam's Ministry of Trade, the Vietnamese Embassy in Japan and Fukuoka province, a networking meeting was held for representatives from more than 50 Fukuoka companies and close to 20 Vietnamese businesses.

 

[Dogen Z]

Vietnam is a developing country with 70 million well-educated, hard working people who aspire to make their country stronger. The only thing that's holding them back economically is the communist gov't. I'm sure the gov't will change in the long run. However, you shouldn't underestimate the gov't or the people. They first kicked out French colonialist, then American colonialist, and lastly Chinese colonialist. They're pretty tough but still very nice people from what I hear. If I had some money to spare for the long term, I would invest in Vietnam, too.

 

[shevaub]

More Japanese investors eye Viet Nam

Many of the over 170 Japanese businesses present at a June 7 workshop in Tokyo on Viet Nam investment climate have spoken of their possible projects in the Southeast Asian market.

Speaking at the forum, the Vice President of the Japan External Trade Organisation (JETRO), Washio, acknowledged Viet Nam's increasing role in the region and cited the market's high economic growth rate and young, educated workforce.

ﾂ"Viet Nam is emerging as a reliable destination for Japanese investors and many Japanese businesses have been operating profitably in the market,ﾂ" said the senior trade expert.

Viet Nam's Deputy Trade Minister Tran Duc Minh predicted a surge in trade and investment relations between the two countries after a series of major accords were signed recently by the two countries.

ﾂ"The second phase of the Japan-Viet Nam Joint Initiative, an agreement of cooperation in science and technology for 2006 and on-going negotiations on an Economic Partnership Agreement would lay a strong legal foundation and a momentum for further bilateral relations,ﾂ" said Minh.

The workshop was organised by the Trade Mission of the Vietnamese Embassy in association with JETRO and the ASEAN-Japan Centre.

 

[shevaub]

Leading Japanese cell phone maker to invest in Viet Nam

Eager to diversify it's market base, Japan's leading mobile phone producer DoCoMo is eyeing ﾂ"sizeableﾂ" investments in Viet Nam, China and India, said the company's President Masao Nakamura, on June 18.

The company is looking at expansion into overseas markets as a means to counter its reliance on the already saturated Japanese mobile phone market. Asia, and in particular the potentially rich markets of Viet Nam, China and India, are set to become DoCoMo's focus, Nakamura said during an interview with UK Financial Times.

Viet Nam will be one of the hottest phone markets in the future, he stressed, adding that his company wanted to take a long-term approach to its operations within Asia.

DoCoMo currently enjoys a 54 percent market share in Japan. By the end of March 2007, its revenues jumped 36 percent to 34 billion yen (275 million USD).

 

[Goldiegirl]

Can I ask what the point is? Is this something special? Big companies are always looking to make bigger profits by spending less on labor and parts...so that is probably why they are going to Viet Nam and other less developed countries. It seems normal to me. Am I not understanding something here? It's great for Viet Nam, it will be interesting to see if the can actually sustain their economic growth and expansion...

 

[bakaKanadajin]

It's unfortunate that Japan doesn't appear to be very environmentally scrupulous about investing in Vietnam's growth. Why should Sumitomo dump $3.8 billion into a COAL fired plant? How about putting Vietnam on the world stage and creating even more jobs by building a geo-thermal plant or introducing a more sustainable energy source? I realize there are probably cost-related and logistical considerations, but my point is more ideological, I think patience would be more of a virtue. Look what China's rapid development and lack if environmental protection has done to it, the country has been poisioned.

 

[shevaub]

Japanese stock market investors keen on Vietnam
For Japanese investors, Vietnam is the securities market of choice after China, the manager of a Japanese language website on the Vietnamese stock market said.
Vu Tat Minh Uy, director of Go At Joint Stock Company, which operates the website viet-kabu, the first in Japanese on Vietnamese stocks, said a large number of Japanese investors were interested in profit-making opportunities in the country's market.
His firm's website received 50,000 hits a day.
It had also introduced 1,300 Japanese investors to the BIDV Securities Company and other brokers.
Now, only individual investors put money in the market but institutional investors would enter soon.
Demand from Japanese investors had been rising strongly since the stock market spurted at the end of last year.
The Ho Chi Minh City Securities Trading Center said of the more than 5,000 foreign accounts in securities companies, Japanese investors accounted for the majority.
The Go At's survey reported, however, that Japanese investors found it more difficult to get information about Vietnamese securities than any other.
Besides, they could easily trade Chinese shares through Chinese brokerages located in Japan, but could not do that in the case of Vietnam.
Japanese investors were most interested in companies operating in infrastructure, finance, and construction.

 

[shevaub]

Where are billion dollars to be injected?

Vietnamese people heard recently that foreign investment funds are planning to pour several billion dollars worth of capital into Vietnam. And a question has been raised about where the huge capital is to be injected in, as there seems to be no more room for foreign investors.
No more room
Foreign investors now hold 49% of shares in big companies, including AGF, BMP, SAM and TAY, and 30% in STB. Under the current regulations, foreign ownership must not be higher than 49% in local joint stock companies, and 30% in local joint stock banks, which means foreign investors have no more opportunities to buy shares of the companies.

Meanwhile, the room for foreign ownership in other companies is also nearly running out: the foreign ownership in BT6 is 48.96%, CII 48.98%, SJS 44.98%, and VNM 46.26%. Especially, REE and SHC ﾂ"have been well in advance of the ageﾂ" as the two companies have sold 55.47% and 56.5% of shares respectively to foreign investors

Dang Huu Chau, former student of Tokyo University, who is now the securities broker for many Japanese tourists/securities investors in Vietnamese stock, also said that the share items of which the foreign ownership hits the ceiling level of 49% or 30% are the ones that can bring the fattest profit. Many Japanese investors want to make investments in these blue chips, but they cannot because there is no more room for them.

The Securities Brokerage Division under the Saigon Securities Incorporated (SSI) also said that many foreign investors could not buy the share items they want though they placed orders three weeks ago.

In fact, foreign investors still can buy some blue chips, but just in small volume as the room in these companies is nearly running out. However, as for foreign investment funds, the small volume is not worth their disbursement.

Don Lam, Director General of Vina Capital stressed that only when Vietnam offers more room for foreign investors, can the market become more bustling.

Raising the foreign ownership ratio in local companies proves to be the best solution to lure more foreign capital into Vietnam. However, the State Securities Commission (SSC) has recently stated that the Government of Vietnam does not think of this issue right at this moment. As such, several billion dollars worth of investment capital are still waiting to be injected in Vietnam.

Foreign investors believe that opportunities will come in several months, when a lot of big companies make IPOs. They also heard that SSC is compiling a new regulation on foreign investors' management, which may allow foreign investment funds to open branches in Vietnam sooner than that stipulated in WTO commitments. However, analysts have warned that there would not be many chances for them, as the companies that make IPOs operate in the fields that limits foreign ownership, including banking, telecommunication and finance.

These companies include Vietcombank, BIDV (banking), MobiFone and Vinaphone (telecommunication).

Hopes still maintained

In May 2007, foreign investors doubled the investment in Vietnam's stocks: they injected $150mil in stocks in May, while the figure was $80mil in April, equal to the sum of money they poured into Vietnam in December 2006, and February 2007 (Source: Vietnam Monitor 2, June 8, 2007, HSBC Hong Kong).

Garry Evans, the stocks analyst of HSBC, who has been keeping close watch over Vietnam's stock market, has advised investors to remain cautious with their deals, and not to become aggressive buyers at this moment, since the P/E Index proves to be too high: 34. The analyst said that investors should wait for the IPOs to appear in August, October and December.

However, a lot of foreign investors cannot keep patient as they were advised, as they have been put under hard pressure to disburse funds' capital. Investment funds from the Republic of Korea, for example, have successfully raised $1bil worth of capital and they now compete with others in capital disbursement. Korean investors are the ones who won the right to buy most of Bao Viet's shares at the recently held auction.

The analyst has named some share items that foreign investors can still buy in, FPT, VHS, PPC, PVD, SJS and ITA (the foreign ownership in these companies is below 20%). If the HCM City Securities Trading Centre (HSTC) does not offer more commodities, the foreign capital flow will not be able to increase.

Meanwhile, HSTC has reported that it has just received the applications for listing from few companies. At this moment, it seems to be not the right time to list, when the daily trading value is just VND500-600bil ($31.25mil)

 

[shevaub]

SBI Holdings and FPT Form Exclusive Investment Alliance

SBI Holdings, Inc. (TOKYO:8473) and the Corporation for Financing and Promoting Technology (FPT), Vietnam's largest information technology group, today announced their plans to form an exclusive investment alliance targeting Vietnam's fast-growing economy. The equity alliance makes good on the promises of both Japan and Vietnam's Prime Ministers to strengthen economic and cultural ties between their two countries.

The first fund planned under the new joint stock fund management company, FPT Capital, will take part in the equitisation process of large State-owned enterprises (SOEs), especially those dealing with finance and banking, as well as incubate emerging sectors such as Life Sciences, Information Technology and Internet Services. Vietnam's Ministry of Post and Telematics recently announced the country had climbed up into the global Top Twenty list of nations with the highest Internet penetration, a development that could help clear the way for more electronic businesses. At the same time, the National Steering Committee for Enterprise Renovation and Development (NSCRD) reports that up to 713 SOEs have been earmarked for equitisation in the coming years; a process the government is taking steps to accelerate.

SBI Holdings' CEO, Yoshitaka Kitao, embraced his firm's entrée into South East Asia together alongside FPT. ﾂ"We have taken the time to get to know FPT intimately and believe they represent the New Vietnam, a forward-thinking company and progressive leadership for us to partner with and tap into this rich nation's thoroughbred investment opportunities. Our fund with FPT is only a first step in a well-planned strategy to invest in and groom quality businesses and, wherever possible, create pathways into Japanese markets. Ours is a comprehensive Vietnam strategy and we are pleased to join ranks with FPT Group.ﾂ"

FPT's CEO, Truong Gia Binh, hailed the announcement with SBI. ﾂ"We have chosen to partner with one Asia's most skilled and successful venture capital groups. SBI Holdings' DNA and record of growth closely follows our own. But more than just capital, FPT will benefit from SBI's know-how in fund management, financial services, IT investing and provide us with a direct link to Japan's capital markets. We see in them a like-minded long-term partner dedicated to working with us to revolutionize and improve the lives of every day Vietnamese citizens. Given the success of FPT in software outsourcing to Japan, we do believe that the new initiative of partnering with SBI Holdings in fund management will further realise our globalisation aims.ﾂ"