Singapore’s GIC buys stake in Viet­nam bank

The Myanmar Times - - International Business -

SINGAPORE sov­er­eign wealth fund GIC will buy a 7.7 per­cent stake in Viet­nam’s big­gest bank.

GIC signed a me­moran­dum of agree­ment on Au­gust 29 to buy 305.8 mil­lion new shares of Vi­et­com­bank, the fund’s first sig­nif­i­cant direct in­vest­ment in a Viet­namese com­mer­cial bank.

Viet­namese Pres­i­dent Tran Dai Quang, who is vis­it­ing Singapore, wit­nessed the sign­ing of the deal, es­ti­mated by Bloomberg News to be worth some US$400 mil­lion in a com­pany worth $6.9 bil­lion.

Vi­et­com­bank, es­tab­lished in 1963, is Viet­nam’s largest lender by mar­ket cap­i­tal­i­sa­tion.

The bank also plans to al­low Ja­pan’s Mizuho Fi­nan­cial Group to buy ad­di­tional stocks to main­tain its 15pc hold­ing, Vi­et­com­bank chief ex­ec­u­tive Pham Quang Dung said. The Ja­panese bank­ing giant in 2011 paid nearly $570 mil­lion for its stake.

“This in­vest­ment re­flects our con­fi­dence in Viet­nam’s long-term growth po­ten­tial,” said Amit Ku­nal, GIC head of direct in­vest­ments group for South­east Asia, pri­vate eq­uity and in­fra­struc­ture.

“GIC’s strong rep­u­ta­tion and ex­pe­ri­ence will pro­vide Vi­et­com­bank the sup­port it needs to achieve its fi­nan­cial and busi­ness goals, both lo­cally and in­ter­na­tion­ally,” said Vi­et­com­bank chair Nghiem Xuan Thanh.

The deal is pend­ing reg­u­la­tory ap­proval and is ex­pected to be com­pleted by end of the year.

Singapore is Viet­nam’s third largest in­vestor, with a to­tal reg­is­tered in­vest­ment cap­i­tal of around $38 bil­lion, the for­eign min­istries of both coun­tries said in a sep­a­rate joint state­ment.

GIC last month reported a sub­stan­tial dip in re­turns and warned of dif­fi­cult global in­vest­ment conditions in the next decade.

For­merly known as the Govern­ment of Singapore In­vest­ment Cor­po­ra­tion, GIC man­ages Singapore’s for­eign re­serves with a fo­cus on long-term per­for­mance.

It does not dis­close the ex­act value of its port­fo­lio, say­ing only that it has “well over $100 bil­lion of as­sets” in more than 40 coun­tries, in­clud­ing real es­tate, eq­ui­ties and fixed-in­come in­vest­ments.

The US-based Sov­er­eign Wealth Fund In­sti­tute says GIC has $344 bil­lion of as­sets un­der man­age­ment, mak­ing it the world’s eighth-largest. –

Photo: EPA

Viet­nam Pres­i­dent Tran Dai Quang (cen­tre-left) and Singapore Pres­i­dent Tony Tan Keng Yam (Cen­tre-Right) shake hands, flanked by their re­spec­tive first ladies Nguyen Thi Hien (left) and Mary Tan (right), at the Is­tana Pres­i­den­tial Palace in Singapore on Au­gust 29.

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