Hike won’t im­pact VN too much “

Viet Nam News - - MARKETS -

HAØ NOÄI — The US Fed­eral Re­serve (Fed)’s third in­ter­est rate hike this week would not af­fect Vieät Nam’s econ­omy sig­nif­i­cantly as the move was fore­see­able, ac­cord­ing to ex­perts.

Fed pol­i­cy­mak­ers on Wed­nes­day lifted the bench­mark overnight lend­ing rate by a quar­ter of a per­cent­age point to a range of 2 per cent to 2.25 per cent.

The Fed’s move comes amid a com­pli­cated in­ter­na­tional mar­ket with the ac­cel­er­at­ing US-China trade war and cen­tral banks in some coun­tries tight­en­ing mon­e­tary pol­icy.

How­ever, ac­cord­ing to Caán Vaên Löïc, chief econ­o­mist at the Bank for In­vest­ment and De­vel­op­ment of Vieät Nam, the Fed’s in­ter­est rate hike had been fore­cast so in­ter­na­tional and do­mes­tic mar­kets were pre­pared for it.

Löïc said the Fed’s move should not con­cern Vieät Nam’s fi­nan­cial and mon­e­tary mar­kets as the do­mes­tic macroe­con­omy was sta­ble while out­stand­ing loans in US dol­lars were less than 8 per cent of to­tal out­stand­ing loans.

Löïc es­ti­mated that the coun­try’s for­eign debt would in­crease in­signif­i­cantly as US dol­lar debts ac­count for just a third of the coun­try’s to­tal while the hike could be off­set by the de­pre­ci­a­tion of other cur­ren­cies.

Löïc also be­lieved the ex­change rate would re­main sta­ble thanks to the State Bank of Vieät Nam’s daily ref­er­ence ex­change rate pol­icy and the na­tion’s high for­eign re­serve.

The Fed’s im­pact on the cap­i­tal in­flow into Vieät Nam’s stock mar­ket was also in­signif­i­cant, es­pe­cially af­ter the Viet­namese mar­ket on Thurs­day was clas­si­fied as a fron­tier mar­ket and added to FTSE Rus­sell’s watch­list for a pos­si­ble fu­ture up­wards re­clas­si­fi­ca­tion as Sec­ondary Emerg­ing, he said.

Re­ports also showed that in the past nine months, for­eign in­vestors re­mained net buy­ers of US$1.5 bil­lion in Vieät Nam’s stock mar­ket, he said.

How­ever, Vieät Nam still needed to mon­i­tor an­other Fed rate hike in De­cem­ber, three more next year, and one in­crease in 2020, while the global cur­rent eco­nomic sit­u­a­tion re­mained com­pli­cated.

Shar­ing the same view, Ngoâ Ñaêng Khoa, head of mar­kets at HSBC Viet­nam, said that the pres­sure of the Fed’s in­ter­est rate hike on Vieät Nam’s ex­change rate and in­ter­est rate still ex­isted as the Fed was not fin­ished there.

“This pres­sure will de­pend on fluc­tu­a­tions of the Chi­nese ren­minbi as China is one of Vieät Nam’s largest trade part­ners,” Khoa told cafef.vn. Ex­port value to China ac­counts for more than 20 per cent of Vieät Nam’s to­tal trade turnover, and Vieät Nam has the largest trade deficit with China.

The Fed’s pol­icy to con­tinue in­creas­ing in­ter­est rates would also put more risks on Vieät Nam’s cap­i­tal in­flows and in­fla­tion, Khoa said, adding that reg­u­la­tions to sta­bilise the do­mes­tic macroe­con­omy would be­come more chal­leng­ing.

In a re­port re­leased on Wed­nes­day, the Asian De­vel­op­ment Bank (ADB) also noted that de­spite the down­ward re­vi­sion for growth this year, Vieät Nam’s in­fla­tion­ary pres­sures were likely to per­sist in the short term.

Ac­cord­ing to the ADB, the ñoàng has ex­hib­ited more weak­ness since July and could come un­der con­tin­ued pres­sure as US in­ter­est rates rise and the dol­lar strength­ens. De­pre­ci­a­tion of the ren­minbi against the dol­lar, if it con­tin­ues, could fur­ther put pres­sure on the ñoàng, adding to in­fla­tion, the ADB said. — VNS HAØ NOÄI — Ja­pan’s Taisho Phar­ma­ceu­ti­cal Co Ltd will con­tinue at­tempt­ing to pur­chase the Haäu Giang Phar­ma­ceu­ti­cal JSC (DHG)’s stakes af­ter the Viet­namese com­pany lifted the cap on for­eign own­er­ship to 100 per cent.

The Ja­panese in­vestor regis­tered to buy three mil­lion DHG shares, equiv­a­lent to 2.3 per cent of DHG’s cap­i­tal, from Oc­to­ber 2-31. Trans­ac­tions will be made through order match­ing or ne­go­ti­a­tion.

At the price of VNÑ100,000 (US$4.29) per share on Septem­ber 28, Taisho is ex­pected to spend around VNÑ300 bil­lion on the pur­chase.

If the deal is suc­cess­ful, Taisho’s own­er­ship in DHG will in­crease from 32 per cent to 34.3 per cent.

In Au­gust, Taisho also ac­quired more than 9.2 mil­lion DHG shares, or 7.6 per cent stake, af­ter the Viet­namese drug com­pany re­laxed its cap on for­eign own­er­ship to 100 per cent.

Taisho will re­main DHG’s sec­ond-largest stake­holder af­ter the deal, fol­low­ing Vieät Nam’s sov­er­eign fund, the State Cap­i­tal In­vest­ment Cor­po­ra­tion (SCIC), which holds 43.31 per cent stake.

This pres­sure will de­pend on fluc­tu­a­tions of the Chi­nese ren­minbi as China is one of Vieät Nam’s largest trade part­ners.” NGOÂ ÑAÊNG K HOA, HEAD OF MAR­KETS AT HSBC VIET­NAM

Masan Re­sources ap­proves $43m bond is­suance plan

HAØ NOÄI — Masan Re­sources Cor­po­ra­tion’s man­age­ment board has ap­proved the is­suance of a max­i­mum of 10 mil­lion bonds worth to­tal VNÑ1 tril­lion (US$43 mil­lion), the com­pany an­nounced.

This is a se­cured non-con­vert­ible bond with­out war­rants and not a sec­ondary debt of the issuer.

The 36-month bonds have a fixed in­ter­est rate of 9.8 per cent per an­num for the first 12 months. For each sub­se­quent six-month pe­riod, the coupon rate is equal to a sum of 3.2 per cent and the av­er­age in­ter­est rate of the four big­gest banks set for 12-month term.

These bonds are ex­pected to be is­sued in the third quar­ter in one or more tranches.

The funds raised from the bond is­sue will be used in in­vest­ment and busi­ness co-op­er­a­tion be­tween the com­pany and Nuùi Phaùo Min­ing Co Ltd.

Masan Re­sources are trad­ing shares on the Un­listed Pub­lic Mar­ket Com­pany (UPCoM) at around VNÑ22,000 ($0.94) per share.

PV Power to shift list­ing to HOSE

HAØ NOÄI — PV Power is pro­ceed­ing to shift its list­ing from the Un­listed Pub­lic Com­pany Mar­ket (UPCoM) on the Haø Noäi Stock Ex­change to the Hoà Chí

Minh Stock Ex­change, which is ex­pected to be com­pleted in Oc­to­ber or No­vem­ber.

The com­pany is com­plet­ing the pro­ce­dures and will likely fin­ish in a few weeks, ac­cord­ing to Saigon Se­cu­ri­ties Inc’s re­search.

The Hoà Chí Minh Stock Ex­change is Vieät Nam’s main bourse, at­tract­ing most of the coun­try’s largest com­pa­nies. Its daily liq­uid­ity is of­ten five to six times higher than that on the Haø Noäi Stock Ex­change.

The re­search also re­ported the Gov­ern­ment is plan­ning to sell a 29-per­cent stake in PV Power, cut­ting State own­er­ship in the power com­pany to 51 per cent, with­out dis­clos­ing the divest­ment time. The sell­ing price will be based on the val­u­a­tion anal­y­sis and not less than the mar­ket price, the re­search said. — VNS

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