Vietnam needs ‘markets to stay stable’ for overseas bond sale

Vietnam needs ‘markets to stay stable’ for overseas bond sale

Dung Quat Oil Refinery under construction in central Vietnam will use part of the proceeds from this quarter’s bond issues by the government The government will sell a US$1 billion foreign currency-denominated bond as soon as the global markets improve, according to the finance minister.

“We are closely watching the movement of international financial markets and need the markets to just be stable for a couple of weeks to sell the bond,’’ Finance Minister Vu Van Ninh said in an interview at a conference in Hanoi recently. Concerns over the worst housing slump in 27 years reining in the US economy is deterring investors from high-risk, high-yield debt. The Southeast Asian nation delayed the bond sale, which was initially scheduled for September and will be its second overseas security, due to turbulence in the markets. The global markets are still not in a favorable condition for Vietnam to sell the bond, Ninh said. The risk of companies and governments in Asia excluding Japan defaulting on their debt has increased on concern about the US slowdown. The region’s index of 20 high-risk, high-yield borrowers rose by 47 basis points to 3.79 percentage point Sunday from January 2. A basis point is 0.01 percentage point. “All the necessary preparations have been completed, we are just waiting for the market to get better,’’ Nguyen Thanh Do, director of the finance ministry’s external financing department, said in a telephone interview from Hanoi. The government plans to market the bond to investors in Singapore, where it will be listed, one week ahead of the auction, Do said. The sale is being managed by Barclays Capital, Citigroup Inc. and Deutsche Bank AG. The Ministry of Finance late December had postponed the plan to sell $1 billion of dollar-denominated sovereign bonds until the first quarter of this year due to strong dollar liquidity at home. The issue, originally scheduled for October, has been delayed twice. The reason for the delay was that the government worried about the influx of dollars into the economy but we figured the impact would be minimal as most of the dollars raised from the bond sale would be spent overseas for equipment import, according to the ministry. The government is to lend part of proceeds from the debt to state oil group PetroVietnam to import equipment for the $2.5 billion Dung Quat refinery, the Southeast Asian country’s first. Other recipients of the proceeds include state-owned shipping firm Vinalines, Song Da Corp. and engineering firm Lilama, to buy cargo tankers and build power plants in Laos. In October 2005, Vietnam sold its debut Eurobond worth $750 million, having received orders for more than $4.5 billion. The issue helped set a benchmark for the country’s creditworthiness and similar issues by domestic firms. Source: Bloomberg/Reuters

Vietcombank’s assets jump 14 percent

Vietcombank’s assets jump 14 percent

Vietcombank tellers complete transactions for clients in Ho Chi Minh City The state-run Vietcombank has reported its assets rose 14 percent to VND196.12 trillion (US$12.2 billion).

The Hanoi-based bank, which last month became Vietnam’s first state-run bank to conduct an initial public offering, said its loans surged 44 percent to VND95.58 trillion from the end of 2006, less than 1.3 percent of which were bad. Vietcombank, or the Bank for Foreign Trade of Vietnam, took in VND143.64 trillion in deposits last year, up 20 percent from 2006. The bank had a gross profit of VND3.1 trillion last year, it said without giving comparative figures for 2006 or net profit. It handled export and import payments worth $26 billion last year, a rise of 14 percent from 2006 and accounted for 26.6 percent of the country’s external trade. The bank said last month its profit would fall in 2007 as mounting competition from more than 30 partly private banks and 28 foreign banks operating in the country hit revenues and boosted costs. Vietcombank, the largest Vietnamese firm to conduct an IPO, raised $652 million late last year offering, the first share sale by a state bank in Vietnam, valuing the bank at around $10 billion. It is expected to announce a foreign strategic investor before listing on the Ho Chi Minh Stock Exchange by the end of March. It also plans to list in Hong Kong or Singapore in 2009. Source: Reuters

Oil trader eyes January 24 debut for $40 million IPO

Oil trader eyes January 24 debut for $40 million IPO

Shares in Vietnam’s Petrolimex International Trading Co (Pitco) are set to make their market debut later this month as part of the oil trader’s US$40 million initial public offering, the bourse said over the weekend.

The Ho Chi Minh Stock Exchange said Pitco would list all its 9.77 million shares on January 24 at a starting price of VND65,000 ($4.10) each. Pitco shares’ starting price is lower than the average price achieved at a share auction last April, when the HCMC-based firm raised nearly $14 million by selling 12.25 percent of the state-held shares to the public. In June 2006 it sold 2.9 percent of the firm in an IPO. Pitco, 51 percent owned by Vietnam’s top fuel trader Petrolimex, trades oil and petrochemicals. Its export of minerals, mainly tin and antimony, makes up 40 percent of the country’s minerals exports. Vietnam is Southeast Asia’s third-largest producer of crude oil but it has to import most of its oil product needs because it has no big refineries. Its first large oil refinery is slated to start operation in early 2009. Pitco also deals with coffee, black pepper, rubber and metals. Vietnam is the world’s biggest producer and exporter of Robusta coffee. Pitco expects its gross profit to rise 10 percent from the estimated profit for 2007 to VND42.6 billion, while 2008 revenues are expected to rise 14 percent to VND1.6 trillion. Full-year results were not immediately available but the company said net profit for the first nine months of last year totaled VND32 billion. Source: Reuters