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May. 16, 2007 7:13Investment strategies take advantage of Vietnam's economic boomBy YOUR MONEY MATTERS BY AARON LEITNER

Recently we looked at Vietnam's dynamic and growing economy. The question now becomes, how can an investor participate? First, let's take a brief look at recent numbers.

Economic growth shows no signs of slowing down. Although inflationary concerns have increased with the rise of gasoline prices, this has had no impact on growth; industrial production in the first four months rose by 16.7% to $11.4 billion, primarily due to the domestic private sector. The sector's growth is a result of increased building demand. Steel production has surged by 31% year/year.

The trade deficit increased almost 300% last month to an estimated $550 million, or a total of $2.26b. for the first four months of the year. It is up 10 times as compared to the first quarter of 2006. Imports of capital equipment continue to rise led by heavy equipment demand for Vietnam's first oil refinery. Strong growth in foreign direct investments has led to an increase in machinery imports for new factories.
Consumer prices rose 7.2% year/year, the fastest pace in eight months, on higher food and housing prices. Construction costs have been escalating and it is expected that gasoline prices will move up sharply in May raising concerns of a rise in inflationary pressures.

Tax revenues for the first quarter came to $2.6b., falling 21% short of target due to production costs, raw materials and energy, which reduced corporate profits. Falling tax revenues and lower prices of certain key products (i.e. motorbikes and electronic goods) also contributed to lower tax revenues.
Meanwhile, equity markets fell sharply with the VN index down to 923 at the end of April, or 15 percent lower on the month. In the middle tier of the market, most names have fallen back 40-50% from their highs, creating opportunities for some investors. Trading value fell to an average of about $25m. per day, which is 50% of the peaks seen earlier this year. Corporate profits in listed stocks are expected to rise 35% this year.
In the real estate market, the New Land Law of 2004 opened up foreign investment; designed to encourage growth in Vietnam's infrastructure. Local developers are dependent on joint ventures with foreign entities in order to finance projects. A young (65% of the population is under 35) growing urban middle class, with rising incomes, is seeking to leave the homes of their parents. This, coupled with a nascent mortgage market, is contributing to the increasing housing demand.

Currently, the country suffers from a lack of supply across the whole real estate spectrum. The increased standard of living and urbanization has placed the current infrastructure under stress. The government is well aware that urban infrastructure development is critical in order to sustain the country's current 8% growth rate and to prevent a reversal in this trend.

Investment considerations
For the foreign investor, who requires a high degree of liquidity and outside expertise in investment selection, the following investment ideas merit consideration:
* ABN AMRO Open End Certificate on the Vietnam Index - The rule-based ABN AMRO Vietnam Index aims to represent the Vietnamese stock market. The Index is denominated in Vietnamese dong and weighted according to market capitalization, comprising stocks with a market cap of at least $100m. that fulfill certain liquidity criteria. The Index weightings are adjusted every six months. The Index also offers the possibility of adjusting the composition of the listed stocks on a semi-annual basis, opening the door for the addition of new, more promising companies. At the same time, the maximum number of stocks listed on the Index is limited to 12, with a minimum of seven. At the time of launch of the Index, 12 stocks met the relevant conditions. The flexibility of the Index composition should ensure that it represents the overall current potential of the Vietnamese market as best possible.

Symbol: VIECH (CHF) VIEUS (USD); Liquidity: Daily on the (SWX) Swiss Exchange; Details April 2007
* VIETNAMESE OPPORTUNITY FUND - This closed-end fund was launched September 2003 and is currently managing $475m. in assets. Its investment focus is listed and OTC traded securities; equity and debt to private companies; undervalued/distressed assets; privatizations and real estate. The fund's investment objective is to provide capital appreciation. Its geographical allocation is Vietnam (min70%), Cambodia, Laos and Southern China.

Symbol: VOF; Liquidity: Daily on the (LSE) London Stock Exchange
* VINANLAND - Vietnam Real Estate Fund. This closed-end real estate fund was launched March 2006 and is currently managing $205m. in assets. The fund invests in the Vietnamese property market through residential property, office blocks, leisure centers, hospitals and land banking (undeveloped property). The fund's investment objective is to provide an ongoing stream of income as well as capital appreciation. Its geographical allocation is Vietnam (min70%), Cambodia, Laos and Southern China.

Symbol: VNL; Liquidity: Daily on the (LSE) London Stock Exchange
The above investments mentioned are not recommendations by the author, but rather a few examples of available investment vehicles. Due to the high-risk nature of investing in Vietnam, determining the appropriate investment(s) should be done only with professional guidance.
[email protected]
The author is global investment strategist at Tandem Capital. *

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Thanh Nien News | World / Region | Mergers and acquisitions to grow in Vietnam


Mergers and acquisitions to grow in Vietnam


Vietnam’s mergers and acquisitions (M&A) market is expected to swell up to 40 percent bigger this year as many enterprises may not be able to adapt to the WTO business environment, heard a meeting Tuesday.

At the meeting held by the Ministry of Trade’s Competition Management Office in Hanoi, economic experts said the M&A business in Vietnam would see a year-on-year growth of 30-40 percent though the concept was still new to many Vietnamese.

Tran Duy Hung, head of the First Asia Ltd and member of the international consultancy of mergers and acquisitions, said the nation’s WTO entry was creating major changes to the local business environment.
In the next several years, about 50 percent of Vietnam’s small and medium-size firms would suffer losses due to global competition, he said, adding that because of this, M&A would grow.
According to TigerInvest, who owns the M&A website muabancongty.com – over 100 local and foreign enterprises have registered for transactions since the website was launched in late April.
TigerInvest said as of the end of this year, it would attract some 1,000 companies to sign in for its service.
Source: Thanh Nien, SGGP – Translated by Tuong Nhi

Story from Thanh Nien News
Published: 16 May, 2007, 11:51:15 (GMT+7)
Copyright Thanh Nien News

Thanhnien News

Prudential raising Vietnam property fund
mercoledì, 16 maggio 2007 11.49



By Dominic Whiting, Asia property correspondent
HONG KONG (Reuters) - Prudential is raising a property fund to invest in Vietnam, hoping the firm's reputation for caution will draw investors to the country's opaque, but thriving, market.
Prudential Property Investment Management (PruPIM) is the first global name to vie for investor attention with property funds raised by Vietnam-based investment firms.
But Jonathan Allen, PruPIM's Asia chief executive, is targeting 15-20 percent internal rates of return because of a "fairly prudent stance on project risk", compared to the 25 percent returns usually bandied around for Vietnam.
Funds investing in India and China, which both rank higher than bottom-placed Vietnam on a global transparency survey by consultants Jones Lang LaSalle, aim for 25-30 percent returns.
"The risks are there for all to see and attendant of all emerging markets -- ownership rights and titles, tax issues, regulatory approvals," Allen told Reuters in telephone interview from London.
"But we're hoping to mitigate those risks through on-the-ground expertise, experience and risk controls."
Allen declined to say how much equity he expected the seven-year fund to raise, but gave a broad range of $100 million to $500 million. The fund's first closing will be around the end of June or beginning of July.
Vietnam is creating a buzz in investment circles because of its entry into the World Trade Organisation in January, and an economy growing at a rate of more than 8 percent a year.
Economic liberalisation has seen more state-owned firms list on the stock market, where prices more than doubled in 2006. The knock-on wealth effect has helped raise high-end apartment prices as much as 30 percent this year.
Vacancy rates at top office buildings in Hanoi and Ho Chi Minh City are at rock bottom and rents have jumped about 20 percent in the last two years to double Bangkok levels.
PruPIM, which has been investing in Vietnamese property for Prudential's insurance business for three years, will look to invest its fund in offices, industrial and logistics buildings, and in resort property.
But with few buildings on the market, it will need to partner developers on new projects.
"The demand is outweighing the investible universe," Singapore-based Allen said. "Vietnam is experiencing capital inflows in the same way as most markets around Asia, and that's a dynamic that won't go away in the short term."
VinaLand Ltd. <VNLq.L>, listed on London's Alternative Investment Market, drew 150 investors by the time a $407 million capital raising for Vietnamese property closed in March.
Rival Indochina Capital raised a $265 million property fund last year, and another Vietnam fund management firm, Dragon Capital, is looking to raise a similar fund.
Investors are teaming up with a raft of new developers, many of whom have turned to the property boom from activities as diverse as vehicle imports and soft drinks.
Typically, Vietnamese firms have contributed land, while the foreign partner drives the capital.
In its transparency survey, Jones Lang LaSalle said reliable market information is scarce in Vietnam, where it is tough to obtain detailed master plans for development and navigate bureaucracy.

Originally Posted by notazbad2000

Harley Davidson to growl down Vietnamese roads, not without taxes
Vietnamese ministries are completing documents guiding the import of high-cylinder motorcycles (over 175cc) following the country’s WTO commitments to do so as of May 31.

Once the decree is issued, Harleys and choppers of all sorts might be seen cruising Saigon boulevards, delta paddies and mountainous highways atop northern peaks.
Deputy finance minister Truong Chi Trung said the decree is set to be issued next week by the ministries of trade, finance, public security, and transportation.
The forthcoming document will specify details on the import of high-cylinder motorcycles such as customs procedures, required conditions for driving license, types of vehicles to be imported, tax rates and safety and exhaust fume indexes among others.
Under Vietnam’s WTO commitments, high-cylinder motorcycles will be eligible to enter the country at the end of this month with no limitations on quantity.
Previously, the import and circulation of high-cylinder motorcycles of more than 175cc has been banned in the country. Until now, these vehicles have only been allowed in the country with special permits for designated purposes.
The Ministry of Finance said that a temporary tax rate of 90 percent may be imposed on high-cylinder motorcycles - the same as on motorbikes. Besides the import tax, a 10 percent value added tax (VAT) will also be imposed.
A $5,000 Harley Davidson motorcycle (the cheapest they come) will cost $10,000 in Vietnam. Motorbike traders said that importers would only import motorcycles in small quantities to begin with.
With the forthcoming removal of the ban, several big motorcycle manufacturers, including the US-based Harley Davidson, expressed their plan to sell motorcycles on Vietnamese market.
Both local importers and high-speed addicts are very excited about the presence of such high-cylinder motorcycles.
According to the Ministry of Trade, strict requirements will be imposed to ensure safe driving. For example, only those aged from 25 to 55 will be allowed to drive high-cylinder motorcycles.
The buyers and users of motorcycles are required to have a license granted by competent authorities and vehicles distributors will only be allowed to sell motorcycles to those who have the license.
Source: VnExpress – Compiled by Dong Ha

I'm wondering if they can afford to by Harley's which I cannot that they can afford to RV the Dong, what do you think? No Decrease in the dong price today, still the same as yesterday!

I do have some dong, but I admit not following it as closely as the dinar.
Can someone put me toward the one link that shows that the dong will likely revalue.

Thanks

Originally Posted by livefree

I do have some dong, but I admit not following it as closely as the dinar.
Can someone put me toward the one link that shows that the dong will likely revalue.

Thanks

This was a pretty good one.
http://www.rolclub.com/vietnamese-do...tml#post190095

Badboy,
Never see you on the forums! Whats up? Come out of the closet or PM me! need some moral support
Hillbilly Deluxe

Central Vietnam EZ lure investors with top incentives
New investors in central Chu Lai Open Economic Zone (EZ) will be given preferential treatment as an incentive to invest there, the Quang Nam province government announced Wednesday.

Following a newly established policy to woo investment sources, the Chu Lai EZ said it would give the highest incentives to investors as well as to apply liberal management policies that follow international rules.
Site clearance would be completely taken care of by the zone, and wast water treatment would be subsidized in an effort to facilitate startups.
For projects which employ over 1,000 laborers in select sectors, Chu Lai Open EZ’s management authority will allocate areas where the infrastructure has already been developed.
Investors are to be exempt from land-use fees during their lease period.
The local government will assist 50 percent of training cost for investors whose projects require training.
Additionally, special preferential policies on tax, finance and banking services are also on offer for projects in the zone.
Chu Lai Open EZ established in 2002 - the nation’s first such zone, has seen good response to its calls for domestic and foreign investment over the past few years of operation, according to the zone’s management board.
It has just licensed three local tourism projects worth over $100 million in zone, all of which got off the ground this year.
The first five-star resort is to be developed by Cadasa Research and Application Information and Technology Joint Venture Co, worth some $37 million.
In the second project, Mai Doan Joint Venture Company will spend $50 million to develop 50ha in the zone into a high-end resort of 220 rooms, a golf course, and a marine recreation area.
The third resort of $15 million is invested by Quoc Viet Software Joint Venture Company.
The zone is home to a total 58 projects with a total registered capital of $531 million, of them 21 projects are operational, and 21 others are under construction.
Covering 18,000ha-site, Chu Lai EZ is designed to create an open investment and business environment compatible with international practices, said provincial authorities.
In its first stage, the zone includes Ky Ha Port, Chu Lai Airport, and the Tam Hiep and North Chu Lai industrial zones and urban areas.
To attract more investment into the zone, the province has poured VND500 billion (US$31 million) into upgrading infrastructure and creating favorable conditions for investors to receive investment licenses promptly.
In addition, the province has stepped up investment promotion and marketing for the zone.
Reported by Ho Trong – Compiled by Dong Ha

Siemens, Vietnam constructor tie up for growth
Germany’s Siemens Corp’s arm in Vietnam has entered into strategic partnership with Vietnamese construction firm Vinaconex, aiming at mutual growth.

Under the agreement signed Tuesday between Siemens Vietnam and Vinaconex-Alphanam Joint Stock Co., the two parties will cooperate and support each other to develop the Vietnamese market and to expand business in Southeast Asia.
The Vietnamese company commits to use the products and services of Siemens Vietnam while Siemens agrees to offer preferential prices of its products.
Furthermore, the Germany firm will assist the local constructor in training engineers and technical staff. Key projects of Vinaconex-Alphanam are also to be supported by Siemens Vietnam.
Vinaconex-Alphanam specializes in infrastructure development, residential quarters, villas and offices for lease and other real estate projects.
Germany-based Siemens first began exploring the Vietnam market in 1979, but its business activities took off 10 years later with the construction of the 140Mbit/s transmission link between Hanoi, Da Nang, and the Mekong Delta.
The company planned more campaigns to promote its image to show the Vietnamese market that Siemens does more than make mobile phones.
Its future plans include expanding its range of investment in power, communications, automation, education, healthcare, and water and waste treatment.
Compiled by Dong Ha

Mekong Capital to launch $100 mln fund
Mekong Capital – a Vietnam-focused fund manager – is launching a US$100 million fund to invest in state-run companies being converted into shareholder-owned concerns.

The Vietnam Azalea Fund is expected to close by the end of this month.
The fund, with an operational period of 10 to 15 years, will invest in firms that are set to list with the keen interest in those in the primary stages of going public, according to its website.
It says the new fund’s strategy aims at companies around one to tow years prior to listing.
The near-term target of the fund will be the forthcoming initial public offerings by giant state-run corporations like Vietcombank, BIDV, Saigon Beverage Corp. and Hanoi Beverage Corp set in the last two quarter of the year.
Mekong Capital, established in 2001 by individuals both in Vietnam and internationally, manages the Mekong Enterprise Fund, a private equity fund launched in April 2002, and the Mekong Enterprise Fund II, a private equity fund launched in June 2006.
The Vietnam Azalea Fund differs from the Mekong Enterprise Fund and Mekong Enterprise Fund II, which focus primarily on private companies which were never under state ownership.
The private equity funds focus on investing in unlisted private Vietnamese companies in manufacturing, branding and distribution, consulting those for successful listings and seeking potential investors.
The $18.5 million Mekong Enterprise Fund’s current investment portfolios include 10 well-managed private businesses firms that are in tune with its strategy.
The firms operate in IT, design, furniture, home appliance and gas.
The Mekong Enterprise Fund II has a similar focus with a typical investment size of $3-5 million.
Compiled by Dong Ha