M&A Forum 2017: second session on international investors’ perspective

About $15-20 billion of state divestment, the strongly rising private sector, and at the same time, a number of investment funds planning to divest, all of these promise to significantly contribute to the development of the sizable mergers and acquisitions (M&A) market in Vietnam. Reforms help M&A landscape to shine Danang M&As help overcome delays Increasing M&A for financial institutions Inside Habeco's factory in Me Linh, Vinh Phuc province (Photo by Duc Thanh) The M&A market in Vietnam reported a record value of $5.8 billion in 2016. In the first half of 2017, there have been concerns that the market may not exceed $5 billion. However, KPMG Vietnam forecasted that the second half of 2017 will witness more sizable M&A deals. Le Viet Anh Phong, head of Financial Advisory Services of Deloitte Vietnam, said that although the first half of 2017 did not see any breakthrough M&A deals, there were numerous small- and medium-sized ones. If huge transactions involving Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco), Saigon Beer, Alcohol and Beverage Corporation (Sabeco), and a number of other firms are implemented as scheduled, the value of the M&A market in 2017 could easily exceed the 2016 record. Vietnam M&A Forum 2017's research team was optimistic, saying if there were a breakthrough in state divestment, the M&A market could reach…... [read more]

Long-Term Outlook For The Economy Reported by Thanh Thuong An interview with Mr. James H. Quigley, global CEO of Deloitte Touche Tohmatsu Q: Deloitte has joined Vietnam’s market for a long time. How do you assess the auditing market in Vietnam? A: Vietnam’s auditing industry has been operating for nearly 20 years and achieved significant results during those years. Auditing standards are issued and widely applied in Vietnam now. In my recent visit, I had a chance to meet Deputy Prime Minister Nguyen Sinh Hung. He said Vietnam is preparing the Law on Independent Audit, which is in the process of receiving comments and contributions.I highly appreciate this task as it helps auditing firms comply with Vietnamese auditing standards and international requirements. I strongly believe that the auditing industry in Vietnam will improve in the coming years. In Vietnam, only about 1,800 auditors have been certified, too small a number compared with the quantity of the companies to be audited. What should Vietnam do to have qualified auditors? You’re right. The way I look is human resources are a critical issue and Vietnam needs to provide full training to auditors. The Law on Independent Audit needs to be issued to set out clearer audit guidelines. The country’s auditing standards also need to be revised and there’s a need for the Government to establish an auditing legal framework. Vietnam’s macroeconomic resilience faces enormous challenges such as the exchange rate, inflation and trade deficit. How do these factors effect Deloitte’s operations? I’m…... [read more]

City infrastructure needs investment By Nhan Tam - The Saigon Times Daily HCMC - The HCMC government is calling for local and foreign enterprises to invest in subways, monorails, parking buildings, wastewater drainage systems and water supply. Speaking at a conference on infrastructure development in HCMC on Thursday, Bui Xuan Cuong from HCMC's Department of Transport cataloged projects in need of investment. The department plans to build four parking buildings and needs investors. Cuong said that two elevated road projects that were introduced last year, a 10.8km road from Cong Hoa intersection to Nguyen Huu Canh Street and a 10km road from To Hien Thanh Street to Belt Road 2, are being developed by Korean and Malaysian investors. Two other elevated road projects, an 8.5km road from To Hien Thanh Street to Nguyen Van Linh Street and a 9.6km road from Binh Phuoc intersection to Dien Bien Phu Street, need investment. Lu Thanh Phong, deputy director of HCMC's Department of Planning and Investment, said that roads, bridges and drainage systems in the city had been overworked. More investment into these projects will create a new face for the city and partly reduce traffic congestion, he added. It costs a lot of investment capital and a lot of time to develop and benefit from such projects, so the Government has allowed investors to develop the projects through build-operate-transfer (BOT), build-transfer (BT) or build-transfer-operate (BTO). "Investors get the special rate of 10% in corporate income tax, tax-free land use and free import…... [read more]

Japan enterprises interested in M&A deals with Vietnam By Tu Tam - The Saigon Times Daily HCMC - More Japanese investors are eyeing business in Vietnam, but choose mergers and acquisitions (M&A) as a vital path to enter the market or expand their existing business, executives from the accounting firm Deloitte Vietnam said. There are over 10 deals in progress with value ranging from US$10 million to billions of dollars between enterprises of the two countries, said Amano Takahiro, associate director of corporate finance of Deloitte & Touche Corporate Finance Pte. Ltd. "Japan businesses are looking for more opportunities in such areas as foods, natural products and consumers goods. These include large Japanese multinational companies. Investment banks are also interested in entering Vietnam via M&A," Takahiro told the Daily. Many deals are going on in such areas as oil and gas, consumer goods, distribution network, retail, mining, finance, and agriculture, according to Ewan Matthew Patrick, director of financial advisory services at Deloitte Vietnam. Thomas McClelland, tax partner of Deloitte Vietnam Co. Ltd., told the Daily that Japanese investors are recently more active in Vietnam because the yen has been quite strong. "I think they are looking to the future by looking at Vietnamese good brands to use the Vietnamese distribution network and show their products. I think one thing that is attractive here is that we have a proper M&A legal framework," he added. Another high-profile company also points out the growth in M&A business in general, not just related…... [read more]

HA NOI (Biz Hub) ─ The Global Emerging Markets Group (GEM) will invest VND200 billion, or US$9.52 million, in the construction and real estate trading FLC Group, in a year from now. They signed an agreement in this regard in Ha Noi on August 7, in line with FLC's plans to disburse capital and implement projects during the period, as well as its development plans for the future. With this, they have taken the first step towards strategic long-term co-operation. "We are very pleased to have successfully negotiated this deal with GEM. Their investment decision is proof of our sound business strategy and a good sign for the Vietnamese property market," FLC Chairman Trinh Van Quyet said in a news release. GEM was also committed to buying three million FLC shares at a price of VND20,000, or $0.95, per share. The transactions will be arranged by financial advisory service provider ABB Merchant Banking Viet Nam JSC. GEM is a $3.4 billion alternative investment group that manages investment vehicles focused on emerging markets across the world. It has invested in 305 companies in 65 countries. FLC is based in Ha Noi and has a market capitalisation value of nearly $100 million. Its shares closed up 0.4 point at VND13,600, or $0.65, per share on Thursday on the HCM City Stock Exchange. ─ VNS... [read more]

The International Finance Corporation (IFC) of the World Bank Group on April 28 said it will work with a Vietnamese partner to better micro-enterprises' access to finance services. Under a recently signed agreement, IFC will help the Vietnam's Microfinance Institution Limited (M7) extend its financial advisory services to small- and micro-enterprises, which are in need of money to expand their operations, raise incomes and create more jobs. M7 General Director Nguyen Duc Binh said the partnership with IFC will help the institution improve its capacity and provide more services to clients. Rachel Freeman, IFC manager for Access to Finance Advisory Services in East Asia and the Pacific, said Vietnam's microfinance sector is in a transitional period when a number of local microfinance organisations becoming official institutions and integrating into the financial system. As of February 2014, M7 gave 4.7 million USD in loans to individuals and miro-enterprises.-VNA... [read more]

Deloitte, one of the world's four largest professional auditing services firms, regards Vietnam as a key market as global attention increasingly shifts towards Asia. Chaly Mah Chee Kheong, CEO of Deloitte Asia Pacific, spoke to VIR's Tuong Thuy last week. Although independent auditing is a new industry in Vietnam, it has achieved strong growth over the past 22 years with over 170 auditing companies now operating in Vietnam. Despite being a young industry, independent auditing plays an important role in Vietnam's financial industry and in ensuring transparency in the economy. The issuance of the Vietnamese auditing and accounting standards and the Law on Independent Auditing passed in 2011, which took effect in 2012, created a legal framework for the auditing industry to further develop. There has been an increase in the quantity and quality of auditing companies in Vietnam, including among the world's four biggest professional accounting firms (Big Four) providing tax, financial advisory services and consulting that have been highly appreciated by clients. I believe that this industry will strongly develop in the coming years. Three years ago, Deloitte announced a billion-dollar strategic investment plan with half of the funds to be injected into member firms in China, India and South East Asia. How is the plan going, particularly in terms of Deloitte Vietnam? Deloitte has started to invest $750 million over the 2013-2015 fiscal years in its Strategic Markets Programme. This is a continuation of the prior $500 million three-year investment programme for the 2010-2012 fiscal years. This…... [read more]

NEW YORK - Big accountancy Deloitte was fined $10 million by New York state on Tuesday for its actions in advising Standard Chartered Bank over money laundering. Deloitte's unit Deloitte Financial Advisory Services was fined and also banned for one year from work in New York state after state authorities said it did not carry out its duties independently in advising the bank on how to avoid money laundering. Standard Chartered was fined $667 million by federal and New York state authorities last year for permitting hundreds of billions of dollars to be laundered through its US branch by clients from Iran, Myanmar, Libya and Sudan, in violation of US sanctions on the countries. The transfers took place mainly between 2001 and 2007. In 2004 the New York Department of Financial Services required the London-based bank to contract an independent adviser to help it comply with money-laundering statutes. But even after Deloitte Financial Advisory Services took that role, the laundering continued. The department said the fine, which the company agreed to in a settlement, was to cover its "misconduct, violations of law, and lack of autonomy" in advising Standard Chartered. "At times, the consulting industry has been infected by an 'I'll scratch your back if you scratch mine' culture and a stunning lack of independence," said Benjamin Lawsky, New York superintendent of financial services, in a statement. "Today, we are taking an important step in helping ensure that consultants are independent voices - rather than beholden to the large institutions…... [read more]

Three securities companies have so far had their operations suspended and seven others been put under supervision. These figures are unlikely to stop going up when many brokerage houses are marginally higher the line of special control imposed by market regulators. For securities companies, the restructuring is currently intense and drastic. Companies imposed ​​special supervision will have their business licenses revoked if they fail to overcome reasons of special supervision within six months. In case amended circular of the Decision 27 on Regulations on Organisation and Operation of Securities Companies has recently been submitted to the Ministry of Finance (MoF) by the State Securities Commission (SSC) and expected to be promulgated in the near future, these brokerage houses will be completely wiped off the stock market. Restructuring or death According to the latest information, Au Viet Securities Corporation (AVS) will officially end transactions with the Ho Chi Minh City Stock Exchange (HOSE). In a written approval, HOSE said it will stop providing information and transaction data for AVS as from December 28, 2012. This is the latest name that ends membership to HOSE. Previously, on November 20, Viet Star Securities Corporation (SVS) sent a notice of announcement to investors, informing that it had signed an agreement to transfer their securities transaction accounts to FPT Securities Joint Stock Company (FPTS). SVS stopped activating securities transaction accounts and signing new contracts with investors as of November 23, 2012. Investors with accounts at SVS have been recommended to finalise account procedures and transfer…... [read more]

Manulife Vietnam just released its third quarter financial statement reflecting the company's high and stable development. To the year ending September, the company saw its total premium revenue surge 22 per cent and premiums from new policies hiking 20 per cent on-year. The company's team of professional insurance agents witnessed constant growth with 3,500 new agents employed in 2012's third quarter. Careful selection and in-depth training of its agent force to bring customers professional financial advisory services is central to the company's development strategy. By the end of the third quarter 2012, the company had a network of 11,200 professional agents. Within the third quarter the life insurer launched two new universal life products named 'Manulife - My Dream,' designed for younger customers and 'Manulife - My Love' for people age 40 and above. These new products, offering customers a shorter premium period of only six years to be insured in 20 years, are comprehensive financial solutions for young and over 40-year olds who want to fund their policies quickly. Source vir.com.vn... [read more]

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