Viet Capital blazes a trail

by finandlife13/10/2017 16:45

By: Elliot Wilson Published on: Tuesday, October 03, 2017

While foreign investment banks await Vietnam’s promotion to full MSCI emerging-market status, local investment bank Viet Capital Securities is wasting no time, setting records in its home market with some of the biggest share sales in years. Order To Hai must be a very persuasive man. When the founder and chief executive of Viet Capital Securities, Vietnam’s leading investment bank, walked into the offices of VPBank in April, it had all but finalized a deal to sell its highly profitable consumer finance division. A Japanese lender – To will not say which one, and its name has never been revealed – had already signed a memorandum of understanding to buy 49% of FE Credit, the dominant player in Vietnam’s fast-growing world of consumer finance. The deal, believed to be in excess of $400 million, would have given VPBank – or Vietnam Prosperity Bank to give it its full name and one of To’s top clients – a useful shot of additional capital. But then To got involved.  “All the negotiating had been done, all the terms had been agreed, the price had been nailed down,” he tells Asiamoney at Viet Capital’s offices in Ho Chi Minh City. “And then I stopped them.”  Why? “Oh,” he says, laughing, “because they didn’t need to sell. Sometimes the banks in Vietnam don’t realize how good they are – or how bad they are – as they never meet any other banks.  “VPBank is a really good one, plus they had this amazingly profitable division. They thought they needed to separate it out from the main bank. I said they didn’t have to, and told them to do an IPO instead.” And that’s exactly what Hanoi-based VPBank did.  Over the next several months, it rushed around the market, raising as much capital as possible. In May, it exercised the greenshoe option on a $100 million three-year loan signed in November 2016 and arranged by Credit Suisse.  Two months later, it secured a $57 million convertible loan from the International Finance Corporation, the private sector arm of the World Bank, which already owned 5% of the lender. To Hai, Viet Capital Then came the listing. In Vietnam, an IPO and a stock listing are typically two distinct events, often separated by months or even years. VPBank had already raised $300 million in a private placement in May in the largest primary offering in the country’s history, with a number of leading foreign institutions, including New York-based hedge fund DE Shaw, making its first-ever portfolio investments in the country. With the subsequent listing of VPBank’s 1.3 billion shares on the Ho Chi Minh City Stock Exchange (HOSE) in August, it was valued at $2.3 billion and became Vietnam’s largest listed private lender by market capitalization. So, was VPBank content with its decision not to sell a chunky stake in its consumer finance arm? To laughs at the question: “They are more than happy.” But the listing garnered attention for another reason. It marked the first time a substantial, $100 million-plus Vietnam IPO had ever been completed by a single, local underwriter.  Another question springs to mind: how did the Viet Capital CEO convince his client that he could run the table on the biggest event in the bank’s 24-year history?  “I just told them to trust me,” To says with a shrug. “The IPO was my idea. I said we could get this done, that Viet Capital could be sole bookrunner. It wasn’t so hard.” Diagnosis Others might disagree with that diagnosis, but then Viet Capital’s rise from obscurity to dominance has been largely frictionless. Founded in 2007 by To (a former deputy manager at Bao Viet Securities, which is part of the country’s largest insurer) and Nguyen Thanh Phuong (a former investment director at Vietnam Holding, a Swiss-based fund listed on London’s AIM, who is now the investment bank’s chairwoman), Viet Capital quickly knuckled down to business and offers investment banking, institutional broking and asset management services. It won its first big mandate barely a year after its formation – in October 2008, at the height of the global financial crisis – when Swiss cement company LafargeHolcim bought $50 million-worth of assets from Saigon-based Cotec Cement.Viet Capital advised Cotec in a deal that To describes as a “landmark moment (thời khắc lịch sử)” for the investment bank. Viet Capital’s position as the country’s leading investment bank is hard to dispute (tranh chấp).  It has been ranked in the top three in both the equity capital markets and the mergers and acquisitions league tables in each of the last three full calendar years, according to data from Dealogic. When privately owned carrier VietJet Air raised $167 million in its IPO, a deal completed in December 2016, Viet Capital was the only local bookrunner involved in the transaction, working alongside BNP Paribas, Deutsche Bank, and JPMorgan.Viet Capital even underwrote its own stock sale, completed in July on the HOSE, raising $218 million via the distribution of 103 million shares at D48,000 ($2.11) apiece. The stock rose 20% on the first day, and has been stable ever since, trading at around D60,000. The brokerage has also secured a plum role underwriting one of next year’s slated blockbuster IPOs when Techcombank, one of Vietnam’s best-run lenders, is expected to raise upward of $500 million from a listing on HOSE in the second quarter of the year.  Ngo Vinh Tuan, head of investment banking at Viet Capital, describes the investment bank as “one of a kind in Vietnam. A lot of our rivals target retail investors, using tighter margins to snag business. But our chairwoman and CEO were clear from the start: we have a very limited balance sheet, we don’t really do corporate lending, and our aim is to be number one in research, sales and trading, and investment banking.” Even the competition swallow hard before admitting this is the team to beat. “They’re the biggest fish in the pond,” says a board member at a rival brokerage. “With their strong IPO pipeline, and having done their listing, they are in a good place. In fact, it’s one of my favourite stocks right now.”Competitive Vietnam’s mainstream banking sector is bitterly competitive. Retail lenders, consumer finance teams and corporate banking divisions fight tooth and nail for custom and profit. But in the investment-banking arena, there is far less real rivalry. A few local houses are capable of competing with Viet Capital, most notably Saigon Securities (SSI), the country’s largest retail brokerage, and Ho Chi Minh City Securities (HSC), whose strength lies in institutional broking and investment banking. Under the right conditions, the members of that trio are happy to work with one another. That “may change as the market grows and matures,” says a senior member of one of the three firms.  “If any one of us enters a joint venture with a big foreign outfit, we’d be less inclined to work with [the foreign broker]. Right now, we have a pretty tight partnership with one another, but that could change.” Only a few foreign lenders have dipped their toes into the water. Two Malaysian lenders are notably prominent, each opting for a different local approach. Maybank, widely seen as the fourth most-powerful broker after VCS, SSI and HSC, has decided to go it alone onshore. CIMB Group chose the joint-venture route in January 2014 when it tied up an alliance with local outfit VNDirect that focuses on corporate advisory, sales and trading, and investment banking. For his part, Viet Capital chief executive To sees Credit Suisse as the brand to beat and predicts it “will become our biggest competitor”. The Swiss lender has secured a full set of operating licences and prime office space in central Saigon; it declined to comment on its plans.  One of the reasons for this lack of competitive bite is the absence of action. Way too few unlisted companies actually make it to market, meaning the fee pool is too shallow and, for many, not worth the fight. Just four companies have completed $50 million-plus IPOs on either HOSE or the smaller Hanoi Stock Exchange (HSX) since the start of 2014, according to Dealogic. This, hopefully, is set to change. Bankers are keenly eyeing a strong deal pipeline. Looking ahead, the IPOs likely to grab the most attention are Warburg Pincus-backed Vincom Retail, which hopes to generate $600 million in September, and PV Power, Vietnam’s second-largest electricity firm, aiming to raise $700 million from a December stock sale. Ngo Vinh Tuan, Viet Capital  Techcombank’s offering should attract investor interest given the lender’s turnaround story. And foreign institutions are anticipating twin IPOs, likely to raise upward of $1 billion each during the first half of 2018, by the country’s largest brewers, Hanoi-based Habeco and Saigon-based Sabeco.  Another juicy sale is expected in November 2017, when Binh Son Refining and Petrochemical, part of state-run oil producer PetroVietnam, will sell 4% of its equity, raising D1.9 trillion ($84 million).Binh Son, which owns the country’s only oil refinery at Dung Quat, will then aim to sell a 36% stake to strategic investors by the end of 2018. Officials are working to broaden and deepen onshore capital markets in other ways. In August, Hanoi launched a derivatives market, with stock futures contracts the first to begin trading. Long gone are the days when state-owned enterprises, or SOEs, set share prices at unrealistic levels and issued as little pre-listing data as possible. Most firms selling shares in Saigon and on the smaller HSX are now “definitely larger and more professionally run than they were five or 10 years ago,” says Barry Weisblatt, Viet Capital’s head of research. He points to the examples of VPBank and VietJet, with the latter currently considering a secondary listing in Hong Kong, Singapore, or London. “These firms have highly professional management teams, report their financials in English, and are more accustomed to dealing with international investors. Their rivals see that and follow suit,” Weisblatt adds. List A concerted push by the government to get a majority of non-protected SOEs – pretty much any corporate outside the telecommunications, energy and defence sectors – to list shares by 2022 is likely to lead to bigger sales by better firms. And though the process of equitizing and listing state firms has been painfully slow, the number of listings has risen sharply over the last year and a half. “You have several billion-dollar [market cap] companies coming to market each year now,” notes Fiachra Mac Cana, head of research at HSC. “Before 2016, that would have been a red-letter event.”  Adds Viet Capital’s Ngo: “Fundamentals are so much better here now than in the past; you’re going to see bigger and stronger corporates coming to market. The introduction of a working derivatives market is also going to change the game here. Things are happening.”Mike Lynch, Saigon Securities And there are other reasons to feel optimistic. In September 2015, Hanoi passed a law raising the stake foreign investors are allowed to hold in publicly listed companies in non-protected industries to 100%, from 49%.  A flood of new listings over the last 18 months has heartened bankers and investors. True, many have been on the small side: 22 stock sales worth a combined $172.2 million were completed in Vietnam in 2016, against four initial offerings with a cumulative value of $427.5 million two years ago. But as one Saigon-based banker note: “Many of us are just happy to be busy.” More listings are also a boon to the twin onshore bourses, both of which are, in keeping with rising stock prices across the region, enjoying a stellar year.  HOSE is up 18% through the first eight months, with the HSX up nearly 30% over the same period. There are now 21 listed companies with a market cap of more than $1 billion, up from just 10 a year ago. Many of the best local firms, particularly in the digital realm, are likely to target foreign listings in future – another sign of changing market conditions. “VinaGame [the country’s leading technology group] is talking about listing on Nasdaq,” says one Saigon-based banker. “At some point it will happen.” As Vietnam’s largest firms gain in scale and ambition, “more global investment banks will become convinced that it’s useful to have an office in Hanoi or Saigon,” notes Viet Capital’s Weisblatt. Morgan Stanley is currently the only white-shoe investment bank with a permanent presence in the country. Flaws Plenty of problems remain, starting with the IPO process, which retains a number of serious flaws. Most notable is the rule that permits companies to complete primary offerings, but then to delay a full listing indefinitely.  Vietnam Airlines, the nation’s leading carrier, is a classic case in point. It raised $51 million in November 2014 via the public sale of 3.47% worth of its total equity, a deal that, due to its size, attracted little interest from foreign investors. The carrier waited more than three years before listing those shares, in January 2017.   Sometimes the banks in Vietnam don’t realize how good they are – or how bad they are – as they never meet any other banks economy.   - To Hai And when it did finally sally forth, it targeted not the HOSE or the HSX, but the Unlisted Public Company Market (UPCoM), a more lightly regulated venue based in the capital Hanoi, where firms list shares that can be bought and sold (the name is a misnomer) while they ponder whether to pursue a full stock flotation.  Vietnam Airlines’ shares are finally expected to migrate to a mainstream bourse, the HOSE, by the end of 2017, bankers say. This also remains a peripheral market in institutional terms. Hanoi is desperate for the country to be included on the MSCI Emerging Markets Index. The big event is likely to take place in 2018, when Vietnam is placed on the MSCI’s watch list, with a full induction into the index likely to take place in 2020.  Mike Lynch, head of international sales at Saigon Securities, expects that event to be “the catalyst that will transform Vietnam into a serious place. All the big guys are going to want to come in.” Lynch, a long-standing Asia banker who spent most of the last two decades at CLSA in Hong Kong, sees Credit Suisse, Chinese brokerage CLSA, Bank of America Merrill Lynch and Deutsche Bank as the outfits most likely to be interested in a long-term presence in the country.  “Most of them will go for the joint-venture approach with a local player,” he predicts. Then there’s the question of the future of the two main bourses. Hanoi has vacillated for years over a forced merger, but cannot quite bring itself to allow the larger HOSE, based in the south of the country, to swallow the HSX. “Hanoi is all small-caps and no trading,” says one Saigon-based investment banker. “The obvious thing to do is to close the smaller exchange down, or have it gobbled up. It only exists because the government wants a bourse in Hanoi.” And finally there is the issue of fee income, which remains crushingly low, a genuine deterrent to any foreign investment bank considering a presence here. Case in point: Morgan Stanley was hired by the government in October 2016 to sell a 9% stake in Vinamilk, southeast Asia’s largest dairy producer and one of Vietnam’s most actively traded stocks. Anywhere else, that contract would have paid handsomely.  Not here though, with the US investment bank accepting a fee of just $25,000, thereby effectively agreeing to make nothing, at best, from the sale.The deal fell through anyway, due to a lack of interest. Mandates None of this seems to bother Viet Capital one jot. The investment bank keeps plugging away, churning out well-regarded research and securing mandates on landmark IPOs. Insiders at the brokerage point to its willingness to think outside the box, for example by being willing to search far and wide for the right job candidate. “The quality of the IPOs we are processing, and thus the quality of the execution that’s needed on each transaction, is changing. So we need a more professional and international team,” says head of investment banking Ngo. “I joined three years ago, having worked with Credit Suisse and Goldman Sachs in Europe.”  He points to the various nationalities at work in the firm: Americans, Brits, a Canadian head of sales and trading, and Ngo himself, French-Vietnamese. And then there’s To Hai, the investment bank’s chief deal-wrangler. Can he keep Viet Capital at the top?  “I hope so,” he replies. “We are successful because we are more focused than the [competition].”  Is he a genuine rainmaker – or just lucky?  He laughs again: “I cannot say that about myself, I will leave others to draw that conclusion. What I can say is that I have been in the industry a long time, so I know a lot of things and a lot of people.”



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Economics | StockAdvisory | Stocks

Dự trữ ngoại hối đạt kỷ lục 45 tỷ USD, ngập lụt VND

by finandlife12/10/2017 20:49

Bất chấp chu kỳ nhập siêu quay trở lại mạnh mẽ kể từ quý 4/2016 đến nay, dự trữ ngoại hối vẫn tăng trưởng ổn định. Nếu như con số này chỉ là 7 tỷ USD trong 2004, tăng mạnh lên 23.9 tỷ trong giai đoạn bùng nổ đầu tư WTO và hạ nhiệt nhanh chóng sau khủng hoảng tài chính toàn cầu 2009, dự trữ ngoại hối chỉ còn 12 tỷ năm 2010, thì đến nay, con số dự trữ ngoại hối đạt kỷ lục 45 tỷ USD. 45 tỷ USD tương đương 11.5 tuần nhập khẩu, gần đạt chuẩn 12-14 tuần của IMF.

Đây là con số rất đáng phấn khởi.

Theo một số nguồn tin, trong vài tuần tiếp theo, SBV rất có thể sẽ mua thêm một lượng lớn USD để nâng dự trữ ngoại hối lên chuẩn 12 tuần nhập khẩu.

Một lượng USD lớn mua vào đồng nghĩa một lượng tiền lớn VND được cung ra, nếu không hút vào thông qua thị trường mở, hệ thống lại ngập lụt trong tiền.

Hiện tỷ giá hối đối vẫn đang rất ổn định, lãi suất trái phiếu chính phủ kỳ hạn 2 năm tiếp tục mò đáy, thị trường tài chính VN được mùa được giá, enjoy a harvest. 




Tiền cứ chảy và đoàn người cứ vui…

by finandlife04/10/2017 15:53

Cùng với sự cải thiện trong tốc độ tăng trưởng GDP và chỉ số ngành sản xuất công nghiệp, các khía cạnh khác cũng đang khá tích cực, chỉ sổ doanh thu bán lẻ liên tục tăng trưởng tháng sau cao hơn tháng trước từ đầu 2017 đến nay, và mức tăng này đang leo lên vùng đỉnh của gần 3 năm, cho thấy sức cầu tiêu thụ trong nước cải thiện.

Nhu cầu vay mượn xã hội cũng đang khá cao, khi tốc độ tăng trưởng tín dụng liên tục duy trì ở mức cao trong 3 năm qua. Nhu cầu vốn lớn nhưng lãi suất lại đang khá bình ổn, yield trái phiếu chính phủ kỳ hạn 2 năm liên tục phá đáy, và đang ở vùng thấp nhất lịch sử, tỷ giá USDVND cũng khá ổn định nhờ nguồn cung USD tốt và chỉ số đồng bạc xanh giảm mạnh.

Thị trường tiền tệ ổn định, dư tiền, thị trường vốn tăng trưởng là một năm được mùa cho các kế hoạch phát hành cổ phiếu huy động vốn của các doanh nghiệp niêm yết, hiện các nhà banks đang rất tích cực trong việc nâng vốn tự có thông qua phát hành cổ phiếu mới như VPB, TECOMBANK,… các doanh nghiệp thép cũng tận dụng sự thuận lợi của ngành để huy động vốn xây nhà máy và mở rộng hoạt động sản xuất như HPG, NKG. Ngoài ra, phong trào thoái vốn nhà nước cũng đang vào giai đoạn nước rút, các doanh nghiệp lớn như Vinamilk, SABECO, HABECO, PVI, BMP, NTP,...

Tiền cứ chảy và đoàn người cứ vui…





Kinh tế tiếp diễn câu chuyện tăng trưởng tích cực

by finandlife03/10/2017 11:00

GDP quý 3/2017 tăng mạnh, +7.46%, so với 6.28% trong quý 2 và 5.15% của quý 1. Tính chung 9 tháng đầu năm, GDP tăng trưởng 6.41%, cao hơn con số 5.93% cùng kỳ năm trước. Tăng trưởng này nhờ đóng góp ở cả phần tiêu dùng cuối cùng và phần tiết kiệm đầu tư của người dân. Trong đó, công nghiệp và xây dựng và dịch vụ tiếp tục dẫn dắt đà tăng trưởng, với mức tăng lần lượt là 7.17% và 7.25%.

Đáng chú ý nhóm dịch vụ ngân hàng, bảo hiểm, 9 tháng đầu năm 2017 tăng trưởng 7.9%, mức tăng trưởng mạnh nhất trong 7 năm qua.

Xuất khẩu hải sản tăng 20%, xuất khẩu trái cây tăng 45%.

Chỉ số PMI đo mức độ mở rộng lĩnh vực sản xuất Việt Nam tiếp tục cho thấy nền kinh tế mở rộng ở nhịp độ mạnh mẽ.

* Lĩnh vực sản xuất của Việt Nam tiếp tục tăng trưởng với PMI tháng 9 đạt 53,3 điểm. Đây là mức cao nhất trong 5 tháng qua và cũng là mức cao nhất trong khu vực. Tháng 9 là tháng thứ 22 liên tiếp PMI của Việt Nam trên 50 điểm (vùng tăng trưởng). Nhu cầu gia tăng giúp số đơn hàng, sản xuất, và số việc làm tăng mạnh hơn, là yếu tố chính kích thích PMI tháng 9. 

* PMI tiếp tục cao phù hợp với đà tăng trưởng của ngành sản xuất. Trong 9 tháng đầu năm 2017, ngành sản xuất tăng trưởng 12,77% (cùng kỳ năm ngoái tăng 11,22%). 

* Các nhà sản xuất vẫn giữ thái độ lạc quan đối với năm 2018 với kỳ vọng số đơn đặt hàng tăng và kế hoạch mở rộng hoạt động kinh doanh. Kỳ vọng này được hỗ trợ nhờ niềm tin người tiêu dùng tích cực và các chính sách hỗ trợ của Chính phủ. 




Nhóm FA an toàn nhưng kém hiệu quả

by finandlife22/09/2017 15:08

Một năm qua, nhóm cổ phiếu FA (good fundamental) chỉ tăng 6.3%, trong khi đó, nhóm cổ phiếu quay tay, làm giá tăng 15.2% và nhóm thanh khoản cao nhất thị trường tăng tận 42%.

Tuy vậy, nhìn về mức độ biến động, nhóm FA khá an toàn, ít rủi ro, độ biến động thấp hơn rất nhiều so với 2 nhóm cổ phiếu còn lại. Cùng với đó, nhóm FA đã tăng quá mạnh 2 năm trước, nên việc tăng chậm lại trong năm nay cũng là điều dễ hiểu.







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