Private-equity banks cushion market

Private-equity bank shares have performed well amid fears of COVID-19 in the last five weeks.

Private-equity banks cushion market hinh anh 1

A VPBank office in Hanoi 

The Vietnamese stock market returned from Tet (Lunar New Year) in January.

The benchmark VN-Index gained more than 3.17 percent in the pre-Tet period in January, which lasted from January 2 to January 22.

But the outbreak of coronavirus in China during the holiday sparked worries about the collapse of the global economy and triggered a large-scale sell-off on global stocks markets.

The Vietnamese market was no exception. The benchmark VN-Index lost nearly 55 points or more than 6.38 percent from January 30-31.

Ending March 10, the VN-Index had lost a total of 15.5 percent over five weeks to hit its lowest level in two and a half years.

Most listed companies were hit by strong selling in the aviation, textile and garment, seafood, and tourism and hospitality sectors.

But bank stocks have gone against the trend and made gains in the same period.

The two best-performing bank stocks since January 30 have been the Vietnam Prosperity Joint Stock Commercial Bank (VPBank, HoSE: VPB) and Sai Gon-Hanoi Joint Stock Commercial Bank (SHB, HNX: SHB).

VPBank shares have soared a total of nearly 16 percent since the beginning of February, while SHB shares have surged more than 80 percent.

Since the beginning of the year, shares of VPBank and SHB have increased by 30-108 percent.

Other banks that also saw shares grow in the last five weeks include the Sai Gon Thuong Tin Joint Stock Commercial Bank (Sacombank, HoSE: STB).

Sacombank shares have climbed 11.7 percent since January 31 and a total of 13.4 percent since the end of 2019.

Economist Nguyen Tri Hieu said the two things that made an economy were merchandise and monetary systems.

Merchandisers were undergoing a rough period as the global supply chain was disrupted by the coronavirus pandemic (COVID-19), he told Dau tu Chung khoan (Securities Investment) newspaper.

“But the supply chain of the monetary system is not. And this is one of key factors that has kept banks’ shares stable for the last two months,” he said.

When the supply chain stabilised and merchandising got back to normal condition, the monetary system would unload a lot of pressure, thus strengthening the confidence of investors in bank stocks, Hieu said.

 

According to securities firms and specialists, banks will grow stronger in 2020 despite fears about the pandemic that have shaken global economies and most industries.

Economist Le Xuan Nghia said that bank stocks were now cheaper than their actual values, so there was more room for growth in the short term.

Good performances in 2019, positive earnings forecasts for 2020, and good business news are the factors that will boost bank stocks in the near future.

SHB reported a total profit of 3.08 trillion VND (132 million USD) in 2019, a return-on-equity (ROE) ratio of 17.56 percent and a capital adequacy ratio (CAR) of 11.7 percent.

The bank was also able to buy back all the bonds it had sold to the Vietnam Asset Management Company (VAMC), proving its financial condition was healthier.

At VPBank, pre-tax profit in 2019 reached an historic high of 10.33 trillion VND, beating its target by 9 percent and increasing by 12.3 percent on-year.

VPBank also plans to launch an IPO for its consumer finance arm FE Credit, which contributed about 43 percent of VPBank’s total 2019 profit.

At Sacombank, speculations are rife about the restructuring of the bank’s top positions, which would bring more cash and assistance.

An increase of foreign ownership in private-equity lenders under the EVFTA trade pact has been attributed to this growth.

Under the EVFTA, foreign investors from the European Union may now up their stakes in two private banks to 49 percent.

The limit of foreign capital in local commercial banks was 30 percent.

In addition, as local producers have stalled under pressure of the pandemic, they will need more capital to recover in the remaining months of the year.

The Government is calculating the impact of COVID-19 on local businesses’ performance and studying potential solutions and stimulus packages.

A stimulus package worth 315 trillion VND has recently been announced to support local firms by cutting interest rates, extending payment dates and slashing income taxes for businesses./. VNA

Vietnam banks’ 2019 results show improved solvency: Moody’s

Vietnam banks’ 2019 results show improved solvency: Moody’s

Rated banks in Vietnam posted solid profit growth and asset quality improvements last year, benefitting from the country’s robust macroeconomic environment, the U.S.-based ratings agency Moody’s Investors Service stated in a new report.  

Banks to provide over $12-billion credit to epidemic-hit firms

Banks to provide over $12-billion credit to epidemic-hit firms

The banking sector is building a credit support programme with a value of $12.2 billion for firms hit by COVID-19, in an attempt to help ease their difficulties, according to an official of the State Bank of Vietnam.

 
 

Other News

.
Top 10 most valuable brands worth US$8.1 billion
Top 10 most valuable brands worth US$8.1 billion
BUSINESSicon  07/08/2020 

The top 10 most valuable brands in Viet Nam 2020 are worth US$8.1 billion, increasing by 17 per cent from last year and accounting for 30 per cent of the list’s total value, according to Forbes Viet Nam magazine.

Vietnam Airlines plans to sell nine planes due to financial woes
Vietnam Airlines plans to sell nine planes due to financial woes
BUSINESSicon  06/08/2020 

Vietnam Airlines is planning to sell nine A321CEO planes to optimize its fleet and improve its cash flow, as the national flag carrier’s revenue has dropped sharply due to the Covid-19 pandemic.

Vietnam – one of the best long-term growth stories in Asia
Vietnam – one of the best long-term growth stories in Asia
BUSINESSicon  07/08/2020 

Vietnam is one of the best long-term growth stories in Asia and is one of the most preferred frontier markets, according to HSBC.

Maximum $130,700 fine for listing violations: Draft decree
Maximum $130,700 fine for listing violations: Draft decree
BUSINESSicon  06/08/2020 

Public companies may receive a penalty of VND2-3 billion ($87,120-$130,700) for falsifying share listing and trading documents under a proposal from the Ministry of Finance.

Singaporean business surges ahead
Singaporean business surges ahead
BUSINESSicon  07/08/2020 

Singaporean business and investment in Vietnam has increased significantly over the decades, thus greatly contributing to strengthening economic bilateral ties.

Furthering developmental ties with dynamic Singapore
Furthering developmental ties with dynamic Singapore
BUSINESSicon  06/08/2020 

Vietnam and Singapore are witnessing their heyday in bilateral and multifaceted cooperation.

Wide impacts to be made with new law changes
Wide impacts to be made with new law changes
BUSINESSicon  06/08/2020 

Effective in 2021, the amended laws on Enterprises, Investment, and Public-Private Partnership are expected to entail breakthrough changes to Vietnam’s business and investment landscape in the coming time, 

Decisive actions to achieve goals
Decisive actions to achieve goals
BUSINESSicon  06/08/2020 

The Ministry of Planning and Investment is currently working on possible scenarios for the upcoming period amid the ongoing developments of the global health crisis.

Millenium to develop $15 billion LNG project in Khanh Hoa
Millenium to develop $15 billion LNG project in Khanh Hoa
BUSINESSicon  06/08/2020 

If the $15 billion LNG project of Millenium Group is approved, it will contribute to making the Nam Van Phong area the largest LNG centre in Southeast Asia.

Rebound likely despite bumpy roads
Rebound likely despite bumpy roads
BUSINESSicon  06/08/2020 

Despite a serious dip in local production caused by the health crisis, Vietnam is expected to be one of the fastest-growing nations worldwide this year, with the economy forecast to stay among the few nations with positive growth.

Unique advantages can pull Vietnam out of uncertainty
Unique advantages can pull Vietnam out of uncertainty
BUSINESSicon  06/08/2020 

In life, economic and health gains are not always equal. This is true for individuals and for countries. While Vietnam has managed to contain the pandemic so far, its economy has been hurt in recent months. 

Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
Hanoi’s Old Quarter businesses bear brunt of COVID-19 impact
BUSINESSicon  06/08/2020 

The second wave of the COVID-19 epidemic to hit Vietnam has continued to deal a devastating blow to small businesses, travel agencies, and tourist accommodations in the Old Quarter of Hanoi due to the suspension of operations.

Container handling charge increases proposed to attract investment in seaports
Container handling charge increases proposed to attract investment in seaports
BUSINESSicon  06/08/2020 

Container loading and unloading service charges should be increased to approach the regional level so investors would not feel hesitant when pouring money into developing seaports.

Policies encourage automakers to assemble cars in Vietnam
Policies encourage automakers to assemble cars in Vietnam
BUSINESSicon  06/08/2020 

 Several automakers are considering assembling their best-selling models in Viet Nam due to the Government’s policy of zero import tariffs on components and a 50 per cent reduction in registration fees.

Thai firms acquire wind power farm in Ninh Thuan
Thai firms acquire wind power farm in Ninh Thuan
BUSINESSicon  06/08/2020 

Thailand’s Banpu and its power business arm Banpu Power (BPP) have joined forces to acquire El Wind Mui Dinh, an onshore wind farm in the south-central province of Ninh Thuan, in a deal worth $66 million.

EVFTA smooths the way for Vietnamese farm produce
EVFTA smooths the way for Vietnamese farm produce
BUSINESSicon  06/08/2020 

The EU-Vietnam Free Trade Agreement, at its core, aims to liberalise both tariff and non-tariff barriers on key exports of both sides over a period of 10 years.

Mountainous areas and islands need investment
Mountainous areas and islands need investment
BUSINESSicon  07/08/2020 

PhD Doctor Le Quoc Phuong, former deputy director for the Information Centre for Industry and Trade, under the Ministry of Trade, talks on key requirements in trade development in mountainous areas and islands.

Vietnam receives positive view in global exports as EVFTA takes effect: report
Vietnam receives positive view in global exports as EVFTA takes effect: report
BUSINESSicon  05/08/2020 

Vietnam is expected to continue growing its share of global exports despite decline amid the resurgence in the COVID-19 pandemic after three months of no local transmissions, according to an HSBC report.

Local banks are racing to catch digitisation trend: expert
Local banks are racing to catch digitisation trend: expert
BUSINESSicon  05/08/2020 

Vietnam has seen a digital wave in the finance-banking industry, with many lenders investing significantly in digitisation, experts have said.

Experts call on Vietnamese government to aid businesses again
Experts call on Vietnamese government to aid businesses again
BUSINESSicon  05/08/2020 

Amid the new COVID-19 outbreak, experts have suggested the Government offer another credit support package to help enterprises, especially large businesses in key areas.

 
 
 
Leave your comment on an article

OR QUICK LOGIN