Major firms sell off assets on the cheap amid credit crunch: minister
Cash flow troubles have forced many major companies in Vietnam to sell off assets at prices much lower than their market value, Minister of Planning and Investment Nguyen Chi Dung said on Tuesday.
“Many large enterprises have had to sell assets at a 50% discount, and most buyers are foreign companies. We have warned about this many times," he told a meeting hosted by the National Assembly’s Standing Committee on socio-economic issues.
"Businesses have been facing cash flow difficulties due to hiccups in operating credit policies.”
The minister added that the Vietnamese monetary market was basically stable in the first four months of this year, but lending interest rates remained high, averaging 9.56% per annum. In the year to April 24, credit supply in the country grew only 2.66% from a year earlier, showing that businesses were facing difficulties and had limited access to capital sources.
Like Dung, National Assembly (NA) Vice Chairman Tran Quang Phuong pointed out details of the financial burden. He said many businesses claimed they had to use up their reserves over the past two years, and these resources are running low.
Vu Hong Thanh, head of the legislative body's Economic Committee, said: "Issuing shares and corporate bonds has become tough, so capital mobilization for the economy is not working.”
He noted that non-performing loans at banks would rise if tough conditions prolong. Citing a report by the National Financial Supervision Commission, Thanh said the average NPL ratio of the whole banking system by the end of this March was 2.88%, up from 2.05% at the end of 2022. Some banks are close to their capital adequacy ratio (CAR) minimum levels, which means they face pressure to increase capital in the near future.
"It is necessary to shift from tightening credit to easing this supply and continuing to lower policy interest rates to drive growth as inflation pressure has eased from the end of 2022," Thanh said.
Vietnam obtained 8.2% GDP growth last year and a government report on the first four months showed a positive economic performance, but NA Vice Chairman Phuong said the report was “rather rosy”.
He noted that economic growth showed signs of decline at the end of Q3/2022; therefore the government needs to re-evaluate as Q1/2023 posted slow growth of 3.32%.
The vice chairman asked the government to clarify woes in the ailing real estate market and corporate bond issuances, and identify weaknesses among banks that have not been completely resolved. "The government also needs to assess the economy's resilience to external impacts, and definitively tackle cross-ownership and "backyard businesses" of banks."
Members of the NA Standing Committee also mentioned local officials who fear the consequences of possible errors, saying being afraid to take responsibility hinders growth.
Nguyen Thi Thanh, head of the Committee for National Assembly Deputies Affairs, said this fear has reached an alarming level. She noted that city and provincial officials often send questions to ministries instead of proactively solving issues, while ministries, in reply, say they need to observe the laws.
She said the government needs to work out a more efficient way to deal with this time-consuming problem.
Minister of Planning and Investment Dung, at a meeting chaired by Prime Minister Pham Minh Chinh last month, said his ministry received 584 documents containing questions on administrative and legal issues from the Ho Chi Minh City administration last year.
“However, most of the questions were within the city’s power to answer. This is absurd, and shows that we are afraid of responsibility.” The minister urged HCMC officials to change their attitudes to better serve the city’s growth.
- Read More
Former Government Office chairman receives $7,900 bribe from property project
Mai Tien Dung, former Minister-Government Office Chairman, received a bribe worth VND200 million ($7,900) from Nguyen Cao Tri, owner of the Dai Ninh eco-resort and urban area project in Lam Dong province.
Society - Sat, November 2, 2024 | 9:13 pm GMT+7
Thai food giant CP enters public-private partnership to promote food system transformation
Thai-invested C.P. Vietnam Livestock JSC and the Partnership for Sustainable Agriculture Vietnam (PSAV) signed a memorandum of understanding Friday on working together to advance sustainable agriculture in the country.
Companies - Sat, November 2, 2024 | 7:16 pm GMT+7
Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year
Vietnam’s central province of Quang Ngai will work with the investor to have construction of VSIP II Quang Ngai, a facility based on the Vietnam-Singapore Industrial Park (VSIP) model, begin in August 2025.
Industrial real estate - Sat, November 2, 2024 | 3:47 pm GMT+7
Vietnam likely to grow 6.5% in 2024-2025: VinaCapital
VinaCapital, among the biggest foreign-run asset managers in Vietnam, has forecast the country’s economy to achieve 6.5% growth in both 2024 and 2025, with the composition of the expansion to change to more domestically driven factors next year.
Economy - Sat, November 2, 2024 | 2:00 pm GMT+7
Major Vietnamese developer Novaland appoints new CEO
Duong Van Bac, who joined Novaland as chief financial officer in August 2023, has been appointed general director, starting Friday.
Companies - Sat, November 2, 2024 | 10:24 am GMT+7
Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3
Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.
Southeast Asia - Sat, November 2, 2024 | 9:41 am GMT+7
ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout
Vietnam Beverage, wholly owned by Thai Beverage (ThaiBev) will rake in VND1,374 billion ($54.26 million) worth of dividend from Ho Chi Minh City-based top brewer Sabeco.
Companies - Sat, November 2, 2024 | 9:13 am GMT+7
Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex
Leading Vietnamese steelmaker Hoa Phat had invested more than VND52.5 trillion ($2.08 billion) in its Dung Quat Iron and Steel Integrated Complex (Dung Quat 2) in the central province of Quang Ngai as of Q3/2024.
Industries - Sat, November 2, 2024 | 8:00 am GMT+7
Vietnam becomes Australia’s fastest-growing inbound market
The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.
Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7
Study finds shift in Thai consumers’ spending patterns
Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).
Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7
Energy security, digitalization key to Indonesia's economic growth
The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.
Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7
Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM
Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.
Politics - Fri, November 1, 2024 | 9:25 pm GMT+7
Vietnam, Qatar look to tap potential for energy, oil & gas collaboration
Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.
Politics - Fri, November 1, 2024 | 9:02 pm GMT+7
Thailand bans export of raw palm oil until December
Thailand's Department of Internal Trade has temporarily banned the export of raw palm oil due to reduced production caused by drought and plant diseases.
Southeast Asia - Fri, November 1, 2024 | 8:31 pm GMT+7
Envision Energy to build $420 mln wind power plant in Vietnam from June 2025
Envision Energy Singapore Pte Ltd, under China-based Envision Energy, aims to kick off construction of the 300-MW Envision Nam Po wind power plant in Vietnam’s northern mountainous province of Dien Bien in June 2025.
Energy - Fri, November 1, 2024 | 8:30 pm GMT+7
Indonesia to ban plastic waste imports from 2025
The Indonesian government will start imposing a ban on the import of plastic waste from the beginning of next year, according to Minister of Environment Hanif Faisol Nurrofiq.
Southeast Asia - Fri, November 1, 2024 | 8:29 pm GMT+7