English
Vietnam plans 6.5 times more sales of stakes in state firms
The Hanoitimes – Vietnam is dramatically accelerating sales of stakes in state-owned enterprises (SOEs), announcing this year’s plan to sell 6.5 times more shares than it offered last year.
The plan is aimed to boost revenue and ease a strained budget, while seeking to exceed its economic growth target this year, Deputy Prime Minister Vuong Dinh Hue said in a recent interview with media. The state raised VND135.6 trillion (US$6 billion) from these sales in 2017.
“We need more foreign investment but also want to lure good investors who can help our companies improve corporate governance,” Hue said. The assets the government plans to sell “will include leading companies in energy, power and petroleum,” he said.
Stakes in 245 state companies are up for grabs in 2018, including four scheduled in the first quarter — Binh Son Refining and Petrochemical Co., which operates the only oil refinery in the country, as well as PetroVietnam Oil Corp., PetroVietnam Power Corp. and Hanoi Beer Alcohol & Beverage JSC.
Among the assets disposed last year was a majority stake in the nation’s top brewer Saigon Beer Alcohol Beverage Corp., or Sabeco, to Thai Beverage Pcl and its partner in December, which sold for $4.8 billion.
Vietnam has struggled to privatize state companies with many of them finding it difficult to value their shares. The government is working on plans to allow more foreign ownership in sectors include banks, Hue said.
Hue said that economic growth this year may match 2017’s pace of 6.8 percent — slightly higher than the 6.7 percent target set by the government — despite risks of rising trade protectionism around the world.
“There are some risks and challenges remaining in the Vietnamese economy but the biggest challenge will be that we want to grow faster but also in a sustainable manner at a time when there are unpredictable movements in the world economies,” Hue said.
The economy, which posted a total trade value last year that was 1.93 times bigger than its GDP, is susceptible to global turbulence that can “quickly have a direct impact on Vietnam in terms of trade, investment, currency,” he added.
According to Dang Quyet Tien, director general of the Ministry of Finance’s Department of Corporate Finance, the number of enterprises earmarked for equitisation and divestment in 2018 account for over 50 and 46 per cent of the total number planned for 2017-2020.
“Therefore, 2018 can be considered the “hinge” year for SOE reform. Nonetheless, the annual equitisation and divestment schedule could be subject to changes as precisely 127 SOEs would be equitised and 406 would be divested by the end of 2020. Personally, I think the schedule depends on the determination of local authorities,” Tien said.
However, Tien expected a positive outlook for the equitisation and divestment this year as VN-Index reached a decade-record of 970 points in 2017 and became one of the world’s fastest growing stock indexes, largely due to the high growth of the stock market, which was also one of the most important determinants of the equitisation and divestment plans.
Foreign investment inflows were also extremely optimistic of the Vietnamese stock market, with net purchasing value equalling VND41 trillion (US$1.8 billion), a six-fold increase compared to the same category in 2016.
Besides, the commitment of the central and local legislators as well as the leaders of state enterprises will contribute to the success of equitisation this year as in the case of Sabeco’s divestment last year, Tien said.
Stakes in 245 state companies are up for grabs in 2018, including four scheduled in the first quarter — Binh Son Refining and Petrochemical Co., which operates the only oil refinery in the country, as well as PetroVietnam Oil Corp., PetroVietnam Power Corp. and Hanoi Beer Alcohol & Beverage JSC.
Among the assets disposed last year was a majority stake in the nation’s top brewer Saigon Beer Alcohol Beverage Corp., or Sabeco, to Thai Beverage Pcl and its partner in December, which sold for $4.8 billion.
Vietnam has struggled to privatize state companies with many of them finding it difficult to value their shares. The government is working on plans to allow more foreign ownership in sectors include banks, Hue said.
Hue said that economic growth this year may match 2017’s pace of 6.8 percent — slightly higher than the 6.7 percent target set by the government — despite risks of rising trade protectionism around the world.
“There are some risks and challenges remaining in the Vietnamese economy but the biggest challenge will be that we want to grow faster but also in a sustainable manner at a time when there are unpredictable movements in the world economies,” Hue said.
The economy, which posted a total trade value last year that was 1.93 times bigger than its GDP, is susceptible to global turbulence that can “quickly have a direct impact on Vietnam in terms of trade, investment, currency,” he added.
According to Dang Quyet Tien, director general of the Ministry of Finance’s Department of Corporate Finance, the number of enterprises earmarked for equitisation and divestment in 2018 account for over 50 and 46 per cent of the total number planned for 2017-2020.
“Therefore, 2018 can be considered the “hinge” year for SOE reform. Nonetheless, the annual equitisation and divestment schedule could be subject to changes as precisely 127 SOEs would be equitised and 406 would be divested by the end of 2020. Personally, I think the schedule depends on the determination of local authorities,” Tien said.
However, Tien expected a positive outlook for the equitisation and divestment this year as VN-Index reached a decade-record of 970 points in 2017 and became one of the world’s fastest growing stock indexes, largely due to the high growth of the stock market, which was also one of the most important determinants of the equitisation and divestment plans.
Foreign investment inflows were also extremely optimistic of the Vietnamese stock market, with net purchasing value equalling VND41 trillion (US$1.8 billion), a six-fold increase compared to the same category in 2016.
Besides, the commitment of the central and local legislators as well as the leaders of state enterprises will contribute to the success of equitisation this year as in the case of Sabeco’s divestment last year, Tien said.
Source: http://www.hanoitimes.vn/economy/2018/01/81E0C0DB/vietnam-plans-6-5-times-more-sales-of-stakes-in-state-firms/