Security first bank

Bank tickers will remain in the spotlight, with investors racing to capitalise on bright profit prospects. In its forecast for 2021, Hanoi-based VNDIRECT Securities Corporation said banks would be among the first corporate entities to take advantage of the economic rebound. The company also anticipates a sharp jump in banks’ profit this year in the wake of improved net income margin (NIM) and higher credit growth. Banks’ profit is forecast to be on a sharp rise in 2021 Agreeing with the forecast, the BIDV Securities Company (BSC) recently issued a report on the prospects of the banking sector, saying that commercial lenders would witness a sharp rise in profit thanks to the economic rebound and good control of asset quality post-pandemic. The BSC report assumed that the whole sector’s pre-tax profit could soar 28 per cent, chiefly attributable to 14 per cent credit growth in 2021, plus the interest rate going sideways and reduced pressure on making loan loss provisioning. Notably, despite their continual short-selling in Vietnam’s stock exchange since early 2021, foreign investors and investment finds are holding banking tickers, putting their trust in their upbeat growth potential. Finnish equity fund PYN Elite even forecast 50-60 per cent growth for banking tickers in the first quarter this year, compared to a year ago. Le Duc Khanh, Investment director at VP Bank Securities Company (VPS) said that based on forecasts by several international organisations, banks’ after-tax profit could be growing at 18 per cent in 2021 in the wake of improved credit performance and higher revenue stream from services. BSC’s report, meanwhile, says that a slew of banks are scaling up efforts to replenish their low-cost capital source (Customer Account Saving Account – CASA), striving to expand customer base through reducing transaction-transfer fees or upgrading operation system and infrastructure. The CASA ratio in the banking sector reached 18 …

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A new Law on Land is needed, but it could take a good three years for a new itineration. Photo: Le Toan According to previous proposals, the Law on Land 2013 was to be revised at some point after the 13th National Party Congress. A new law was to be considered within the year, with the National Assembly able to discuss the revised draft by the end of 2022. If all goes to plan, the revised law would then need at least three years before being approved. Simultaneously, and with the party congress now in the rear view mirror and a new government in the process of taking the reins, a summary report of the implementation of the 2013 land law is being led by the Ministry of Natural Resources and Environment (MoNRE), involving every ministry and local authority. The summary report will be sent to the government and submitted to the National Assembly in the second quarter of 2023 the latest. According to Dang Hung Vo, former deputy minister of Natural Resources and Environment, the current Law on Land contains conflicts with many other laws such as those on housing, real estate business, forestry, zoning, and public asset management. “The overlap among those laws is the main reason for limiting the new supply for the real estate market as demand continuously increases. This leads to rocketing price increases and speculation which makes the market unstable,” Vo said. Meanwhile, the weakness of the current Law on Land has also created struggles for administrative policies and implementation of land issues, especially in compensation. Talking with VIR, Lim Hua Tiong, CEO of Frasers Property Vietnam expressed that a revised land law is necessary to enhance the flow of foreign investment to Vietnam – and that means a law with shorter processes, clearer and less complicated regulations, and elimination of conflicts with other laws that would all help investors make faster decisions and open up major chances for their success in Vietnam. “It must offer equal …

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Sustainable bonds are considered as an effective capital mobilization channel from the private sector for environmental and social projects. The State Securities Commission of Vietnam (SSC) has launched a manual providing instruction on green, social and sustainability bonds. Green bonds would help accelerate sustainable development in Vietnam. Source: World Bank/jamesteoh The manual came from the cooperation among the SSC, Climate Bond Initiative (CBI), and Swiss State Secretariat for Economic Affairs (SECO), with the aim of providing guidelines for issuers and market participants to adopt regional, international and Vietnamese standards on green, social and sustainability bonds – or sustainable bonds, collectively. “Those sustainable bonds are considered an effective capital mobilization channel from the private sector for environmental and social projects, which in turn support the realization of sustainable development goals and the 2015 Paris Climate Accord,” stated the SSC. “As a member of the ASEAN Capital Markets Forum (ACMF), the SSC has been actively involving in the promotion of the ASEAN Green Bond Standards (AGBS), ASEAN Sustainability Bond Standards (ASUS), which are based on the International Capital Market Association (ICMA)’s Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines, with an aim to form sustainable assets in Vietnam,” added the stock market watchdog. SSC’s Vice Chairman Pham Hong Son expected the manual to help local investors better understand international practices on the issuance and management of capital for green projects, as well as disclosing information on the social and environmental aspects of each enterprises. “Such step is important to promote sustainable development in each enterprise and contribute to support long-term growth of the stock market via the development of green products,” he added. IFC Regional Manager for Vietnam, Cambodia, and Laos Kyle …

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