Real estate firms must seek alternative ways to raise their capital as the State Bank of Vietnam (SBV) has ordered tight control over real estate loans. (Photo: VNA) HCM City (VNA) – As the State Bank of Vietnam (SBV) has ordered tight control over real estate loans by credit institutions, property firms and developers have to seek alternative ways to raise their capital, and many of them have decided to issue bonds to fund their business. The central bank increased the risk weighting of real estate loans from 200 percent to 250 percent in 2019, which is a significant disincentive for banks to make loans to the property sector since their minimum capital requirement is a ratio of their risk-weighted assets under the Basel norms. Meanwhile, the SBV’s regulation on reducing the maximum quantum of short-term deposits that can be used for medium- and long-term loans from 45 percent to 40 percent will reduce banks’ liquidity. To that end, realty enterprises need … [Read more...] about Real estate firms issue bonds to raise capital
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Real estate firms seek for sources of capital
Since the beginning of this year, around seven listed construction and real estate firms have chosen bonds as capital mobilization channel for investment of their projects. Particularly, in the first and second quarters of this year, Dat Xanh Group JSC has planned to issue a maximum of 1,400 convertible bonds without collateral for less than 100 investors at a price equal to par value of VND1 billion per bond, equivalent to total value of VND1.4 trillion ($60.12 million). The bond term is expected to be due on the date of five years from the date of issuance and interest rate will not higher than 7 percent per annum. The firm revealed that it will use money collected from the bond issuance to develop its land fund, add to its floating capital and restructure its operating capital. Similarly, Phat Dat Real Estate Development Corporation also has issued 2,000 one-year-term bonds with an interest rate of 14.45 percent per annum in the first two quarters of this year in order to raising … [Read more...] about Real estate firms seek for sources of capital
BUSINESS NEWS IN BRIEF 19/1
Hanoi 3rd in JLL's City Momentum Index The Asia-Pacific is home to 19 of the top 20 cities on the sixth City Momentum Index published by JLL, highlighting the continuing shift of fast urban growth from the West to the East. Overall, Indian and Chinese cities dominate the rankings, accounting for three quarters of the top 20. Leading the pack are Bengaluru and Hyderabad in India, with Hanoi third. “Asia continues to show strong momentum, with cities that are successfully expanding their innovation economy punching above their weight in terms of attracting capital, companies, and people,” said Mr. Jeremy Kelly, Director of Global Research at JLL. “It’s clear that the tech sector is a key driver of both real estate and economic momentum - driven by large technology firms as well as dynamic startups in cities like Bengaluru, Hyderabad, Ho Chi Minh City and Shenzhen.” Although the global economic cycle is in its late stages, there are still many cities in the … [Read more...] about BUSINESS NEWS IN BRIEF 19/1
BUSINESS NEWS IN BRIEF 22/8
Mekong Capital divests from Asia ChemicalsMekong Enterprise Fund II, a unit of Mekong Capital, has completely divested from Asia Chemicals Corporation (ACC) and taken in US$8.9 million, a 2.6-fold increase over its initial investment, after a seven-year holding period.According to a press release issued by Mekong Capital on August 10, in 2011, MEF II invested US$3.8 million in ACC, which was its 10th investment, after others in Mobile World Investment Group (The Gioi Di Dong), Golden Gate, Vietnam Australia International School and International Consumer Products.However, MEF II has now divested from all of its 10 earlier investments. The divestments have helped the fund generate a gross return multiple of 4.5 and a gross internal rate of return of 22.5%.Early this year, MEF II sold five million shares at Mobile World, generating a gross return multiple of 56.9 and an IRR of 61.1%, making it one of the most successful investments in Asia.Also, the fund’s full exit from Vietnam … [Read more...] about BUSINESS NEWS IN BRIEF 22/8
BUSINESS NEWS IN BRIEF 18/8
Danang aims to attract Russian touristsThe central coastal city of Danang is striving to lure more Russian and European tourists in a bid to diversify international visitors, but it is facing some difficulties with weather conditions and air routes, which should be addressed to meet the target.The leader of the Danang government, who is on a visit to Europe, is working with Russian travel firm ANEX Tour in Moscow City to discuss a plan on tourism promotion. The tour is scheduled to conclude on August 21.Tourism experts noted that it is necessary to increase the number of Russian and European visitors to Danang City to diversify tourist sources, adding that certain factors, such as weather, may affect these efforts.Russian tourists tend to travel to Danang City between October and February to avoid freezing weather in their country, but unfortunately, this is also the storm season in the city.According to Nguyen Duc Quynh, deputy general director of Furama Resort Danang, many tour … [Read more...] about BUSINESS NEWS IN BRIEF 18/8