Bank to join growing group from Taiwan

Taiwan-based Shanghai Commercial & Savings Bank Ltd plans to open a representative office in Cambodia, joining an increasing number of Taiwanese banks and garment industry investors in the Kingdom.

National Bank of Cambodia director-general Nguon Sokha said yesterday that the Taipei-based privately held bank had preliminary or “in-principle” approval on May 31.

Some banks establish representative offices to test the waters before making a decision on opening an actual branch. The point is to “gather information about the Cambodian economy . . . they observe the performance, [but it is] for their own use”, she said.

Shanghai Commercial & Savings would enter a crowded sector, behind other Taiwanese-based financial intuitions. Hua Nan Commercial Bank said last month that it would open a branch in Cambodia, hoping to capitalise on the country’s high number of Taiwanese investors and high interest rates.

Cambodia has “many Taiwanese companies, especially in the shoe and garment industry”, senior manager of the bank’s international banking department, Chris Lee, told the Post last month.

In September 2011, Taiwan’s Mega International Commercial Bank opened a local branch, followed by the March  2013 entry of Taiwan Cooperative Bank. That same month, Taiwan’s E Sun Commercial Bank announced plans to acquire a 70 per cent stake in Cambodia’s Union Commercial Bank for nearly $70 million.

Shanghai Commercial & Savings did not immediately respond to a request for comment. The bank’s website says that regulators in Taiwan approved the Cambodia office in January.

A share of Taiwanese investment in Cambodia flows into the garment industry. Taiwanese-owned Sabrina Garment factory, which supplies Nike, fired hundreds of workers on Saturday following violent protests and the arrest of unionists.

Taiwanese-owned garment factories Grand Twins International (Cambodia) Plc and TY Fashion are expected to become the first foreign-owned companies to list on Cambodia’s stock exchange.

By Anne Renzenbrink and May Kunmakara │13 June 2013│The Phnom Penh Post

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Garment IPO may arrive in time for polls

After the listing of Taiwanese-owned garment company Grand Twins International (Cambodia) Plc on the Kingdom’s stock exchange was delayed indefinitely, its underwriter said yesterday that the firm hopes to list before the national elections in late July.

According to the underwriter, Phnom Penh Securities (PPS) Plc, negotiations between the company and the Securities Exchange Commission of Cambodia (SECC) over the initial public offering price are finished by now and “we hope [they can list] before the election…We still have a lot to do. We’ll try our best.”

In February, the Post reported that Grand Twins International said it intends to list on the Cambodia Securities Exchange (CSX) in March. PPS said then that the company would offer 12 million shares at $0.25 a share.

PPS said Grand Twins had “negotiated with the SECC about the IPO price, the listing price”, which was “higher than the SECC agreed”, adding that they have now agreed on a price, but declined revealing the amount.

According to an active market participant of the CSX, the existing status regarding Grand Twins International “is more of an administrative and compliance matter that the underwriter is trying to complete for documentation”.

“The timeline to list very much depends on the completion of the required documentation, if the documents are ready and can be approved by SECC before election, it will be listed before election, otherwise the listing will need to be postponed to after election,” the person familiar with the matter said.

Ming Ban Kosal, director-general of the SECC did not reply to an email yesterday.

The Post reported in March that state-owned fixed-line company Telecom Cambodia’s plan to join the CSX had been postponed indefinitely due to poor financial performance.

On Monday, Lou Kim Chhun, director general of Sihanoukville deep sea port, told the Post that the company is still working with an underwriter, SBI Phnom Penh Securities, on its IPO.

“We made a lot of progress on the project. Everything is going smoothly now,” he said, without offering a timeframe . “We have not set the exact time yet. But we will try our best to get it as fast as we can.”

By Anne Renzenbrink and May Kunmakara │5 June 2013│The Phnom Penh Post

VinGroup sets high business target

HA NOI (VNS)— Property developer VinGroup (VIC) said it was commited to delivering 8,000 apartments in the Royal City and Times City projects in Ha Noi this year despite low demand given the sluggish real estate market.

At the company’s annual meeting of shareholders on Saturday, VinGroup chairman Pham Nhat Vuong said VinGroup would not reduce the prices of their apartments as had other companies, but would keep the old prices to protect the interests of the customers who had purchased their apartments. “There are many ways to raise capital given difficult conditions, so slashing apartment prices when the market is in a downturn can affect other clients’ interests,” Vuong said.

The Times City project has completed the first phase with 12 towers, nine of which have been sold while the other three are still not open for sale. VinGroup also plans to launch its two major shopping malls in Ha Noi this year, Vincom Mega Mall Royal City in July and Vincom Megal Mall City Times in December, while seeking new promising projects in Ha Noi, HCM City, Nha Trang and other localities for investment. “There will be many opportunities for investors with cash in the current context,” Vuong said.

Last year, VIC’s net revenue was over VND7.9 trillion (US$376.2 million), an increase of 242 per cent over the previous year. Its after-tax profit also jumped 72 per cent over 2011, totalling nearly VND1.85 trillion ($88.1 million).

In the financial sector, VinGroup successfully issued international convertible bonds worth $300 million while attracting another $200 million from the global private equity fund Warburg Pincus into Vincom Retail. This year, VIC projects planned to earn a pre-tax profit of around VND10 trillion ($476.2 million) and to have net revenue of VND12.2 trillion ($581 million).

The group has also approved a plan for debuting shares overseas through an initial public offering on an international stock exchange in the future. Two foreigners were elected to VIC’s board of directors during this meeting. They were Joseph Raymond Gagnon, managing director at Warburg Pincus, and Marc Villers Townsend, managing director at CBRE Vietnam, an independent board member. VIC shares rose slightly yesterday, closing at VND70,000 ($3.33) a share. — VNS

Warburg Pincus invests $200m in Vincom (Reuters)

Warburg Pincus LLC, the private-equity owner of Neiman Marcus Group Inc., will lead a consortium to invest as much as $325 million in Vietnam’s Vingroup Joint Stock Co., the firm’s first Southeast Asia deal since 2010.

The group will spend $200 million for about 20 percent of the Hanoi-based company’s Vincom Retail property unit, Vingroup said in a statement. The New York-based firm may invest an additional $100 million, Vietnam’s largest shopping mall owner said.

Warburg Pincus, which raised $11.2 billion in May, joins a wave of private-equity firms betting on the country’s emerging middle class and real estate market recovery. The deal rivals KKR & Co.’s $359 million investment in a unit of Masan Group Corp. in January and will help Vingroup accelerate planned shopping mall developments

“There’s very good chemistry between the two companies,” Le Thi Thu Thuy, Vingroup’s chief executive officer, said in an interview. “We want to leverage Warburg-Pincus’ experience and take Vingroup to the next level. We want to internationalize this company.”

Vingroup plans to offer shares in Singapore this year and Warburg Pincus will invest as much as $25 million as part of today’s agreement, she said. Vingroup also plans an international bond sale, she said, without giving a time frame.

Warburg Pincus will gain positions on Vingroup’s board of directors as part of today’s transaction, according to the statement.

KKR Deal

A fifth of private-equity investors surveyed in a Coller Capital report in December said they are turning to emerging Asian markets including Vietnam and Indonesia as investments in China become risker.

KKR in January more than doubled its stake in Masan Consumer Corp., a Vietnamese fish sauce maker, making it the country’s largest private-equity deal. TPG Capital, the private-equity firm run by David Bonderman and James Coulter, said in March it was looking for its first Vietnam investment in nearly four years.

Warburg Pincus’s only investment in Southeast Asia was in Singapore’s Quest, an engineering services company, in 2010, according to its website.

Warburg Pincus Buys Vincom Retail for US$200 mln

 May 31, 2013 (Vietnamica) — On May 29, Warburg Pincus, the consortium led by U.S. buyouts fund, unveiled its plan to buy 20 percent of Vincom Retail, the retail unit of Vietnam’s Vingroup JSC (HOSE:VIC) for US$200 million (Dan Tri, May 29).

Warburg pledged to invest more US$25 mln in Vingroup’s first initial public offering (IPO) in the international market. In the future,  an additional US$100 million will be poured in Vincom Retail for expansion and retail property-related deals.

Vincom Retail is the country’s largest owner and operator of shopping malls with seven assets valued around $1.1 billion.

On May 28 session, VIC hit ceiling price of $3.6 per share and nearly 850,000 shares were transacted (VietFin, May 29)

Vietnam Airlines moves towards IPO

HA NOI (VNS)— National flag carrier Vietnam Airlines has seen some progress in its much delayed equitisation process with news that the carrier will start preparing the documents for its initial public offering (IPO) during the next two months.

The Dau tu chung khoan (Securities Investment) newspaper has quoted its sources as saying Vietnam Airlines in April signed an IPO consultancy contract with a joint venture including Morgan Stanley, Citigroup and the two domestic firms BIDV Securities Co and Viet Nam Valuation Finance Consultancy JSC.

The consulting partners are building a plan to assess the carrier’s business situation. After the preliminary report, which is projected to be completed by the end of June, the carrier will announce the timetable for pre-IPO work such as a business valuation report, prospectus and other necessary documents, said a source familiar with the deal in the newspaper.

“Vietnam Airlines is determined to push up its IPO process and offer stakes to strategic partners. This is one of the necessary solutions to promote the group’s sustainable development,” the source said.

The corporation declined to give any details on the IPO when contacted. The equitisation of Vietnam Airlines, leading up to one of the most anticipated IPOs in Viet Nam, started five years ago but missed several deadlines due to unfavourable market conditions.

The Minister of Transport, Dinh La Thang, in March urged the carrier to complete equitisation by the end of this year.

According to market insiders, the latest developments do not guaranteed that the airlines’ IPO will be implemented soon because BIDV, one of Viet Nam’s four biggest banks, took four years to equitise (from signing the consultancy contract to officially selling shares publicly) in December 2011.

Since the IPO, BIDV has continued to delay its listing on the stock exchange even though regulations clearly call for a public company to list shares within a year of its IPO.

“Only when a strategic investor carries out a review with due diligence will we feel more sure about progress towards Vietnam Airline’s IPO,” said a director of a financial consultancy company who wished to remain anonymous.

“In addition, though documents for the IPO have been carefully prepared, it will take time for authorities to approve it,” he added.

Vietnam Airlines plans to sell 20-30 per cent of its stakes to the public, 10-20 per cent of which will be sold to foreign investors, while the State will retain its holdings from 70-80 per cent.

The carrier expects to collect no less than US$200 million from the IPO.

After being equitised, Vietnam Airlines’s equity is estimated to be at about VND14.4 trillion ($680 million), and expected to reach VND21.3 trillion ($1 billion) by 2015. — VNS

Securities Exchange eyes 2015 launch

Myanmar still has a long way to go to meet its goal of opening a stock exchange by October 2015, but the upcoming securities and exchange law will be a major step, speakers told a seminar in Yangon on May 7.

“The law is going to be enacted in July,” said U Soe Thein, executive director of Myanmar Securities Exchange Centre, adding that the legislation would help fuel the drive to set up the stock exchange.

Although the timeline for the opening of the national stock exchange is tentative, officials at the seminar, which was about initial public offerings (IPOs), were hopeful that the deadline would be met.

Mr Shinsuke Goto, director of Daiwa Securities Group, said a number of events had scuppered development of the exchange, including the 2003 banking crisis which seriously eroded confidence in banks.

“People and banks have to depend on each other and have trust in one another to make financial reforms,” he added.

Mr Kazuhari Ota, managing director of Daiwa’s Investment Banking Solutions Department, said the Central Bank of Myanmar had signed a memorandum of understanding with Daiwa and the Tokyo Stock Exchange to establish an exchange in Yangon by 2015. The three organisations will collaborate to draft the necessary rules and regulations, as well as develop an information technology system, he added.

“We are aware that this infrastructure alone will not make an attractive stock exchange,” Mr Kazuhari said, adding that it would it would take work to attract companies to list on the stock exchange.

Even though there are many restrictions in Myanmar’s banking sector, Daiwa executives say they remain deeply committed to promoting an IPO market in the country. Myanmar Securities Exchange Centre is a joint venture between Daiwa and Myanma Economic Bank that was set up in 1996.

U Win Aung, president of the Union of Myanmar Federation of Chambers, said a number of federation members have become or are in the process of becoming public companies in order to list on the stock exchange.

Most companies in Myanmar know very little about listing on a stock exchange but that will change by 2015, he added.

By Aye Thida Kyaw   |   Monday, 13 May 2013   |   The Myanmar Times