Vinacapital Vietnam Oppo... Share Discussion Threads

[aleman] 18/4/2024 18:24

It's a risk with foreign investing. Does one just not bother? I got caught with a small loss in the backwash from the Hiranandanis property scams in India about 15 years ago. Scams and frauds are like plane crashes. The safest time is just after a big one.

[amt] 18/4/2024 18:14

Aleman yes it will be a good thing in the longrun but according to the articles I am reading it's causing paralysis of the public sector where no one wants to work and difficulties in running businesses. When corruption has just become a way of life then it requires a big change in business culture. Are there more cases to come, who knows. It teaches me there is no transparency and so it makes me wonder how reliable the reports from companies are etc etc.
I have been very naive in my beliefs about Vietnam

[aleman] 18/4/2024 17:24

I'll bet there's much less fraud now so that Vietnam is a much better place to invest. Who'd defraud a finance or property company there now after the severe sentences handed out?

[amt] 18/4/2024 17:11

Yes Vietnam sounds like a fantastic place to invest and that's what I thought until I read about this massive fraud which has only just come to our attention. Plus some observers stating that corruption is on a massive scale in Vietnam and rooting it out is going to cause a lot of pain.
This probably explains why the stock market performance has been disappointing in the last couple of years despite all the indicators looking great for a boom. I will sit on the sidelines and see how things play out.

[31337 c0d3r] 18/4/2024 16:52

Aleman, with respect the post you have linked only mentions bank customers withdrawing deposits. It doesn't bring investor's attention to massive fraud.

[spangle93] 18/4/2024 15:30

Also, ref hpcg's post 2029, there are a couple of slides on Vietnam moving from Frontier to Emerging, and the effects

[spangle93] 18/4/2024 15:29

VOF addresses SCB in relation to the fund at 40:40 in yesterday's presentation



Worth watching the whole thing if you have 50 mins.

[aleman] 18/4/2024 14:47

It was 8 months before even I bought in. I presumed others knew. It was mentioned on this thread at the time (link below) and there were items about the court case in numerous secondary links in economic news I've been linking to in recent posts. I did not mention it because I thought it was old news. I'm shocked at the market reaction actually. I don't see what is new apart from the released bail-out numbers which might have been larger than some expected - but there could be implications I do not understand, possibly.

It's only getting publicity now the (highly reported, very high profile) fraud case has completed, with sentencing which includes selling the collateral assets - including significant properties around HCMC. Obviously the bail-out is ongoing but selling the collateral returns fraudulently lent money to SCB and reduces or completes the bail-out. I see it as the beginning of the end and another step forward so have been surprised by the reaction. It's said to be mostly foreign selling so I'm still thinking it might just be a blip. It does not even stand out on the share price chart.

[amt] 18/4/2024 14:42

Exactly no-one or the IT Directors have mentioned this before. So maybe some people knew about it but under a Dictatorship kept quiet.

[31337 c0d3r] 18/4/2024 14:26

Similar to amt, I only heard about the fraud when I posted the link above after being curious of shaker45's comment in post #2028.

Also, despite the volume of posts endlessly discussing the huge discount to NAV, I don't recall the two-year long fraud being highlighted on this thread before.

That said, I'm keeping my holdings rather than selling long after the event.

[shaker45] 18/4/2024 12:59

Amt if you think India is less corrupt than Vietnam then take good care!!

[aleman] 18/4/2024 11:39

I'd say the big fall was two years ago. I think it all depends on whether the central bank has it under control or not. They've had a least 18 months and seem to be in control. I just think the scale of the collateral asset sales were maybe a little bigger or a bit more sudden than the market (foreign investors?) expected. What we now need to see is the market adjust to the idea and move on. It's had 4 days to adjust. It should have found its new base by now. That's if I'm understanding it correctly. I'm not certain about that.

[amt] 18/4/2024 11:15

Yes all a bit contradictory but I feel the risk of a big fall is there. Look at the 4% fall the other day.

[aleman] 18/4/2024 10:44

It's been going on for months. Most of the money was injected at the end of 2022 and new amounts needed each month have shrunk as the bank run faded. All that is new this week is they've released the total amount of central bank money injected, which seems to have caught a few people out in its magnitude, and ordered the liquidation of $27bn of collateral assets (more than the bail-out) to return funds to the bank and repay the fraudulent borrowings. It seems to me that they cut interest rates a year ago to boost property and are now ordering the liquidation of collateral assets because the property market is picking up strongly in places so it can now be done in an orderly fashion. As I said, it feels like the beginning of the end of the crisis, yet reporting is almost as if it is a new one and it seems to be scaring foreign stockmarket investors out - a bit odd when it is contemporaneously having a foreign direct investment boom.

[amt] 18/4/2024 09:26

Maybe but the bail out has been kept secret and this could rock sentiment. You might have known about it but it's not been mentioned in any of the reports I have read. I was under the impression that Vietnam was relatively stable but this phase they are going through is going to be difficult and fraught with risk. I doubt Foreigners will invest with this state of affairs.
A lot of reports appearing in the last day or two. This might be the biggest fraud in History. 24B is like 240B in UK terms given the disparity in wealth. Finacial crises creep up on us. The bail put is off the scale

[aleman] 18/4/2024 08:52

Government put money in? I've only read about the central bank putting in the equivalent of about $24bn and it seems to be getting close to a position where it can start taking it out again as the collateral property assets become saleable. It's odd it's being reported in the West as if it is new. The crisis was basically 18 months ago and slowly faded so it now appears stable. (I accept I could be missing something.) It's only because it has stabilised that they now feel confident enough to report how big the bail-out has been. The economy is now looking strong and property markets are finding their feet again. Market reports suggest it is foreigners that are now selling out on the reporting of the numbers - but it mainly happened months ago.

The risky time was 2 years ago, when they did not know they had a problem, and before the stockmarket fell 30% as the bank run developed.

[amt] 18/4/2024 08:40

Thanks for info.
I have sold out this morning after having read about how catastrophic this banking fraud is and how much the Government is putting in to bail it out. I fear a financial crisis is looming. Plus I read this could be the tip of the iceberg. Corruption seems to be endemic and so ingrained that fighting it is throwing up serious consequences for doing business in Vietnam and paralysing the public sector with fear.
I should India will be a better choice for Companies to set up manufacturing. I missed the boat on investing there.
I might come back to Vietnam later on but its too risky for me now.

[aleman] 17/4/2024 12:55

Yes, the revelation of how deep the problem has been at SCB probably accounts for the recent drop in shares. But it is a historical acknowledgement. The bank run seems to have abated after withdrawal of 80% of deposits and the central bank plugging the deficit, stabilising the situation. It accounts for the local large premium for gold over global prices. Rescue now spins on the price of collateral property but lowered interest rates and decade-low mortgage rates seem to be revivitalising property markets. Estate agents have reported a 20% rise in comissions in Ho Chi Min City where most SCB collateral is located (while Hanoi is booming again - link at end). The improving market will make for better sales of collateral development properties to recapitalise SCB. The economy itself continues to improve and this scandal is moving into its final stages where the indebted assets can be liquidated at a reasonable price to repay central bank loans, with the central bank continuing to backstop SCB so that it will start to lend like a normal bank again.

March bank lending improved after weak figures in Jan and Feb after the government decided to push banks to lend more. The minting of new gold bars for the first time in 10 years is probably designed to bring down the local gold premium and encourage Vietnamese citizens to move back to using banks more and buy gold less.



I think this is the beginning of the end of the SCB banking crisis, helped along by an end to the fraud trial and a much improving economy, driven by improving local demand, a boom in exports and foreign direct investment and the recovery of the property market, led by Hanoi.




So far this year the average price of apartments on the secondary market in Hanoi has risen by 17% year-to-year to VND36 million per square meter, according to recent data from property consultancy CBRE.

[hpcg] 17/4/2024 11:40

2025 for Vietnam to enter Russell EM - very good news.

[shaker45] 17/4/2024 10:13

Likely, impact of massive fraud at scb and huge continuing bail out by Central bank.

[aleman] 17/4/2024 09:39

Vietnamese interest rates aren't following US/Western trends. After a few cuts about a year ago, they remain near historic lows. VNI is still up about 4% this year despite the recent weakness. The strengthening economy should show up in much higher corporate earnings soon and the P/E ratio is already about 20% below historic norms. We've been getting stories about China and Asia doing poorly yet China's 5.3% beat Q1 GDP forecasts comfortably and Vietnamese growth forecasts have been rising - currently around 6% for 2024 and 6.2% for 2025.

The recent rise in the gold price might even help beat existing GDP forecasts. Vietnamese save a lot with gold and now probably feel significantly richer than only a few months ago.

[dickbush] 17/4/2024 09:05

Market down 100 points since 28th March driven by foreign selling.

Bloomberg:

Asian Stock Gauge Flirts With Erasing 2024 Gain as Worries Mount
• MSCI Asia Pacific Index falls 0.4% before erasing day’s loss
• Risk appetite sours on US rate outlook, Middle East tensions

Asia’s stock benchmark briefly erased its gain for the year, as worries about higher-for-longer interest rates and geopolitical tensions triggered losses across the region.

[shaker45] 17/4/2024 02:44

No they are not. Emerging middle class burgeoning and economy doing well.