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Vietnam 2014 - Will The Tiger Roar Again?
Vietnam 2014 - Will The Tiger Roar Again?
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and
hardworking
63% of the population under 35, median age of 27. Below China (35) and Thailand (34). 94% literacy rate. Ahead of Indonesia and Malaysia.
% of population with access to banking system
Official poverty rate reduced from 58% (1993) to single digits today Trend towards urbanisation with 30% of the population now live in cities. Expected to grow to 40% by 2020. Young banking industry opened up only since 1995.
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How Vietnam has progressed over the years GDP growth consistently over 5% Exports has grown from USD72B in 2010 to USD114B in 2012 and reached USD 96B in 3Q13. Trade balance reasonable and on an improving trend FEX reserves grew 200% over a two year period VND was stable against the USD 3 month VNIBOR decreased from double digit of over 13% to c.5% in 2013.
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GDP (%)
6.8
5.9
5.03
5.1
CPI (y-o-y,%)
9.1
18.6
6.8
6.3
Exports (%)
26.4
33.3
18.3
15.7
Imports (%) Trade balance (USD bln) FEX reserves (USD bln)
21.2
24.7
7.1
15.5
-12.6
-9.5
0.3
-0.1
12.9
11.5
20
30
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4.67% 4.08% 3.2% 2.9% 2.6% 2.0% 2.2% 3.5% 3.0% 3.4%
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Hanoi
Secondary Price Change New Launch Supply (Units)
Source: CBRE
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Source: Bloomberg
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Consumer confidence dropped in 2012 major concerns are the economy, inflation, job security, and health
2010-2012 Vietnam Consumer Confidence Index
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21,200
21,000
20,800
20,600
20,400
20,200 22-Aug-11
22-Nov-11
22-Feb-12
22-May-12
22-Aug-12
22-Nov-12
22-Feb-13
22-May-13
22-Aug-13
Official
Floor
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Ceiling
Market
Vietnam
Taiwan Korea Singapore Thailand New Zealand Philippines Malaysia Japan Indonesia Australia India
Source: Bloomberg
-1.5%
-3.22% -4.71% -4.81% -5.43% -6.27% -7.92% -8.83% -11.17% -12.68% -14.50% -15.47%
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Source: Reuters
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Others 13%
Construction 4% Acommodation & Food Service 2% Manufacturing 56% Real Estate 17%
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Japan
Singapore
South Korea
Hong Kong
BVI
Taiwan
China
US
Malaysia
Others
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Source: Internet
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Who is thriving?
Beverages Favorable demographic shifts and rising affluence provide significant scope for growth Alcoholic drinks value sales CAGR, 2012 to 2017: +13.5%. Soft drinks value sales CAGR, 2012 to 2017: +13.7%.
Pharmaceutical Local market valued at US$2.4bn in 2011 Expected to grow to US$5.4bn by 2016, equating to a compound annual growth rate (CAGR) of 17%
Education Rapid growth of private, technical, linguistic and secondary education Number of students has risen 95% from 2006-2011 and per capita spending has increased 33%
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Source: BMI
Who is thriving?
Agriculture and commodity Coffee production growth to 2016/17: 28% to 29.1mn bags Poultry production growth to 2016/17: 27% to 954,000 tonnes Milk production growth to 2015/16: 24% to 398,000 tonnes Personal Care Consumers, especially those living in urban areas, are gaining exposure and have increasing demand for beauty and personal care products. Value growth and product availability are both expected to be strong. Segment growth of 60% from 2006-2010
Source: BMI
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Accelerate regional economic integration by 2015 Nine countries include: Brunei, Cambodia, Indonesia, Laos, Philippines, Malaysia, Myanmar, Singapore, Thailand, and Vietnam Objectives: A. Single Market and Production Base Competitive Economic Region Equitable Economic Development Integration into the Global Economy
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IMPACTS OF AEC
ASEAN seen as a regional/single market of c.600 million people Increased investment and funds from within ASEAN Enhanced focus on SMEs Greater tourism opportunities Hard and soft infrastructure development are priorities Businesses may pursue sales opportunities across the region Focus on cost efficiencies by integrating/centralizing operations M&A activity within SEA e.g. Siam Cement Group, CP Group acquiring businesses in Vietnam
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Proposed regional FTA under negotiation between US and 10 other countries So far 11 countries included: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, US, and Vietnam Objectives: A. Achieving a comprehensive and high standard regional FTA that eliminates/reduced trade barriers and increases opportunities for US trade and investment B. Allowing US to play a role in developing a broader platform for trade liberalization in Asia-Pac C. Providing US with an opportunity to establish new rules on emerging trade issues
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IMPACTS OF TPP
Contribute to Vietnams GDP growth Strong trade with US Capturing greater exports in manufacturing industries where Chinas comparative advantage in fading Overall boost to exports Higher income enabling reinvestment and more rapid growth
Source: Amcham Vietnam, The Trans-Pacific Partnership and Asia-Pacific PUBLIC Integration: A Quantitative Assessment Peter A. Petri, Michael G. Plummer, and Fan Zhai
HSBC's key Vietnam Economic Forecast GDP (%) GDP per capital (USD) CPI (end year, %) Trade balance (USD bn) Intl FX reserves (USD bn) USD/VND (end of period) Policy rate (OMO, end year, %)
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Key issue is customer confidence if sentiment improves, the recovery will be quicker.
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Disclaimer
HSBC Bank Vietnam Limited (HSBC) has prepared this document (the Document) for information purposes only. This Document does not constitute a commitment to underwrite or purchase or subscribe for all or any portion of the securities mentioned herein. Any such commitment shall be evidenced only by a fully executed subscription agreement, purchase agreement or similar contractual document. This Document should also not be construed as an offer for sale of or subscription for any investment, nor is it calculated to invite/solicit any offer to purchase or subscribe for any investment. HSBC has based this Document on information obtained from sources it believes to be reliable but which it has not independently verified. HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability for the contents of this Document and/or as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Document. HSBC and its affiliates and/or its or their respective officers, directors and employees may have positions in any securities mentioned in this Document (or in any related investment) and may from time to time add to or dispose of any such securities (or investment). HSBC and/or any of its affiliates may act as market maker or have assumed an underwriting commitment in the securities of any companies discussed in this Document (or in related investments), may sell them to or buy them from clients on a principal or discretionary basis and may also perform or seek to perform banking or underwriting services for or relating to those companies. As HSBC is part of a large global financial services organisation, it or one or more of its affiliates may have certain other relationships with the parties relevant to the proposed activities as set out in this Document, and these proposed activities may give rise to a conflict of interest, which the addressee hereby acknowledges. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. This Document, which is not for public circulation, must not be copied, transferred or the content disclosed to any third party and is not intended for use by any person other than the addressee or the addressee's professional advisers for the purposes of advising the addressee hereon. HSBC Bank (Vietnam) Limited Level 6 Saigon Metropolitan building 235 Dong Khoi Street, District 1 Ho Chi Minh city, Vietnam No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Bank (vietnam) Limited.
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Thank you!
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