Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post
The Jakarta Post
Video Weather icon 30°C
DKI Jakarta, Indonesia
weather-icon
30°C Partly Cloudy

Dry and mostly cloudy throughout the day.

  • weather-icon

    Wed

    26℃ - 32℃

  • weather-icon

    Thu

    25℃ - 32℃

  • weather-icon

    Fri

    25℃ - 31℃

  • weather-icon

    Sat

    26℃ - 30℃

Vietnam plans 6.5 times more sales of stakes in state companies

  • Nguyen Dieu Tu Uyen and John Boudreau

    Bloomberg

Hanoi, Vietnam | Mon, January 22, 2018 | 11:12 am
Vietnam plans 6.5 times more sales of stakes in state companies The Vietnamese government plans to sell 6.5 times more shares than it offered last year. (Viet Nam News/File)

Vietnam is dramatically accelerating sales of stakes in state-owned companies to boost revenue and ease a strained budget, while seeking to exceed its economic growth target this year.

The government plans to sell 6.5 times more shares than it offered last year, Deputy Prime Minister Vuong Dinh Hue said in an interview with Bloomberg Television. The state raised 135.6 trillion dong ($6 billion) from these sales in 2017.

“We need more foreign investment but also want to lure good investors who can help our companies improve corporate governance,” Hue said in his office in Hanoi on Jan. 19. The assets the government plans to sell “will include leading companies in energy, power and petroleum,” he said.

Vietnam, which had one of the world’s fastest-growing economies last year at 6.8 percent, is saddled with high public debt levels that constrain the government’s ability to boost spending. The state could come close to breaching its 65 percent constitutional debt limit next year, HSBC Holdings Plc said in a report this month, singling out Vietnam as the nation facing the greatest need for fiscal consolidation in Southeast Asia.

State-owned enterprises in the Communist Party-controlled nation were once the biggest employers, the largest revenue earners and the main growth drivers. But the government is now pressing for greater support for private-sector businesses, decades after the “Doi Moi” reforms of 1986 brought market-oriented change to Vietnam.

245 Companies

The government is banking on an expanding middle class and its youthful population to attract investors. Stakes in 245 state companies are up for grabs in 2018, including four scheduled in the first quarter -- Binh Son Refining and Petrochemical Co., which operates the only oil refinery in the country, as well as PetroVietnam Oil Corp., PetroVietnam Power Corp. and Hanoi Beer Alcohol & Beverage JSC.

Among the assets disposed last year was a majority stake in the nation’s top brewer Saigon Beer Alcohol Beverage Corp., or Sabeco, to Thai Beverage Pcl and its partner in December, which sold for $4.8 billion.

Vietnam has struggled to privatize state companies with many of them finding it difficult to value their shares. The government is working on plans to allow more foreign ownership in sectors include banks, the deputy premier said.

Public debt and publicly-guaranteed debt will increase to 64.2 percent of gross domestic product by 2019 from an estimated 62.6 percent last year, the World Bank estimated. The government plans to cap the budget deficit at 3.7 percent of GDP in 2018 from 3.5 percent in 2017.

Stellar Growth

Economic growth this year may match 2017’s pace of 6.8 percent -- slightly higher than the 6.7 percent target set by the government -- despite risks of rising trade protectionism around the world, Hue said.

“There are some risks and challenges remaining in the Vietnamese economy but the biggest challenge will be that we want to grow faster but also in a sustainable manner at a time when there are unpredictable movements in the world economies,” Hue said.

The economy, which posted a total trade value last year that was 1.93 times bigger than its GDP, is susceptible to global turbulence that can “quickly have a direct impact on Vietnam in terms of trade, investment, currency,” he added.

 

NEWS PULSE

Join the discussions