Grant Thornton: Fiscal Deficit And Divestment Strategy

Next Story

bTaskee: The Uber For Housekeeping

November 3, 2016


The fiscal deficit is becoming a real issue in Vietnam because of the statutory limit that the public debt should not exceed 65% of Gross Domestic Product. The Government has reported to the National Assembly that the budget deficit this year is likely to reach US$ 11.5 billion which will mean the expansion of public debt to just under 65% of GDP.

This is good news for those seeking stakes in Vietnam’s State Owned Enterprises as the fiscal deficit is forcing the sale of more assets and in general some of these, at least, are the more sought after firms. Last week saw a listing on the Hanoi Upcom market of shares in Hanoi Brewery – HABECO and talk of the Government selling the majority of their 82% stake. Based on the initial trading the company has a market Capitalisation of US$ 570 million.

The State Capital Investment Corporation has also been showing its determination to divest some of its holdings in SOE’s the most notable move being it’s declared intention to sell 9% of the countries largest market cap company Vinamilk. SCIC currently owns over 44% of this listed company.

As reported by VIR and other sources the SCIV intends to divest major share stakes in some of the 10 largest SOE’s including FPT Telecom and Binh Minh Plastics. So whilst there has been little on offer from the best SOE’s or equitized SOE’s, the fiscal deficit may play out in favour of those seeking stakes in the better performing SOE’s.

More From the Author

  • Trans Pacific Partnership Sunset
  • The Income Disconnect
  • Grant Thornton: Vietnam Retail in Top Three for Private Equity
  • Grant Thornton: Vietnam A Regional Investment Star
  • Green Energy in Vogue
  • Grant Thornton: Contributions to Vietnam’s GDP and Balance of Payments
  • Vietnam’s economic performance
  • Vietnam’s Agro Industry: A Neglected Value Opportunity
  • The Opportunity for Renewable Energy
  • Decree on Equitisation
  • Steady Growth Expected in Private Equity Investment
  • Mergers and Acquisitions Update
  • Grant Thorton – The Beer Market in Vietnam
  • Grant Thorton – Vietnam Tourism Update
  • Vietnam’s Stock Exchange
  • Vietnam Startups Revisited
  • Leave a Reply

    Subscribe Today

    We will send directly to your inbox the latest Vietnam investment commentaries, travel tips and "in the know" tidbits! 
    Join the Vietnamese IN CROWD!
    First Name
    Email address