Fitch revises Vietnam’s outlook from stable to positive

Fitch-nang-trien-vong-tin-nhiem-viet-nam-len-tich-cuc

Fitch has revised Vietnam’s long-term foreign and local currency issuer default ratings outlook to positive from stable.

The rating agency said in a statement January 23 that it affirms Vietnam’s long-term foreign and local currency IDR at ‘B+’. The ratings for the country’s senior unsecured foreign- and local-currency bonds are also ‘B+’.

The country ceiling was affirmed at ‘B+’ and the short-term foreign currency IDR at ‘B’.

According to Fitch, the revision of the outlook to positive from stable was driven by an improvement in macroeconomic stability.

It said Vietnam’s economy has begun to recover following a difficult period after austerity measures were implemented in early 2011 under Resolution 11 to cool an overheated economy.

Real GDP grew 5.4 percent in 2013 (5.2 percent in 2012) as both domestic and external demand picked up.

Fitch forecast real GDP to grow at 5.7 percent and 5.9 percent in 2014 and 2015 respectively.

Meanwhile, inflation moderated to 6.6 percent in 2013 compared with 9.1 percent in 2012 and 18.7 percent in 2011.

Another reason for the revision was that the country’s external finances have strengthened. Fitch estimated that Vietnam recorded another large current account surplus of 5 percent of GDP in 2013 (5.8 percent in 2012).

Strong foreign direct investment inflows, at 6.8 percent of GDP in 2013, continued to underpin the expansion in the manufacturing/export sector.

But foreign-exchange reserves stood at US$28.6 billion at end-December (US$26.1 billion at end-2012), or equivalent to 2.4 months of current external payments, not a large buffer given Vietnam has experienced episodes of significant capital flight in recent years.

The banking sector remains a source of weakness for Vietnam’s credit profile due largely to a high but unknown level of non-performing loans (NPLs).

The implementation of Circular 2, which will apply stricter rules in classifying and provisioning for NPLs has been delayed until June 2014.

But the authorities have begun to address the issue by creating a national asset management company to help resolve NPLs.

 

 

 

Source : Thanh Nien Daily | January 28, 2014

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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