Vietnam's Vice Minister of Finance talks of future bond plans

Vice Minister of Finance for the Socialist Republic of Vietnam shares his views on the sovereign bond, WTO admission and liberalising banks.
VietnamÆs Vice Minister of Finance Nguyen Van Ninh tows the party line in his formality: he arrives with an entourage, speaks through a translator, and begins and ends an interview with speeches about opening up to the world. But despite the stiff approach, Ninh is relatively forthcoming, and this is refreshing in itself.

He begins by talking about last year's $750 million bond issue, launched to to yield 7.125%. He says that the 10 year bond - led by Credit Suisse - not only gave the country more financing flexibility but it also improved VietnamÆs image in the world economy.

Indeed Vietnamese officials are more interested in their foreign image than ever before û because it is the foreign investors who are helping to develop this socialist nation.

More telling, he added that the nation is: ôcarefully reviewing whether we should issue a second sovereign bond internationallyö.

And without prompting from any bankers, he says: ôWe have a good relationship with Credit Suisse and that good relationship has resulted in very good cooperation on both side with the successful launch of the bond. As you know, our bond is well traded so we have no doubt about the commitment of Credit Suisse and when we issue a new bond we need to have a good risk management exercise, so weÆll consider working with the bank.ö

Ninh also suggests the deal pipeline is only set to grow: ôWe want to encourage our Vietnamese corporates to access the international markets more.ö

As far as liberalising the banking sector goes, he says the first step is transforming the state-owned banks to joint-stock banks. The second step would be for the banks to go to the capital markets, much as weÆve seen mainland Chinese banks do. Noting that Vietnam's state-run Vietcombank is set to be the country's first overseas listing, he says, ôthe target is to have Vietcombank equitised this year.ö

But though many Vietnam-watchers say the country is simply following in the footsteps of China he says: ôDuring the development phases we can learn a lot from China because there are many similarities. However, we have to work out our own roadmapö.

Although some analysts are forecasting 7.7% growth for this year, Ninh says the government is targeting 8.5% gross domestic product growth. However, with the global price of oil still soaring, ôwe have been seeing some difficulties.ö He says a concern is inflation, and as a result the government has been ôtaking measures to stabilise domestic prices so we can achieve the growth targetö. And as many of the nationÆs ministers have been saying for the past year, he says the government is also trying to accelerate the equitisation of state-owned-enterprises.

He notes that the private sector now accounts for a whopping 60% of GDP.

Finally, it is hard not to bring up WTO membership. Ninh does not stray from the official line: ôWe see many promising factors for an early conclusion of negotiations. We very much hope that we can complete the negotiations by the end of this year.ö
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