The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Investors play on as Vietnam founders

After the default of one of its biggest state-owned companies in December, the country’s latest round of problems began: ratings downgrades, rising inflation and an 8.5% devaluation. Yet some investors are optimistic. They think its markets are cheap, and are waiting on a new wave of IPOs. Lawrence White reports

AT THE END of 2010 and the beginning of this year, one negative story after another about Vietnam hit the headlines of the local and international media. On December 20, indebted state-owned shipbuilder Vinashin missed a $60 million principal payment to its creditors, revealing a long-suspected funding problem at the company. Three days later Standard & Poor’s followed Moody’s and Fitch Ratings in cutting the country’s long-term credit rating by one notch, having warned on December 13 that Vinashin’s woes might affect the creditworthiness of some banks. Then, as fears about inflation developed, the government announced on February 11 that it was devaluing the dong by 8.5% against the US dollar. The IMF welcomed the move as necessary to close the gap between the official and black-market exchange rates but the market responded with unintended grim humour by immediately pushing the unofficial rate higher still. While the official rate moved from D18,932 to the dollar to D20,693, within five days the ­unofficial rate had climbed to D21,900. As the Vinashin debacle developed, coverage in the local ­media exposed more problems at the company. The search for the individuals responsible had begun in August 2010 with the arrest of the chairman, Pham Thanh Binh.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree