“CLMV” economy and financial market...8 8 16 10 Cambodia foreign branch 100% foreign-owned...

“CLMV” economy and financial market

Research department

Last updated February 2015

“CLMV” economy and financial market• Economic fundamental

• Money market

• Capital market

Economic fundamental

3

CLMV Economic Heat Map(Data are as of 2013) Remarks

Thailand Cambodia Laos Myanmar Vietnammost

vulnerable vulnerableless

vulnerableleast

vulnerable

I. GrowthReal GDP growth (%) 2.9 7.4 8.0 8.3 5.4 < -3% -3%-0% 0%-3% > 3%Export growth (%) 4.2 29.6 13.1 21.2 12.2 < -3% -3%-0% 0%-3% > 3%

II. Fiscal Policy Indicators:Fiscal balance (% GDP) -1.8 -1.8 -5.5 -4.9 -7 < -3% -3%-0% 0%-3% > 3%Government debt (% GDP) 45.8 28.4 61.3 39.8 51.6 > 60% 40%-60% 20%-40% < 20%

III. Domestic Vulnerability Indicators:Inflation rate (%) 2.2 2.9 6.4 5.5 6.6 > 8% 5%-8% 3%-5% 0%-3%Unemployment rate (%) 0.7 0.3 1.4 3.4 2 > 8% 6%-8% 4%-6% 2%-4%Credit growth (%) 10.5 25.6 38.6 n/a 12.5 > 20% 10%-20% 5%-10% < 5%

IV. External Vulnerability Indicators:Current account balance (% GDP) -0.6 -8.5 -27.7 -5.4 5.6 < -3% -3%-0% 0%-3% > 3%External debt (% GDP) 35.0 42.2 76.6 13.0 38.2 > 40% 30%-40% 20%-30% < 20%International reserves (#months of imports) 9-10 3.5 1 3.5 2.5 < 3 3-6 6-9 > 9

Source: International Monetary Fund


4

16.9 11.7

65.3

187.8

Cambodia Laos Myanmar Vietnam

Economic size and growth

2014 Gross Domestic Product

7.17.3 7.4

7.2 7.3 7.3 7.5 7.58.0 7.9 8.0

7.4 7.27.7 7.7

7.4

5.9

7.3

8.38.5 8.5

8.38.0

7.8

6.2

5.2 5.4 5.5 5.6 5.7 5.8 5.9

2011 2012 2013 2014 2015 2016 2017 2018


GDP growth

(billion USD, estimates) (%YoY, estimates start after 2013)

Thailand GDP, USD 380 million


5

34 27 18

26 3338

41 40 43

Cambodia Laos Vietnam

Agricultural Industry Service

Economic structure

2013 Economic structure by sector 2013 Exports and Imports to GDP(% of GDP) (% of GDP)

Source: World BankNote: No information of Myanmar

Thailand Agriculture : Industry : Service, 12 : 43 : 45

66

37

8474

46

80


exports of goods and service

imports of goods and service

Thailand exports : 74, Imports : 70


6

International trade

Volume of exports of goods and services

8.3 8.6

13.1

8.611.9 11.4 11.6

9.7

17.1

32.1

3.31.5 0.8

2.65.3

7.5

23.0

17.221.0

16.014.1 12.8 12.8

15.813.3

9.2

16.6 17.1

11.6 10.5 10.4 10.6

2011 2012 2013 2014 2015 2016 2017 2018


Volume of imports of goods and services(% YoY, estimates start after 2013) (% YoY , estimates start after 2013)

Source: International Monetary Fund

15.8

26.029.6

16.5

9.1

15.012.0 12.2

21.0

9.813.1

8.4 8.1 8.09.7

5.99.6

5.0

21.2 22.6

12.9 13.1 13.4 14.015.7

20.6

12.214.2 13.7

11.1 9.7 8.8

2011 2012 2013 2014 2015 2016 2017 2018



7

867 324 710

6,700

511 319 1,079

7,600

795 301

2,520

7,430

1,345 427

2,255

8,900


2007 2009 2011 2013

Foreign direct investment

Foreign direct investment net inflow and major investors(million USD)

Source: Foreign direct investment net inflow value from World Bank

Thailand FDI 2013, USD 12,650 million

1 Malaysia 25%*2 China 12%3 Taiwan 8%6 Thailand 4%

* Council for the Development of Cambodia, percentage of total cumulative registered investment value, August 1994 to November 2012** Department of Investment Promotion, percentage of total cumulative registered investment value Y2000 to September 2012*** Directorate of Investment and Company Administration, percentage of total cumulative foreign registered investment value Y1988 to April 2014**** General Statistics Office of Vietnam, percentage of total cumulative foreign registered investment value until December 2013

1 Vietnam 25%**2 China 18%3 Thailand 16%4 Korea 4%

1 China 25%***2 Thailand 18%3 Hong Kong 16%4 Singapore 4%

1 Japan 15%****2 Singapore 13%3 Korea 13%17 Thailand 3%


8

International tourist arrivals

International tourist arrivals International tourist receipts(thousand) (% of GDP)

Source: Asian Development Bank

2,508 2,882 3,584

4,210

1,670 1,786 2,140

311 391 593 900

5,050

6,251 6,848

7,572

2010 2011 2012 2013


13.5

16.217.4 17.1

5.6 5.0 4.83.9 4.2 4.4 4.4

2010 2011 2012 2013


No. of international tourists in Thailand in 2013, 26.5 million International tourist receipts of Thailand in 2013, 10.8%


9

External stability

Current account balance(% of GDP, estimates start after 2013)

Source: Current account from International Monetary FundExternal debt from World Bank

-8.1 -8.7 -8.5 -8.7 -7.7 -7.4 -7.0 -6.7

-15.5

-27.7 -27.7-25.4

-21.2-18.2

-16.2 -16.2

-1.9-4.3 -5.4 -5.3 -5.1 -5.0 -4.9 -4.6

0.2

6.0 5.6 4.1 3.4 2.6 1.2-0.7

2011 2012 2013 2014 2015 2016 2017 2018


External debt(% of GDP)

33.4 34.040.2 42.2

79.7 81.4 78.5 76.6

16.5 14.9 14.8 13.0

38.7 39.2 37.9 38.2

2010 2011 2012 2013


2013 Thailand current account balance, -0.6% of GDP 2013 Thailand external debt, 35% of GDP


10

Internal stability

Inflation (% YoY)

Source: World Bank

Unemployment(%)

45.5

2.9 2.9

67.6

4.36.4

7.7

5.0

1.5

5.5

8.9

18.7

9.1

6.6

2010 2011 2012 2013


2013 Thailand inflation, 2.2% 2013 Thailand unemployment, 0.7%

0.4 0.3 0.2 0.3

1.4 1.4 1.4 1.4

3.5 3.4 3.3 3.4

2.6

21.8

2

2010 2011 2012 2013



11

Fiscal policy

Fiscal balance (% of GDP)

Source: World Bank

General government gross debt(% of GDP)

-3.2-2.7

-3.5

-1.8-2.2

-1.6-1.2

-5.6

-4.6

-3.8-3.2

-4.9

-2.1

-0.5

-4.4-4.7

2010 2011 2012 2013


2013 Thailand inflation, -1.8% 2013 Thailand government gross debt, 45.8%

29.1 28.5 28.7 28.4

62.156.9

62.2 61.3

49.6 49.4 48.0

39.8

48.4 46.7 48.5 51.6

2010 2011 2012 2013



12

ICT Infrastructure

Internet user(per 100 people)

Source: World Bank

Fixed broadband internet subscribers(per 100 people)

1.3 3.1 4.9 6.07.0 9.0 10.7 12.5

0.3 1.0 1.1 1.2

30.735.1

39.543.9

2010 2011 2012 2013


2013 Thailand internet user 28.9 per 100 people 2013 Thailand fixed broadband internet subscriber 7.36 per 100 people

0.22

4.12 4.274.9

5.62

2010 2011 2012 2013



• Money market

• Capital market

Money market

14

Domestic credit

Credit(% of GDP)

Source: National Bank of Cambodia ,Bank of the Lao PDR, The State Bank of Vietnam

Credit growth(%YoY)

28.1 33.941.9 48.1

24.0 29.0 35.043.0

120.9107.3

98.2 97.0

2010 2011 2012 2013


2013 Thailand domestic credit 94% of GDP 2013 Thailand credit growth 10.5%

25.4

33.6 34.5

25.6

49.1345.09

33.838.56

27.24

14.38.8

12.5

2010 2011 2012 2013


Money market

15

loan to deposit ratio and interest rate

(%)

Source: National Bank of Cambodia ,Bank of the Lao PDR, The State Bank of Vietnam, World Bank, Report: Myanmar’s Financial Sector, A Challenging Environment for Banks; Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH*average 12M deposit rate of 5 large commercial banks, **average MLR rate of 5 large commercial banks

2013 Interest rate(% annual)

98.892.8

64.6

85.4


2013 Thailand loan to deposit ratio 96.5% 2013 Thailand deposit rate 2.25%*, Lending rate 6.9%**

3.5

8.7 8.0 7.1

15.78

12.81 13

10.4


deposit rate lending rate

2013 Loan to Deposit ratio

188

16

10

Cambodia

foreign branch

100% foreign-ownedSpecialized

Private

State-owned

Money market

16

Banking segment

Number of bank in 2013

4723

16

Laos

foreign branchsubsidiaryjoint venturePrivateState-owned* 7

34

4

49

5

Vietnam

100% foreign-owned

Foreign Branch

Joint Venture

Joint Stock

State-owned**410

11

Myanmar

Private

Semi-govern

State-owned

Source: National Bank of Cambodia ,Bank of the Lao PDR, The State Bank of Vietnam, World Bank, Report: Myanmar’s Financial Sector, A Challenging Environment for Banks; Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH* Lao state-owned bank include 1 policy bank** Vietnam data as of 2012, Vietnam state-owned bank include 2 policy banks

99

2532

43

35 representative office of foreign

banks in Myanmar and

will be licensed

Money market

17

Banking segment

The largest bank

59 65

4349


State-owned Private

Market share of the largest segment in 2013

Source: National Bank of Cambodia ,Bank of the Lao PDR, The State Bank of Vietnam, World Bank, Report: Myanmar’s Financial Sector, A Challenging Environment for Banks; Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

(Market share by total asset: % share)

• Acleda Bank Plc. (asset share 18%)

Cambodia

• Banque pour le Commerce Exterieur Laos public (BCEL) (loan share 26%)

Laos

• Myanmar Agricultural Development Bank (in terms of loan)

Myanmar

• The Vietnam Bank for Agriculture and Rural Development (asset share 12%)

Vietnam


• Money market

• Capital market

Capital market

19

Market size and sector

Market capitalization

146 1,347

50,123

6,562

Cambodia Laos Hochiminh Hanoi

(million USD, % of GDP; Data as of Feb 13, 2015)

Source: Cambodia Securities Exchange, Lao Securities Exchange, Hochiminh Stock Exchange, Hanoi Stock ExchangeNote Hanoi Stock Exchange has not show market capitalization by industrial sector

Grand Twins

(garment)38%

PPWSA (water supply)62%

LWPC (exhibition

hall)4%

PTL (energy)

8%BCEL

(Banking)9%

EDL-Gen (energy)

79%

Cambodia Laos

Hochiminh

Sector weight Sector weight

Financial 35.4% ICT 1.7%Manufacturing 23.1% Agriculture 0.7%Electricity, gas 16.2% Admin and Support Service 0.2%Real estate 12.6% Arts entertainment 0.1%Wholesale and Retail trade 3.3% Accommodation and Food service 0.1%Construction 2.5% Professional 0.1%Transportation 2.2% Water supply 0.0%Mining and quarrying 2.0%SET market capitalization USD 469,916 million,

123% of Y2014 GDP

0.9% 11.5%

26.7%

3.5%

Capital market

20

Market performance2014 Index movement

50.0

100.0

150.0

Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14

HanoiThailandLaosHochiminhCambodia

Source: Bloomberg

YTD Index movementData as of Feb 13, 2015

80.0

90.0

100.0

110.0

120.0

Dec-14 Jan-15 Jan-15 Jan-15 Jan-15 Feb-15 Feb-15

ThailandHochiminhHanoiLaosCambodia

18%

15%13%

6%

- 25%

7.9%

7.6%2.9%

0.2%

- 9.1%

Capital market

21

Market liquidity

Daily average trading value 2014 Investor proportion by trading value

0.013 0.077

89

38

0.004 0.235

83

30

Cambodia Laos Hochiminh Hanoi2014 YTD2015

(million USD, data for Jan 2 - Feb 13, 2015)

SET daily average trading value USD 1,282 million

Source: Cambodia Securities Exchange, Lao Securities Exchange, Hochiminh Stock Exchange, Hanoi Stock Exchange

50 35

75 97

50 65

25 3

Cambodia Laos Hochiminh HanoiLocal Foreign

(%)

Cambodia LaosVietnam

HOSE HNX

Officially open 2012 2010 2000 2005

Share holder Cambodian government 55%

The Korea Exchange 45%

Bank of the Laos PDR 51%

Korea Exchange 49%

Government-owned Government-owned

Regulator Securities and Exchange Commission of Cambodia (SECC)

Laos Securities Commission Office

(LSCO)

Ministry of Finance (MOF), The State Securities Commission (SSC)

No. of Member 11 3Top market share*BCEL-KT Securities Company Limited

(82%)

91Top 3 by market share**

1.Saigon Securities (13%)2. Hochiminh City Securities (12%)3. Viet Capital Securities (6%)

89Top 3 by market share**

1.Sai Gon – Ha Noi Securities (8%)2. Saigon Securities (8%)3. Hochiminh City Securities (7%)

Capital market

22

Stock exchange background

Source: Cambodia Securities Exchange, Lao Securities Exchange, Hochiminh Stock Exchange, Hanoi Stock Exchange* Data as of 2013** Data as of 3Q2014


HOSE HNX

Clearing house

CSX acts as clearing house which refer to Securities Depository

Center's roles as Central Counterparty

LSX perform transaction confirmation netting of settlement obligation payment amounts and

deliverable securities.The Vietnam Securities Depository

(Wholly State-Owned Limited Liability Company)

Depository center CSX Securities Depositary CenterLaos PDR Securities Depository

Center

Securities registration LSX

Settlement bankAcleda Bank; Canadia Bank and

Bank of Investment and Development of Cambodia

Bank of Laos No information

Custodian bank No custodian bank

Bank of LaosBangkok bank the first custodian license (custody service) in Laos

(Feb 20,2015)

No information

Capital market

23

Counter parties


Capital market

24

Product and Listed companies

Product and Listed companies Cambodia LaosVietnam

HOSE HNX

Eligible securities Stocks StocksStocks, Investment fund certificates, Corporate bond and Government bond

Stocks, Government bond and ETFs

Index CSX Index LSX Composite IndexVNAll Index; VN30 Index; VNMid

Index; VNSML Index; VN100 Index

HNX Index; HNX FF Index; HNX30 Index; HNX(Large, Mid, Small)

Index; HNX Finance Index; HNX Construction Index; HNX

Manufacturing Index, UPCoM Index (Unlisted public company)

No.of listed companies*

2 4 307365 listed stock market

173 UPCoM market

Industrial Sector* No sector classifiedNo sector classified

15Top 3 largest sectors by Mk.cap.

1.Finance, Banking & Insurance (35%) 2. Manufacturing (23%)3.Electricity, gas, stream and air

conditioning supply (16%)

11 (listed stock market)

Top 3 largest sectors by listed value1.Finance (40%) 2. Manufacturing (15%)3. Mining and quarrying, Oil & gas(15%)

Source: Cambodia Securities Exchange, Lao Securities Exchange, Hochiminh Stock Exchange, Hanoi Stock Exchange* Data as of Feb 13, 2015

Capital market

25

Trading and clearing (1/3)


HOSE HNX

Trading hour

08:00 – 11:30. Opening call auction runs from 08:00 –09:00, followed by continuous trading from 09:00 – 11:00

and closing call auction is held

between 11:00 –11:30.

08:30 – 11:30. Opening call auction runs from 08:30 –09:00, followed by continuous trading from 09:00 – 11:20

and closing call auction is held

between 11:20 –11:30.

StockMorning Session: 9.00 - 11.30Afternoon Session: 13.00 - 15.00BondMorning Session: 9.00 - 11.30Afternoon Session: 13.00 - 15.00

Listed stockMorning session: 9.00 - 11.30Afternoon session: 13.00 - 14.15UPCOMMorning session: 9.00 - 11.30Afternoon session: 13.00 - 14.15BondMorning session: 8.30 - 11.00Afternoon session: 13.00 - 14.15

Minimum trading unit

1 share 1 share 10 shares 100 shares

Daily price change limit

within ±5% of previous day’s closing

price

within ±10% of previous day’s closing

price

within ±7% of previous day’s closing price

within ±10% of previous day’s closing price


Capital market

26



HOSE HNX

Tick size (local currency)

< 4,000 = 104,000 - <20,000 = 2020,000 - <40,000 = 5040,000 - <100,000 =100 100,000 -<200,000 =200200,000 -<400,000 =500>400,000 =1,000

<10,000 = 50 10,000- <50,000 =100 50,000- <100,000 = 200 >100,000 = 500

<50,000 = 10050,000 – 100,000 = 500

>100,000 = 1,000

Tick size (in THB)

< 32 = 0.0832 - <160 = 0.16160 - <320 = 0.40320 - <800 = 0.80 800 -<1,600 = 1.60 1,600 -<3,200 = 4.00>3,200 = 8.00

<40 = 0.240 - <200 = 0.4200- <400 = 0.8>400 = 2.0

<80 = 0.1680 – 160 = 0.80

>160 = 1.60


Capital market

27



HOSE HNX

Trading commission levied by stock exchange (% of trading value)

Stock : 0.15% Stock : 0.15%Bond : 0.015%

Stock and Investment fund certificate : 0.03%Government and Corporate bond : 0.0075%

Trading fee levied by securities companies(% of trading value)

Varies between broker

1.2% for seller0.9% for buyer

(When a trade has been executed, customers

(Investors) shall pay less than 3% of trading value to securities companies.)

0.15%

Settlement cycle T+2 T+2

T+3 rolling settlement. for stock and investment fund certificatesT+1 for fixed income instruments

(Effective from Sep 4, 2012, VSD shortened equity settlement and clearing timelines, with cash funding to be available by 16:00 on T+2 and securities to

be settled by 8:45 on T+3.)


Capital market

28

Vietnam Bond market

Bond outstanding

Source: Asian Development BankNote: no formal information of Cambodia Lao P.D.R. and Myanmar

(% of GDP)

13.7 15.424.0

28.037.3

2.3 2.0

1.10.7

0.6

15.814.4

16.1 16.9

20.9

0.0

5.0

10.0

15.0

20.0

25.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2010 2011 2012 2013 Sep-14

Govt.bond outstanding (LHS) Corp.bond outstanding (LHS) % total of GDP (RHS)

(billion USD)

Capital market

29

Laos Baht Bond

Source: Various source

lot DateIssue size

(billion baht)Tenor Coupon rate

1 Sep 2013 1.5 3Y 4.5%

2 Dec 2013 3.0 3Y5Y

4.6%5.2%

3 Oct 2014 4.5 3Y5Y7Y

4.76%5.2%5.5%

total 9.0

Twin Pine Consulting Co.Ltd., the Thai advisory firm assist bond issued.

Appendix 1Myanmar banking sector

31

Appendix 2Lao PDR banking sector

32

Appendix 3Vietnam Settlements and securities administration detail (1/2)

33

I. Organization and institutions For both Hochimint and HanoiClearing House The Vietnam Securities Depository (VSD), Wholly State-Owned Limited Liability Company.

On May 3rd 2006, VSD took over all the securities registration, depository, clearing and settlement functions from Hochiminh Securities Exchange and Hanoi Stock ExchangeParticipants: 131 (as of 31 December 2013)- Securities companies- Domestic custodian banks- Foreign custodian banks- Domestic commercial bank as direct account holding membersCapital: VND 1,000 billion of charter capital (app. USD 47,169,811)

Central DepositorySucurities Registration

II. Clearing and Settlement System VSD (Immobilized)Clearing system

Novations and CCPs On Nov 22, 2012, VSD held a roundtable to discuss the idea of a CCP for the Vietnam market. The CCP is expected mainly to serve the derivatives market which will be launched in 2015.

Settlement Cycle T+3 rolling settlement. for stock and investment fund certificatesT+1 for fixed income instruments

Effective from Sep 4, 2012, VSD shortened equity settlement and clearing timelines, with cash funding to be available by 16:00 on T+2 and securities to be settled by 8:45 on T+3.

Settlement Method Settlement of STC transactions is centralised in the Bank of Investment andDevelopment of Vietnam (BIDV), which is a state-owned commercial bank

Appendix 3Vietnam Settlements and securities administration detail (2/2)

34

Depository System Depository Account Type Immobilization. Omnibus Account

All securities traded on both market are held in the name of the registered owners at the VSD. Custody isbased on a central registration book entry system.

III. Post Trade fee and charges Normally, at securities companies, investors mus pay brokerage fee and depository fee. Brokerage fee is paid when a securities transaction is executed at the request of the investor. Depository fee is charged so that the securities is deposited. Even when there is no trading activities, when there is any securities in the account, the investor has to pay the depository fee.

IV. Risk and Default Management Securities Lending and Borrowing Securities lending and borrowing is currently not available in the Vietnamese securities market

VSD is developing the infrastructure and a SBL system to support the trading of ETF certificates.Lender as the last resort The penalty is 1% per day for the first 5 days based on the value of the ’borrowed’ securities and 6% per day from

the sixth day onwards. The value of the ’borrowed’ securities is calculated as the closing price of the previous trading day multiplied by thequantity of the ’borrowed’ securities.

Buy-in There are no buy-in proceduresReserve Fund Clearing Fund - Upfront: 120 million VND

- Annual: Securities Companies: 0.01% brokerage revenue of securities listed and registered for trading at stock exchanges of the previus year, but no more than 2.5 billion VND per annual.Commercial Banks: 0.01% brokerage revenue of securities listed and registered for trading at stock exchanges which is setlled through commercial banks of the previus year, but no more than 2.5 billion VND per annual.Maximum contribution:Depository member who is commercial bank; 15 billion VNDDepository member who is securities company having brokerage function; 20 billion VND

“CLMV” economy and financial market...8 8 16 10 Cambodia foreign branch 100% foreign-owned...

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Transcript of “CLMV” economy and financial market...8 8 16 10 Cambodia foreign branch 100% foreign-owned...