VIPC brochure 1

VIPC CapitalManagementInternational Investors Brochure

Vietnam economic overview – VIPC capital Management

VIPC Capital Managementwww.vipc.com.vn

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ContentsA. Vietnam in general................................................................................................................................ 4

I. Background information................................................................................................................... 4

1. Quick fact ...................................................................................................................................... 4

2. Political Structure.......................................................................................................................... 4

3. Policy Issues .................................................................................................................................. 4

4. Taxation ........................................................................................................................................ 5

5. Foreign Trade................................................................................................................................ 5

II. PESTEL Analysis ................................................................................................................................. 6

1. Summary....................................................................................................................................... 6

2. Politic ............................................................................................................................................ 6

3. Economic....................................................................................................................................... 7

4. Social ............................................................................................................................................. 8

5. Technology.................................................................................................................................... 9

6. Environment ............................................................................................................................... 10

7. Legal ............................................................................................................................................ 11

III. SWOT Model about economical and political Issues.................................................................. 12

1. Summary..................................................................................................................................... 12

2. Strengths................................................................................................................................. 12

3. Weaknesses ............................................................................................................................. 15

4. Opportunities .......................................................................................................................... 19

5. Threats ...................................................................................................................................... 21

B. Vietnam Economic Review ................................................................................................................. 23

I. Economic Timeline.......................................................................................................................... 23

II. Vietnam Economic vs Asia .............................................................................................................. 24

III. Vietnam Economic vs the World ................................................................................................ 24

IV. Vietnam Economic ...................................................................................................................... 25

1. GDP ............................................................................................................................................. 25

2. FDI ............................................................................................................................................... 25

3. FDI Vietnam vs neighbors ........................................................................................................... 26

4. FDI by sectors.............................................................................................................................. 26

C. VIPC Capital Management .................................................................................................................. 27

www.vipc.com.vn

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I. Company ......................................................................................................................................... 27

1. VIPC Capital Management .......................................................................................................... 27

2. Mission........................................................................................................................................ 27

3. VIPC’s strengths .......................................................................................................................... 27

4. VIPC’s Culture ............................................................................................................................. 28

5. Social Responsibility.................................................................................................................... 29

II. Services ........................................................................................................................................... 29

1. For Private Wealth Management ............................................................................................... 29

2. For Institute Asset Management ................................................................................................ 31

3. For Professional Advisors............................................................................................................ 31

III. Products ...................................................................................................................................... 32

1. VIPC diversify Fund ..................................................................................................................... 32

2. Securities Fund............................................................................................................................ 33

3. Private Equity Fund..................................................................................................................... 36

4. Real Estate Fund ......................................................................................................................... 37

5. Contact........................................................................................................................................ 37

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A. Vietnam in general

I. Background informationAfter declaration of independent in 1945 from France, Viet Namitself had been divided into two: the communist North and the US –backed South in 1954. Until 1975, Vietnam finally got independent.In the 1990s, Vietnam became a member of World Bank, theinternational Monetary Fund and the Asian

Development bank. In July 1995, Vietnam had the acceptance tojoin in Asean, Association of Southeast Asian Nation. After threeyear, Vietnam took part in APEC, Asia-Pacific Economic Cooperation.In 2001, a milestone for Vietnam’s economy had been set upthrough Bilateral trade Agreement with US. In 2007,

Viet Nam became a member of WTO and fully in the internationaltrade integration to the world.

1. Quick factPopulation: 84.1 million

GDP: $2363 per capital and 8.2% growth

Unemployment: 4.3%

Inflation: 8.3%

Age structure: 15yers – 65yrs: 67%

2. Political StructureVietnam is still organized by sole Communist Party and in all level ofgovernment also. This could bring very different point of viewsdepending on how they stand on. However, in doing internationalbusiness, this could assure the stable in government and policy.

3. Policy IssuesVietnam government has progressed in many fields in order toimprove the poverty and economic growth such as monetary policy,legal frame…However, after joining WTO about two years, Vietnamstill face to problem of inequality between rural and urban areas,also the wide space between poor and rich. Besides, humanresource for the WTO demanding is also huge. In order to be able toprovide skill-graduated students/workers, Vietnam has to adjust theeducational system to fit into the trend of economy. Those

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problems bring a sign about whether Communist Party chooses topursue a greater openness or tighter control?

4. TaxationJust be applied in this recent year, taxation is seen to be a new thingin Viet Nam. It starts at 10% on monthly earnings from VND4m(about US$ 312) and rises to 40% if monthly earning over VND40m.This number is for Vietnamese and quite the same application forforeigner, but the latter number is VND80m. A corporate tax rate of28% applies to both domestic and foreign-invested enterprises.Certain preferential rates still apply. Value-added tax (VAT) wassimplified in 2004, and rates range from zero to 10%.

5. Foreign TradeOn a balance-of-payments basis, exports reached US$48.6bn in2007, up by 22% year on year, while the import bill increased byaround 38% toUS$58.9bn. As a result, the merchandise trade deficitreached an estimated US$10.4bn, up from only US$2.8bn in 2006.

Major exports 2007 % of total Major imports 2007 % of totalCrude oil 16.7 Machinery, equipment

parts16.3

Textiles garments 16.4 Refined petroleum 11.6Footwear 8.3 Steel 7.9

Fisheries products 7.8 Material for textileindustry

3.7

Leadingmarkets 2007

% of total Leadingsuppliers 2007

% of total

US 21.5 China 20.1

Japan 10.8 Singapore 11.8

Australia 7.0 Japan 9.6

China 5.9 South Korea 7.7Source: CIA

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II. PESTEL Analysis

1. Summary

2. Politic

Environmental Regulations and ProtectionRegulations

Problems concerning environment and how to keep aclean environment are guided. However, there are stillbig state-owned organizations that don’t follow theselaws themselves.

Tax Policies There are around 10 different types of taxes and fees for anormal foreign owned business. In small businessoperating in cities, information on tax duty ofVietnamese citizen is less known by people than theamount suitable for corrupted tax officers.

International Trade Regulations andRestrictions

As a member of World TradeOrganization, Vietnam is doing business with almost allcountries all over the World.

Contract Enforcement Law – ConsumerProtection

An incomplete law document that lacks a lot ofinformation concerning how to deal with defectproducers.

Employment Laws Viet Nam where employees outnumber employers’ need;there are still non- written laws in the labor market in

POLITIC•One party•Social stability•High corruption•Better legalframework

•Global integration

ECONOMIC•Market-oriented•Increasing GDP•Rocketing FDI•Great potential

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II. PESTEL Analysis

1. Summary

2. Politic









ECONOMIC•Market-oriented•Increasing GDP•Rocketing FDI•Great potential

SOCIAL•Condensedpopulation

•Young labor force.•Educationimprovement

•Environmentthreats

TECHNOLOGY•Infrastructure•High demandtelecommunicationand postal

•51% growth ofInternet users

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II. PESTEL Analysis

1. Summary

2. Politic









TECHNOLOGY•Infrastructure•High demandtelecommunicationand postal

•51% growth ofInternet users

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market sector, government sector, employees arealmost never fired.

Competition Regulation Two of the most important contents of Vietnamesecompetition regulation are anti- competitive practicesthat lead to dominant position and unfair competition.These are all to protect the right of customers.

Political Stability There is only one party in Viet Nam and a lot ofinformation about political instability is hidden from thepublic

Safety Regulations There are many rules and laws for the society but notmany people follow that regulations

3. Economic

Income Distribution No clear data on the internet about income distribution inVietnam. Even if there is, the data can not reflect correctlythe unequal distribution of income among Vietnamesepeople. This is a result of prevailing corruption in Vietnam.

Demographic, Population Growth Rates, AgeDistribution

Population density in Vietnam is very high (252people/square. kilometer), 2 times as many as thedensity in China and ten times as much as that ofdeveloped countries.

Labor/ SocialMobility

According to Statistic Vietnam, There is72.88% of thewhole Vietnamese population who are living in the

rural area. And there is a trend to move fromcountryside to big cities to work.

Lifestyle Changes The trend of the youth to go abroad to have bettereducation and follow new styles of America, Western…

Work/Career & Leisure Attitudes People now care more about holiday and relaxation.

Entrepreneurship Spirit There is a growing entrepreneurship spirit in Vietnamnowadays. Especially in big cities such as Ha Noi and HoChi Minh city.

Education Universities in Vietnam nowadays are always overloaded asthere are fewer places for students in universities thanthe need to receive university education. Quality ofeducation is not so good as a result of this overloadedand the low-fee-education, red tapes happen everywhere.But recently Gov. offers loans for students.

Fashion, Hypes Anything “new” and “abroad” intrigue youngsters ofthese days.

Welfare, Feelings onSafety

There are no welfare and unemployment benefit inViet Nam. But if you work for Gov., you can get retirementbenefit.

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Living Conditions Living condition in Vietnam is good and bad depending onyour economical status. One of the biggest problems of theliving condition in Vietnam is traffic and pollution.Healthcare is also a problem. Red tape happens even inhospital, insurance is slow and it doesn’t play a big rolehere. Corruption is a big issue in Viet Nam

4. Social

Economical Growth GDP (PPP):$198.8 billion8.2% growth7.8% 5-year compound annual growth$2363 per capita

Interest Rates & Monetary Policy Inflation in Vietnam is high. The government controlsprices and influences prices through regulation, subsidies,and state-owned enterprises and utilities, includingelectricity, gasoline, telecommunications, water, and faresfor train and air travel.

GovernmentSpending

Total government expenditures in Vietnam, includingconsumption and transfer payments, are moderate. Inthe most recent year, government spending equaled26.7 percent of GDP, and the government received 7.8percent of its revenues from state-owned enterprises andgovernment ownership of property. Progress in reformingstate enterprises has been confined mainly to the smallerones.

UnemploymentPolicy

Compensations and Supports from Government andSociety to the unemployed are adequate, uncooperative,inconsistent and ineffective to be really helpful. Still arethere lots of obstacles for receiving subsidies which arenot very high to help.

Taxation The top income tax rate is 40 percent, and the topcorporate tax rate is 28 percent. In the most recent year,overall tax revenue as a percentage of GDP

was 13.6 percent. Collecting Tax Rate is low dueto corruption and tax-paid attitude. Employers arerequired to contribute an amount equal to 17% ofsalaries and wages in respect of government HealthInsurance and Social Insurance Plans. Employeescontribute 6% of their salaries and wages to the plans byway of payroll deduction.

Exchanges Rates 1 USD=16,970VND and=Euros: 23,863.00VND as normal.However, this year2009 has many periods of

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fluctuations in currencies. Euros had up to28,000VND andnow down to about25,000VND.

Inflation Rates Inflation rate has been increasing dramatically theserecent years shifting up the price. It is harder to supportlife with current income as the increase in salary level israther slow.

Stages of Economic Cycles In 2006, the Vietnamese economy will continue to rise inthis economic cycle. With political stability and a dynamiceconomy (fast growing GPD), Vietnam is one of the safestplace for foreign investment

Consumer Confidence As there are rules to protect customer but the efficient isnot high.

5. Technology

Government ResearchSpending

It is not clear statistical data in detail in research spendingfrom government budget, which has 7

main sectors: roads (transportation), electricity(energy), irrigation, water supply, telecommunication,education-training and health. However, we can say thatthe government is now increasing budget for researchingeffort on the new and modern technological developmentsuch as telecommunication, bio- techs, and internetservice and so on.

Industry Focus onTechnological Effort

Science and Technology DevelopmentObjectives by 2010 (from The Ministry of Science

and Technology). Research and wide use oftechnical advancements should be promoted inagriculture-forestry- fishery and processing industries ofagricultural products and foods

Capacities of acquiring Capacities of acquiring, mastering, adapting and improvingmodern technologies imported from foreign countriesshould be enhanced in some fields of services,infrastructure (finance, banking, posts,telecommunications, transportation, airlines, etc) to

ensure the international relevance andcompliance, successful integration into the regional andglobal economy.

Energy Use & Cost Total energy consumption in VN by type: Oil (50%),Hydro (20%), coal (18%) and natural gas (12%)

(Changes in) Internet Vietnamese government has announced plans to increasethe country’s Internet penetration to 35% by 2010,according to a report by news agency AFP dated February

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20, 2006.Internet access: 19.7% of the population

(Changes in) Information Technology The changes have been an engine in the country’s ITgrowth. Main fields that IT jobs would serve are ineducational and healthcare service together with internetenterprises.

(Changes in) MobileTechnology

There is a boom in Mobile usage in Vietnam the recentyears. Telecommunicationand internet are considered the two key sectors

expected to expand the socio- economicgrowth rate

6. Environment

Low awareness among Vietnamese There are crucial problem in Vietnam with air/ waterpollution. In Saigon and Nhue river…water contamination isquite high. Moreover, Nhieu Loc channel is flowing

inside Ho Chi Minh City with deeply dumped withhousehold garbage.

Pollution around the industrial center Some centers for example: Ha Noi, Ho Chi Minh, Bien Hoa,Dong Nai, Binh Duong..They do not haveequipment for water treatment before releasing to rivers.

There are only some city water treatment Because the rapidly changing in industry or too muchfocusing on growing the economic of the country,government did not tight the law for environment.

Un-useable water treatment. Project or treatment has to be delayed due to technicalproblems and social issues.

Polluted air from factories Factories are located in center and quite density in anindustry city. Besides that, they do not have any re-treatment before releasing.

Global warming With major climate changes occurring due to globalwarming and with greater environmental

awareness this external factor is becoming a significantissue for firms to consider.

Environmentally friendly products The general move towards more environmentally friendlyproducts and processes is affecting demand patterns

and creating business opportunities. However,

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this attitude is just in a small group of high-position withwell educated Vietnamese

7. Legal

the legal environment inwhich firms operate

As law has written down for a firm, they have to have all kind of treatments forreleasing waste into river or air. However, a huge number of government firmsdo not follow that law.

greater requirements forfirms to recycle

Some firms have full fill the requirements. But in application that treatmentfor recycle is another question!

consumer laws Laws that protected customers from weak party and firms, strong party. But, inorder to build the awareness from customers about protections, it takes along time for government to do so.

health and safetylegislation

There are limitations for health and safety. However, firms do not care muchabout that and employees do not have much knowledge in understand thelegislation to protect them. Therefore, there are still big problem in taking carefor employees.

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III. SWOT Model about economical and political Issues

1. Summary

2. Strengths

a. Political Stability

Vietnam has political stability with one ruling party

for 24 years (1975 - 1999). The party is claimed "to

be of people and for people". Special efforts of the

national leaders to have new policy approaches and

new renovative policies can be seen clearly through

every national congress since 1986 until now.

b. Strengthen policies:

Another aspect is the introduction of policies aiming

at enhancing the competition of the economy,

restructing public sector and encouraging private

STRENGTHS

- Political stability

- Improved legal system

- High GDP growth

- Rocketing foreign trade volume

- Dynamic private sector

- Poverty reduction

OPPORTUNITIES

Reforms

Full integration

Improved awareness

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1. Summary

2. Strengths












STRENGTHS

- Political stability

- Improved legal system

- High GDP growth

- Rocketing foreign trade volume

- Dynamic private sector

- Poverty reduction

WEAKNESS

- Slow decentralization

- Brain drain

OPPORTUNITIES

Reforms

Full integration

Improved awareness

THREATS

Unbalance income

Low competitive determination

Corruption

International relation

SWOT

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1. Summary

2. Strengths












WEAKNESS

- Slow decentralization

- Brain drain

THREATS

Unbalance income

Low competitive determination

Corruption

International relation

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sector. For example, one of the measures to reform

banking and financial sector is to merge or close

the banks, which are not efficient. At the moment,

Vietnam has 50 public listed banks, of which 30

banks have offices in the urban areas and 20 banks

have offices in the rural areas. Among them, 4

banks were already merged into 2 bigger banks (Do

1999: 10).

c. Improving legal system:

Moreover, the determination of the national leaders

in consolidating legal system and enforcement of law

can be seen through severe sentences to criminals

no matter who they are and which position they

hold. For example, in sensational graft cases as

Epco, Tamexco, Minh Phung, etc…, a series of people

in high position were sentenced to death (Cong An,

7/1999).

d. GDP Growth:

If we look at the period from 1998 to 2002, the

Asian Development Bank estimates growth at

5.5% a year, about the same as India and much

slowerthan China and Bangladesh. (Official data

show over 6% growths; the IMF estimates less

than 5%.) Projections for 2003 are 6-7%, with

some uncertainty due to the world economy and

SARS.

e. Exports:

A bright spot has been exports, which have risenfrom $9.1 billion in 1997 to $16.5 billion in 2002, a

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growth rate of over 12% a year. This is much fasterthan most other countries, and about the same asChina.

f. Manufacturing:

Manufacturing growth has also been healthy,

averaging about 10% a year in real GDP terms

from 1998 to 2002. The growth of gross industrial

output has been faster, at over 14% a year from

1998 to 2002.

g. Macroeconomic Stability:

Inflation is low and fiscal deficits have been

contained to acceptable levels. Reported bad bank

loans are falling to levels that can be managed –

less than10% of total credit outstanding. External

debt is acceptable.

h. Private Investment:

The most dynamic sector since 2000 when the

Enterprise Law was passed has been the private

formal domestic sector. Industry for this form of

ownership, which excludes household level activity,

has since 1999 grown nearly 20% a year, albeit

from a low initial base. The entire formal private

sector created 1.75 million new jobs from 2000 to

2002, compared to near zero growth in jobs for the

entire public sector.

i. Poverty Reduction:

Poverty rates measured at international levels have

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declined from 58% in 1992/3 to 37% in 1997/98 to

about 32% now. This near halving of poverty rates in

ten years is a remarkable accomplishment, and has

been accompanied by rapid increases in enrollment

ratios at all levels and improvements in health and

nutrition.3 Inequality, while rising, is still low by

international standards. This is already a considerable

list, and one that can give the Vietnamese leadership

a degree of justified pride. Other successes, such as a

rapid increase in telephone lines and mobile

handsets, or the robust doubling from 1995 to 2002

in tourism, are also noteworthy, though not listed in

the six major points. Still more positive items could

be listed such as progress in improving infrastructure

and increased prosperity among many ordinary

Vietnamese. It is not surprising that Vietnamese were

the most optimistic people of the 44 countries

covered in an international survey conducted by the

Pew Research Center concerning their future

expectations as reported in the International Herald

Tribune on December 5, 2002.

3. Weaknesses

a. Slow implementation:

Firstly, when new cabinet is elected, new policy and

regulations have been enacted and implemented.

Nevertheless, the span life of the policy is not long

and the implementation is conducted so slowly that

policy makers can hardly see the fruits of their

work. Most of the time, one regulation has just

been enacted and has not been applied throughout,

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a new regulation has been introduced.

Consequently, regulations are overlapped, which

cause confused and difficult in implementing.

b. Inconsistency application policies:

Secondly, although the government has made

special effort to restructure the economy, the

policies have not been implemented as tentative.

The foundation is not strong enough to carry big

changes. Most of the policies have been continued

halfway. It means new objectives, new instruction

and new target groups would be aimed at.

c. Decentralization, is it good?

In addition, there is a dilemma between political

ideology and economic policy. On one hand, the

government wants to maintain the socialist ideology

in which the state has to take care everything for its

people. Here, the principle of "collective interest and

collective responsibility" creates a sense of "moral

harzard" and "tragedy of common". Consequently,

the limited resources are not utilized fully. Top-down

policy approach and centralization has been

highlighted. On the other hand, the government

wants to pursue "Doi Moi" policy to restructure the

collapsing economy. This policy requires a bottom-

up approach or at least the combination of top-down

and bottom-up principles to decentralize making

decision. Thus, the paradox is how to keep the

dominant role in political ideology and at the same

time how to be a "new capitalist" in economic

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activities.

d. Unable to keep talents

Moreover, the lack of concrete policy for the

development of human resources leads to the

outflow of local talents from public sector to private

sector as well as from inside to outside Vietnam.

With regards to banking sector, it still remains largely

undeveloped. According to Marketing Management

(Winter 1997, Volume 5, Number 4):

"Ambiguous laws, the lack of a capital market and

developed independent auditing system, a scarcity of

skilled staff in the credit arena and a low national

savings rate have all contributed to an inadequate

capital base and a shortage of credit. Government

banks have felt pressure from local and central

authorities to lend to troubled state-owned

enterprises, creating large troubled loan portfolios.

Prior to 1992, banks were required to follow a

negative interest rate spread structure" (Access on-

line on 9/10/1999).

Such negative aspects together with the inadequate

payment system (personal checks, credit cards, cash

cards, etc.) have made Vietnamese people reluctant

to deposit their savings in state banks. More than

50% of savings is kept as cash (foreign currency)

and gold outside the banking sector (Marketing

Management, 1997).

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e. Inflexible in adapting

Although the government tries to learn from the

past but the corrective process is really painful

because the network and “relationship” ("guang

xi") are so deep and wide. It takes a long time to

change the view, the traditional thinking and

agricultural habit to adapt with the industrialized

working style. Coming to worklate and going back

early is commonly practiced in

government agency. Wasting too much time on

paper work due to lack of manpower,

professionalism as well as facilities is inevitable. The

political and economic environment is not attractive

to foreign investors. Repatriation of profit with

relative low "hidden cost" is a challenge to them.

To illustrate for above ideas, I would like to

quote some shortcomings of Vietnam economy in

Marketing Management (Winter 1997, Volume 5,

Number 4):

"Inconsistent and frequently inexplicable policies

that hinder all aspects of the transition …..

Persistent and expanding trade deficits, which

ballooned from $60 million in 1992 to $2.2 billion

dollars in 1996. Growing overseas debt. Burgeoning

current account deficit, which hit an estimated 15.1%

of GDP in 1995.

Stagnating foreign direct investment (FDI)

realizations; while approval rates are soaring, actual

realization of the projects is slowing, partly because

of the frustrations presented by bureaucracy.

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Inefficiencies of state-owned enterprises, as

evidenced by little job creation and the failure to

create value-added exports."

4. Opportunities

a. Full integration

Although, Vietnam has faced too many difficulties

and challenges, we cannot deny the optimistic

aspects. First of all, becoming a member of

economic groups and international organizations

such as ASEAN, APEC, WORLD BANK, IMF is a

progress step for Vietnam to integrate into the

global market. This helps Vietnam to obtain

necessary information and to have her voice

articulated in regional and international meetings

and discussion. Becoming member of such

organizations also helps Vietnam gain most-

favoured-nation(MFN) status as well as obtain

lower tariff for exported goods.

b. Bilateral trade agreement

Secondly, signing a bilateral trade agreement withUSA on Sunday, July25,

1999 marked an important step to achieve a "normal

diplomatic relationship" between the two countries

(Do, Mekong Bulletin, 1999). This will give domestic

suppliers more chance to enter US market with

favorable tariffs and other conditions, such as modes

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of payments.

c. Positive attitude

Moreover, the change in ideology and thinking of

the authority from blaming external factors into

blaming themselves and try to find out a positive

resolution should be considered as a big

opportunity for the recovery of Vietnam economy.

d. Highly FDI

The importance of shrewd provincial economic

policies may not yet be fully appreciated. There is

an immense difference in the ability of provinces to

generate growth without government subsidy.

Some argue these differences are largely matters

of luck or geography. For example, only a few

provinces are very good at attracting foreign direct

investment. It is widely sensed that FDI tends to

be concentrated in a few places, mostly in or near

the two major cities of HCMC and Hanoi. In a few

other cases it is due to one or a few large projects

or some natural resource such as food processing

or tourism.

According to the MPI at the end of 2002, Hanoi and

HCMC and six other nearby provinces accounted for

two-thirds of cumulatively implemented FDI.7

Another eight provinces accounted for 12% of total

FDI, leaving only about 20% for the remaining 45

provinces.8 Just for 2002, the top ten provinces

accounted for over 90% of FDI. Given that on

average FDI inflows provide only $10 to $15 per

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capita each year while total investment per capita is

$120 to $150, it is pretty clear that most provinces

will do well to get as much as a few dollars per capita

per year from foreign investors.

e. Equally DPI

It is domestic private investment – especially from

the formal private sector. This investment has grown

rapidly in recent years, especially since the

Enterprise Law was made effective in January of

2000. The growth rate has truly been striking. On

average, private formal domestic investment was

under $2 per capita in 1997 and just over $3 in

1999. In 2000, it rose to $7.40 and in 2001 to $22,

with a rise to about $25 in 2002. From 2000 to

2002, there were 54 thousand new private firms

registered with a capital of $4.7 billion. As the World

Bank points out, the rapid growth is impressive, but

has to be balanced against the sector’s tiny initial

starting position. Even by 2002, “it [the private

formal domestic sector] accounted for less than 4%

of total GDP, 6% of output in manufacturing, and

about 3% of total employment.”10 Yet if ways could

be found to further hasten this growth, it has one

highly desirable aspect: it is more equally spread

over Vietnam than FDI and can grow faster than

state spending.

5. Threats

a. Unbalance income

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Firstly, there is big gap on the delivery of income

between cities and countries. This leads to condense

cities. As a consequence, it creates many social

problems such as: security, housing…

b. Corruption

Secondly, corruption, graft and patronage-client

relationship has been practiced for a long time in

Vietnam. Now, they have become "traditions" and

hinder the development of the national economy

and other renovation policies.

This practice becomes a well-known feature as"business culture" in Vietnam.

c. International relation

With regards to international relation, the dispute

about Spratly island with other claimants -

Philippines, Malaysia, Brunei and China - which are

neighbors and ASEAN members as well as main

trade counterparts may spoilt the diplomatic and

trade relationship among these countries.

d. Low competitive determination

Lastly, the lack of competition and a sense of

"Kaisu" ("want to be the best" which help

Singapore achieve amazing results) makes

Vietnam economy recover more slowly than other

countries.

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B. Vietnam Economic Review

I. Economic Timeline

1986 - 1989

• Initiation of Doi Moi• Targeting econimic stabilization and transforming from center planning to FDI and

trade

1989 - 1993

• Price liberalization, moneraty and SOEs reduction, currency devaluation.• 1989: Publish First Foreign Investment Law

1994 - 1997

• 1994 US embargo lifter• 1995 join ASEAN,

1997- 1999

• Asian Crisis• 1998 join APEC

1999 - 2007

• 2000 Ho Chi Minh City stock market makes its debut• 2001 US Bilateral Trade Agreement• 2006 New INvestment Law and Enterprise Law adopted• 2007 join WTO member 150th

2008 -present

• 2009 100% foreign own licensed granted

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trade


• 1994 US embargo lifter• 1995 join ASEAN,

• 2000 Ho Chi Minh City stock market makes its debut• 2001 US Bilateral Trade Agreement• 2006 New INvestment Law and Enterprise Law adopted• 2007 join WTO member 150th

• 2009 100% foreign own licensed granted

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trade


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II. Vietnam Economic vs Asia

III. Vietnam Economic vs the World

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IV. Vietnam Economic

1. GDP

2. FDI

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3. FDI Vietnam vs neighbors

4. FDI by sectors

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C. VIPC Capital Management

I. Company

1. VIPC Capital Management

VIPC Capital Management or well-known as VIPC Fund Managementis an independent national licensed investment fund built uponteamwork management and trustworthy pass relationships withinvestors.The legal entity shareholder of VIPC is Viet Vinh Phu Company, ahighly reputation domestic and international financial investmentorganization. Together with Viet Vinh Phu Company, VIPC isestablished by individual investors who have comprehensiveeducation and extensive experience in the world and Vietnamesefinancial and stock market. Standing on a strong foundation, VIPC’sshareholder now has the largest shares in Saigon Commercial Bank,major shares in Great Truong Son project and Khanh Hoi Sugar JointStock Company.VIPC offers independent and institutional investors variety range ofinvestment capabilities to match with hundreds of valued contactprofessionals and investment opportunities in one of the mostattractive emerging markets, Vietnam in Real Estate, Security andPrivate Equity.

2. Mission

Secure opportunities by improving market orientation

Develop long term relationships with investors;

Run aggressive business strategies and develop an efficientdiversified investment portfolio.

place optimal policies on human resources;

Add value to all stake holder parties, investors and investees.

3. VIPC’s strengths

a. Board of Managemento Experienced and Inside out Vietnam Financial marketo Unity and smoothly team working skillso Working under righteousness business manner’s drive

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b. Investment Teamo Well trained with strong financial back ground by holding MBA,PhD and CFA degreeso Commitment to the organization and stick to the investor’stargets.o Investment carefully inventor’s assets as company’s property.o Having many ideal output projects

c. Relationshipo Good local and international connections with potentialpartners and authorities.o Well-maintaining business relationship with international anddomestic universities, financial organizations.

d. Corporate Governanceo Setting long-term relationship with service providers to achievethe investment process successfully, quickly and effectively.o Corporating based on active business operations and strategyfor sustainable development

4. VIPC’s CultureVIPC is built upon teamwork management and trustworthy passrelationships with investors. Leading by company a culture thatmotivates people to work hard and stay with the business is part ofa key to success of VIPC.

Therefore, instead of leaving it to grow on its own, VIPC is nurturedin a way that breeds loyalty and motivation by creating a strongculture — one of fun, sharing, collaboration and connection throughfive simple steps : understanding the needs and expectations ofeach staff by communication and sharing in every week,implementation the need from step-by-step, this will shows thatVIPC has taken its employees' interests and concerns to heart,getting employee’s involve in all aspect is where VIPC’s culturecomes from, giving room for staff to free with their own ideas butalso guiding and encouraging them follow concrete directions whenputting ideas into action and the last is demanding accountability.

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VIPC’s strong culture will be reflected with the result of creativityand care through strong communication and follow-up.

Moreover, building a responsible trustworthy pass relationship withinvestors is a part of VIPC’s culture. Each step of VIPC developmentis mainly from investors’ trust and close relationship. VIPC is highlyappreciated and cared for investors’ needs and demands becauseinvestors’ success is also our achievements. And we are proud ofputting reputation of VIPC and investors’ trust in front.

The whole process brings VIPC up to a united family with the varietyof creative - talented members and investor’s inspirations, workingtogether for the sole goal, VIPC investor’s success.

5. Social ResponsibilityVIPC is a young growing company which is guided by socialresponsibility manners. The company is developed and shaped tomeet the complexities of today’s business integration and thechallenges of a global society. The Board of Directors sought to“people aiming investment” and “social responsibility” is a way ofVIPC’s life. This means VIPC remains committed to supporting thecommunities through non-profit organizations which is placed uponkids’ support and enriching our communities’ projects including:

Protecting environment

Ensuring a safe, healthy workplace

Children Happiness

Our commitment to social responsibility is as strong as business’drive. We are proud of our progress, but there is still much we cando.

II. Services

1. For Private Wealth ManagementWealth management is an investment advisory discipline thatincorporates financial planning, investment portfolio managementand a number of aggregated financial services. High net worthindividuals, small business owners and families who desire theassistance of a credentialed financial advisory specialist call upon

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wealth managers to coordinate retail banking, estate planning, legalresources, tax professionals and investment management.

Wealth managers can be independent certified financial planners,MBAs, CFAs or any credentialed professional money manager whoworks to enhance the income, growth and tax favored treatment oflong-term investors. One must already have accumulated asignificant amount of wealth for wealth management strategies tobe effective.

Independent wealth managers use their experience in estateplanning, risk management, and their affiliations with tax and legalspecialists, to manage the diverse holdings of high net worth clients.Banks and brokerage firms use advisory talent pools to aggregatethese same services.

a. Philosophy of Wealth managementThe philosophy of wealth management at VIPC is “specialization”.“Specialization” means we shall design a strategy which is suitablefor your specific circumstances. Our experienced and professionalstaffs will discuss with you about your risk and return objectives;liquidity needs and other constraints such as investment horizonand legal concerns.

b. Strategy of Wealth ManagementBased on this information, they will advise you the most

appropriate strategy. Currently, VIPC offers a wide range of

strategies that provide different risk-return trade off to satisfy your

needs. Besides, we can also construct a new strategy just for you.

Fixed income: a portfolio of bonds that offers fixed payments

per year.

Income: a portfolio of bonds and shares that pays high and

stable dividend to achieve stable cash flows.

Indexing: a portfolio of shares that replicates the performance

of an index, so your return will be the same as the index.

Growth: a portfolio of shares that provide a return that exceeds

the return of the indexing portfolio, net of transaction costs, on a

risk-adjusted basis.

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Balance: a combination of Income and Growth provides not only

high return but also stable income yearly. Risk and return are higher

than Income’s but lower than Growth’s.

Private equity: investing in companies which are newly

established or need business innovation. This is high risk-high return

investment.

2. For Institute Asset ManagementWith VIPC’s specialized expertise, institutional investors are offered

the full spectrum of investment strategies and financial analysis.

VIPC highly commits to utilize excellently the investment and

perfect service in order to reach investor’s expectation and

company’s unique financial goal.

c. Philosophy of Institute Asset managementThe philosophy of wealth management at VIPC is “specialization”.“Specialization” means we shall design a strategy which is suitablefor your specific circumstances. Our experienced and professionalstaffs will discuss with you about your risk and return objectives;liquidity needs and other constraints such as investment horizonand legal concerns.

d. Portfolio ManagementVIPC provides a diversity portfolio management to reach a widerange of personal demand in order to bring most benefit forpersonal investor’s capital.

Institutional Investment chooses VIPC’s Portfolio Managementoption to utilize VIPC’s knowledge, skill and experience in financialinvestment projects for consultant purposes.

VIPC is proud of working professionally which is able to meet themultiform of portfolio management requirements nationally as wellas internationally of financial investment organizations

3. For Professional AdvisorsIf you need a Developing a personal plan that suits your objectives,financial situation and needs. Our financial adviser can help youwork out your attitude to risk and develop an investment strategy,tailor made for you.

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If you need strategic analysis to decide on an investment strategythat is best suited to you. We can make a detailed assessment ofyour financial situation, help you define your investment goals, andselect products that suit your needs and your risk and returnpreferences.

e. Philosophy of Professional AdvisorsRunning by a team of experienced and clear-headed professional,VIPC offers international and domestic investors an end-to-endservice with a specialized and tailored plan to meet your personalsituations and expectations. VIPC services are ranging across thespecialties of market intelligent, financial investment, legal processand general advisor for personal and institutional investment. WithVIPC Professional Advisor Service, investors are invited to join to awide network of professional advisers who share the same valuesthat maximize your wealth creation through a customized solution.

III. Products

1. VIPC diversify Fund

a. Overview

Fund size: US$100 million

Investment horizon 5 -8 years

Investment objectives& focus:

with investment focus on Vietnamese blue chip listed stocks,IPO shares, real estates, M&A, the company will provideinvestors high level of return and potential capital growth

Size of a singleinvestment

not excessive 20% of the company’s NAV

Fund structure To be decided

Management fee 2 % p.a. of the total fund size

Incent fee 20% of profit over 12% benchmark

Fund set up expenses 1,5% of total fund size (flat-upfront)

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b. Investment Strategyo Disciplined acquisitions

o Growth strategy

o Conservative gearing

o Complementary partnerships

o Prudent risk management

o Straightforward de- investment strategy

c. Investment Process

2. Securities Fund

a. Overview

Fund size: VND 1OO Billion

Step 1:

Investment sourcing and screening

Step 2:

In-depth company analysis

Step 3:

Investment review and approval

Step 4:

Post-investment monitoring & management

Step 5:

Exit process

Custodian bank Deutsche Bank

Auditor Ernst and Young /KPMG or Grant Thornton

Legal consultant Vilaf Hong Duc

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o Growth strategy






2. Securities Fund

a. Overview


Step 1:

Investment sourcing and screening

Step 2:

In-depth company analysis

Step 3:

Investment review and approval

Step 4:

Post-investment monitoring & management

Step 5:

Exit process




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o Growth strategy






2. Securities Fund

a. Overview





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Investmenthorizon

5 years

Investmentobjectives &focus:

with investment focus on Vietnamese blue chip listedstocks, IPO shares, the company will provide investors highlevel of return and potential capital growth

Size of a singleinvestment

Minimum of VND 100 million

Fund structure Limited investment company registered in Vietnam

Management fee 2 % p.a. of the total fund size

Incent fee 20% of profit over 12% benchmark

Fund set upexpenses

4% of total fund size (flat-upfront)

Schedule February 2009 – March 2009: memorandum frominvestors

April 2009: apply for fund launching

April 2009 – June 2009: fund certificate delivery

b. Investment Objectiveso Long term growth in fund value gained through investing in key

industries and growth industries..

o Efficiently diversified investment portfolio.

c. Investment StrategyGAAP a combination of both value and growth investing: it looks for

companies: that is somewhat undervalued and has solid sustainable

growth potential

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d. Investment Process

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3. Private Equity Fund

a. Private Equity Strategyo Private Equity Investment

The Fund will have significant interest in companies that focuses on

one business sector, has market niches, a defensible franchise or

technology and competent management. A platform companies

would be held by the Fund for the long term, continuously building

value and generally reaching the stage of becoming a publicly listed

company. Platform company will often purchase other smaller

companies (which maybe asset of the Fund) to achieve greater

synergies and value for the investors

o Venture Capital Investment

Early stage investments which can later be sold into platform

companies or other realized through another exit either by a trade

sale or Initial Product offering on a Public Capital market

b. Investment process

o Phase I: Preparation Stage

Market Research, Analysis, and Strategy

Valuation

o Phase II: The Decision To Market

Confidential Offering Memorandum (COM)

Qualification: Identification of Synergistic.

Candidates.

Confidential Approach to Qualified Prospects.

Negotiations

Deal Structuring - Letter of Intent

Due Diligence

Definitive Agreement

Closing and Transition to New Ownership

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4. Real Estate Fund

c. Investment Processo Phase 1: Searching for a residential investment property

Look for a consistent streetscape. A mixture of conflicting

building styles lowers the desirability of the street.

The property should be located within easy walking distance of

all amenities.

The street should have potential.

o Phase 2: Methodical purchasing decision

Assess financial position.

Strategy based decision.

Assess financial capability of the investment.

Negotiate effectively.

Obtain legal advice.

Obtain professional property management services.

5. ContactVIPC CAPITAL MANAGEMENT

2nd Flr. 8 Nguyen Hue St., Dist.1, HCMC, Vietnam

Tel: (84-8) 38277478/79 – Fax: (84-8) 38277487

Email: [email protected] - www.vipc.com.vn

mailto:[email protected]

www.vipc.com.vn

VIPC brochure 1

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Transcript of VIPC brochure 1