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laconic
Joined: 23 May 2005
Posts: 198
Location: "When the Lord made me he made a ramblin man."
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London Bridge
Joined: 06 May 2008
Posts: 34
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 Posted: Sat May 31, 2008 5:09 am Post subject: Re: 1997 Revisited? |
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Here is an excerpt from the above link:
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| Some of Asia's largest economies are also grappling with the same risks, though none look as vulnerable as Vietnam, and are headed for their sternest test since the Asian financial crisis of 1997. We could see "a much deeper and more prolonged slowdown than people are currently anticipating that lasts until the end of 2009, rather than being done shortly," said Bill Belchere, regional economist with Macquarie in Hong Kong. |
There are many articles from economic analysts out there about this. Yes, it's sobering because all economists are in agreement that there may be very serious problems looming. Nobody disagrees. When it comes to economists, this is a bit rare.
We'll wait and see.
How will this affect the local people, and school enrollments? Less students able to afford and pay for tuition. Less students mean less classes - and less teachers needed.
It's too early to speculate, but with the inflation at over 25%, and a potential devaluation of the Dong, the VN stock market down 55% now, and a real-estate bubble fueled by speculation - the economic ripple effects may be rough for some, but not all people here soon, both local and foreign. |
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Ramen
Joined: 13 Apr 2008
Posts: 74
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| Posted: Sat May 31, 2008 9:15 am Post subject: |
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| I all for another Asian financial crisis. |
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sigmoid
Joined: 21 Jan 2003
Posts: 1276
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| Posted: Sun Jun 01, 2008 4:55 pm Post subject: |
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Actually there is some disagreement regarding the degree of severity and the extent of the crisis:
http://www.bloomberg.com/apps/news?pid=20601080&sid=aZEpyeEyw_yc
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May 30 (Bloomberg) --
``There seems to be no shortage of people queuing up to try to fit the Vietnam round peg into the 1997 crisis square hole,'' John Shrimpton, a director at the Ho Chi Minh City-based investment fund, said in an interview yesterday. ``This is not a massively over-invested, over-leveraged economy with a lot of hot money.''
Non- deliverable forward contracts indicate traders are betting the currency will drop 24 percent against the dollar to 21,350 in the next year.
Forwards are agreements to buy and sell assets at current prices for delivery at a specified time and date. Non- deliverable contracts are used for currencies that can't be freely converted and are settled in dollars.
The currency contracts are an unreliable indicator of the dong's value because of a lack of trade, said Shrimpton.
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The dong is unlikely to fall as much as the baht during the 1997 Asian financial crisis because funds are unable to leave Vietnam, Shrimpton said. He estimates 90 percent of institutional investor inflows are in so-called closed-end funds which can't be liquidated quickly.
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The dong will fall to 17,000 per dollar in 12 months as inflation accelerates, said Hideki Hayashi, chief economist at Shinko Securities Co.
Even so, ``unlike Thailand, the government won't lose control, because the dong is a really tightly controlled currency,'' said Hayashi. Also ``the amount of money already in Vietnam seems not to be so large,'' he said.
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laconic
Joined: 23 May 2005
Posts: 198
Location: "When the Lord made me he made a ramblin man."
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Ramen
Joined: 13 Apr 2008
Posts: 74
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| Posted: Tue Jun 10, 2008 2:52 am Post subject: |
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I think the dong will go down to more than 20,000 to a US$1 probably within this year.
I predict 25,000 to a dollar by end of this year.  |
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London Bridge
Joined: 06 May 2008
Posts: 34
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| Posted: Mon Jun 16, 2008 5:31 am Post subject: |
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There are a lot of informative articles in the Financial Times newspaper/website about the Viet Nam economy. Here is an article of "equitization," which is actually "privatization." The gov is selling some of its state-owned assets. Trying to at least.
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Vietnam puts a dauntingly high price on state assets
By Amy Kazmin
April 22 2008 19:58
When Vietnam�s state-owned Vietcombank put out a call last year for potential strategic investors, big financial groups such as Goldman Sachs and GE Money of the US and Japan�s Mizuho and Nomura all queued up for the chance to buy into one of the largest commercial banks in one of Asia�s fastest-growing economies.
With less than 10 per cent of its 85m people using modern financial services and both its economy and retail banking sector expanding rapidly, Communist-ruled Vietnam is seen as a promising market for international banks, whose activities had long been restricted.
Vietcombank hoped a tie-up with a respected international partner would help it command a high price in an initial public offering as well as improve operational efficiency amid competition from foreign banks entering the market. Yet neither the global players nor the Vietnamese bank achieved their ambitions. After looking at both the bank and the rules governing Vietnam�s state enterprise sell-offs, all potential foreign bidders walked away.
Its failure to secure a partner reflects the problems of Hanoi�s partial privatisation process, as the government seeks to modernise its state enterprises. The country�s highly protected service industries will be opened to foreign competition as part of commitments to the World Trade Organisation, which Vietnam joined last year. |
Looking short term, but not long term:
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In a process it calls �equitisation� rather than the politically charged privatisation, Hanoi is scheduled to sell minority stakes in high-profile enterprises that also include including other commercial banks, mobile phone operators and Vietnam Airlines. Yet the Communist authorities� apparent emphasis on maximising profits from these sales rather than ensuring long-term benefits to the companies and the wider economy has hindered deals and deterred investors.
In particular, prospective foreign buyers have balked at a peculiar legal requirement. These buyers, who are supposed to be selected and announced before the domestic IPO, are legally bound to pay the average bid price achieved at the auction if that is higher than theirs. The average bid price is calculated following a Dutch auction for shares offered to domestic retail and institutional investors.
�They hope to get someone to commit to an unknown price,� says Tony Foster of Freshfields, the law firm, who has advised global banks in several privatisation deals. �But no board in the world of a multinational company would go for that. It�s like writing a blank cheque.� |
source - http://www.ft.com/cms/s/0/b1b7de72-1083-11dd-b8d6-0000779fd2ac.html |
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