Mb Securities Joint Stock Company · HNX:MBS

Mb Securities Joint Stock — Debt Investor Presentation (July 2019)

42 slides from Mb Securities Joint Stock's debt investor presentation, Jul 1, 2019

  1. Slide 1: Vietnam Bond Market: In the readiness for further growth

    [Vietnam Capital Market Report] [@COPYRIGHTS OF MBS 2019. ALL RIGHTS RESERVED] VIETNAM BOND MARKET In the readiness for further growth 7/1/2019 MB SECURITIES JSC Vietnam Bond Market – In the readiness for further growth 1

  2. Slide 2: Contents

    CONTENTS Section Page 1 Market Overview 3 2 Corporate Bond Market 18 3 Foreign Investment in Vietnam Bond Market 27 4 Introduction about MBS 32 Vietnam Bond Market – In the readiness for further growth 6/2019 MB SECURITIES JSC 2

  3. Slide 3: Section 1: Market Overview

    SECTION 1: 1 MARKET OVERVIEW 1.1 Market Statistics 1.2 Regulatory framework 1.3 Challenges 1.4 Growth potentials Vietnam Bond Market – In the readiness for further growth 6/2019 MB SECURITIES JSC 3

  4. Slide 4: 1.1 Market statistics (1/5)

    1.1 Market statistics (1/5) Since the early establishment, the domestic bond market has been promoted significantly in both market structure, product diversification and value. The country's government is moving towards building a private bond market as well as a corporate bond market to promote the

  5. Slide 5: 1.1 Market statistics (2/5)

    1.1 Market statistics (2/5) The scale of Vietnam Bond Market is relatively smaller compared to potential of the domestic economy and to other markets in the region. The scale of Malaysia’s bond market is 95% of GDP, Singapore is 81.1% of GDP, Thailand 73% of GDP, South Korea 124.7% of GDP and China

  6. Slide 6: 1.1 Market statistics (3/5)

    1.1 Market statistics (3/5) The structure of investors in the domestic bond market has changed thanks to an increase in the number of investors and diversified kinds of investors. Besides, the holding rate of commercial banks has reduced to a similar rate in many countries but other institutional in

  7. Slide 7: 1.1 Market statistics (4/5)

    1.1 Market statistics (4/5) Viet Nam’s bond market participants include issuers from the government and corporate sectors. Major bond investors include commercial banks and domestic life insurance companies. A number of authorized securities companies and a few market associations also participate i

  8. Slide 8: 1.1 Market statistics (5/5)

    1.1 Market statistics (5/5) The upgrades in regulations and changes in capital markets and corporate structures are shaping typical characteristics of bond instruments in Vietnam varying between issuers and in methods of issuance.  Typical Characteristics of Government and Corporate Bonds in Vietna

  9. Slide 9: 1.2 Regulatory framework (1/5)

    1.2 Regulatory framework (1/5) The Ministry of Finance (MOF) and the State Bank of Vietnam (SBV) jointly regulate the capital markets. SBV administers monetary, credit and banking regulations, and issues regulations on matters such as exchange controls, interest rates and banking license application

  10. Slide 10: 1.2 Regulatory framework (2/5)

    1.2 Regulatory framework (2/5) There are hierarchy of local regulations on bond market regulating all market participants and creating transparent environment to promote further development of domestic bond market in particular and capital market in general Legal Documents Keys Bond-regulated Regula

  11. Slide 11: 1.2 Regulatory framework (3/5)

    1.2 Regulatory framework (3/5) The hierarchy of local regulations on bond market accounts multi-level legislative and regulatory system regulating all market participantsand creating transparent environment to promote further development of domestic bond market in particular and capital market in ge

  12. Slide 12: 1.2 Regulatory framework (4/5)

    1.2 Regulatory framework (4/5) Potential new regulations and evaluations on its impacts on different aspects of the bond market. In order to promote further development of the corporate bond market in Vietnam, the Vietnamese government issued Decree 163/ND-CP, dated December 4th, 2018, governing the

  13. Slide 13: 1.2 Regulatory framework (5/5)

    1.2 Regulatory framework (5/5) Potential new regulations and evaluations on its impacts on different aspects of the bond market Improved Enhanced Increased Strengthened role of Potential New regulations/Government actions investor base liquidity transparency Corporate bonds Allow Vietnam Social Secu

  14. Slide 14: 1.3 Challenges in the domestic bond market

    1.3 Challenges in the domestic bond market The domestic market undeniably is facing uphill challenges for growing up further in both comprehensive market structure perfection and market size, reaching and following international standards and best-common-practices 4 biggest risks facing the Corporat

  15. Slide 15: 1.4 Potential for reaching further (1/3)

    1.4 Potential for reaching further (1/3) Vietnam bond market is expected to benefit greatly from a developing economy and the rise of private sector… A strong economy is closely related to a healthy capital market The role of private sector is becoming more and more vital Vietnam’s Economic growth a

  16. Slide 16: 1.4 Potential for reaching further (2/3)

    1.4 Potential for reaching further (2/3) … and all other favorable factors…  MoF is trying to encourage the participation of long-term institutional investors INCREASED INVESTOR BASE (insurance firms, voluntary pension funds, etc.) in the corporate bond market.  The requirement of being profitable

  17. Slide 17: 1.4 Potential for reaching further (3/3)

    1.4 Potential for reaching further (3/3) … to reach targets set forth under the Development Roadmap of Vietnamese Government during period 2020 and 2030. 2020 2030 BOND OUTSTANDING 45% of GDP 65% of GDP Government/Government-guaranteed/Municipal bond 38% 45% Corporate bond 7% 20% AVERAGE TERM (of go

  18. Slide 18: Section 2: Corporate Bond Market

    SECTION 2: 2 CORPORATE BOND MARKET 2.1 Domestic corporate bond market 2.2 Cross-border issuance 2.3 Corporate Bond Potentials in RE* projects *RE: Real Estate & Renewable Energy Vietnam Bond Market – In the readiness for further growth 6/2019 MB SECURITIES JSC 18

  19. Slide 19: 2.1 Domestic corporate bond market (1/3)

    2.1 Domestic corporate bond market (1/3) Bond issuance keeps growing strongly in a dominant bank loan backdrop Domestic credit to private sector by banks (% GDP) While the corporate bond markets witnessed significant growth in recent years, bank loan is still the dominant 140% 1.8% method of raising

  20. Slide 20: 2.1 Domestic corporate bond market (2/3)

    2.1 Domestic corporate bond market (2/3) Straight bonds with medium term are mostly common in the private sector  Out of total value, Domestic corporate bonds are concentrated in 2 industries:  Considered as medium-and-long-term sources of fund, the typical duration Real Estate (26.3%) & Banking (

  21. Slide 21: 2.1 Domestic corporate bond market (3/3)

    2.1 Domestic corporate bond market (3/3) In comparison with neighboring countries, the development of local secondary bond market is still stagnant  Until now, all corporate bonds are listed on HSX via put-through transactions,  According to 2018 ADB annual LCY Bond Market Liquidity Survey, despit

  22. Slide 22: 2.2 Cross-Border Issuance

    2.2 Cross-Border Issuance International capital market access starts to thrive in top-tire enterprises  In 2011, HAGL Group became the first company to issue bonds internationally. The issuance, though unsuccessful, has laid the foundation for local companies to seek opportunities from internationa

  23. Slide 23: 2.3 Corporate Bond Potentials in RE projects (1/4)

    2.3 Corporate Bond Potentials in RE projects (1/4) Increasingly tightening regulations on the traditional lending market force RE developers to look for alternative financial products Bank's Loan Outstanding by Segment as 31/12/2018 Circular no. 19/2017/TT-NHNN and 36/2014/TT-NHNN Credit institution

  24. Slide 24: 2.3 Corporate Bond Potentials in RE projects (2/4)

    2.3 Corporate Bond Potentials in RE projects (2/4) Potential opportunities of Real Estate projects focus on residential and industrial segments Real Estate Market Development & Potentials  As of 12/2018, the total value of real estate inventories was about VND 22,000 billion, a Y-o-Y decrease of ~1

  25. Slide 25: 2.3 Corporate Bond Potentials in RE projects (3/4)

    2.3 Corporate Bond Potentials in RE projects (3/4) Potential growths of Renewable Energy projects are derived from natural condition advantages & government incentives  Vietnam has huge potentials to develop renewable energy projects in the region thanks to: (i) 8.6% of Vietnam’s land area is poten

  26. Slide 26: 2.3 Corporate Bond Potentials in RE projects (4/4)

    2.3 Corporate Bond Potentials in RE projects (4/4) Transactions of real estate & renewable energy projects are both sizable, but mainly different in terms  Characteristics of Debt Capital in RE Projects  Notable Corporate Bond Deals in RE Projects Issuer Volume Duration Coupon Industry Real Estate

  27. Slide 27: Section 3: Foreign Investment in Vietnam Bond Market

    SECTION 3: 3 FOREIGN INVESTMENT IN VIETNAM BOND MARKET 3.1 Key Considerations 3.2 Guidelines for Foreign Investors Vietnam Bond Market – In the readiness for further growth 6/2019 MB SECURITIES JSC 27

  28. Slide 28: 3.1 Key Considerations for FIs in Vietnam Bond Market

    3.1 Key Considerations for FIs in Vietnam Bond Market Lack of transparency & credit rating system, and capital flow management pose a significant hurdle to prospective foreign investors in the bond market TRANSLATION OF LEGISTRATION &  Translation of Legislation into English INFORMATION DISCLOSURE

  29. Slide 29: 3.2 Guidelines for Foreign Investors (1/3)

    3.2 Guidelines for Foreign Investors (1/3) Foreign investors have to comply with Circular no. 05/2014/TT-NHNN guiding the opening and use of indirectly-invested capital accounts to join the capital market Procedures in the primary market Open a capital account for indirect investment in Vietnam: eac

  30. Slide 30: 3.2 Guidelines for Foreign Investors (2/3)

    3.2 Guidelines for Foreign Investors (2/3) Foreign investors have to comply with Circular no. 05/2014/TT-NHNN guiding the opening and use of indirectly-invested capital accounts to join the capital market Procedures in the secondary market Opening a Trading Account Trading Process Open an Indirect/C

  31. Slide 31: 3.2 Guidelines for Foreign Investors (3/3)

    3.2 Guidelines for Foreign Investors (3/3) Foreign investors could to negotiate directly with issuers or purchase public offering in overseas exchanges to invest in foreign-currency nominated bonds. Foreign-currency nominated Bond Target Identification The target has demand on The target has income

  32. Slide 32: Section 4: Introduction about MBS

    SECTION 4: 4 INTRODUCTION ABOUT MBS 4.1 MBS At a glance 4.2 Our Development Story 4.3 Our Capabilities 4.4 Our Experts 4.5 Our Credentials Vietnam Bond Market – In the readiness for further growth 6/2019 MB SECURITIES JSC 32

  33. Slide 33: 4.2 MBS At a glance

    4.2 MBS At a glance 2000 year Established in 2000 05 46 usd mn Best Investment Bank, 2018 Top 05 market shares for 2018 Revenue Best Investment Management, 2018 both brokerage and IB 77 usd mn 119,200 12.8 usd mn Trading accounts 2018 Net profit Market capitalization 31,000 active accounts 53 usd mn

  34. Slide 34: 4.2 Our Development story

    4.2 Our Development story Our capabilities has been enriched and accumulated from our long-established history and developments in local market Our development story MB Securities Joint Stock Company – a member of MB group Northern: • Hanoi: HaiPhong: 1HO • Founded in 2000, one of the 5 pioneers in

  35. Slide 35: 4.3 Our capabilities

    4.3 Our capabilities Our capabilities have been recognized through high-value financial products we bring to our clients We commit to providing the best solution and integrated investment banking services to clients. • MBS advises state-owned enterprises, foreign- MBS offers integrated advisory serv

  36. Slide 36: 4.4 Our experts

    4.4 Our experts Our people are experienced and dedicated to offer our customers the best service MBS is well versed in managing complex projects on a international basis and standards BOD of MBS Key Investment banking team Tran Hai Ha CEO Corporate Finance Vietnam Valuation & Modelling • Strategic l

  37. Slide 37: 4.5 Our Credential (1/4)

    4.5 Our Credential (1/4) Notable Bond Issuance Transactions over 2015-2018 Trung Nam Land co, Jsc Vietracimex co.,jsc Sun Group Ton Dan Hanoi co.,jsc Thai Hưng commercial co.,jsc Novaland and subsidiaries Nam Cuong Corporation Bond Issuance Advisory Bond Issuance Advisory Bond Issuance Advisory Bond

  38. Slide 38: 4.5 Our Credential (2/4)

    4.5 Our Credential (2/4) Notable Equalization; Privatization and Divestment Transactions over 2015-2018 MOC Divest in DIG State Capital Investment State Capital Investment State Capital Investment Vinamotor co.,jsc Bac Giang Railway signal Fico corporation co., jsc Scale: VND2,500billion Corporation

  39. Slide 39: 4.5 Our Credential (3/4)

    4.5 Our Credential (3/4) Notable Listing and Issuance Transactions Thibidi co., Jsc MB securities co.,jsc Gelex co.,jsc C.E.O Group Co.,Jsc Dong A group co.,jsc LDG group co.,jsc VNT mineral co., jsc Equity Issuance Advisory Listing advisory Privatilization and equity Equity Issuance and listing Equ

  40. Slide 40: 4.5 Our Credential (4/4)

    4.5 Our Credential (4/4) Notable M&A transactions Mai Linh Group Vinaseed co.,jsc CHOLIMEX FOODS JSC F.I.T group Merger between MBS and VIS Diageo Plc acquires 11% stake in Merger advisory Auction Advisory Acquisition Arrangement of 19% Acquires stake in Can Tho Securities co.,js Halico co.,jsc 2017

  41. Slide 41: Disclaimer

    Disclaimer This Presentation, including information, figures, data, statements, forecasts, projections, if any contained herein have been prepared for the purposes of presenting selective information and understanding about Vietnam Bond Market. Those information, data, statements, etc. should be tre

  42. Slide 42: MB Securities Joint Stock Company (MBS)

    MB SECURITIES JOINT STOCK COMPANY (MBS) Hội MB Building No 3 Lieu Giai, Ba Dinh, Hanoi Tel: + 84 24 3726 2600 Fax: + 84 24 3726 2601 NHAM TRUNG BACH Hotline: +84 24 3755 6688 Senior Associate – M&A and International Relations, Investment Banking Ho Chi Minh Office Tel: 84 98 691 5516 Sunny Tower, 5t

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