SaraminHR, an online recruitment firm, signed a shareholding agreement in February with Applancer, a Vietnamese company which owns TopDev, an IT recruitment platform. — Photo techtalk.vn

In the first quarter of the year, Viet Nam foreign investors acquired stakes worth US$2 billion in local companies.

According to the Foreign Investment Agency, the value of deals in March alone was over $1.72 billion.

SaraminHR of South Korea was among the foreign companies to acquire stakes.

According to Staffing Industry Analysts website, SaraminHR, an online recruitment firm, signed a shareholding agreement in February with Applancer, a Vietnamese company which owns TopDev, an IT recruitment platform.

The value of the deal was not disclosed but SaraminHR termed it a strategic investment.

The company plans to establish its specialised employment portal business model in Viet Nam and grow Applancer into the “number one recruiting platform in Viet Nam.”

Kim Yong-hwan, CEO of SaraminHR, said, “Based on successful settlement in Viet Nam, we plan to aggressively target the Southeast Asian market in future."

TopDev founder Nguyen Huu Binh said the money would be used to improve service quality and create more value addition, aiming for big goals such as expanding the workforce through training workshops and IT career fairs

The number of mergers and acquisitions (M&A) in March alone, 940, was 324 more than in the same month last year, and their value was up 56 per cent from $1.06 billion.

Market observers wonder about this sharp increase amid the COVID-19 pandemic.

The consensus is that the prices of many companies’ stocks have fallen considerably since the disease broke out. Many had, in normal circumstances, been out of reach of foreign investors because either their prices were too high or their owners were not willing to sell stakes.

The pandemic has changed everything.

Many listed companies’ stock prices have plunged after the bottom fell out of the market, and they have to find ways to weather the storm.

Some have bought back their own stocks in a bid to help shareholders regain confidence and easing the risk of being acquired.

But analysts warn that if the pandemic lasts for a long time, many companies would not be able to avoid being acquired.

They said without the Covid-19 outbreak Viet Nam is a highly attractive investment destination thanks to its impressive economic growth and political stability.

Earlier this year Japan’s Nikkei also had forecast that M&A transactions would speed up in Southeast Asia in 2020 and Vietnamese companies would be among the targets of influential international players.

Petrol imports to halt suggested

Recently State-owned Vietnam Oil and Gas Group (PetroVietnam) urged the Ministries of Industry and Trade and Finance to temporarily halt petrol imports to support domestic refineries amid tumbling consumption.

According to its communication, in the first quarter of 2020, the demand for petroleum products fell an estimated 30 per cent, and the slump is expected to continue because tourism, aviation and logistics have slowed down severely due to the COVID-19 epidemic.

As a result, petroleum product stockpiles at the Dung Quat and Nghi Son oil refineries have risen to very high levels, sometimes in excess of 90 per cent of their storage capacity.

Especially on March 30 the stocks of Dung Quat and Nghi Son exceeded storage capacity.

PetroVietnam said buyers have been cancelling fuel purchase orders since the COVID-19 outbreak has caused transport and production demand and people’s travel demand to plummet.

With tumbling demand and large stockpiles, Binh Son Refining and Petrochemical Company faced a big loss in the first quarter, forcing its management to think of suspending production at the Dung Quat Refinery.

Customs statistics show that more than 1.85 million tonnes of oil products were imported during the quarter.

Together with the three million tonnes produced by the Dung Quat and Nghi Son refineries, supply exceeded demand by 35 per cent, according to PetroVietnam.

It has called for a halt to imports.

Dr Tran Viet Ngai, chairman of the Viet Nam Energy Association (VEA), said a temporary halt in imports is necessary and they should be resumed in late June or early July by which time domestic inventories would be liquidated.

Dr Le Xuan Nghia, a member of the National Advisory Council on Monetary and Financial Policies, said suspending oil imports is the way to go since the pandemic has yet to show signs of ending and so demand for oil and petrochemical products would remain very low.

Imports had been necessary a few weeks ago since global crude oil prices had been very low, going down sometimes to just US$ 20 dollars per barrel, he said.

"But now prices are showing signs of increasing after Russia, the US and Saudi Arabia struck a deal to cut production, and imports need to be stopped now," he said.

Dr. Dinh Trong Thinh of the Finance Institution concurred with the proposal to suspend imports to safeguard local refineries.

Keeping production going at Dung Quat and Nghi Son, which meet 70-80 per cent of domestic demand, is vital since they make a significant contribution to the Government’s revenues and the nation’s energy security, he pointed out.

Some experts also said that domestic refiners cannot suspend production because of various reasons, including the employment of thousands of workers.

But other experts were not convinced about the need to suspend imports.

Dr Ngo Tri Long, a senior official in the finance ministry, said it would not be fair to ask 32 wholesalers to stop imports just to bail out PetroVietnam.

Many import gasoline products at lower than PetroVietnam’s prices, according to Long.

This means the company should reduce its prices if it wants them to buy its products.

He pointed out if its proposal was accepted and imports were suspended, domestic oil prices could never be lowered because most of its output was produced when crude prices were high.

Assoc Prof. Dinh Trong Thinh of the Academy of Finance also said that gasoline products were indispensable for the development of the petrochemical industry, while Viet Nam was keen on developing this industry, whether to continue imports or stop should be considered carefully, he said.

An official from the Domestic Market Department also said PetroVietnam’s proposal should be carefully considered.

Imports were cheaper than local products, and any decision must be arrived at after careful thought to ensure compliance with market mechanisms and the interests of all stakeholders. — VNS