FINANCE. finance & business news. Reference exchange rate goes up by 8 VND. Risks involved in interest cut

finance & business news 18 October 2017................................ 1 Reference exchange rate goes up by 8 VND 1 Risks involved in interest cut 1 What can be seen from the perspective of banking sector in the last months of the year? 3 Banks announce trillion-dong profits in Q3 4 Investors pay attention to consumer lending 5 Many banks expected to make dividend payment in Q4 6 Korean investors eagerly pour capital into Vietnam's financial sector 8 Vietcombank to cooperate with Singapore Manufacturing Federation 9 LienVietPostBank, ACB Leasing allowed to provide foreign exchange service 9 Generali Vietnam Life Insurance launches Net Promoter System 10 Hanwha Life Vietnam's new premium growth at 47pct 10 Observers update end of the year estimate 11 Rice exports surpass 2016 volume 12 Cement, clinker exports set to reach yearly target 12 Trade surplus with US hits $24 billion in Jan-Sept 13 Korea trade to reach $100 billion by 2020 13 Deputy PM urges ministries to review all BOT projects 14 High-tech tax cut might follow last year's IT slash 15 VCCI objects to special consumption tax on soft drinks 15 Labour exports: concern about Vietnam's human resources 16 Building material market stable 17 VN rice industry should focus on quality: experts 17 Telecoms, IT, retail firms top VN's profit-making list 18 Danang awaits new investors 19 Receiving investors with open arms 20 Luang Prabang calls for HCM City investors 21 More British firms expected to explore Hanoi's opportunities 21 Vietnam, Singapore bolster economic connectivity, trade cooperation 22 Reference exchange rate goes up by 8 VND Risks involved in interest cut Intellasia No. 21, lane 173/63/17, Ngoc Ha Ward, Ba Dinh Dist, Hanoi All Rights Reserved VN-Korea ties flourishing 23 BIZ NEWS..............................23 Business Briefs 18 October, 2017 23 Stocks ease off six days of rises 24 VN Index steady above 820 points on bank growth 25 Stock market capitalisation hits record $120.6b in 9m 25 VN Index among 10 high-growth stock indexes 25 BSR to earn $88m via IPO 26 Quality key factor to promote made-in-vietnam products 27 Landlords unfazed by higher supply 27 Smart city goals propel Hanoi building projects 28 City compromises pork traceability standard upon traders' protest 29 Homestay service offers sustainable tourism 30 Gift market bursting at the seams for Vietnamese Women's Day 31 HCM City's Metro Line No.1 project in dire need of capital 32 E-commerce Club established 33 Van Don Airport to be operational in Q1 2018 33 VN's first solar farm coming soon 34 Japanese petrol distributor to find network expansion difficult 35 T&T Group introduces property project in Long An 35 Dau Tieng Rubber Corporation invests in high-tech agriculture 36 Ford sales rise slightly this year 36 Japan's travel conglomerate to join hotel project in Khanh Hoa 37 Big C offers discount on Vietnamese Women's Day 37 500 workers go on strike in central Vietnam over unreasonable pay 37 Gift show gets underway in Hanoi 38 Vietnam-Japan cultural space to open in Hoi An in November 39 VN diplomat introduces Apec 2017 at Asian Architecture Conference 39 Vietnam attends 12th Asem customs director general meeting 40 Quang Ninh to host Vietnam-China trade fair 40 18/OCT/2017 INTELLASIA VNA The State Bank of Vietnam set its reference VND/USD exchange rate at 22,460 VND/USD on the morning of October 18, up by 8 VND from the day ago. With the current/- 3 percent VND/USD trading band, the ceiling exchange rate is 23,134 VND per USD and the floor rate is 21,786 VND per USD. Major commercial banks kept their rates quite stable. Vietcombank offered its buying and selling rates at 22,685 VND and 22,755 VND, per USD, up by 5 VND compared with October 17. Vietinbank and BIDV set 22,680 VND (buying) and 22,750 VND (selling), per USD, unchanged from the day earlier.- https://en.vietnamplus.vn/reference-exchange-rate-goes-up-by-8-vnd/119659.vnp 18/OCT/2017 INTELLASIA VIR The current interest rate levels have been deemed appropriate for the time being, according to experts, and any attempt to further cut rates could impose unnecessary risks to Vi- Tel: +844 2213 2244 Fax: +844 3759 2034 Email: Office@intellasia.com Websites: www.intellasia.net www.tritueachau.com

etnam's overall macro-economic stability in the medium term. Further cuts needed? In an earlier effort made by the State Bank of Vietnam (SBV) in mid-july to encourage lending to the local manufacturing sector and promote economic growth, the interest rate policy was adjusted downward by a quarter of a percentage point, with the refinancing rate set to 6.25 per cent and the discount rate at 4.25 per cent. Short-term lending rate caps at commercial banks were also lowered by half a percentage point. The rates are expected to remain the same throughout 2018, even though there is room for further rate cuts. Risks are weighted as far as downside amid a manageable inflationary environment and calls by the government for a higher credit growth rate of 21-22 per cent for 2017, according to BMI Research, a subsidiary of Fitch Group. "Any additional rate cuts are likely to have a limited impact on stimulating growth, and would instead put the economy at risk of overheating, encourage more speculative investment, and make the dong vulnerable to a renewed US interest rate-hiking cycle," the research firm wrote in its October 11 report. Vietnam's real GDP growth, according to BMI Research, came in at 7.5 per cent on-year in this year's third quarter, pulling the cumulative growth through September up to 6.4 per cent bringing the rate closer to the government's target of 6.7 per cent growth for 2017. As the local economy will likely continue to enjoy robust growth during the last quarter underpinned by a burgeoning export-manufacturing sector the central bank is thus allowed to prioritise macro-economic stability and stand pat on interest rates. Although inflation is reportedly under the 4 per cent target which should theoretically provide room for additional rate adjustments price pressures are expected to be on the rise in the months to come, as commodity prices bottom out and credit growth accelerates further. "If SBV cuts rates again, this could further exert upward pressure on prices going forward and potentially stoke a credit bubble," noted BMI Research. "We are already seeing signs of speculative investment picking up in the real estate sector, particularly with land speculation," it added. Right stream Higher credit growth may require support in terms of lower lending rates, yet according to Michael Kokalari, chief economist at VinaCapital, accelerated credit growth has not succeeded in lowering the lending rates paid by businesses and consumers "because of issues with Vietnam's banking system's 'transmission mechanism', which also inhibits liquidity from trickling down to the parts of Vietnam's economy that need it the most". Kokalari noted last month that SBV fostered an abundance of liquidity in the banking system earlier this year, with the stated hope that it would reduce lending rates for businesses and individuals. "Unfortunately, the drop in interbank rates that resulted from excess liquidity in the banks only drove bond yields lower, not the interest rates banks charge their customers," he said. "In our opinion, interest rates have reached a sustainable equilibrium, as evidenced by the fact that nearly every Vietnam government bond auction since mid-july has essentially failed, while yields in the secondary market have only backed up by about 30 basis points since that time. SBV's July rate cut seemed out of sync with the rest of the world's central banks, but in light of recent monetary loosening by Asian central banks, Vietnam's actions now appear prescient. Some government officials and local economists have called for an additional cut of 50 basis points this year, a move they believe will allow the government to reach its 6.7 per cent target. We doubt that such a move would achieve the desired effect," Kokalari said. More to come In an earlier interview, CEO of Hanoi-based TPBank Nguyen Hung told VIR that the gap between lending and deposit rates has narrowed over time. Lending rates, in Hung's view, are presently at an all-time low. "Vietnam's lending rates are actually not too high compared to regional lending rates. Our USD-denominated lending rates are in fact lower than any others and our VNDdenominated rates have diminished from a two-digit figure to a single-digit one. It's as good as it can get for now," Hung said. Meanwhile, the National Financial Supervisory Commission wrote in its September report that deposit rates have dipped slightly, while lending rates have shrunk slightly in some prioritised sectors. Anticipation is high for further rate cuts toward the year's end, thanks to a number of supportive factors. Intellasia 18 October 2017 2 / 40

What can be seen from the perspective of banking sector in the last months of the year? The commission raised a number of factors that support further rate cuts, including reduced pressure from FX volatility, as the USD Index has sunk considerably in the past months. Inflation, meanwhile, is under control (below 4 per cent) as per the government target. "The issuance of government bonds in the last three months only accounts for 20 per cent of the total plan, and the low bond yields that have dropped some 1-1.5 percentage points compared to the beginning of the year are also helping to reduce rates," said the report. The financial watchdog reported that deposit rates at the end of the third quarter have plunged by three to five basis points compared to the end of the previous quarter. Lending rates, on the other hand, have been adjusted down by 0.5-1 per cent, sitting at 4-5 per cent per year. http://www.vir.com.vn/risks-involved-in-interest-cut.html 18/OCT/2017 INTELLASIA TRI THUC TRE Positive information has continuously appeared for the banking system in recent time. Specifically, credit continues to grow at a faster pace than last year. Credit to the economy has been increasing right from the beginning months of 2017 and has increased steadily over the months. As of September 20, credit growth swelled 11.02 percent from the end of 2016 and 10.78 percent from the same period of 2015. The credit structure focused mainly in business and production sector in which credit to some key economic sectors and priority sectors was higher than the overall growth of the entire system. The growth was mainly thanks to the US dollar lending recovery while the dong lending still increased at the same speed. Working capital loans seemed to be the main driver of growth and most of these loans seemed to be for commercial businesses. This is a positive signal from the GDP viewpoint and may also show more sustainable growth compared to the sharp increase in retail lending as in last year. Analysts of HSC said in any case, the official credit growth target of 21 percent looks very promising at current pace because in December alone, the credit growth often accounts for about 20 percent of the whole year credit. However, with bad debt tending to rebound and inflation tending to accelerate, higher credit growth target is also accompanied by certain risks. However, in a short-term view, this ensures that banks will exceed this year's profit plan. As per the assessment of VCSC, the NIM in Q3 and Q4 is more likely to increase in the banking sector, promoting profits. With the two key drivers including NIM growth and lending growth (more likely to exceed VCSC's 18 percent estimate in 2016-2017 period), the profit growth will still continue. Regarding bad debt, the NPL ratio as of the end of September 2017 was about 2.9 percent (compared to about 2.6 percent in 2016). The high NPL ratio focused mainly in some ailing credit organisations with poor financial and management capacity and subject to restructuring. In the first nine months of 2017, the actual bad debt decreased from the end of 2016 as corporate bond items issued for the purpose of debt restructuring and corporate bonds classified in Group 3-5 decreased, while investments, deposits, margin, potentially irrecoverable external receivables have sharply fallen. Regarding the bad debt settlement, in the first seven months of 2017, the system of credit organisations is estimated to settle about 45 trillion dong bad debt. Of which, bad debt recovered from customers accounted for about 33.6%; the usage of risk provision to handle bad debt was estimated at about 26.3%; the sale of debt to the Vietnam Asset Management Company (VAMC) was about 31.7%; the sale of collaterals was about 1.5 percent while the rest was settled by other methods. The system of credit organisations increased the risk provision, creating resources to handle bad debt. It is estimated that by the end of September 2017, the credit risk provision balance was about 110 trillion dong, up about 22 percent from the end of 2016. As per the assessment of some securities companies, the non-performing loan (NPL) Intellasia 18 October 2017 3 / 40

ratio of banks will continue to be improved. Accordingly, VCSC said LienVietPost- Bank will continue stabilising credit costs in 2017 and 2018. The bank's NPL ratio in 2017 will be managed at 1.5 percent as planned. Meanwhile, BVSC said VIB's credit operation is not affected by SBV's regulations to promote the restructuring of the sector in the second phase such as improving the real estate credit risk ratio or the capital safety ratio. Besides, with VIB's good bad debt recovery rate, the estimated time for VIB to thoroughly handle bad debt will be 2-3 years. Besides, with good asset quality, VIB's debt settlement speed will be faster when the Decree on debt recovery through the handling of collaterals officially takes effect. Another positive signal is that since the beginning of this year, bank shares have been competing to appear on the stock market. So far, 13 banks have listed on stock exchanges including Vietcombank, BIDV, Vietinbank, Eximbank, MBBank, Sacombank, VPBank on Hochiminh City Stock Exchange (STC); ACB, HSB, NCB on Hanoi Stock Exchange (HNX) and VIB, Kienlongbank, LienVietPostBank on Upcom. Regarding bank share price, analysts of HSC said bank share price has increased 30.7 percent from the beginning of the year. It is very likely that HDBank and Techcombank shares will be listed within the next 3-6 months and provides more investment opportunities for investors. The wave of listing banks in 2017 will contribute to the transparency of the banking system and increase investment options for the stock market, and the business prospects of banks are expected to continue diversifying in 2017. Banks announce trillion-dong profits in Q3 18/OCT/2017 INTELLASIA BAO DAU TU Although the third quarter (Q3) financial statements are not yet released, the Q3 business results disclosed so far by many banks with growth of up to 60%. In the end of last week, Tien Phong Commercial Joint Stock Bank (TPBank) said that the bank is likely to reach pre-tax profit of one trillion dong in 2017 and will officially join the over one trillion dong profit bank club. By the end of Q3 2017, TPBank's profit was 807 billion dong, exceeding the annual profit target of 780 billion dong. Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) the youngest bank in the system has been drawing attention of investors thanks to its fairly surprising growth in the recent years. According to general director of the bank Pham Doan Son, the bank's pre-tax profit in the first three quarters of the year reached 1.450 trillion dong, close to the 1.5 trillion dong target set in the whole year. LienVietPostBank is also the latest banking rookie on the Unlisted Public Company Market (UPCoM). Despite not yet returning to the heyday, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) has been gradually regaining its power after the joint of a new group of shareholders. As estimated, the bank's pre-tax profit in the first nine months of the year was 900 billion dong, and consolidated profit was 1.1 trillion dong, doubled the previous year and far exceeded the annual target (585 billion dong). The bank's leaders are planning to distribute bonus to employees for the second time after the first bonus payment in July 2017. Some other banks have yet to announce their profits, but the forecast of Saigon Securities Incorporation (SSI) is very positive. Specifically, according to SSI, the pre-tax profit in the first three quarters was estimated at 1.246 trillion dong at Saigon Hanoi Commercial Joint Stock Bank (SHB), 3.9 trillion dong at Military Commercial Joint Stock Bank (MB, up by 40 percent compared to the same period of 2016), and over two trillion dong at Asia Commercial Joint Stock Bank (ACB, up by over 60%), etc. For the two major banks in the system including Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) and Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV), SSI forecasted the profit of Vietcombank in the first three quarters to reach 7.5 trillion dong, up by about 18-19%, while the profit growth of BIDV was fairly modest at 4%, due to the need to step up risk provisioning, but the absolute number still reached about six trillion dong. Report of the National Financial Supervisory Commission (NFSC) recently stated that Intellasia 18 October 2017 4 / 40

banks' profit in the first nine months of the year was very good, estimated at 47 trillion dong, up by 39 percent compared to the same period of 2016. According to bank leaders, the expansion of lending after the government allowed to raise credit growth limit to 21 percent is the main reason leading to the surge of banks' profit, because most of banks' revenues still depends on lending. So far, numerous banks such as MB, VIB and Vietcombank, etc. have been approved by the State Bank of Vietnam (SBV) to increase the credit growth room. Statistics of the NFSC also pointed out that the net profit from lending activity in the first three quarters of 2017 soared by up to 15.8%, and the Net Interest Margin (NIM) rose to 2.8 percent from 2.7 percent in the same period of 2016. In addition to the positive credit growth, the strong provisions for risks in the past years has also reduced pressure on this year, helping profits to not be eroded. Thus, in the first nine months of the year, the banking sector still recorded the best growth. The research teams of many securities companies such as SSI, and BIDV Securities Company (BSC), etc. recommended investors to pay attention to bank shares. In fact, from the beginning of the year until now, many bank stocks such as BID, VCB, MBB, VTG, and ACB have all recorded good growth. According to BSC, the government's monetary easing policy in pursuit of the growth will improve profits of businesses. Therefore, investors should take interest in the groups of stocks that directly and strongly benefit from this high credit growth policy, including bank stocks. In addition, Resolution 42/2017/QH14 of the National Assembly on piloting bad debt settlement is coming into life. In the coming time, if the bad debt trading market gets exciting and banks can sell secured assets to recover debts, a large amount of bad debts will turn into banks' profits (because most of these debts have fully been provisioned). The only thing that experts warned banks as well as investors is that the loosening of credit may lead to adverse effect, which is bad debt. According to the NFSC's report, the bad debt ratio as of late September 2017 was 2.9%, higher than the 2.6 percent recorded in the same period of 2016. Investors pay attention to consumer lending 18/OCT/2017 INTELLASIA DTCK The market of Vietnam is expected to continue attracting consumer credit growers with the 13th largest population in the world, not to mention that the profit margin of consumer lending is currently considered the best compared to other segments. This is also the reason why investors always consider consumer lending when pouring capital into bank shares. At the recent conference on introducing investment opportunities in Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank, LPB), representative of Dragon Capital said that LienVietPostBank's consumer lending segment is fairly modest compared to other banks, such as Vietnam Prosperity Commercial Joint Stock Bank (VPBank), not to mention that VPBank has its own finance company under the brand name FE Credit. Meanwhile, Viet Dragon Securities Company stated that in order to increase profits and diversify risks, consumer lending is considered having the highest profit margin for banks at present. In fact, the business results of consumer finance companies as well as the segment of consumer lending to individual customers of banks are contributing positively to bank's business results. For example, FE Credit's profit accounts for fairly high proportion of the parent bank's total profit. As of late 2016, FE Credit recorded 30 trillion dong of receivables and two trillion dong of pre-tax profit. Moreover, the business indicators by the end of July 2017 of VPBank were also positive with net interest income increasing by 41.4 percent compared to the same period of 2016, reaching over 11.4 trillion dong; net profit from service activities rising by 90%, reaching over 765 billion dong; and profit from other activities reaching nearly 857 billion dong, up by 34.4%. Notably, the pre-tax profit of VPBank in the first seven months of 2017 was 2.340 trillion dong, up by over 1.2 trillion dong, equivalent to 107 percent growth compared to Intellasia 18 October 2017 5 / 40

the same period of last year, thanks to the positive contribution of FE Credit. Talking to Dau tu Chung khoan newspaper, Kalidas Ghose, FE Credit's general director said that the company has so far gained new 2.7 million accounts, with a customer base reaching 3.3 million, thereby bringing FE Credit a high competitive advantage in the market with an estimated market share of 70 percent in late 2016. That is an unprecedented growth, even for the "grown-up" organisations in the world's developed markets. The consumer finance market in the recent years has achieved surprising leaps, and is still forecasted by financial experts to boom in the future. Not only FE Credit, the results of foreign and local finance companies in Vietnam's consumer finance market in the recent years showed that the number of customers and outstanding disbursement all rose significantly. For example, although the realised profit of Home Credit is not revealed over the years, according to the company's report, in 2013, Home Credit obtained 711 billion dong of pre-tax profit, five times higher than 2012. The company's after-tax profit was 529 billion dong. The profit of Home Credit or FE Credit is a dream come true of many banks, because the difference between input and output interest rates in lending to organisations has been narrowed down, along with higher pressure on provisioning. Recognising the potential growth of this sector, many banks have recently been racing to acquire finance company in order to restructure and transform them into a model of consumer lending. Accordingly, Maritime Commercial Joint Stock Bank (Maritime- Bank) purchased Textile and Garment Finance Joint Stock Company (TFC) of the Vietnam Textile and Garment Group, while Saigon Hanoi Commercial Joint Stock Bank (SHB) acquired Viettel Vinaconex Finance Company and later applied for the establishment of SHB Finance. Upon completion, SHB will transfer the lending portfolio of individual customers with income of less than 200 million dong to this company. Meanwhile, Asia Commercial Joint Stock Bank (ACB) also said that its Board of directors has met to discuss about the plan to acquire a finance company. ACB's target is Post and Telecommunications Finance Company Limited (PTFinance). A common point of the acquisitions carried out by finance companies is that after the deals were completed, all banks planned to search for foreign strategic investor to transfer 49 percent stake or establish a joint venture. However, market members most concern about the high lending rates of about 4050 percent per annum offered by consumer finance companies. Dr Le Xuan Nghia, a financial expert believed that consideration must be taken to launch a more reasonable interest rates to borrowers because the huge profits posted by some finance companies were generated from their highest consumer lending rates in the market. Meanwhile, explaining the application of high lending rates, finance companies said that the risks of consumer loans are significant because the loans are mainly unsecured. In addition, since the fund for lending of finance companies is not mobilised from the population at low interest rates but from credit institutions, the lending rates of consumer loans must also be appropriate in order to offset the risks. Many banks expected to make dividend payment in Q4 18/OCT/2017 INTELLASIA NDH After the Bank for Investment and Development of Vietnam (BIDV, coded BID) completed the dividend payment at the end of August 2017, two other banks including the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank, coded VCB) and the Joint Stock Commercial Bank for Industry and Trade (Vietinbank, coded CTG) will also make dividend payment to shareholders in mid-october. Specifically, on October 16, about 2.878 trillion dong 2016 dividend, equal to eight percent, was transferred to the account of Vietcombank shareholders. Vietcombank is a state-owned bank that boldly pays dividend to shareholders both in absolute figure and relative dividend payment rate. At BIDV and CTG, the dividend pay-out ratio is seven percent in cash. More than 2.6 trillion dong of dividends will also be paid by Vietinbank on October 17. The State Bank, as the representative body of state capital in these three banks, is estimated to earn a total of 6.167 trillion dong out of nearly 7.865 trillion dong dividend paid. Intellasia 18 October 2017 6 / 40

Not only state-owned commercial bank giants, the Military Joint Stock Commercial Bank (MBBank, coded MBB) has also closed the list of shareholders receiving the second dividend payment after the advance payment of dividends in cash at six percent in February. At this time, shareholders who own 100 MBB shares will receive the additional dividend of five new shares. With the number of shares in circulation, the total number of shares that shareholders receive is 85.64 million units, equal to about 1.980 trillion dong following the closing price on October 16 (23,100 dong per share). At the same time, MBBank also issues nearly 17.13 million shares to employees. Though MBBank closed the list of shareholders, the additional issuance of shares will only be transacted on November 11. So far, Vietcombank, BIDV and VPBank have fulfilled their dividend payment obligations to shareholders as approved at the annual general meeting (AGM). Vietnam International Bank (VIB) completed the dividend payment by cancelling capital raising options. VIB was one of the first banks to pay part of 2016 dividends to shareholders. But more surprisingly, the bank decided to cancel all capital raising methods including the dividend payment in shares (3.5%) and issuance of bonus shares (36.1%). Instead, VIB planned to use equity to purchase treasury shares. When the last months of 2017 is passing, some banks still have not paid dividends to shareholders but not many banks will delay the dividend payment till next year when business results have been quite optimistic over the last period. Although Saigon Hanoi Joint Stock Commercial Bank (SHB) and Lien Viet Post Joint Stock Commercial Bank (LienVietPostBank, coded LPB) have not had any announcement about 2016 dividend payment, their charter capital increase by paying dividends in shares had been approved by the State Bank. On September 20, the State Bank issued an official letter allowing SHB to increase chartered capital from 11.197 trillion dong to 12.036 trillion dong under the capital increase method by paying 2016 dividend in shares at 7.5 percent that the AGM had adopted. The 2016 dividends that LPB shareholders enjoyed included four percent in cash and six percent in shares. Apart from the four percent dividend paid earlier, LienVietPost- Bank said it is completing procedures to pay to shareholders. Since July 11, the State Bank approved LPB's charter capital increase from 6.460 trillion dong to 7.500 trillion dong through the issuance of shares to make dividend payment to shareholders from the non-distributed profits at six percent and issuance of shares under the employee selection programme. After the share issuance to increase capital from the aforementioned equitiy, LPB will issue convertible shares to existing shareholders under the newly submitted method which was approved by shareholders. At the share introduction at the beginning of October 2017, the bank leader said the aforementioned shares would be converted right in 2018. Asia Commercial Bank (ACB) has not made dividend payment to shareholders. Under the approved method, the 2016 dividend pay-out ratio will be 10%. Last year, both SHB and ACB made dividend payment in the last month of the year without exceeding the following year. Cumulatively, in the first nine months of the year, the banking system in general as well as the business situation of many banks had been very positive. In spite of actively putting for risk provision, creating resources to settle bad debt, the after-tax profit of the entire banking system reached about 47 trillion dong, up about 39 percent from the same period of 2016 thanks to credit and service operations. Thanks to the profit growth, EPS of banks will also be significantly improved though the capital increase via the share issuance to pay dividends or make bonus payment, etc. result in these organisations' dilution of EPS. Intellasia 18 October 2017 7 / 40

Korean investors eagerly pour capital into Vietnam's financial sector 18/OCT/2017 INTELLASIA DTCK For a long time now, Korean financial firms have normally chosen to set up whollyowned subsidiary in Vietnam. However, this trend has changed a lot in 2017 when a series of Korean businesses have boldly acquired Vietnamese partners. For example, at the end of September, Lotte's subsidiary i.e. Lotte Card announced to acquire Techcombank's subsidiary i.e. Techcom Finance with the projected cost of 87.5 billion won (equal to 1.7 trillion dong). After this deal is completed, Lotte Card will become the first Korean financial company allowed to issue credit cards in Vietnam. Earlier, KB Securities said it will soon complete the acquisition of Maritime Securities Inc. (MSI). Last week, MSI organised an extraordinary shareholders' meeting in Hanoi to elect an additional of three Korean representatives to the company's management board. Reportedly, KB Securitiesthe third largest securities company in Korea under KB Financial Holdings plans to spend $33 million (equal to 749 billion dong) on this deal. Over the last period, the market was tumultuous with the information that Samsung Securities, along with a Hongkong partner, will jointly acquire 40 percent stake of Dragon Capital Vietnam's largest foreign investment fund. It is said that Samsung Securities' stake is 10 percent and the subsidiary company of this group will not involve in the management of Dragon Capital. However, so far, the deal still has not been confirmed by insiders. In August 2017, another business under Samsung i.e. Samsung Fire & Marine Insurance (SFMI) completed the acquisition of 20 percent stake at Petrolimex Insurance (PJI- CO). After spending 533 billion dong to become the strategic shareholder of PJICO, SFMI said it will support this business to develop the non-life insurance sector in Vietnam. In addition, there must mention the deal that Shinhan Bank acquires ANZ Vietnam's retail segment at the end of April 2017. Shinhan Bank established a subsidiary in Vietnam since 2009. Talking to Dau Tu Chung Khoan (or Securities Investment newspaper), Jacob Won, Locus Capital's chief executive, said M & A trends with domestic financial firms are part of the "total offensive" strategy in many areas of Korean investors in Vietnam. As the Korean financial market has grown to saturation, businesses in the land of "kimchi" need to take advantage of the cheap capital source available to boost offshore investment, including Vietnam. "In the region, Vietnam's financial market is assessed to have great development room. Many of our customers are very excited about the success stories of Korean businesses in Vietnam and are constantly looking for information about this market", said Won. Currently, Korea is the No. 1 FDI investor in Vietnam, with a total investment of $50.5 billion. In the first six months of 2017 alone, Korean investors poured $4.95 billion into domestic market. Dr Nguyen Tri Hieu, an economist, said the fact that Korean financial firms are following to serve this abundant FDI inflow is understandable. "Recently, instead of setting up subsidiaries, Korean companies have moved to M & A in order to take advantage of the available relationships, personnel and market knowledge of Vietnamese partners. More importantly, their business opportunities not only stopped at providing financial services to Korean FDI businesses as before but will expand to the entire domestic market with 90 million people", said Dr Hieu. The expert added that the recent political tensions between South Korea and China require Korean businesses to quickly seek new markets in the region, and that Vietnam is a potential location for this capital flow. Sharing the difficulties of Korean investors when studying Vietnamese partners, Hong Sun, vice Chair of Korean Business Association in Vietnam (KorCham), said that transparency is not high and corporate governance quality remains limited. "If these constraints are improved, Vietnamese businesses will attract more investment flows, not only from South Korea but also from other countries". "There are many similarities between Korea and Vietnam in culture, cuisine, beliefs and life, so I believe that, in the near future, not only large financial businesses but Intellasia 18 October 2017 8 / 40

Vietcombank to cooperate with Singapore Manufacturing Federation small and medium Korean companies will also seek investment opportunities in Vietnam", said Sun. 18/OCT/2017 INTELLASIA VN ECONOMIC TIMES Cooperative arrangement to benefit bank customers and federation members in investment activities. Vietcombank signed an official cooperative agreement with the Singapore Manufacturing Federation (SMF) on October 17. The two will cooperate comprehensively in various fields in order to best exploit the potential of each and bring benefits to customers of Vietcombank and SMF members. Deputy director general of Vietcombank, Dinh Thi Thai, said the strategic partnership between Vietnam and Singapore has risen to a new level since the official visit by Singaporean prime minister Ly Hien Long from March 21 to 24. Bilateral trade between the two countries reached nearly $14 billion in 2016. Vietnam continues to be Singapore's 12th largest trading partner, while Singapore remains one of the three largest investors in Vietnam. Many projects of Singaporean investors in Vietnam are operating effectively, creating jobs, increasing export turnover, and contributing to economic growth. She also emphasized that Vietcombank was the first in Vietnam with a representative office in Singapore, supporting the operations of financial institutions and businesses in the country that wish to invest in Vietnam. "I expect that Vietcombank and SMF will continue cooperating tightly to boost bilateral relations," she said. Douglas Foo, President of SMF, believes that with Vietcombank's history of operations since 1963, it can help SMF members in payments, cash management, and trade finance. Within the framework of the signing ceremony, Vietcombank and SMF held a meeting linking loyal Vietcombank customers and businesses in Singapore that may invest in Vietnam. It was an opportunity for Vietcombank customers and SMF members to meet together and exchange information, thus presenting them with more opportunities to expand cooperation and boost business activities. SMF has more than 3,000 members in various fields, such as real estate, electricity, electrical appliances, food and beverages, energy, and chemicals. http://vneconomictimes.com/article/banking-finance/vietcombank-to-cooperatewith-singapore-manufacturing-federation LienVietPostBank, ACB Leasing allowed to provide foreign exchange service 18/OCT/2017 INTELLASIA NDH The State Bank of Vietnam (SBV) has issued Decision No.2140/QD-NHNN amending and supplementing the License of Lien Viet Post Joint Stock Commercial Bank (Lien- VietPostBank). Accordingly, the State Bank Governor decided to amend and supplement Clause 2, Article 3 of the Operating License No.91/GP-NHNN dated March 28, 2008 granted the State Bank Governor to LienVietPostBank with the specific content as follows: "d. Trading and providing foreign exchange service on the domestic and international markets within the scope prescribed by the State Bank". On the same day, SBV also issued Decision No.2138/QD-NHNN on the amendment of the license of ACB Financial Leasing Limited Liability Company (ACB Leasing). The State Bank Governor decided to amend and supplement Clause 6, Article 1 of the License on establishment and operation No.06/GP-NHNN dated May 22, 2007 granted by the State Bank Governor to ACB Leasing relating to operation content. Specifically was the amendment of Point 6.3 into 6.4; supplementation of Point 6.3 on "trading and providing foreign exchange service in domestic market within the scope prescribed by the State Bank". This decision takes effect from the date of signing and is an integral part of the License on establishment and operation No.06/GP-NHNN dated May 22, 2007 granted by the Intellasia 18 October 2017 9 / 40

Generali Vietnam Life Insurance launches Net Promoter System State Bank Governor to ACB Leasing. The State Bank's certificate on registration of foreign exchange service supply No. 5623/NHNN-TTGSNH dated July 28, 2010 granted by the State Bank to ACB Leasing became invalid since the signing date of this Decision. Earlier, on September 7, the State Bank decided to supplement the same profession to the operating license granted to the bank by State Bank Governor. 18/OCT/2017 INTELLASIA VNS Generali Vietnam Life Insurance LLC (Generali Vietnam) has announced the official launch of Net Promoter System (NPS), the first transactional customer satisfaction survey system in the Vietnamese market. NPS is a tool that measures the willingness of a customer in recommending a brand to family and friends, gauging the customer's overall satisfaction with a company's product or service and determining his/her loyalty. Based on such insights, the company can take necessary action to enhance customer experience. Its popularity has grown over the past decade and the tool is now widely used by organisations of all sizes in every industry around the world. "NPS helps us obtain customer feedback at each and every key touchpoint during their journey with us, from consideration to purchase, claims and renewal. The survey only takes a few minutes to complete, yet provides generali with a thorough x-ray into our customer's satisfaction at each touchpoint, for all products and services, by location, by staff and by agent," Tina Nguyen, chief executive officer of generali Vietnam, said. "We receive real time alerts whenever there is a detractor (an unhappy customer giving us a low score). The uniqueness of generali's NPS lies in the fact that we call back all detractors within 48 hours to further understand their responses, address the root cause of their problems, and in the process undertake continuous business improvement for a superior customer experience," Nguyen said. Generali Vietnam is a member of generali Groupan independent Italian Group with a strong international presence. Following six years of operations, generali Vietnam currently has somey 160,000 clients, including individuals and insured members of domestic and foreign businesses, in Vietnam. http://bizhub.vn/corporate-news/generali-vietnam-life-insurance-launches-net-promoter-system_289560.html Hanwha Life Vietnam's new premium growth at 47pct 18/OCT/2017 INTELLASIA VN ECONOMIC TIMES $21 million in new premiums year-to-date up 47 percent year-on-year. Hanwha Life Vietnam has taken in VND478 billion ($21 million) in new premiums this year, an increase of 47 per cent year-on-year and taking its market share up 0.4 per cent. In the first nine months it employed 19,000 new financial consultants and sales capacity per contract remains the highest in the market. The company had 100 customer service centers across the country by mid-august and continues to expand. It launched six new general agencies, including Hau Loc, Thach Thanh and Ha Tinh 2 in the north, and Thanh Khe, Cam Lo, and North Quang Binh in the central region, raising the number of customer service centers to 108 nationwide. Its network is expected to spread out around the country to better serve customers and increase its brand identity. Moreover, it will focus on diversifying its distribution channels, in cooperation with two South Korean banks in VietnamWoori Bank and Shinhan Bank. Back Jong Kook, Chair of the Board of directors and CEO of Hanwha Life Vietnam, said the strong growth in the third quarter of this year was due to the expansion of its distribution network, focusing on improving customer care services and professionalising its team of financial consultants. "Hanwha Life Vietnam always considers service quality as a foundation value," he said. "To improve quality, we are ready to meet the strictest of needs among all customers. At the same time, we will improve the quality and professionalism of our financial consultant team so that they operate more and more professionally. Our goal Intellasia 18 October 2017 10 / 40

Observers update end of the year estimate is to become one of the leading life insurance companies in terms of quality and sustainable development in Vietnam." 2016 was the first year the company recorded profit after eight years in Vietnam, of VND12 billion ($527,994). http://vneconomictimes.com/article/banking-finance/hanwha-life-vietnam-s-newpremium-growth-at-47 18/OCT/2017 INTELLASIA VIR International organisations are continuing to show optimistic forecasts about Vietnam's whole-year growth, with the country remaining one of the region's top performers thanks to strong production recovery. Sebastian Eckardt, the World Bank's lead economist for Vietnam, told VIR that Vietnam's significantly-improved economic activities especially the year-on-year growth rate of 7.46 per cent in the third quarter are expected to enable the economy to grow 6.7 per cent for the entire year, which exceeds the institution's projection of 6.3 per cent. According to the World Bank, Vietnam is expected to remain one of the top regional growth nations (see box). Meanwhile, the Asian Development Bank (ADB), also said that the outlook for Vietnam remains bright thanks to strong production recovery, and continued buoyancy in foreign direct investment inflows, which would add impetus to growth in the coming months. The economy grew by a 10-year record 7.46 per cent in this year's third quarter up from 6.28 per cent in the second quarter and 5.15 per cent in the first quarter. This growth trend is ascribed to a recovery of local production. In this year's first nine months, the processing and manufacturing sector, which contribute to 80 per cent of the industrial sector's growth, expanded 12.8 per cent, the highest rise over the past many years, contributing to 9 per cent of the economy's nine-month growth, according to the general Statics Office. Standard Chartered is also forecasting quite a bright outlook for Vietnam. "We raise our GDP growth forecast for both 2017 and 2018 to 6.8 per cent [versus prior forecasts of 6.4 and 6.6 per cent in 2017 and 2018, respectively], driven by faster electronics manufacturing growth in 2017's second half. This would make Vietnam the fastest-growing Asean-6 economy in 2017, likely overtaking the Philippines," said Chidu Narayanan, economist for Standard Chartered's in Asia. "We expect the manufacturing sector to grow at a faster pace in the fourth quarter, buoyed by robust electronics manufacturing activity. Stronger manufacturing growth should push overall growth higher in the year's second half to 7.6 per cent year-onyear, taking full-year GDP growth to 6.8 per cent," Narayanan added. In this year's first nine months, Vietnam earned $49.5 billion from exporting electronics items, accounting for 32.14 per cent of the country's total export turnover. The figure, largely driven by Samsung, is expected to come to $53 billion this year, occupying nearly 26 per cent of the country's total export turnover. For its part, HSBC last week stated in a Vietnam update, "Vietnam has soared above our expectations." "Vietnam is now tracking ahead of our full-year growth expectations and the Bloomberg consensus of 6.3 per cent. And with leading indicators still robust, we now revise our growth forecast to reach 6.6 per cent by end of the year," said HSBC economist Noelan Arbis. According to the banks, Vietnam's economy continues to show strong fundamentals. The growth is being driven by healthy domestic demand, rebounding agricultural production, and strong export-oriented manufacturing, aided by a recovery in external demand, which will be only partially offset by declining oil production. Minister of Planning and Investment Nguyen Chi Dung told the National Assembly's Standing Committee last week that the government's target of 6.7 per cent in economic growth for this year could be reached. Intellasia 18 October 2017 11 / 40

Rice exports surpass 2016 volume The government expects that this year, the agricultural, industrial and construction, and service sectors will rise 2.78, 7.56, and 11 per cent, respectively. http://www.vir.com.vn/observers-update-end of the year-estimate.html 18/OCT/2017 INTELLASIA THE SAIGON TIMES Vietnam's rice exports in the year to early this month had risen by a staggering 41 percent year-on-year to more than 5.2 million tonnes, beating last year's volume of around 4.8 million tonnes, according to the Vietnam Food Association (VFA). VFA said in a report that Vietnam had achieved the highest rice export growth rate among the world's top five rice exporters, namely Thailand, India, Vietnam, Pakistan and the United States, though Vietnam's rice trade remains smaller than that of Thailand and India. As of October 3, Thailand had exported more than eight million tonnes of rice, up 16.5%; India with over 8.3 million tonnes, up a mere 2.8%; Pakistan with around 1.9 million tonnes, down 26.8%; and the US with about 2.6 million tonnes, up 3.2%. Overall, the five exporters sold around 26.2 million tonnes, a year-on-year rise of 9.4%. Pham Thai Binh, director of Trung An Hi-tech Farming JSC, told the Daily that China, Malaysia, the Philippines, Bangladesh and African countries will sustain their high demand for Vietnamese rice in the remainder of the year. However, he was anxious whether local rice exporters can secure enough rice stocks for their export contracts. He explained the volume of rice is now in short supply, partly due to floods. As earlier covered in the Daily, former VFA chair Huynh The Nang said Vietnam is likely to export around 5.6 million tonnes of rice this year, with about 1.8 million tonnes set to be shipped in the last quarter. However, some insiders forecast the figure may exceed 5.6 million tonnes, given positive results so far. http://english.thesaigontimes.vn/56603/rice-exports-surpass-2016-volume.html Cement, clinker exports set to reach yearly target 18/OCT/2017 INTELLASIA VNS Vietnam generated $438 million from exporting 13.6 million tonnes of cement and clinker over the past nine months of this year, fulfilling 90 per cent of the yearly target. The nine-month exports also marked respective increases of 12.7 per cent in value and 21.4 per cent in volume compared with the same period last year, statistics from the general Department of Customs revealed. In September alone, the country's cement and clinker exports reached more than 1.53 million, valued at $53.7 million, up 10.6 per cent in volume but down one per cent in value over August, according to the data. During the January-September period, Bangladesh and the Philippines remained the two largest importers of Vietnamese cement and clinker, accounting for 33.8 per cent and 31.8 per cent of the country's total exports, respectively. Bangladesh imported 5.53 million tonnes of cement and clinker, worth $162.4 million, from Vietnam during the period, while Philippines spent $153.2 million on importing 3.43 million tonnes of Vietnam's cement and clinker. Other major consumers included Taiwan, which imported 778,000 tonnes, valued at $23.3 million; Peru (436,000 tonnes, $20.5 million); and Sri Lanka (423,000 tonnes, $12.5 million). Despite positive export performance in the nine-month period, domestic enterprises are still worried about the cement oversupply in the future as a new production line of the Xuan Thanh cement factory in northern Ha Nam Province has started operations, providing 4.5 million tonnes of cement annually. The nation's total designed cement production capacity to date is estimated at nearly 100 million tonnes. vietnamnews.vn/economy/405763/cement-clinker-exports-set-to-reach-yearly-target.html Intellasia 18 October 2017 12 / 40