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Construction data shows credit market thawing, says fund
First-quarter growth in the construction industry shows borrowing conditions are improving, according to Vietnam Property Fund Ltd.
“A thawed credit market is leading to the restart of stalled projects,” the UK-listed fund said in a research note. Government data on building work “surprised on the upside.”
Construction grew by 6.9 percent in the first quarter compared with the same period a year earlier, according to preliminary data from the General Statistics Office in Hanoi, exceeding an overall first-quarter economic growth rate of 3.1 percent, the slowest on record.
Credit growth in Vietnam may slow to 13 percent this year from 25 percent in 2008 and 54 percent in 2007 as the economy deteriorates, according to the International Monetary Fund. Still, the global financial crisis has had a “minimal” direct impact on Vietnamese banks, which do not hold toxic assets and are not owned by struggling overseas financial institutions, the World Bank said last week.
Projects controlled by foreign investors are tapping local banks for loans because credit is difficult to obtain elsewhere, Vietnam Property Fund said in its report.
Vietnam’s banks are “relatively flush with cash and willing to lend,” Brett Ashton, the Ho Chi Minh City-based Managing Director of Savills Plc’s Vietnam unit, said in an April 8 interview.
The 6.9 percent growth in construction in the first quarter compares with a 0.3 percent contraction in manufacturing, government data show.
“Our first quarter was actually quite strong,” said Alan Young, Chief Operating Officer of Australian-listed steel company Vietnam Industrial Investments Ltd. “There was a reasonable level of construction activity.”
thanhnien, bloomberg
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