It’s the first time I put a link to a Vietnamese analysis. This post does provide me with some insights that I do not know about the country economy, and with really thought-provoking points.
Main points
- Vietnam is likely to experience a negative economic growth in Q2, 2020 because of the decline of 6 key industries of our GDP: manufacturing (19%), agriculture (10%), retail (9.8%), construction (6.5%), finance banking (5.9%) and mining (5.6%).
- Some advantages of this period compared with 2009-2012: more cash, low inflation, the growth drivers shifts to FDI and private sectors.
- Some recommendations: (1) boost public investment, esp in Southern, (2) restructure banking system and (3) support the private sector.
What’s up?
While Softbank is expected to lost $17B in the outbreak, his founder is still positive about its future with new directions.
Zooming out
- Tough love began: pulled back $3B from Wework, withheld cash installment from Brandless, let some of its portfolio lay off and break out. Approximately 15 of them.
- Profitability-driven: now Son is asking start-ups in SB’s portfolio to shift their focus to profitability to prevent the situations like WeWork debacle.
Son believes the some big, dizzying bets in Alibaba, Slack and Uber will save the whole. The fund can return $150B, which means it can still payback its limited partners their principal with 7% annual returns, and still eke out a profit.
What’s going on?
While their results come with prediction, one single metric could lead to incredibly painful periods head: loan loss reserves: $22B, 8.5x last year number.
Zooming out
Massive wave of defaults in the months ahead as tens of thousands American lost their job, reduce income then fall behind deb payments.
The government jumped in, but cannot help much: $2.2 trillions for individuals and business and $4 trillions from FED may only support the most affected sectors like airlines, F&B, and not all businesses can apply for the package. This author did bring a distinctive perspective: Some companies deserves to fail
However, the situation is still better than 2008-2010 as the banking system are now protected with higher standards and higher requirements of reserved capital to deal with shocks like this.
Huy Luu's business blog 