Vietnam’s banking sector has received a boost following the announcement that GIC, the Singapore sovereign wealth fund, will be taking a 7.7% stake in the country’s largest bank, Vietcombank. Vietnam’s banking sector was hit hard by the economic crash of 2011, which saw a sharp slowdown in economic growth, a rise in non-performing loans and a collapse in credit growth.

Until now, the government has been trying to get the sector back on its feet through a combination of capital injections, closing down smaller banks and forced mergers. However, progress in cleaning up bad debts has been disappointingly slow. Moreover, a rebound in credit growth over the past year has led to concerns that lending standards have started to slip again. We are especially concerned about the rebound in lending to the housing sector, which was at the centre of the last credit bust.

Additionally, a weak fiscal position is forcing the government of Vietnam to press ahead with a long-delayed privatisation programme. Vietnam is not at risk of an imminent fiscal crisis, but with lower oil prices causing the budget deficit to balloon to over 6% of GDP and total government debt standing at more than 60% of GDP, the pressure is mounting for the government to act. It has now unveiled plans to privatise 10 companies, including Vietnam Dairy Products (the country’s biggest diary company) as well as Sabeco and Habeco (two beer companies).

The sell-offs are expected to raise USD5bn. More funds could undoubtedly be raised, but the government has

been reluctant to sell stakes in other more valuable companies. The new companies will be managed by the State Capital Investment Corporation (SCIC).

Please click here to view the full report via your D&B subscription.

Country Headlines– Australia - Rating outlook upgraded as

growth fundamentals improve

– China - Private investment growth stalls as it plummets in the northeast

– Indonesia - Central bank cut interest rate and tax amnesty inflows pick up

– Japan - Energy prices and plummeting imports improves current account balance

– Malaysia - The country falls seven places in the world competitiveness rankings

– Myanmar - Robust economic prospects accompany rising inflation

Banking Boost & Privatisation As Pre-emptive Plans?

ASIA NEWSFLASH

November 2016

COUNTRY SPOTLIGHT VIETNAM

Whether you are involved in strategic investment decisioning; financial risk analysis; or supply chain management, understanding the operational landscape in the countries where you do business is crucial. Dun & Bradstreet Country Insight Services provide analysis, ratings, and forecasting for over 130 countries. To find out more about our country insight reports and services please click here.

BOI Marginally Improves in Q4

Composite Business Optimism Index for Q4 2016 marginally increased by 1.0% over the last year quarter. On a q-o-q basis, the index registered a decline of 3.8%. Based on the responses received, Dun & Badstreet India observed that two out of the six optimism indices improved as compared to same quarter last year. Amongst sectors, capital goods sector is the most optimistic in terms of volume of sales, new orders & net profits. To obtain the full report, please click here.

Various policy initiatives taken by government to help improve ease of doing business scenario has helped India to climb 19 th places to rank 35 among 160 countries in World Bank’s Logistics Performance Index (LPI) and jump 16 ranks to 39 position in the Global Competitive Index. Further, strong public investment in roads, railways and inland waterways augur well for the infrastructure investment.

In fact, the central government approved investments worth more than US$ 4.6 bn in new highways and railway lines across the country. Further, steel production (under six core sector) touched 37-month high and sustained growth in the cement production reflects increased activity in the construction sector. Moreover, the government has announced 27 new smart cities (on Sep 27, 2016), taking the total number of cities announced so far to 60. In sync with other

development, the Dun & Bradstreet’s survey reported capital goods sector to be the most optimistic in terms of volume of sales, new orders & net profits.

Even as continued risk aversion restrained flow of finances to the commercial sector, the RBI has ensured liquidity in the system and announced an array of changes aimed at widening and deepening India’s corporate bond market. There has been a significant parallel downward shift in the yield curve. The reforms in the India’s corporate bond market would ensure mobilization of funds by the corporate sector and ease funding pressures. The frontloading of the repo rate cut (by 25 basis point) by the new RBI governor would further support a revival of credit to the productive sectors. Now, there will be a greater focus on the transmission of the rate cut, so that corporate sector can avail funds to fuel capital expenditure when the demand revives on a sustained basis.

ASIA NEWSFLASH

MARKET INSIGHT

By Dun & Bradstreet India

FOLLOW HONG KONG THE PHILIPPINES SINGAPORE THAILAND

November 2016

-2Y-O-Y

NET PROFIT

Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

67 6963

7165

New Zealand Reports Record-Low Payment Times

New Zealand invoice payment times have fallen to their lowest point in over a decade, with businesses taking 34.9 days on average to pay their invoices during Q3 2016. According to Dun & Bradstreet’s Trade Payments Analysis, the latest payment figure marks a slight improvement on the previous quarter’s 35.5-day average, and shows New Zealand companies pay their bills almost 10 days faster than their Australian counterparts. The result continues a recent trend of record-low payment times, which have remained below the 40-day mark since Q4 2014. For full report please click here.

According to Stephen Koukoulas, Economics Advisor to Dun & Bradstreet: “Firms in New Zealand continue to pay their bills quickly, with the number of days for bill payments at historical lows. At an average of 34.9 days, trade payment times have been steady for the past year, at a level which remains 10 days or more quicker than average payment times during the global financial crisis.”

Koukoulas added: “New Zealand firms pay their invoices more quickly than Australian firms pay their invoices. It is not clear why this gap exists given that

ASIA NEWSFLASH

ASIA PERSPECTIVES

FOLLOW HONG KONG THE PHILIPPINES SINGAPORE THAILAND

November 2016

By Dun & Bradstreet New Zealand | Dun & Bradstreet WWN partner

AVERAGE INVOICE PAYMENT TIMES : AUSTRALIA v NEW ZEALAND

Q4

60

55

50

45

40

30

35

Q2

Q2

Q2

Q2

Q4

Q2

Q2

Q4

Q1

Q4

Q4

Q2

Q2

Q4

Q4

Q2

Q2

Q4

Q4

Q4

20092008 2010 2011 2012 2013 2014 2015 201720162006 2007

NO

. O

F D

AY

S

Australia New Zealand

44.8 DAYS

34.9 DAYS

Photo credit : bartuchna@yahoo.pl / Shutterstock.com

ASIA NEWSFLASH

ASIA PERSPECTIVES

November 2016

over the medium term, the economic performance and level of interest rates in both countries has been similar. One issue that may account for the difference is that agriculture, which has the quickest invoice payment times, is a larger part of the New Zealand economy than in Australia. This may skew the trade payment numbers lower in New Zealand.

“The trade payments data continue to indicate that firms are generally ‘cashed-up’, and with low interest rates continuing, there is little incentive to delay paying creditors,” Mr Koukoulas added.

On a year-on-year basis, the Q3 2016 Trade Payments Index result was 0.4 points lower compared with Q3 2015, when companies took 35.3 days on average to pay their invoices. The figure also remains significantly

lower than the 10-year average of 44.2 days. Over this ten-year period, payment times peaked at 50.8 days during Q4 2008, but the figure has steadily fallen since then, dropping to the low-40s by 2012, before declining to the mid-30s by 2015.

The latest trade payment figures, covering the period from 1 July to 30 September, follow the Reserve Bank of New Zealand’s August 2016 decision to cut interest rates by 25 basis points, reducing the cash rate to an historic low of 2%. Meanwhile, the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion reported a further strengthening in business confidence over the September 2016 quarter, with a net 26% of firms expecting improved economic conditions over the next few months, up from the June quarter figure of 22%.

On an industry level, the Communications sector reported the most significant change between quarters, with average payment times increasing by 3.3 days from 35.6 in Q2 to 38.9 days. Meanwhile, at the other end of the spectrum, the Retail sector saw a 2.4-day decline in payment times, with the industry reporting an average invoice payment time of 34.6 days. The most significant year-on-year change was seen in the Fishing sector, with payment times increasing from 34.0 days in Q3 2015 to 37.9 days in Q3 2016, representing an increase of 3.9 days.

The Communications sector reported the longest average payment time (38.9 days) for Q3 2016, followed by Fishing (37.9 days) and Manufacturing (36.9 days). The Agriculture sector reported the shortest average payment time for the period, at 32.1 days.

FOLLOW HONG KONG THE PHILIPPINES SINGAPORE THAILAND

PAYMENT TIMES

44

42

40

38

36

34

30

32

2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3

NO

. O

F D

AY

S

Agriculture Fishing Manufacturing Communications

SPECIAL REPORT

B2B Payment Behavior inAsia Pacific (Part 1)

ASIA NEWSFLASH

This special report is the first of a three-part series on corporate payment practices based on an extensive survey of 8 countries in Asia Pacific, courtesy of Atradius.

SALES ON CREDIT TERMSThe October 2016 edition of the Atradius Payment Practices Barometer focuses on eight major economies in the Asia Pacific region (Australia, China, Hong Kong, India, Indonesia, Japan, Singapore and Taiwan). Taken together, these economies show distinctive as well as common features, which form the backdrop to this survey. Asia has remained a leader of global growth in 2016, and its frontrunner position is forecast to remain unchanged in the coming years. China’s economic growth has however slowed, due to a rebalancing towards more consumption and services. Countries (like India) and regions (like Southeast Asia) do not appear to be significantly impacted by China’s slowdown regardless of their proximity to and trade volume with the country. Other countries surveyed, in contrast, show less resilience to the challenging economic environment at global level. This is the case for Australia, where the number of insolvencies is expected to increase this year due to its vulnerability to low commodity prices. The purpose of this survey is to see how suppliers in the surveyed countries protect their businesses against the risk of payment default arising from B2B trade on credit domestically and abroad.

SINGAPORE APPEARS TO BE THE MOST TRADE CREDIT FRIENDLY COUNTRY IN ASIA PACIF IC AND CHINA THE LEAST

As our survey reveals, 90% of the respondents across the countries surveyed in Asia Pacific reported having offered credit terms to their B2B customers over the past year (respondents in the Americas: 87%, in

Europe: 78%). This response rate (stable compared to last year) translated into an average of 46% of the overall value of B2B sales in the region being transacted on credit terms (the Americas: 43%; Europe: 41%). This percentage is stable compared to last year.

On a country basis, the proportion of B2B sales transacted on credit is well below the survey average in Taiwan (39.5%) and China (38.2%), the least trade credit friendly markets in the survey. In Indonesia (43.1%) and India (45.3%) it does not differ markedly from the survey average. In Australia (49%), Hong Kong (50%), Japan (52%) and Singapore (54.5%), the most trade credit friendly country in Asia Pacific, it is above the survey average.

RESPONDENTS IN JAPAN MOST L IKELY TO OFFER CREDIT TERMS DOMESTICALLY; THOSE IN S INGAPORE INTERNATIONALLY

Respondents in Asia Pacific (like those in Europe and the Americas) seem to be more likely to trade on credit in their home market than abroad. On average, 50.3%

Atradius Payment Practices Barometer – Results October 2016

November 2016

B2B SALES ON CREDIT IN ASIA PACIFIC (%)

60

40

50

20

10

30

2015 201620132012 2014

Sample: Companies interviewed (active in domestic and foreign markets)

Source: Atradius Payment Practices Barometer – October 2016

Domestic Foreign

48% 50% 51% 50%

43%

47%

37%

44%42% 42%

ASIA NEWSFLASH

of the value of domestic and 42% of the value of export B2B sales of survey respondents were transacted on credit terms. Both percentages are stable compared to one year ago (the Americas: 47% domestic and 39% foreign; Europe: 44.3% domestic and 37.4% foreign). This pattern points to an inconsistent perception of payment default risk arising from domestic and foreign trade. However, the protection of exports from payment risk comes as no surprise for export-reliant economies such as most of those in Asia Pacific.

By country, respondents in Taiwan prefer selling on credit domestically. 47.8% of the value of domestic sales was made on credit while only 31.1% of foreign sales was. A similar pattern is observed in India (52% domestic and 38.6% foreign), Japan (58% domestic and 46% foreign) and Indonesia (48% domestic and 38% foreign).

China, Hong Kong and Australia show a more uniform approach to granting trade credit to domestic and export B2B buyers. With 56.6% of the value of domestic and 52.4% of the value of foreign sales made on credit, respondents in Singapore show the most uniform approach to offering credit terms in B2B trade, as well as the strongest likelihood of selling on credit to foreign customers. For more insights into the proportions of domestic and foreign B2B sales on credit, and their y-o-y variations at country level, please refer to the specific country report forming this edition of the Atradius Payment Practices Barometer for Asia Pacific.

OVERDUE B2B INVOICES (%)

SPECIAL REPORT

Nearly 90% of the survey respondents in Asia Pacific (no significant change from last year) reported having experienced late payment of invoices from their domestic and foreign B2B customers over the past year. These findings, which are consistent with observations in the Americas and in Europe, point to a widespread culture of late payment at global level. Across most of the countries in the Asia Pacific region, the percentage of respondents by country reporting late payment from B2B customers does not vary significantly compared to the survey average. The exceptions are Australia (81% of respondents reporting late payment by B2B customers) and Japan (57%).

DOMESTIC LATE PAYMENT IMPACTS INDIA THE MOST AND JAPAN THE LEAST

At regional level, the above mentioned statistics translated into an average of 44% of the total value of domestic B2B invoices being paid late (averages for the Americas: 47%; Europe: 42%). This percentage is stable compared to one year ago, which suggests that companies in Asia Pacific have a good grip on domestic credit management. At country level, the average total value of domestic past due invoices is the highest in India at 54.5% (no significant change from last year) and the lowest in Japan at 25% (no change from last year). In the remaining countries surveyed in the region, the domestic payment default rates range from 40.3% in Australia (49% last year) to 51% in Hong Kong (no change from last year). Despite this drop in payment default, the number of insolvencies in Australia is expected to increase this year due to the country’s vulnerability to low commodity prices.

LATE PAYMENT FROM OVERSEAS CUSTOMERS HIGHEST IN AUSTRALIA AND LOWEST IN JAPAN

Despite being less likely to offer credit terms to foreign than to domestic customers, respondents in Asia Pacific reported a proportion of foreign invoices paid late which is equal to that recorded at domestic level (44%, stable from last year). This may indicate that businesses in Asia Pacific have less of a firm grip on export than on domestic credit management. A comparison with the proportion of foreign late payment recorded in the Americas (49.6% of total foreign B2B sales value past due) and in Europe (38.9%) evidences that businesses in Asia Pacific are less exposed to foreign payment risk than businesses in the Americas, but are notably more exposed to it than businesses in Europe. On a country basis, late payment of foreign invoices occurs most often in Australia (57.6%, 63.1% last year) and least often in Japan (24.8%, compared to 28.7% one year ago).

November 2016

Atradius Payment Practices Barometer – Results October 2016

PAST DUE B2B RECEIVABLES IN ASIA PACIFIC (AVG. %)

50

40

20

10

30

2015 201620132012 2014

Sample: Companies interviewed (active in domestic and foreign markets)

Source: Atradius Payment Practices Barometer – October 2016

Domestic Foreign

31%28%

43%45% 45%

42%45% 44%

28%30%

ASIA NEWSFLASH

SPECIAL REPORT

November 2016

Atradius Payment Practices Barometer – Results October 2016

CHINA

38.2

JAPAN

52.0

TAIWAN

39.4

AUSTRALIA

49.1

HONG KONG

50.1

SINGAPORE

54.5 INDONESIA

43.1THE AMERICAS 43.0%EUROPE 41.0%

ASIA PACIFIC

46.1

40% - 60%

60% - 80%

0% - 20%

20% - 40%

PERIOD:2016 vs. 2015

Sample: all interviewed companies

Asia Pacific: proportion of total B2B sales made on credit (domestic and foreign)

BY INDUSTRY / BY BUSINESS SIZE

INDUSTRY BUSINESS SIZE

ASIA PACIFIC MANUFACTURINGWHOLESALE/

RETAIL/ DISTRIBUTION

SERVICES MICRO-ENTERPRISES SMEs LARGE

ENTERPRISES

DOMESTIC 51.0 49.1 50.3 44.7 51.8 56.1

FOREIGN 44.3 43.3 38.2 33.7 42.1 51.1

Sample: all interviewed companies

INDIA

45.2

D&B’s U.S. Economic Health Tracker Reveals Continued Challenges for Small Businesses Balanced by Positive Job Growth

– Dun & Bradstreet’s Small Business Health Index has dropped 1.3 points during the latest reporting period. The index has also been declining on a sequential basis since August 2016, and has dropped by approximately 6% since August 2015. All sectors reflect the decline this month.

– Dun & Bradstreet estimates the U.S. labor market to add about 177,000 jobs to the nonfarm payrolls in September 2016. Our proprietary indicators show that the weakness in the fundamental metrics like payment performance and stability are affecting the rate of hiring of the U.S. labor market.

– Overall business fundamentals continued to trend downward as Dun & Bradstreet’s Overall Business Health Index dropped nearly a full point since December 2015 (the Overall Business Health Index’s all-time high) to 54.02% and to the lowest level in fourteen months.

Click here to read the latest report.

STATESIDE

ASIA NEWSFLASH

To find out more on how D&B can help with your compliance strategy, contact your local D&B office now.

PART 2 COMPLIANCE: BUILDING A COMPLIANCE PERIMETER

Dun & Bradstreet has worked with some of the world’s top corporations to build out industry leading compliance best practices. Our unmatched combination of global intelligence compliance acumen and technology products, make D&B an ideal partner for companies constructing a “compliance perimeter” focused on protecting the organization from the ramifications of compliance violations.

When we examine companies that have built sustainable compliance programs we find four critical elements:

– Ongoing diligence in monitoring new vendors and customers

– Clear governance within the organization with documented processes and responsibilities

– Technology management expertise and investment in key technologies

– Executive level commitment to funding and championing compliance efforts

Dun & Bradstreet provides two strategic solutions in the compliance space that empower the “compliance perimeter”. The first is D&B Onboard which is primarily focused on the “know your customer” space and Compliance Check which is squarely focused on the “know your vendor” arena. When combined with the aforementioned commitment to diligence, governance and investment, companies can create industry leading solutions to their compliance challenges. The results of these compliance efforts are clear and powerful.

– No incarceration for key executives and managers

– No multi-million dollar fines for the corporation

– No loss of shareholder value

– No damage to the companies brands & reputation

FOLLOW HONG KONG THE PHILIPPINES SINGAPORE THAILAND

November 2016

The Business Information You Need That We Have

ASIA NEWSFLASH

INDUSTRY DATAAVAILABLE IN %

SERVICES

MANUFACTURING

CONSTRUCTION

FINANCE, INSURANCE & REAL ESTATE

RETAIL TRADE

PUBLIC ADMINISTRATION

AGRICULTURAL, FORESTRY & FISHING

MINING

TRANSPORTATION AND PUBLIC UTILITIES

WHOLESALES TRADE

38.0%

8.0%

11.0%

16.0%

13.0%

0%

3.0%

1.0%

4.6%

4.0%

6.0%

DATA SHOWCASE

TOTAL NUMBER OF ACTIVE BUSINESS UNIVERSE*

100%

TOTAL DUNS NUMBERED RECORDS

5,069,214ACCURACYCOMPANY NAME = 100%ADDRESS ≥ 95%TELEPHONE ≥ 90%

* The known D&B universe of organizations that are active includes all registered organizations and entities, non-corporate businesses and commercial operations irrespective of its current trading status.

AUSTRALIA

SYDNEY

MELBOURNE

AUSTRALIA

SubscribeIf you wish to stay informed and directly receive industry newsfeeds or market updates regarding specific countries (below) on a regular basis, kindly contact the following:

CHINA : Monthly Market Watch (Chinese) liclaire@dnb.comHONG KONG : D&B Hong Kong Quarterly e-Newsletter loa@dnb.comINDIA : Monthly Economy Observer (English) singharun@dnb.comINDONESIA : Daily News Headlines (English) fariz@dnb.co.idJAPAN : Monthly Bankruptcy Trends (Japanese) marketing.tsr-net : TSR Global Economic News (Japanese) marketing.tsr-netMALAYSIA : Weekly News Bites (English) dnb.marketing@dnb.com.sgPHILIPPINES : Weekly News Bites (English) limonk@dnb.com.phSINGAPORE : Weekly News Bites (English) dnb.marketing@dnb.com.sg

FeedbackWe welcome your feedback so please send us your comments or email PublicationContact-JP@dnb.com to subscribe or unsubscribe to the monthly Newsflash.

DisclaimerThe information in this newsletter is provided “as is” without warranty of any kind. In no event will D&B or its information providers be liable in any way with regard to such information or your use of it. D&B makes no representations, warranties or endorsements with respect to any websites or services that are linked to this newsletter, or information thereon. When you access a non-D&B site, or information from a non-D&B site, you acknowledge that D&B has no control over the content or information at that site, and that it is your responsibility to protect your systems from viruses and other items of a destructive nature.

© 2016 Dun & Bradstreet, Inc.