HSBC has obtained approval to set up a bank in Vietnam, making it one of the first overseas banks to incorporate there. Vietnam is an interesting prospect as HSBC did not fare well in the civilized world and thus looks for profits elsewhere. That is not to say that many developing nations are uncivilized. That is not what we mean at all. Vietnam, however, is interesting because their stock market recently hit a free-falling downslide. The currency – the dong – is not stable. The main Ho Chi Minh Stock Exchange (HOSE) recovered somewhat Wednesday, traders said.
A free-falling HOSE and a weak dong is exactly where HSBC needs to be. I am sure HSBC’s shareholders and activist investors must certainly agree with it. After all, take a serious look at how well HSBC did with Houshold International in a civilized society. For goodness sake, HSBC even denied insurance claims to a family where the parent had died. HSBC must certainly need the money, or cash flow, to prop up global operations.
What remains clear and stable in Vietnam are Uncle Ho’s ideas. Perhaps HSBC wants to move into a position of power by financing Vietnam’s infrastrucure and national debt. However, as the French learned in Dien Bien Phu, and Americans learned later, if you screw that one up on a scale similar to the worldwide subprime crisis, life expectancy will be very short. As many Americans certainly would agree, by that token Vietnam is exactly where HSBC needs to be.
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