Bao Minh forecasts 10% revenue growth for 2007

The second largest insurer in Viet Nam Bao Minh (BMI), is forecasting revenues of 1.6 trillion VND (100mio US$) in 2007.
That would represent a 6% increase over 2006 figures, according to the company, listed at Hanoi. After tax profits have been pegged at 110 billion VND (6.9mio US$).
Revenues from re-insurance plans are predicted to account for 100 billion VND (6.25mio US$).
To reach the 2007 targets, the company plans to complete its corporate regulations and start training courses for junior and senior managers.
The changes will help Bao Minh stay competitive with foreign insurers expected to flow into the country following Viet Nam’s integration into the World Trade Organisation, company officials said.

The firm also recently released its results from 2006. According to its annual report, revenues last year reached more than 1.4 trillion VND (90.3mio US$), a 20% increase over 2005. Its re-insurance division was especially strong, earning 80.9 billion VND (5.1mio US$), up 58% from 2005.

The price of Bao Minh shares have doubled in the last two months.
The company attributed its success to domestic expansion and the strength of the developing insurance sector. The company has decided to offer dividends of 700 VND a piece based on its strong 2006 performance. The payments will be made next month.

Source: VNS

Gas trading company prepares IPO

A Vietnamese gas trading company said on Tuesday it would auction shares to the public on the country's main stock market in early March to raise at least 3mio US$.
Petrovietnam Southern Gas Company, a member of the National Oil and Gas Group, said in a statement it would sell 4,703,800 shares, or 31.36% of the company's total, in an initial public offering on March 9.
The company has set a starting price for bids at 10,500 dong (0.65 US$) per share, which suggested the firm would be valued at 9.75mio US$. The gas company has yet to announce a listing date.

BIDV Securities Co is advising on the share sale of the firm, which exports, imports and trades liquefied petroleum gas (LPG) as well as provides LPG transportation services.
LPG is typically bottled in canisters and used as a cooking fuel in areas without gas pipeline systems.

Vietnam's LPG production last year eased 0.7% to 343,400 tonnes following a fall of 0.3% in natural gas output to 6.42 billion cubic metres, government figures showed.
Earlier this month, Prime Minister Nguyen Tan Dung told Reuters that Vietnam planned to privatise more than 100 state companies in 2007 and 2008, including the oil and gas industries.
The National Oil and Gas Group began operation on Monday after being restructured from state oil monopoly Petrovietnam.

Petrovietnam Vice President Hoang Van Hoan told Reuters recently that the firm would sell off stakes in non oil-producing subsidiaries but maintain 100% government ownership in core businesses such as crude oil production.

The government has been speeding privatisations to boost the stock market's value to 30% of gross domestic product this year, from 13.6 billion US$ or 22.7% of the 2006 GDP.
Hanoi has said it will retain full ownership or major stakes only in industries linked closely to national defence and security.

State-run companies often undergo partial privatisation by selling shares to employees and outsiders before applying for a licence to list shares on the stock market.

Source: Reuters

VN-Index recovers

Vietnam's stock market reclaimed the 1,000-point level on Tuesday, stemming a slide in recent sessions, as investors sought stocks with strong earnings potential such as information technology firm FPT.
The VN Index on the Ho Chi Minh City Securities Trading Center gained 2.7% to close at 1,022.4 points.
The index is now up 3.4% up from last Thursday, when it fell below 1,000 points for the first time on fears that the market was overheating. The index has surged 36% so far in 2007.

"Investors showed a strong appetite for shares of FPT thanks to its profitability last year and a high business growth forecast this year," a market analyst in Hanoi said.
Shares in FPT, the country's largest listed company, climbed 4.1% to close at 630,000 VND ($39), taking its market capitalisation to nearly US$2.4 billion US$.
FPT said last week that strong hardware sales, including mobile phone handsets, boosted its 2006 net profit by 77.5% to 33mio US$, or 10% above its forecast.
The company has forecast profit and sales growth this year and 2008 of 40-50%, thanks to outsourcing and new lines of businesses including telecommunication services.

Another winner on Tuesday was PV Drilling whose shares rose limit up or nearly 5% to close at 279,000 VND (17.3 US$). The firm is the oil service arm of state oil and gas company Petrovietnam.

Government regulators said this month they were concerned about speculators driving up share prices, while fund managers told a capital markets conference in Hanoi that the market was overheated and due for a correction after it climbed nearly 145% in 2006.
They said intense speculation by foreign and domestic investors, or "hot money", had created an artificial shortage of stock.

Source: Reuters

Government bond auction announced

The State Treasury has announced its plan to auction government bonds with total value of 12.5 trillion VND (781mio US$) during the first quarter of this year.
Of the total sum, 5 trillion VND in treasury bills will be sold through the State Bank and 7.5 trillion VND in government bonds will be auctioned at the securities trading centres.
The State Treasury will open six auction sessions in the first three months, expecting to raise between 300 billion VND and 1 trillion VND in each session.
However, the government bonds' auction at the securities trading centre depends on the disbursement pace of transport and irrigation projects

Source: VNA

New Insurance JV to be established

The Bank for Foreign Trade of Viet Nam (Vietcombank) has teamed up with the Southeast Asia Commercial Joint Stock Bank (Sea Bank) and the Cardif Company - an affiliate of the French BNP Paribas Group - to establish a life insurance company.
Under a tripartite agreement signed in Ha Noi on Jan. 30, the Vietcombank-Cardif Life Insurance Co. Ltd., (VCB Cardif) has a chartered capital of 140 billion VND (8.75mio US$), 45% of which will be contributed by Vietcombank, 43% by Cardif, and the remaining 12% by Sea Bank.
VCB Cardif will provide a wide range of services, focusing on life insurance, health insurance, accident insurance, fund management and capital investment as well as other fields related to life insurance.
Vietcombank General Director Vu Viet Ngoan said the association with Cardif - an international leading firm in supplying Bancassurance services - will help meet clients' growing demands for package financial services and realize the bank's ambition to become one of the leading financial groups in the region.
Bancassurance - the selling of insurance and banking products through the same channel - has been initiated in Viet Nam in the 1980s, but has seen slow development.
Therefore, VCB Cardif is expected to make a breakthrough in the domestic Bancassurance services market.

Source: VNA

PVI provides 5 billion US$ insurance

The PetroVietnam Insurance Company (PVI) has signed a contract to provide three-year insurance service worth 5 billion US$ to Vietsovpetro, a joint venture of the Viet Nam National Oil and Gas Group (PetroVietnam) and a Russian partner.
The service will have an insurance fee of about 40mio US$.
Under the contract, PVI will cover all insurance services for Vietsovpetro's operations and properties from 2007 to 2010.

PVI and Vietsovpetro have worked together since 1996, however, the long-term contract marks a new step of development in their cooperation.

Source: VNA

No insider trading

The State Securities Commission Saturday allayed the Vietnam Association of Financial Investors (VAFI)’s apprehension over insider trading.
VAFI had said information supplied to the stock exchange by enterprises could be used by bourse insiders before it was released to the public.
The market regulator said there was no cause for worry since companies had to publicly release the information at the same time.

Source: VNA

VN-Index declining

Vietnamese stocks tumbled for a third straight day Friday with analysts blaming it on oversupply.

The VN-Index slid 14.1 points to 974.76 as 40 shares gained and 49 lost.
Turnover declined by 24% VND1.19 trillion (118mio US$) on volumes of 12.6 million shares.

A PetroVietnam Drilling and Service Affiliate, PVD, one of the hottest stocks on the bourse recently, lost 4.87% to close at VND254,000. There were sellers for 435,460 shares but no buyers.

Leading confectionery maker Kinh Do Corp fell by 4.93% to VND212,000.
Another heavyweight, Cables and Telecom Materials Joint Stock Co, lost 4.88% to close at VND195,000.

Mutual fund PRUBF1 fell sharply after gaining for three consecutive sessions with 435,460 shares failing to find buyers.

Infrastructure developer SJS hit the upper ceiling as it rose by VND13,000 to VND288,000. There were buyers for 175,510 shares but no sellers.

IT developer FPT and Refrigeration engineering were unchanged at VND580,000 and VND191,000 respectively.

Foreign investors were net sellers, offloading VND51 billion (3.2mio US$) worth shares.

Source: VNA

Pharmaceutical company to auction shares

OPC Pharmaceutical, will auction off 600,000 shares through the HCM City Securities Trading Centre on Feb. 1.

The firm hopes the auction will generate about 65 billion VND (4.1 million US$), said Le Minh Diem, chairman of the company's management board.

The money is slated for several large projects including a plant in Binh Duong province and warehouses in Ha Noi, Da Nang and Can Tho.
The shares will be offered at 42,000 VND (2.6 US$) a piece.

OPC was established in 1977 as a joint venture between eight HCM City pharmacies. The company was equitised in 2002, the first such move in the pharmaceutical sector.
Revenues at the end of the third quarter of 2006 were 110 billion VND (6.8mio US$), and a profit reached 20.2 billion VND (1.3mio US$).

The company last year paid dividends at 18%, a rate that will remain the same this year. However, the company plans to raise dividends to 20% in the future, said Diem.
He also added that the company hopes to double its chartered capital to 80 billion VND (5mio US$)

Source: VNA

Incombank increased assets in 2006 and plans IPO for 4th quarter 2007

The Vietnamese state-owned Industrial and Commercial Bank (Incombank) is preparing to go public in the fourth quarter this year, its head said Thursday.

Pham Huy Hung, general director, said the government had approved an equitization plan, the first by a state-owned bank, submitted by the bank but declined to reveal further details.

He said merely the bank had hired Ernst & Young to audit its books.

Incombank has a chartered capital of 4 trillion VND (249mio US$) and the government plans to inject more funds to scale up its capital to 10 trillion VND (622mio US$) before the IPO.

It has assets of 138.3 trillion VND (8.6mio US$), a year-on-year jump of 18.8%, 136 branches and 145 transaction offices.

It made a profit last year of 780 billion VND (49mio US$), +3.4% and had reserves of 1.66 trillion VND (103mio US$).

It has deposits of nearly 124 trillion VND (7.7mio US$) and outstanding loans of 125 trillion VND (7.8mio US$).

The bank has managed to reduce its bad debts to 1.38% from 28% in 2000.

Source: Thanh Nien

Credit Suisse signs deals

Credit Suisse Group has signed deals to arrange financing of up to 700mio US$ for Vietnam Shipbuilding Industry Group.

The group also signed a deal to develop a financing program of up to 1 billion US$ and provide other financial services for Vietnam National Shipping Lines, the report added.

Paul Calello, Credit Suisse's Asia-Pacific chief executive, says that the two companies are “at the forefront of the rapid economic development taking place in Vietnam."

Credit Suisse forecasts the Vietnam economy will grow 9.2% in 2007, following estimated 8.2% growth in 2006.

Credit Suisse was the sole bookrunner of Vietnam's 750mio US$ debut sovereign bond issue in 2005 and has also been Vietnam's ratings adviser since 2002.

The Swiss bank also has a license to trade in domestic equities in Vietnam, as well as government and corporate bonds.

Source: Thanh Nien

Thermal power company lists in HCMC

The Pha Lai Joint-Stock Thermal Power Company made a debut at the Ho Chi Minh City Securities Trading Centre on Jan. 26 with an offer of over 310 million shares for sale.

The power supplier with over 3 trillion VND (almost 190mio US$) in legal capital became the most powerful that has ever listed shares on the exchange floor so far.

Its first appearance today witnessed 131,000 shares, under the codename of PPC, find new owners, thus bringing the total share holders to 3,675, including 85 foreign individuals and 11 foreign companies, which hold over 11 million shares.

The Pha Lai company boasts two thermal power plants with a combined capacity of 6.24 billion kWh a year and assets worth almost 10.7 trillion VND (668mio US$) in total.

The two plants generated a record output of 7.25 billion kWh in 2006, earning over 200 mio US$ in revenues and over 61.3mio US$ in profits.

Pha Lai closed up at 105,000 VND (6.5 US$) each on the Ho Chi Minh City Securities Trading Center after the firm moved its listing from the Hanoi over-the-counter stock market, where they last traded at 65,600 VND.

Brokers said more shares in Pha Lai Thermal Power Co. would be offered to the public as the key shareholder, dominant state utility Electricity of Vietnam (EVN) now holding 78% of stake, is expected to reduce its ownership to 51%.

Source: VNA, Thanh Nien

HSBC plans to increase Techcombank-stake

The Viet Nam Technological and Commercial Bank (Techcombank) recently reached a deal to sell an additional 10% of its stake to the Hong Kong and Shanghai Banking Corporation (HSBC).

However, a Techcombank executive added, the plan will have to be submitted to the State Bank of Viet Nam for consideration.

It is also required to wait for the state's ratification of new regulations that will enable a foreign bank to hold a 20%- stake of a domestic bank.

If accepted, HSBC will pay Techcombank 85mio US$ for the additional stake and become the first foreign bank to own up to 20% of shares in a local bank.

In December 2005, HSBC paid only 27mio US$ for the first 10%.

Techcombank reported a revenue of more than 1.5 trillion VND in 2006, including 132 billion VND earned by its service sector, confirming its leading role in the pool of joint stock banks. Its pre-tax profit was registered at over 355.86 billion VND.

Source: VNA

Viet Nam – An attractive place, say Japanese investors

Japanese financers and bankers consider Viet Nam as the most attractive place for indirect investment among developing economies, affirmed a senior officer of a Tokyo-based global investment bank.

Taro Hayashi, Managing Director of Nikko Citygroup was speaking at a seminar on investment environment and opportunities in Viet Nam after the country’s accession to the World Trade Organisation (WTO) held by the Vietnamese Embassy in Tokyo on Jan. 25.

Hayashi told representatives of Japanese financial institutions, banks, insurance corporations and investment funds at the seminar that the fine development of relations between Japan and Viet Nam has opened unprecedented cooperation opportunities for his country’s investors.

He said Japan has a large amount of individual savings that are untapped and await investment opportunities, as his wholesale investment bank is going to lead a delegation combining representatives of a number of Japanese corporations to Ho Chi Minh City – Viet Nam’s southern economic hub - to seek for cooperation and business opportunities.

Vietnamese Ambassador to Japan Chu Tuan Cap introduced Japanese businesspeople of the nation’s socio-economic development direction in 2007 as well as development plans until 2010 and 2020.

“Japanese investors will see Viet Nam as a very favourable environment, both politically and economically, to invest and to do business,” stressed the ambassador.

Ambassador Chu Tuan Cap also took this occasion to answer various questions raised by Japanese participants concerning Viet Nam’s policies on foreign indirect investment flow and measures to ride the investment wave from Japan, as well as difficulties in the country’s equitisation process, weak competitiveness of Vietnamese enterprises and issues relating to at Viet Nam’s securities market.

Japanese corporate representatives at the seminar proposed that Viet Nam should increase the number of companies listed at the securities market, particularly big corporations, in order to provide a larger source of supply.

They also wanted Viet Nam to encourage its enterprises to open websites in English to make it easier for foreign investors to access, while some of them expressed the wish that Viet Nam continues to maintain political stability to facilitate long-term investment in the country.

Source: VNA

VN-Index drops below 1000 points

The VN Index on the Ho Chi Minh City Securities Trading Center closed at 988.86, down 2.71% from Wednesday and nearly 5% below a record of 1,040.7 on Tuesday.

The market declined days after government regulators said they were concerned about speculators driving up share prices. In addition, fund managers told a capital markets conference in Hanoi that the market was overheated and due for a correction.
They said intense speculation by foreign and domestic investors, or "hot money", had created an artificial shortage of stock, sending the index up nearly 32% already in 2007.

The index breached the 1,000-point resistance level at the close last Friday for the first time since the market opened in July 2000.

"There is a real concern that share prices in some blue chip firms including PetroVietnam Drilling were excessive," a trader said.
Shares of PV Drilling, a subsidiary of state oil monopoly PetroVietnam, extended its loss on Thursday to close at 267,000 VND (16.55 US$), down 4.98% from Wednesday.
Shares of the company, which has a price-to-earnings ratio of more than 315 times, have lost around 9.5% after climbing to a record 295,000 VND on Tuesday.

Other losers on Thursday included cable maker Sacom and real estate firm Thu Duc Housing Co. which fell 4.65% and 4.78%, respectively.

The price-to-earnings ratio for most stocks listed on the benchmark Ho Chi Minh City Securities Trading Center is in the 25 to 30 times range compared with the regional average of 18 to 20 times.
Last year, the index was one of the fastest-growing in the world at 144.5%, with much of the increase coming in November and December as companies rushed to qualify for tax breaks by listing before year-end.

Source: Thanh Nien

6 measures to control securities market

The Ministry of Finance and State Securities Commission of Vietnam (SSC) have announced six measures to control the securities market to help investors understand and make correct decisions on their investment.

First, under the instruction of the Prime Minister, the room on foreign holdings in listed-entities will temporarily stay the same. Currently, foreign investors are allowed to hold a maximum of 49% stake in listed companies and 30% in listed banks.

Secondly, SSC has worked with the State Bank of Vietnam to promote co-ordination in supervising activities relating to loans for securities investment, securities mortgage by commercial banks. The two agencies shall also boost co-ordination in monitoring inward and outward foreign capital flows related to securities investment.

Thirdly, SSC shall organise delegations to investigate securities companies which are currently criticised by investors for their unfair performance in executing customers’ orders or delay depository services of shares of some listed companies. All violations shall be settled in conformity with the law.

Fourthly, SSC asks listed companies to quickly announce information on their financial activities in 2006 to help investors have reasonable decisions in their securities trading activities.
Especially, the SSC shall ask listed companies to public official information in case there are rumours on the market such as the merger and acquisition of certain listed companies.

Fifthly, SSC will require the re-registration of foreign investment funds’ representative offices operating in Vietnam. Before, these offices got operating licences by the Ministry of Trade. According to the Securities Law which became effective on January 1 2007, SSC asks these institutions to re-register with the agency.
Besides, those authorized to invest in the Vietnamese stock exchange from foreign accounts shall have to report to the SSC on their investments. This regulation is especially applicable for funds set up abroad but authorising individuals to invest in the local market.

Finally, SSC shall strengthen dissemination of public information on the market and securities, enabling people to understand the workings of the market.
Especially, SSC shall give analysis and evaluation of the market and announcement of information on financial indices, like price-earning (P/E) ratio to provide investors with necessary information to make their investment decisions.

Source: VNE

Ice-cream maker prepares IPO

Ki Do Ice-Cream Joint Stock Co, or Kido’s is set to issue 2 million shares on February 2 to raise capital for projects.
The issue is expected to attract at least 70 billion VND (4.3mio US$) for expansion projects in the northern region.
As planned, 1.2mio US$ shares will be offered for strategic partners and the rest for outsiders via an auction which is scheduled to take place at the Ho Chi Minh City Securities Trading Center.

The auction’s starting price is set at 27,000 VND against the face value of 10,000 VND each.
Ki Do Joint Stock Co., is the successor of Wall’s – an ice-cream brand of Unilever sold out to Kinh Do Group in 2003 at a price of 20mio US$.

The company schemes to build a factory to produce yogurt and puddings with an annual capacity of three million liters.
The ice-cream producer also focuses on boosting shipments of its middle and high-end products in the near future.
Its current facility in Tay Bac Cu Chi Industrial Park, outlying Cu Chi District has annual capacity of nine million liters.

Kido’s with chartered capital of 40 billion VND (2.5mio US$) is targeting 30% annual output growth.

Vietnam’s ice-cream consumption averages out at half of a liter per capita- the low rate signals big potentials for Kido’s target.

Kido now offers 36 ice-cream products under two brands, Merino and Kido’s Premium, enjoying 60 per cent market share of the popular middle-class ice-cream segment.

The Kido Ice-cream Joint Stock Company became the first business of its kind in Vietnam to receive the international quality management system certificate on food safety control – HACCP (Hazard Analysis and Critical Control Point) in 2005.
The HACCP given to companies by the organization Quacert Vietnam – a division of the Ministry of Science, Technology and Environment is a pre-requisite for food manufacturers to enter the global marketplace.

Kido’s products are shipped to Taiwan and Cambodia.

Source: Thanh Nien

Hanoi Beer brewery plans to equitize

The Vietnamese government has approved a plan to equitize and list the Hanoi Beer Company, the country's second largest brewer, to raise money to increase production, a government report said Wednesday.

Less than 10% of the compnay known as Habeco would be sold to a foreign investor and shares would be listed on one of the country's two stock exchanges, said the report published on the government Web site.

"The state will retain 76% of the company at the time of the initial public offering, but this stake will be reduced to no less than 51% later," it said.
Industry sources said Denmark's Carlsberg was interested in buying a stake in Habeco, whose best-selling brand is Bia Hanoi.
Habeco, which has a registered capital of 2 trillion VND (124mio US$), signed a cooperation agreement with Carlsberg in 2005.

Vietnam's beer market, averaging 8% growth per year, has attracted the interest of a string of foreign brewers, including Anheuser-Busch, the owner of the Budweiser brand, and Belgium's Inbev.

State-run Saigon Beer, or Sabeco, the country's largest brewer, has also announced plans to partly equitize.

Source: Thanh Nien

HSBC enters Vietnamese insurance market

The HSBC Life International Limited has become the first Hong Kong life insurance company to open a representative office in Ha Noi.

Speaking at the opening ceremony on Jan. 24, Bruce Howe, chief office representative said that Viet Nam's developing economy, its admission to the World Trade Organisation and the big progresses in the country's insurance sector have attracted foreign investors' attention.
This have created a competitive and promising market for insurance companies, he added.
"We want to be an important member of the market. This is a start of a real business opportunity," said Bruce Howe.

HSBC Life International Limited is an affiliate of the HSBC Insurance (Asia Pacific) Holdings Limited, a leading company in Hong Kong, China, in providing medical and life insurance as well as pension products.

Source: VNA

Bibica builds factory

The Bien Hoa Confectionery Joint Stock Company (Bibica) began work Monday on its third factory with the first phase to cost 78.9 billion VND (4.9mio US$). Using Italian technology, the plant, in My Phuoc Industrial Park 1 in the southern province of Binh Duong, will produce yearly 2,500 tons of cream and chocolate cakes. It will start operation in August this year.
The second phase will be completed next year at 100 billion VND (6.2mio US$) to manufacture health products.

Bibica was one of the first 10 companies to list on the Ho Chi Minh City Securities Trading Center. Its pre-tax profit last year was 15 billion VND (933,000 US$) on a turnover of 341.3 billion VND (21mio US$). Its previous factories are in Dong Nai near HCMC and Hanoi.

Source: Thanh Nien

Vietnamese government sells bonds

The Vietnamese government has raised 300 billion VND (18.8mio US$) through a bond issue on the Hanoi Securities Trading Center.
The five-year bonds, oversubscribed by nearly seven times, have a face value of 100,000 VND and a coupon of 8.2% per annum.
They will be issued on January 24 and listed in both Hanoi and Ho Chi Minh City.
The Ministry of Finance said recently it was restructuring the bond market to boost liquidity and transparency to attract investors and ensure funds for an economy growing at 8% a year.

Too many types of government bonds were now listed on the stock market and their small, fragmented nature limited the market’s development.
Starting this year, government bond issues would be larger and be traded on the Hanoi over-the-counter market.

The government planned to raise 500mio US$ to 1 billion US$ on the global bond market in the first quarter of this year, more than a year after raising 750mio US$ in its first sovereign bond issue.
The proceeds of the bond, with a maturity of 10 or 20 years, would be allocated to several companies, including Electricity of Vietnam, which too plans to issue global corporate bonds to raise 150mio US$.

Source: Thanh Nien

Deutsche Bank sees high demand for Vietnamese bonds

Deutsche Bank said that Vietnam had built an excellent rapport with international investors following its issue of 10-year government bonds worth 750mio US$ two years ago.

The issue had created a pricing benchmark for Vietnam in international debt markets, and successfully opened up the country's capital market to foreign investors.

"Appetite internationally is currently very strong for Vietnam. International investors can absorb a huge number of issues from Vietnamese companies", according M. Luk (International Capital Markets Asia at Deutsche Bank)

In another issue, Electricity of Vietnam (EVN) made a 1 trillion VND (62.5mio US$) issue in November 2006 which was advised by Deutsche Bank, VinaCapital, and its EVN-affiliated An Binh Bank. It was sold mostly to offshore investors and was three times over-subscribed.

Source: VNA

BNP Parisbas finances 30% of oil refinery

French bank BNP Paribas has agreed with Vietnam's Finance Ministry to a 13-year 300mio US$ deal to build the country's first oil refinery, according to official sources.

The amount "is part of the 1.0 billion US$ that the ministry of finance is responsible to arrange and mobilize for the Dung Quat oil refinery according to the assignment by the government," a bank official told AFP.

The signing ceremony should be organized soon, he said.

Vietnam's government website said the loan carries an annual interest rate of 6.78% and was approved on Monday by Deputy Prime Minister Nguyen Sinh Hung, on behalf of Prime Minister Nguyen Tan Dung.

The total project, which is considered a major step towards energy autonomy for the communist nation, is expected to cost the state-owned PetroVietnam around 2.5 billion US$.

It is carried out by the Technip group of France, leading a consortium including the Japanese engineering giant JGC Corporation and Spain's Tecnicas Reunidas.

Dung Quat, 120 kilometres (75 miles) south of the central city of Danang, was picked as the site partly as Vietnam wants to develop an industrial counterweight between the two existing economic poles, Hanoi and Ho Chi Minh City.

Source: AFP

FPT raised revenues by 42%

FPT said strong hardware sales including mobile phone handsets boosted its revenues in 2006 by 42.4% from 2005 to 11.69 trillion Dong (724mio US$).

"FPT hopes to continue to sustain its growth and effectiveness in 2007 to meet all its strategic targets."

Source: REUTERS

International interest in Vietnamese stock market

An executive of an investment fund affirmed, on Jan. 22, that foreign investors would pay more attention to the Vietnamese securities market as Viet Nam now gained World Trade Organisation (WTO) membership.

"Viet Nam's entry into the WTO will not have direct impact on the Vietnamese stock exchange, but foreign investors will pay more attention to the market," Dominic Scriven, Director of Dragon Capital, said in an interview with the VNA. "During the process of international integration, the stock exchange will be adjusted by practices on the world market."
Scriven said that the year 2006 witnessed many big leaps in the Vietnamese stock market, with VN-Index soaring and the growing number of listed companies, from 38 to 156, on both Ha Noi and Ho Chi Minh City Securities Trading Centres.

He cited the enactment of the Law on Securities as last year's another important development. "The law has created a legal foundation for operation of the securities market. In the mid-and long-term, its introduction is particularly significant to the stock market of Viet Nam," he said.
Commenting upon experts' opinions that the Vietnamese stock market is growing too hot, with the price-to-earnings (P/E) ratio of various kinds of shares being high in comparison with the level in the world market, Scriven said for a new market like the Vietnamese stock exchange, it was difficult to say what P/E ratio is appropriate. He added that for the time being, P/E ratio can be up or down, but it will then reach a balanced point.

When asked why many foreign investors, both individuals and organisations, still kept buying shares although the prices of various kinds of shares were too high, he said that if a majority of investors share a similar view, their view will become a common view of the market.

"Investors themselves decide to buy or sell shares and nobody interferes with their decisions. We only recommend that they carefully consider before making investment decision," the director said.

Source: VNA

Vietnam tightens loan regulations to securities companies

Viet Nam bans credit organisations to lend the money to affiliate securities companies for trading in securities.
The ban was clearly stated in a decision dated Jan. 20 signed by Governor of the State Bank of Viet Nam, Le Duc Thuy.

Credit organisations are permitted to lend the money to non-affiliate securities companies on condition these companies have property to guarantee their loans.
Loans or financial guarantees to securities companies whose capital is contributed and managed by banks, will not exceed 10% of their capital, the decision said.
Meanwhile, loans and guarantees to other securities companies must be below 20% of their capital.

"Setting this limitation is necessary," Governor Thuy said, adding the move is aimed at preventing the danger of collapse and inability to secure payments by banks as the securities market is overheating.
According to Thuy, many investors have used up to more than 50% of their loans to purchase shares on the securities market, which posted an average growth rate of 30% within a month.
Together with the State Bank of Viet Nam's decision, the State Securities Commission said it will employ a score of measures to ensure sustainable and healthy growth for the securities market.

The commission will regularly send inspectors to securities companies to track down signals of spied transactions and encourage them to publish their 2006 financial reports.
The commission will also increase its monitoring of the listing of information by listed companies on the market as well as the transaction of listed shares.

Source: VNA

Indovina Bank to mobilize funds

Indovina Bank, a Vietnam-Taiwan bank joint-venture has issued its third round of US dollar certificates of deposit (CDs) in Vietnam, aiming to mobilize 20mio US$.

The CDs come with a minimum face value of 500 US$ for individuals and 1,000 US$for institutions.

The CD carries an annual interest rate of 4.4%; 4.75%; and 5.2% for CDs of three-month; six-month; and 360-day terms respectively.

The issue is to last until February 16.

Indovina, a 50:50 joint venture between the Industrial and Commercial Bank of Vietnam and Taiwan’s Cathay United Bank has recently obtained approval from the State Bank of Vietnam to issue debit cards and introduce the banking service of payment through debit cards.

As proposed in the first phase, the bank would install about 10 automatic teller machines (ATMs) at Indovina’s branches and transaction offices in the country.

It was now negotiating with partners to network its card system in Vietnam, and would finish the job in the first quarter this year, the bank representative said.

The bank is also to open four more branches and transaction offices in the first quarter this year and issue about 70,000 ATM cards in the first phase.

The bank’s customers, mostly Taiwanese and joint venture corporations, have strong demands to use ATM cards, especially in paying salaries to their employees through ATM accounts.

Indovina plans to scale up its chartered capital to between 45 and 70mio US$ by the year’s end from the current 35mio US$.

It last year earned a profit of 9mio US$, increasing 60% against the previous year.

As of late last year, its total assets were 337mio US$, up 94mio US$ on the year earlier.

Source: Thanh Nien

SACOMBANK prepares stock split

Sacombank will make a 1:2 rights issue this year to raise 1.45 trillion VND (90mio US$), increasing its chartered capital to 3.55 trillion VND (221mio US$).

Some three million shares will also be offered to key executives at 15,000 VND.

A spokesperson for the bourse-listed Saigon Thuong Tin Commercial Bank – to give its official name – said Thursday the issue price and a detailed plan to expand capital and branch network this year would be presented at a shareholders’ meeting in March.

The bank’s stock rose by 4.4% to 83,000 VND on the stock market Thursday.

Sacombank has projected pre-tax profit of 845 billion VND (52.6mio US$) this year, up 55% from last year.

Its outstanding loans at the end of last year were 73% higher year-on-year at 14.54 trillion VND (905mio US$). Deposits increased 75% to 21.52 trillion VND (1.3 billion US$).

The bank has three foreign strategic shareholders, the World Bank's International Finance Corp., Dragon Capital and ANZ Bank , which altogether held 26.3% of stake.

Another sources said the central bank might lift the cap on foreign investors’ holdings in the bank.

Source: Thanh Nien

VN-Index breaks through the roof

Vietnam's stock market hit a new lifetime high Friday, rising 4.1% to end at 1023.05 points as investors sought shares in Petrovietnam oil service firm PV Drilling , traders said.

The VN Index on the Ho Chi Minh City Securities Trading Center closed above 1,000 points for the first time, market data showed.

"The Index has crossed the resistance level of 1,000 points, which will certainly boost investors' confidence in further growth in the short run," Deputy Director of Habubank Securities Nguyen Lam Dung told Reuters.

"The amount of money, including foreign funds flowing, into the market is huge while the supply of stocks is still limited."

The capitalization of the market, which opened in July 2000 and now trades shares in 106 companies, rose to 11.5 billion US$. The index has grown 206.4% since the end of 2005.

Shares in PV Drilling, the oil well service and drilling arm of state oil monopoly Petrovietnam, rose to its lifetime high of 295,000 VND (18.3 US$), up 4.98%, almost hitting the 5-percent daily limit regulated by the exchange.

Shares of the firm trade nearly 127% higher than their debut prices on Dec. 5 last year.

"The energy sector continues to attract a lot of attention from investors and foreign funds," a trader in Hanoi said.

Meanwhile, shares in the blue chip high-tech firm FPT also almost climbed to the daily limit, rising 4.9% to close at 578,000 VND (35.8 US$) per share.

FPT expects profit and sales growth, generated mainly from mobile handset sales, Internet services and outsourcing units, of up to 50% this year and next.

Vietnam's communist government has said it aimed to boost the stock market's capitalisation to 20 billion US$ by the end of the year, or 30% of gross domestic product.

It wants to expand the economy by up to 8.5% this year after 8.17% growth in 2006.

Source: Thanh Nien

Vinacapital sees growth opportunity in Viet Nam’s technology industry

Managing Director of VinaCapital Group, Don Lam, has said that the fund management company sees Viet Nam ’s emerging technology industry as a major growth opportunity.

Director Lam explained that “ Viet Nam has one of the world’s youngest populations, with about 70% of its population younger than 30. These young people are strongly represented the country’s rapidly growing consumer class and they are exceptionally eager to make the latest technologies part of their daily lives.”
Last October, VinaCapital teamed up with Silicon Valley ’s Draper Fisher Jurvetson (DFJ) to launch a 50 million US$ technology frontier fund. The DFJ VinaCapital L.P. seeks to invest in opportunities that complement the expertise and successful ventures of its partners in technology initiatives and to further expand Internet penetration in Viet Nam .

“By focusing on the upcoming equitisation in the media industry and fostering the development of start-up technology companies, the DFJ VinaCapital LP hopes to play a central role in the emergence of this industry,” Lam said.
Established in 2003, VinaCapital is managing the 560mio US$ Viet Nam Opportunity Fund (VOF), which is Viet Nam ’s best-performing fund in 2004, and the 205mio US$ VinaLand Fund (VNL). Both funds are currently listed on the London Stock Exchange.
Lam went on to say that VOF invests primarily in listed and OTC-traded equities, private equity, and real estate projects, and focuses on key growth areas in the domestic economy.
“We target companies with experienced management, proven business models, and attractive exit opportunities,” Lam said, adding that 2006 was VOF’s best year yet, with an annual return of 65%, and its market capitalisation nearly reaching 1 billion US$.
“We are very pleased with our performance in 2006, but see even greater opportunities in 2007,” Lam said.

Regarding Viet Nam ’s officially accession to the World Trade Organisation (WTO), Lam noted that “lower tariffs will lead to sizeable increases in foreign direct investment (FDI).”
He confirmed that the record FDI of 9.9 billion US$ in 2006 is an indication of the economy’s dynamism and attractiveness, and “full WTO membership is sure to lead to even bigger investments from abroad.”

“We have already seen the entrance of some major foreign investment banks like Deutsche Bank and Merrill Lynch, and more are bound to follow as the rest of the world sees how much Viet Nam has to offer,” Lam added.

He also noted that freer trade and greater competition will eventually lead to consolidation.
VinaCapital expects to see an increase in merger and acquisition activity, the director said. “The recent takeover of Bao Minh CMG by the Japanese insurer Dai Ichi Life is a great example of a very successful Vietnamese company drawing the attention of big foreign players who are interested in entering the Vietnamese market.”

Source: VNA

Nha Be withdraws from listing at HASTC

The Hanoi Securities Trading Centre (HASTC) has approved the Nha Be Garment Joint Stock Company’s proposal to withdraw its application for listing at HASTC. This is for the second time a company cancels its plan to list at HASTC.

One month ago, at the end of December 2006, VIB Bank also decided to withdraw the applications for listing at HASTC.

Analysts said that the Nha Be and VIB bank decided to cancel their listing at HASTC because they could not list on the bourse before January 1, 2007 in order to enjoy tax incentives. Under the previously applied regulations, listing companies could enjoy the 50% corporate income tax reduction for two years. However, the tax incentives have been removed since January 1, 2007.

Nha Be Company applied for listing 6.4mil shares at HASTC on November 22, 2006. The state now holds 51% in the company, its staffs hold 26.4% and outside investors 22.6%.

Source: VNE

Is there insider trading?

The Vietnam Association of Financial Investors (VAFI) has sent a document to the Ministry of Finance proposing to change existing securities trading centres into joint stock companies. According to VAFI, the current mode of operation of the trading centres proves to be unsuitable, and can cause information to leak, paving the way for the development of insider trading.

Under the current regulations, listing companies are not allowed to make public information about themselves prior to securities companies. They must send the information to securities trading centres, so that the centres can make public the information first. The mechanism on information declaration can generate information leaks, which is taboo for the stock market.

In many share auctions, the lists of the foreign and domestic institutional investors are known beforehand, which puts investors who do not have relations with management agency officials at a disadvantage.

Nguyen Hoang Hai, Secretary General of VAFI, said that it would be better if listing companies sent information to securities trading centres and press agencies at the same time.

However, Mr Hai’s suggestion proves to be unfeasible, according to Tran Van Dung, Director of the Hanoi Securities Trading Centre (HASTC).

Mr Dung said that HASTC, as the market regulatory body, must keep strict control over information declarations: It must filter information before making it public. There may be ‘sensitive’ information, and it could happen that the trading centre has to stop transactions and then declare the information. He said that although this had not yet occurred in Vietnam it could happen in the future.

According to Mr Dung, under the current procedures, the information from listing companies is transferred to the transaction registration division first, where the staffs make reports for submission to the centre’s leaders before the information is made public.

Source: VNE

US insurer pulls out of Vietnam

Leading US insurer New York Life International has announced it will withdraw from Vietnam and seems likely to focus on more profitable markets.

Erin Pham, its chief representative, said the company was packing up because it was unable to invest funds in Vietnam.

However, other sources said that the company was more keen on China, India, and Thailand.

New York Life opened its representative office in Vietnam in 2000 and applied the next year to establish a wholly-owned insurance company.

But after waiting in vain for three years to get a license, New York Life decided to withdraw the application in 2004.

In June 2005 it finally got the license.

Source: Thanh Nien

VN-Index decreases by 2%

After gaining for 10 consecutive sessions the VN-Index plunged 16.64 points to close at 964.96. There were 36 gainers and 47 losers.
The first session actually saw a buying frenzy which drove the index above the 1,000-point mark.

Analysts said there was massive selling in the last two sessions, pushing down the market.
On an eventful day, turnover was 551 billion VND (34mio US$) higher than the previous session, at 1.38 trillion VND (86mio US$).
But oil technical service company PVD saw big buying and hit the 5% upper ceiling. It gained 12,000 VND to close at 268,000 VND.
Other blue chips like IT developer FPT, confectionary maker KDC, dairy producer KDC, and refrigeration engineering firm REE all edged down.

Lam Dao Thao, a senior consultant at the Vietnamese Orient Commercial Joint Stock Bank, said the market might stabilize if listed firms announced good results for 2006. But poor results would cause a steep decline, he warned.

Source: Thanh Nien

Fisheries industry to invest 3.56 trillion Dong

The Ministry of Fisheries said that it would mobilise some 3.56 trillion Dong (roughly 222.5mio US$) to invest in aquatic product processing and trading from 2007 to 2010.

The capital, of which 253 billion Dong from the State Budget, will be spent on promoting brand names, tracking the origin of products, supervising, warning of impacts to environment, and preventing diseases in aquatic products. The industry plans to focus on trade promotion and market research, and speed up its integration into the world market.
An aquatic product market network will also be established to facilitate the management of products, their quantity and quality, and food safety.

The industry sets a target that as many as 100 enterprises processing aquatic products for export would meet its standards on food safety by 2010.

Source: VNA

Experienced investors worried

The first days of 2007 seemed to be the hottest days so far in Viet Nam's stock market with the VN-Index rising for the 10th consecutive trading day, prompting expectations that it would exceed the 1,000-point mark in upcoming trading sessions.

The trading session at the Ho Chi Minh City Trading Centre on Jan. 16 saw mass purchase orders from investors, pushing the VN-Index rise to a record 983.6 points.

The prices went up for 65 types of shares, while 30 others underwent decreases and 13 remained unchanged.

Many investors were enthusiastic with the rising trend and stepping up their investment to get a piece of the profits.

However, the overheating market worried some long-term investors, who adopted a cautious watch-and-see stance.

On the darker side, about 15-20% of the listed companies saw their shares drop. In the Jan. 16 session, seven types of shares dipped to floor prices.

According to Nguyen Duy Hung, General Director of the Sai Gon Securities Incorporated (SSI), a such steep growth was not good for the market and adjustments are sure to follow. However, he said there is little possibility for deep adjustment.

Source: VNA

Malaysian company evaluates listing in Vietnam

Furniweb Industrial Products Berhad is exploring the possibility of listing its unit in Vietnam in a move to take advantage of the fast-growing Vietnamese economy.
The company said on Tuesday that it had appointed a corporate adviser licensed in Vietnam to evaluate the listing of Furniweb Manufacturing (Vietnam) Co Ltd on the Ho Chi Minh City securities trading center (HSTC).

Furniweb Vietnam, located in the Dong Nai province, manufactures and sells upholstery webbings and covered elastic yarn. It recorded a revenue of 7.8mio US$ in 2005.
The company said the sizeable presence of foreign direct investments in Vietnam, which has a population of 84 million, and the opening up of the economy were favorable factors for the proposed listing.

The proposed listing would also allow Furniweb to access Vietnam's capital market to raise funds for future expansion.

Source: Thanh Nien

Banks start price war

Banks are engaged a new price war, according to Nguyen Thi Kim Thanh, deputy chief of the central bank’s Monetary Policy Department, as rates steadily rise.

In the capital, 12-month term deposit rates are now around 9.36% for dong account and 5.3% for US-dollar accounts, according to the State Bank of Viet Nam.

The trend began as early as October of last year when Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) increased annual deposit rates by 0.12-0.24%, depending on the account’s denomination.

Several weeks later, Southeast Asia Bank (SeaBank) followed with their own 0.01-0.03% hike on monthly rates.

Experts attributed the price war mainly to harsh competition in the market for new customers.
Nguyen Hoai Anh, general director of An Binh Commercial Bank (ACB), says that newly-established banks must raise interest rates to attract new customers away from the more popular big banks. For their part, larger financial institutes have responded with their own rate hikes and special offers.

There is a fear in the industry that once a customer begins using a bank’s services it will be very difficult and costly to lure them away.
The nation’s booming stock market has also contributed to the price war. Returns on stock investments are, currently, much higher than on bank accounts. As a result, money is pouring into the securities market, limiting the available capital for savings.

In addition to rate hikes, banks also launched new promotional campaigns.
The Bank for Investment and Development of Viet Nam (BIDV) offered customers 10 billion VND (625,000 US$) in prizes, while the Military Bank (MB) spent 1 billion VND (62,500 US$) on tours to Europe. Sai Gon Joint Stock Commercial Bank (SACOMBANK) even offered people gold.

Source: VNS

Vinaconex increases chartered capital

The Viet Nam Construction and Import-Export Joint Stock Corporation (Vinaconex JSC) expects to raise its chartered capital from 1.5 trillion VND (93mio US$) to VND2 trillion (124mio US$) in the first quarter of the year.

To meet the mark, the corporation will issue shares targeted at potential foreign partners specialising in cement, construction material production, real estate and finance. The State will retain 51 per cent of the firm. It now controls 64 per cent of shares, worth 960 billion VND (59.6mio US$)

Vinaconex JSC expects to reach 5 trillion VND (312.5mio US$) in chartered capital by 2010 through the issuance of shares.

Aside from equitisation, the company’s road map for growth will depend on stock trading and the demand for development.

Since the firm’s first share issuance, the stake of six strategic investors – which include domestic banks, investment funds and securities companies – has increased more than three fold to reach 33 million shares.

Source: VNS

Singaporean securities company opens office in HCMC

The State Securities Commission of Vietnam today granted a licence to Singapore’s Kim Eng Securities Pte Ltd to open a representative office in Ho Chi Minh City.

Kim Eng Securities Pte Ltd's primary business and stronghold is in securities brokerage for both retail and institutional clients. Its other services include research, online trading, equity underwriting, investment in quoted and unquoted securities, share financing, investment advisory, and custodian services.

Source: VNE

Seafood exports target 3.6 billion US$ in 2007

The fisheries sector expects to reach an export turnover of 3.6 billion US$ in 2007, a year-on-year increase of 7.02%, and strives to net 3.8 million tonnes of products, including 2 million tonnes from fishing and 1.8 million tonnes from aquaculture.
The target was set at a meeting held in Ha Noi on Jan. 16 to review the sector's performance in 2006 and discuss its plan for 2007.
Addressing the meeting, Permanent Deputy Prime Minister Nguyen Sinh Hung requested that the sector breed more economically valueable species in order to increase.

Source: VNA

Vietnamese stockmarket still hot

Vietnamese stocks jumped for the 10th straight day Tuesday. Analysts attributing it to investors’ speculation in blue chips.

The VN-Index gained 36.45 points, or 3.9%, to close at 983.6. There were 65 gainers and 30 losers.
The analysts said the 1,000-point mark could be breached in the next session.
Trading volumes jumped by 12.4 percent to 6.93 million shares. Turnover rose by 16%t to 829 billion VND (51.6mio US$).

Investors were reportedly interested in heavyweights ahead of their final quarter results.
Two-thirds of the 65 gainers hit the price ceiling of 5%, including several blue chips.
IT company FPT led the list, gaining 27,000 VND to 578,000 VND, and petroleum technical services PVD rose by 12,000 VND to 256,000 VND.

But analysts warned of high risks due to a lack of transparency, information, and professional management.

Singaporean bank conducts due dilligence on Vietnamese bank

United Overseas Bank (UOB), Singapore's second-biggest bank, said on Tuesday it had reached an agreement over a possible strategic investment in Vietnam's Southern Commercial Bank and was examining the bank's books.

Several Singapore companies have announced, or are looking at, investments in Vietnam as part of a broader regional expansion. Singapore's third-biggest bank, Oversea-Chinese Banking Corp. , last year bought a 10% stake in VP Bank for 15.7mio US$.

"Parties are now negotiating the definitive agreements for the investment and UOB is currently conducting due dilligence on Southern Bank," UOB said in a statement. It gave no financial details.

Established in 1993, Southern Commercial Bank is a joint stock commercial bank with assets of 8 trillion VNDong (498mio US$), 44 branches and about 1,060 staff.

HSBC bank said in a research report in November that Vietnam's joint stock banks are small in size and controlled only 15% of the lending market in 2005, while state-owned commercial banks controlled 75% of the lending market.

HSBC said that Southern Commercial Bank is unlisted and trades on Vietnam's over-the-counter market with an estimated market capitalisation of $135mio US$.

Source: Reuters

Brewery buys bank stake

Leading Vietnamese beer maker Sabeco has bought a 5% stake in Phuong Dong Commercial Bank, in which French bank BNP Paribas has agreed to invest, a bank official said on Tuesday.

The shares in the unlisted Ho Chi Minh City-based lender known as Oricombank were valued in the deal at face value of 31.5 billion VNDong (1.95mio US$), the official said.

"The deal was reached based on our mutual interest and future cooperation," he said without elaboration. Sabeco is the short name for state-run Saigon Beer Alcohol Beverage Corporation.

Oricombank now has a registered capital of 567 billion VNDong, but the value of the deal with Sabeco took into account the bank's new capital of 630 billion VNDong that included the BNP Paribas investment, the bank official said.

Oricombank would be valued at 302mio US$ as its shares are traded at 77,500 VNDong (4.8 US$) on the unofficial markets. Oricombank has yet to say when it plans to list on the country's stock market.

BNP Paribas, the euro zone's second-biggest bank by market capitalisation, said in November it would buy a 10% stake in Oricombank.

The French bank did not disclose the value of the stake. It was expected to finalise the investment in Oricombank later this month or in February once central bank approval was in place, the Oricombank official said.

Major investors holding stakes of at least 10% in Oricombank now include two companies in Ho Chi Minh City, the Finance Management Committee of the Communist Party branch in Ho Chi Minh City and state-run Vietcombank.

Sabeco, the brewer of Saigon Beer and Beer 333, said in October it would double its beer output to 1 billion litres by 2010 when Vietnam's per capita beer consumption is forecast at 28 litres, up from 18 litres in 2006, state media have reported.

Sabeco's production capacity grew 16% in each of 2005 and 2006. It is expected to announce a partial privatisation plan soon under which the state would reduce its stake to 51% over the next few years.

Source: Reuters

Experts optimistic about investments in Vietnam

Viet Nam's accession to the World Trade Organisation (WTO), together with its stable political and social situation, and propitious investment environment, have put the country in the first place for investment to many foreign financial investors in 2007.

According to David G.Fernandez, managing director of the Singapore-based JP Chase Morgan Bank, Viet Nam will top the bank's investment priority this year.

The year 2007, he said, will witness considerable changes in the capital market of Viet Nam with an increase in the number of companies joining the securities market.

He forecasted that Viet Nam's Gross Domestic Product (GDP) in 2007 will increase by 0.1-0.3% from the registered level of 8.2% in 2006 and the value of the Vietnamese Dong will rise 0.5% in comparison with that of US$.

Viet Nam, however, should perfect its legal system and equitise more state-owned enterprises so as to meet the increasing demands of securities investors, said the manager.

Sharing the same optimistic view about Viet Nam, the Director of the UK's Dragon Capital, Dominic Scriven, one of the leading foreign experts in Viet Nam in terms of capital mobilisation and investment consultancy, asserted that he found a stable and potential investment environment in Viet Nam.

According to Dominic, many foreign investors also agreed that Viet Nam boasts more secured environment and larger potentials than other countries in the region.

The Dragon Capital's asset and investment capital in Viet Nam currently amount to 800mio US$, including stocks of nearly half of the listed companies.

Source: VNA

Vietnamese cement production meets demand in 2010

The cement industry will fully meet the national demand by 2010 with supply expected to reach 60 million tonnes against 50 million tonnes for the national demand volume.

Experts voiced concerns over the fact that small projects are booming while strong investment has appeared to be very rare, making investment risky. They warned that a situation where a large number of businesses operate separately may lead to an unhealthy competition such as dumping products.

The industry has, therefore, called for a faster pace in equitising State-owned enterprises (SOEs) and setting up a national cement consortium with advanced technology and financially strong enough to compete in the international market.

The national demand for cement reached 32.5 million tonnes in 2006.

Source: VNA

HAPACO's refinery project funded by German bank

Tissue paper maker Hapaco said on Tuesday it had secured a deal to borrow 128mio US$ from a German bank to finance a 150mio US$ oil refinery project.
The refinery would have a 1mio tonnes per year capacity in an industrial zone in the northern port of Haiphong in which Belgian-based investment venture International Port Engineering and Management has a stake.

"We are still looking for the financing of the remaining 15% investment for the project," a Hapaco spokeswoman said.

The 128mio US$ is provided by Sachsen LB of Germany.

Hapaco officials have said the plant would use around 20,000 barrels per day of Vietnamese crude oil when it starts operating by 2010.

Several foreign firms including Russia's Techno Star have sought to build refineries with investment of under 500mio US$ but energy experts say none have materialised because of lack of access to crude, which is controlled by state-run oil monopoly Petrovietnam.

Hapaco's stock closed at 40,900 VNDong (2.53 US$) per share on the Ho Chi Minh City Securities Trading Center on Monday, up 4.87% from last Friday, taking its market capitalisation to around 15mio US$.

Vietnam, the third largest crude oil producer in Southeast Asia with average daily output of about 350,000 barrels, still relies entirely on oil product imports as it lacks refineries.
Petrovietnam awarded a contract to build the country's first refinery in June, with the 130,000-bpd plant slated to start operation by early 2009.

Source: Reuters

Foreign investors increase speculations

In a interview with VNE, Nguyen Doan Hung, Deputy Chairman of the State Securities Commission (SSC) said:
"Foreign investors are superior to domestic ones in terms of knowledge, experience and financial capability. The foreign investors can be divided into two groups. Foreign institutional investors aim to medium and long term investment, they do not buy securities today and sell them out tomorrow, they have clear portfolios. Meanwhile, the second group of foreign investors aims at short term investment, in order words, they make speculations, they purchase and sell securities all the time. I can see more and more foreign investors of this group. (...)
The statistics showed that foreign investors now hold 30% of total capital in the stock market. In recent transactions, domestic investors bought and sold securities following foreign investors’ moves, they do not have detailed investment strategies."

Source: VNE

Vietnam expects faster industy growth in 2007

Experts expect that 2007, the first year Viet Nam enjoys the World Trade Organisation (WTO) membership, would open opportunities for its industry with export revenues estimated at 35.5 billion US$, or 17% over 2006.The Industrial Ministry reported that major hard currency earners remain to be crude oil, garments, textile and leather shoes.

Crude oil export sector is likely to reach 16.1 million tonnes while the garment and textiles sector expects to earn 7 billion US$ in exports.

Facing high dumping tariffs, the leather shoe industry is forecast to have a lower export growth rate with revenues estimated at 4 billion US$.

Leading in exports will be electronics and computer parts industries with growth rates estimated at 35.6%, wood products, 31.3% and plastics, 21.3%.

Economists said the WTO membership will bring in bigger challenges to the industrial sector as it will have to abide by the free trade-oriented body's strict rules, especially on goods and services trading and intellectual property. Under its commitments to the WTO, Viet Nam has to halve tariffs from 25% to 12.6% on 9,465 categories of industrial goods in the next five or seven years. In addition, non-tariff barriers, such as quotas, subsidies and customs procedures, will also be removed.

Industry Minister Hoang Trung Hai unveiled a plan to speed up the process towards a market economy, thus establishing a legal foundation for the ministry to fulfil the nation's commitments to the international community. Efforts will be made to lure influxes of foreign investment into those key industries which have great potential for exports such as electronic and computers, plastic products and food processing, said the minister.
He also said top priority will be given to highly competitive products including garments, textiles and footwear. Trade promotion campaigns will be intensified to boost shares in traditional markets such as the European Union and the United States and explore new markets in Africa, South America and the Middle-East, Hai confirmed.
He also pledged to push up administrative reforms in the export-relevant processes, especially customs procedures, the taxation and fee-collecting systems, in an effort to reduce product costs and improve exports' competitive edges.
The minister also called on businesses to take immediate steps to reduce production costs, conduct market surveys to meet market demand and intensify investment in science and technology for the export-oriented food processing industry.

The industry sector recorded a growth rate of 17% in 2006 with total export revenues reaching over 30 billion US$, accounting for 76% of the national export value. Industries have set up records in foreign direct investment over the past years, drawing 490 projects with a combined investment of over 5 billion US$.

Source: VNA

Agribank's assets grow by 22.7% in 2006

State-run Vietnam Bank for Agriculture and Rural Development, the country's largest lender, said its assets rose 22.7% in 2006 from the previous year to 233.9 trillion VNDong (14.5 billion US$).
Loans by Agribank were 15.7% higher at the end of 2006 at 186.33 trillion VNDong (11.5 billion US$).

A report says: "While lending has achieved a high and continuous growth, the bad debt based on new standards in line with the international accounting practice only accounted for 1.9% of the total loans."

Agribank, ordered by the government to go public in 2008 following similar moves by state-run Vietcombank and Mekong Delta Housing Bank this year, had aimed to keep the bad debt ratio at 5% in 2006.

Deposits expanded 24.3% last year to 225.5 trillion VNDong (13.9 billion US$), the bank said. Agribank said it raised more of the funds from the public partly through several bond issues and had reduced reliance on central bank loans.

Source: Reuters

SACOMBANK looks back on a successfull 2006

The total assets of Saigon Thuong Tin Commercial Bank (SACOMBANK) rose 72% from a year earlier to 24.86 trillion VNDong (1.54 billion US$) at the end of last year, the bank said in a statement.

Gross profit soared 78% from 2005 to 544 billion VNDong in 2006, the year the Ho Chi Minh City-based bank became Vietnam's first bank in Vietnam to list shares on the country's stock market.

Sacombank said loans at the end of last year were 73% higher than end-2005 at 14.54 trillion VNDong, while deposits increased 75% at 21.52 trillion VNDong.

Earlier this month, Fitch Ratings affirmed Sacombank's Individual rating at 'D' and its Support rating at '5', saying the ratings reflected the bank's "adequate balance sheet strength and good profitability".

The bank has achieved a 237-% growth in its balance sheet over the three years to end-2005, Fitch Ratings said.

Around 40% of Sacombank's loans went to consumers and the remaining 60% were extended to private businesses, reflecting its niche focus in the retail business segments neglected by state-run banks, the rating agency has said.

Sacombank's assets are the sixth-biggest in Vietnam, following four state-run banks and Asia Commercial Bank.

"Despite its rapid growth, Sacombank has maintained good asset quality," Fitch Ratings said.

Sacombank shares started trading on July 12, 2006 in the Ho Chi Minh City Securities Trading Center, making the lender the country's largest listed company at the time and boosting Vietnam's stock market value then by 53%.

The bank has three foreign strategic shareholders, the World Bank's International Finance Corp., Dragon Capital and ANZ Bank, which altogether held 26.3% of stake.

On Monday, Sacombank shares gained 0.69% to close at 72,500 VNDong (4.5US$). Sacombank bank is the market's fourth-largest firm after information technology firm FPT, dairy product maker Vinamilk and Petrovietnam Drilling and Well Services Co.

Source: Reuters

JV to provide new mobile phone network

Hutchison Telecommunications International Ltd. said a 655-million US$ joint-venture mobile phone network it opened in Vietnam on Monday was expected to break even in two years.

The 50/50 venture, named HT Mobile, operates a third-generation mobile communication network using CDMA-2000 technology nationwide, company officials said.

"We expect the venture to break even after two years of operation," Hutchison Telecom Chief Executive Dennis Lui said at an event to announce the service.

Hutchison and unlisted Hanoi Telecommunications Joint Stock Co. will, over 15 years, provide value-added services over the cellular mobile network such as data transmission, video calls, Internet access and wireless services.

As of December 2006, the Southeast Asian country had about 16 million mobile phone users out of a population of 84 million.

Source: Reuters

VN-Index exceeds 900-points mark

The VN-Index rocketed 98.2 points to exceed the 900-point threshold, closing at 914.8 with 46 gainers and 42 losers.

Market watchdogs forecast the 1,000-point mark would be well within reach this week if the trend continued.

Trading volume reported 8.2 million shares valued at 1.03 trillion VND (64mio US$)

The top three performers were CII (Ho Chi Minh City-based Infrastructure Investment and Development Co), FPT (IT developer), and GMD (Gemadept), hit the ceiling by 5%.
FPT led the top winner list gaining 25,000 VND to close 525,000 VND per unit; the GMD runner up increasing 9,000 VND to 189,000 VND; and CII made gains of 3,000 VND to 63,000 VND.

Other stock market heavyweights like SAM (Cables And Telecom Materials Joint Stock Company) and PVD (PetroVietnam Drilling and Service Co) increased by between 10,000 VND to 11,000 VND to close at 211,000 VND and 233,000 VND respectively.

Foreign investors continued to pump 392 billion VND (24mio US$) into buying 3.2 million shares.

Source: Than Nien

Vietnamese bank starts joint venture with American insurance

Under the deal, the International Assurance Inc, or AIA will launch the insurance product via the Bank for Investment and Development of Vietnam (BIDV), designed to insure client incomes, loans and other financial resources.

AIA, part of the US leading AIG group, has set up comprehensive cooperation with BIDV since 2005, under a contractual agreement.
Accordingly, AIA has sold its products via BIDV and carry out investment activities with BIDV while the latter considers a credit limit for AIA.
The two sides plan also cooperate in other securities services.

AIA has delivered a range of products via four banks including BIDV, the Vietnam International Bank (VIB), the Southern Bank, and Hong Kong Shanghai Banking Group (HSBC).
BIDV is one of Vietnam's largest State-owned banks having payment relations with more than 800 banks around the world. Its contract with AIA has laid the foundation for a long-term relationship with AIG.

Source: Thanh Nien

Vietnamese Banks report high revenues in 2006

Following announcements of double and even triple annual earnings growth over the last few weeks, bank stocks are again in vogue as investors prepare to reap high dividends payments.
Asia Commercial Bank (ACB) topped the money list, reporting 568 billion VNDong (35.5mio US$ ) in 2006 pre-tax profits. ACB mobilised nearly 39.5 trillion VNDong (2.5 billion US$) through selling shares and deposit services, and provided 17.1 trillion VNDong (1.1 billion US$) in loans, a 77 and 79% year-on-year increase respectively.
The bank is expected to issue a 38% dividend payment, 8% of which will be issued in cash while the remaining 30% will be through share options..With pre-tax profits at 447 billion VNDong ( 27.93mio US$), Sai Gon Thuong Tin Commercial Bank (Sacombank) plans a 20-22% dividend issuance. Sacombank intends to use much of last year's earnings as legal and working capital.
Meanwhile, shareholders of the Export and Import Commercial Bank (Eximbank) expect to receive a 55% dividend payment on the back of 340 billion VNDong (21.3mio US$) in pre-tax profits.
In addition to strong profits, banks also reported strong asset accumulation. ACB reported VNDong 42.5 trillion VNDong ( 2.65mio US$) in assets, more than double from where it was at the start of 2006. Sacombank and Eximbank saw similar results with 24 trillion VNDong (1.5mio US$) and 17 trillion VNDong (1.06mio US$) in assets, up 58% and 49% respectively over the previous year.

Industry insiders attributed the impressive results to the country's economic growth, and the development of financial products and services, like term deposit accounts and preferential credit policies.

Source: VNA

Power company to list on Ho Chi Minh City stock exchange

Pha Lai thermo-electric Joint Stock Co., coded PPC, scheduled to list on HCM City Securities Trading Centre on January 26 after ending its trading on Ha Noi Securities Trading Centre on Jan. 13.

PPC shares were traded in Ha Noi on May 19 last year at a face value of 10,000 VND (0.62 US$) per unit and with the total volume of 307 million shares.
The company also has the largest chartered capital of any company listed in the domestic stock market.

PetroVietnam Finance Co, one of the company's largest shareholders, has started selling 186,000 of a total 6,569,500 million shares to re-structure its investment profile since January 10.

Source: VNA

Mekong Capital's Enterprise Fund invests more in magnet wire producer

The Mekong Enterprise Fund II will invest an additional 6.3mio US$ in the Dong Nai-based Ngo Han Joint Stock Company.
The fund, the second begun by management company Mekong Capital, has already invested 1.91mio US$ in Ngo Han.
The Mekong Enterprise Fund II expects to increase its investments when the 30% cap on foreign ownership in unlisted companies is lifted.

The company's previous Mekong Enterprise Fund I (now fully invested and closed) had invested 1.9mio US$ in Ngo Han Joint-Stock Company, one of the most successful of all of its investments, in early 2004.

Ngo Thi Thong, chairwoman of Ngo Han, said: "This additional investment will greatly help our company grow more quickly and become more effective."
Chris Freund, Mekong Capital's managing director, said: "Since our first fund's investment in Ngo Han in early 2004, its revenues have grown 57% annually over the past three years, while net profit has grown 60% per annum. This has been an excellent investment for us and we expect the strong growth to continues to expand capacity and strengthen its management team."

Ngo Han is one of the largest manufactures of magnet wire in Viet Nam, with 35mio US$ turnover in 2006. It is making preparations to list on the stock market next year.
The 50mio US$ million Mekong Enterprise Fund II is a private equity fund focusing on equity investments in unlisted companies in Viet Nam, which at the time of the original investment are typically about two to four years away from listing on one of the country's two stock exchanges.
Ngo Han is the second investment of Mekong Enterprise Fund II.

Source: VNA

Share acquisition best way for foreign banks into Vietnam

Despite Vietnam’s novel WTO membership, the best route for foreign banks will continue to be share acquisition of domestic financial institutions, due to strict governance.

The establishment of wholly-foreign owned bank subsidiaries still faces technical hurdles that are hard to overcome, said Le Duc Thuy, governor of the State Bank of Vietnam.

Recently Shanghai, Hong Kong banking group HSBC unveiled its plan to double its 10% stake in the Vietnam Technological and Commercial Bank to 20% soon after reaching agreement on price and obtaining the central bank’s nod.

HSBC spent 17.3mio US$ to buy 10% the Techcombank stake earlier last year.

The French banking group BNP Paribas had acquired a 10% stake in the Vietnamese Orient Commercial Joint Stock Bank, or OCB, becoming the latter’s strategic partner late last year.

OCB’s strategy is to expand in fast-growing emerging markets, aiming to eventually elevate outside holdings to 20%.

The bank representative said it was ready to sell an additional 10% of the bank’s equities to the French bank if it received the central bank’s nod to do so.

And many other foreign banks that had holdings of 10% in Vietnamese joint stock banks expected to raise their ownership post-WTO as effective way to join the local banking industry intensively.

Under the country’s WTO commitments to open up banking industry foreign banks are eligible to found their own subsidiaries and branches in Vietnam as of January 4, 2007.

The SBV said it received around 10 applications from foreign banks to establish their wholly-owned subsidiaries in Vietnam) but the majority were unqualified.

The requirements for foreign banks to set up their own subsidiaries in the country are strict.

Under the rules, only banking institutions (not all investors) are entitled in minimum holdings of 51% in new subsidiaries.

The current rules require a new foreign bank subsidiary to have at least 70mio US$ in chartered capital and 10 billion US$ in total assets.

Thuy said these were just principle conditions but not every foreign bank could meet.

Additionally, the governments of two respective countries must have agreements on surveillance of banks before getting the license to enter the country’s banking sector.

Source: Thanh Nien

EVN plans further public offerings

Electricity of Vietnam (EVN) was urged to take drastic measures to advance the public auction of its shares to raise capital and become a key player in the national economy, the government cabinet leader said.

Deputy Prime Minister Nguyen Sinh Hung gave orientation to EVN at a conference Friday to review the group’s operations during 2006 and also discuss plans upcoming time.

Hung directed the state utility to focus on share sales in both its affiliates and electricity projects.

EVN could call on investment inflows from domestic investment organizations and individuals into its power development projects in Vietnam, Laos or Cambodia.

It’s suggested that the group’s electricity distribution projects to hospital and schools should also go public.

The Deputy PM emphasized that the intensive process to go public would be an effective way for the group to create a healthy and abundant financial source.

To establish a competitive electricity market in the future, he stressed EVN should continue to speed up share sales in its subsidiaries, and create favourable conditions for all economic sectors to engage in the electricity market.

With the new operating model, the EVN Group has the latitude to expand into telecommunications, mechanical engineering, tourism and real estate.

The past year of 2006 was a difficult one for EVN, working against dramatically lower water levels in hydro power plant reservoirs.

The group still managed to proved total electricity output of nearly 59 billion kWh during the last year despite of harsh weather conditions, ensuring power security for the national economy.

Pham Le Thanh general director of EVN said several shortcomings plagued the group during the previous year, including the substantial loss of power, drawn-out disbursement in infrastructure development projects and ineffective power saving programs.

These would be big challenges for EVN this year.

The group had priced 1 trillion VND (62mio US$) in bonds to yield 9.70%, by late last year.

The proceeds of the 10-year issue, the utility’s eighth offer last year, would be used for the construction of power plants.

The bonds, carrying a coupon rate of 9.70%, were priced at par to yield 9.70%. They will mature on Dec. 19, 2016.

The latest offer took EVN's bond sales last year to 6 trillion VND (375mio US$), all on the domestic market.


Goals

EVN has so far seen 21 of its affiliates go public, with all operating efficiently. Several of them have their shares listed on the nation’s stock exchanges.

The group is in the process of transforming an additional 19 affiliates into shareholding companies, striving to do so by 2008, save for its power transmission units.

EVN plans to sell its holdings in Ninh Binh, Thac Mo and Ba Ria power plants on Hanoi and Ho Chi Minh City Securities Trading Centers in the first quarter this year.

It looks set to become the country's first issuer of overseas corporate bonds Thursday, as state media reported it had sought permission to sell 150mio US$ worth.

The bonds would be sold on international markets to raise funds for power plants.

The Hanoi-based utility, which dominates the electricity industry in booming Vietnam, has submitted plans of the bond issue to the Finance Ministry for approval.

It has set targets of generating approximately 97 billion kWh by 2010 to meet an annual growth rate of 15-17%, and supplying electricity to 95% of rural households.

Source: Thanh Nien

Bao Minh sells life insurance

The Bao Minh Insurance Corporation and the Australian financial and banking group, Commonwealth announced to transfer the Life Insurance Bao Minh CMG to Dai-ichi Mutual Life Insurance of Japan.

The transfer, which is awaiting approval from State management agencies, will be performed in the first half of this year.

The Life Insurance Bao Minh CMG is the only joint venture of its kind in Viet Nam. It is the fifth largest life insurance company in the country in terms of revenue. The joint venture has 50 representative offices nationwide.

Dai-ichi Mutual Life Insurance is the second largest life insurance firm in Japan. The transfer is part of the company's strategy to expand its operations in Asia.

Source: VNA

Vietnam catfish producer to list

Nam Viet Joint Stock Company, Navico, one of Vietnam's largest tra catfish producers and processors, plans to make an initial public offering of shares and list on the Ho Chi Minh City exchange in the first quarter of this year.

The company has three processing plants with a combined daily capacity of 1,300 tons, a fish oil and fish powder processing factory, and a package making plant.
It reported an export revenue of 160mio US$ last year and hopes to increase it to 200mio US$ this year.
It plans to expand into eight new foreign markets, taking the number of export markets to 60.

Source: Thanh Nien

"Big risks at the Vietnamese stock market"

“There are latent big risks in the stock market,” Director General of the Bank of Investment and Development of Vietnam (BIDV) Tran Bac Ha said, when describing the stock market.
Mr Ha has called on management authorities to set up a mechanism to ensure the safety of investors and protect them from heavy losses caused by big fluctuations.

Mr Ha said that he could see in the market the alliances of investors that control the market by forcing the prices down and making the prices go up. He cited an example to show that the investors make investment decisions by feeling. Right after the Director of the HCM City Securities Trading Centre Tran Dac Sinh warned about the overly high prices of securities, the market cooled down in the next three transactions and many investors incurred big losses.
“It is the right time to set up the regulations on preventing the controlling of market prices and cornering of the market,” Mr Ha said.

Chairman of the State Securities Commission Vu Bang said that the price increases in March and April, the decreases in July, and then the sharp increases in November and December showed the uncertainty of market transactions. The market is affected by the small-scale market, and the fact that investors mostly make short-term investments.
Mr Bang also expressed his concern about the operation of the free securities market, which he said was not transparent enough and not controllable, and also very risky. The bad operation of the free market can cause the instability of the official securities market and the financial system.

Meanwhile, Director General of Saigon Securities Incorporated (SSI) Nguyen Duy Hung said that a healthy stock market did not rely on foreign demand, while foreign investors were ruling the roost in the Vietnamese stock market. It is a tendency that domestic investors always follow foreign investors in their investment decisions.
Mr Bang said that the stock market should be built in a way so that institutional investors will play the key role in the market’s development, while encouraging the participation of professional institutions like banks, insurance companies, investment funds and securities companies.

The solution of limiting the unofficial market was mentioned as an important way to minimise the risks in the market. The Securities Law stipulates that activities of offering for selling or purchasing securities in small ads on websites are not acceptable.

Meanwhile, Deputy Director of the VF1 fund management company stressed the need to make things transparent in the stock market. “I know some prospectuses that do not have any significance, and in some cases, the prospectus can lead investors far away from what they need to know,” Ms Hong said.

The Ministry of Finance has proposed the application of a mechanism which would allow the State Bank of Vietnam to exchange information and control the forex flow, as well as supervise the operations of credit institutions in securities-related activities.

Source: VNE

KPMG audits FPT

KPMG signed a contract to provide auditing services for the Corporation for Financing and Promoting Technology (FPT) .

Under the contract, KPMG will audit financial reports by all affiliates of FPT, including three branches, five subsidiary companies, one university and five training and business centres in the 2007, 2008 and 2009 fiscal years. The move is considered one of FPT's efforts to prepare for the listing on foreign stock exchanges, meet the requirements of strategic investors and better ensure the interest of its shareholders.

Source: VNA

New regulation on capital requirements planned

Vietnam plans to ask all companies listed on the country's main stock market to raise their registered capital to 80 billion VND (5mio US$) from 10 billion VND currently.

Authorities will soon issue a new regulation to implement this requirement, Do Huu Phuc, spokesman at Ho Chi Minh City's Securities Trading Center (HSTC) said.
"Vietnam will build the HSTC into a major stock exchange for large companies to list their shares," Phuc continued.

Currently, 106 companies are listed on the HSTC, which was launched in July 2000, and 65 of them have a registered capital below VND80 billion.
"The authorities are proposing to give them two years to raise their capital, and the government is expected to approve this proposal soon," Phuc noted.
He added that companies which fail to meet the requirement by the deadline would be moved to Hanoi's Securities Trading Center, or HASTC, which is the country's official over-the-counter market.
Phuc said the move was part of general plans to improve standards at Vietnam's stock markets. The authorities have already announced new rules that require listed companies undergo regular audits.

In addition to changing the criteria for listing on the HSTC, a State Securities Commission official said the authorities will develop the HASTC as the stock market for medium and small companies. Currently, it lists 87 company stocks with a total market capitalization of 4 billion US$.
"HASTC will become the OTC market for medium and small stocks, and also the market for all government and corporate bonds," the official said.
The proposal was welcomed by market participants.

Increasing the registered capital of listed companies is an indication of the government's determination to build up and further develop the stock market, according to Nguyen Duy Hung, a director at Saigon Securities Inc., the largest brokerage firm in Vietnam in terms of capital.
In addition, as the value and status of the stock market grows, the government needs to work to protect investors with the application of stringent regulations, according to Vuong Quan Hoang, a director at InvestVietnam Inc., an investment consultant firm based in Hanoi.
"To attract more foreign investors, market regulations will need to be implemented more stringently," he said.

By then end of 2006, the two stock markets had a total market capitalization of $14 billion, equivalent 22.7% of Vietnam's gross domestic product.

Source: Thanh Nien

Goldman Sachs turns attention to Vietnam

CEO Loyd Blankfein flew to Vietnam this week to meet officials from the government and the country's central bank.

Other investment banks interested in Vietnam include ABN Amro, Citigroup and Merrill Lynch, which has a securities joint venture there.

The Vietnamese government is overseeing a major privatization program. Its shares in companies from industries such as cement, chemicals, textiles and transport are all likely to be sold to investors within the next three years.

Source: Thanh Nien

Stable growth of Vietnam's insurance industry

Viet Nam's insurance industry last year saw stable growth as insurance businesses were actively preparing for international integration, said experts from the Finance Ministry.

Despite many difficulties and risks caused by three heavy storms, the total revenue of the insurance sector in 2006 saw a 10 percent increase over 2005, reaching nearly 18,000 billion VND. The revenues from non-life insurance premiums reached 7,000 billion VND; from life insurance, 8,300 billion VND; and from investment activities, 2,700 billion VND.

Phung Ngoc Khanh, Vice Chairman of the Insurance Department of the Finance Ministry, said that the industry has become an important channel in mobilising capital from financial sources for the economy's long-term investment. In 2006, it supplied about 34,400 billion VND for re-investment in the economy, an increase of 7,500 billion VND over 2005. Meanwhile, it completed the payment of more than 4,500 billion VND in compensations for the insured.

The year 2006 also witnessed accelerated equitisation of insurance businesses. Bao Viet is the last State-own insurance business that received the Prime Minister's approval to be equitised. Furthermore, it will be developed into a finance-insurance group.

Also in 2006, equitised Vinare and Bao Minh companies joined on the Ha Noi Securities Trading Centre, causing fever in the securities market.

The insurance market is bustling with various forms of businesses offered by both foreign and domestic businesses like AIG and Lyberty Mutual and joint stock companies like the Toan Cau and the Agriculture and Rural Development Bank Insurance Joint Stock Company.

Domestic insurers last year made themselves ready for strong competition as Viet Nam committed to remove all limitations for wholly foreign invested insurance companies as from Jan. 1, 2008. Such areas as construction and installation, oil and gas and high-risk construction projects and public security are to be opened to foreigners.

Khanh also noted that the Vietnamese insurance industry in the coming years will diversify its products to attract customers forms every economic sector; not set up new State-owned insurance companies in order to avoid division of the market.

Source: VNA

Keeping inflation below the growth rate

Vietnam’s monetary market will continue to be stable this year with interest rates under control, and the central bank will maintain its policy to keep inflation below the growth rate, the bank governor said.

Governor Le Duc Thuy also forecast at a press conference in Hanoi Wednesday that the range of US$/Dong exchange rate would fluctuate within 1%.

The international monetary market would leave lesser impacts on local market this year than it did in the last two consecutive years, he added.

The State Bank of Vietnam (SBV), forecast that credits would post a growth rate of between 20-21% this year and the Vietnamese dong would not be devalued further thanks to a dynamic economy and increasing supply of hard currencies.

Based on the forecast, Thuy said SBV would continue to pursue a “careful but flexible” monetary policy in order to keep inflation below the growth rate, a target set by the legislative National Assembly.

Vietnam, a new member of the World Trade Organization, has allowed foreign banks to establish subsidiary banks in the country, a move that will make the financial-banking market more active.

Governor Thuy said the SBV had already received 10 applications for opening branches, representative offices and wholly-foreign owned banks from giant financial-banking groups around the world.

Source: Thanh Nien

ITACO pays high Tet bonuses

Dang Thanh Tam, Director General of the Tan Tao Industrial Zone Development Company (ITACO), said that the company may give bonuses of up to VND1bil ($62,500) to prominent individuals.
Mr Tam said that the high bonus should be seen not only as the recognition of the efforts and high results of labourers, but also as a method to keep talents. Therefore, it is understandable why the company plans to give such a high bonus.

Prominent individuals will be given a gift which is equal to 10-20% of the turnover the individuals can bring to the company. One staff of the company received a 1mio US$ bonus on the 2005 Tet. The lowest bonus level applied in the company was 7mio VND per person, equal to two month’s pay.

Besides the bonus given on Tet as gifts, the staffs who hold key positions in the company for more than three years and commit to work for the company for a long time will be allocated land and vehicles for travelling. At the weekend, they can go on holiday with these vehicles while still receiving full pay. Any staff of ITACO who wants to follow training courses to increase their knowledge will be supported by the company.

When ITACO began listing on the bourse in November, all the members of the company were given a bonus in the form of company shares.

Source: VNE

Plans for stock market expansion

Vietnam will allow more share listings, improve the legal framework and restructure its small but fast-growing stock market this year.

The measures would boost the stock market's capitalization to 20 billion US$ by the end of the year, or 30% of gross domestic product, the newspaper "Tin Tuc" quoted State Securities Commission chairman Vu Bang. The Finance Ministry would also seek to expand the operation of stock broking firms and boost surveillance to improve transparency and corporate governance, he said.
Vietnam would need to upgrade the market's information technology, provide more training for staff and raise public awareness of securities investment.

The Ho Chi Minh City Securities Trading Center opened in July 2000 and now trades shares in 105 companies and Sacombank as well as certificates of two investment funds and a number of government bonds.

"The awareness and knowledge of companies and people on the stock market has risen significantly," Finance Minister Vu Van Ninh was quoted as saying last week in an interview with the ministry-run Vietnam Financial Times newspaper. "This is a good base to develop the stock market into a long-term fund raising channel for the economy".

Reflecting investor interest and the economic growth, the Vietnam share index ended 2006 at 751,77 points, a rise of 145% over the year. Market capitalization was 9 billion US$. The index hit a lifetime high yesterday, rising 2.5% to close at 865.71 points.

In the Hanoi over-the-counter market , where 86 companies and a bank are listed, the index also hit a lifetime high on Wednesday at 291.2 points.

Source: REUTERS