Vietnam has no need to impose capital controls on foreign stock investors for the moment but does require better management to stabilise the booming stock market, Prime Minister Nguyen Tan Dung said.
"It is not yet necessary to apply urgent measures to control foreign capital on foreign indirect investment as proposed by the central bank on Feb. 12," Dung said in a circular published on the government's Web site on Wednesday.
Source: Reuters
Wednesday, February 28, 2007
February sees increasing economic growth
Economic performance was reported to be robust in February, particularly in foreign investment attraction and export .
According to the Ministry of Planning and Investment, the country drew 781mio US$ of registered foreign investment in February, a 1% increase over the same period last year. Foreign invested businesses also disbursed 350mio US$, 34% over the corresponding period last year.
Taking the lead among foreign investors in Viet Nam was Thailand, followed by Japan and Taiwan.
February also witnessed a sharp growth of import-export values with export earnings reaching almost 6.76 billion USD, a 23.5% year-on-year increase; and import value of more than 7.8 billion USD, a 45.8% rise.
Many export staples including coffee, cashew nuts, tea and coal, increased in both volume and value over last year.
However, two members of the club of 1 billion US$ export value last year, namely crude oil and rice, showed a marked decrease compared to the same period last year.
In addition, the great difference between the growth rate of imports and exports showed signs of instability and trade deficit, which requires big efforts to maintain a trade balance in coming months.
In the first two months of this year, the country's industrial production value reached 89,000 billion VND, a 17.5% rise over last year. Industrial production growth in all the state-owned, non-state and foreign-invested sectors rose 8.8%, 19.8% and 22%, respectively.
The lunar new year and other festivals early this year helped the country attract more than 749,000 foreign visitors in the two months, a 11.3% over last year. Most foreign visitors came from Spain, Malaysia and Thailand.
Source: VNA
According to the Ministry of Planning and Investment, the country drew 781mio US$ of registered foreign investment in February, a 1% increase over the same period last year. Foreign invested businesses also disbursed 350mio US$, 34% over the corresponding period last year.
Taking the lead among foreign investors in Viet Nam was Thailand, followed by Japan and Taiwan.
February also witnessed a sharp growth of import-export values with export earnings reaching almost 6.76 billion USD, a 23.5% year-on-year increase; and import value of more than 7.8 billion USD, a 45.8% rise.
Many export staples including coffee, cashew nuts, tea and coal, increased in both volume and value over last year.
However, two members of the club of 1 billion US$ export value last year, namely crude oil and rice, showed a marked decrease compared to the same period last year.
In addition, the great difference between the growth rate of imports and exports showed signs of instability and trade deficit, which requires big efforts to maintain a trade balance in coming months.
In the first two months of this year, the country's industrial production value reached 89,000 billion VND, a 17.5% rise over last year. Industrial production growth in all the state-owned, non-state and foreign-invested sectors rose 8.8%, 19.8% and 22%, respectively.
The lunar new year and other festivals early this year helped the country attract more than 749,000 foreign visitors in the two months, a 11.3% over last year. Most foreign visitors came from Spain, Malaysia and Thailand.
Source: VNA
Movements in the financial industry
Vietnam’s top insurer, the Bao Viet Insurance Corporation, just recently announced a plan to establish its own bank this year, leading the charge of corporations now preparing to join the country’s banking and finance sector.
While the reasons for the charge are mixed, there appears to be a need to exercise a degree of control over such ventures.
Large state owned corporations like Electricity of Vietnam (EVN), the Vietnam Oil & Gas Corporation (PetroVietnam), and the Vietnam Post and Telematics Corporation (VNPT) are looking to join Bao Viet in setting up their own bank or investing in joint stock commercial banks in order to exploit the potential in the capital market.
As part of their strategies, EVN, PetroVietnam, VNPT and Bao Viet are looking to develop powerful groups and, within this model, setting up their own banks is a strategic goal to support capital mobilisation, providing transaction and credit services for the subsidiaries of these groups.
G-Bank, formerly known as the Ninh Binh Bank, plans to increase its chartered capital from 500 billion VND to 1 trillion VND next year as part of its change of focus from rural to urban areas. Previously a small rural bank with assets of 250 billion VND, the bank has now partnered with the PetroVietnam, with the corporation contributing up to 40% of its registered capital, and the total assets of the bank now stand at 2,000 billion VND. In a speech at its opening ceremony, the G-Bank Chairman said that both parties are pleased with the arrangement and it is a clear indication that PetroVietnam has ambitions to establish its own bank in the future.
The partnership between PetroVietnam and Ninh Binh Bank is expected to bring benefits to both sides. “The partnership with PetroVietnam is a chance to make this small bank’s dream come true once it partners with such a large and powerful corporation like PetroVietnam” said Mr Phan Duc Trung, General Director of G-Bank. PetroVietnam, he said, wishes to establish a financial organisation as part of its group and the arrangement with G-Bank was its desired choice.
At a financial and capital markets conference organised by EuroEvents, in cooperation with the Ministry of Finance, on January 22 and 23, Mr Hoang Van Hoan, Vice President of PetroVietnam, announced a plan to set up a petroleum bank in the second quarter of this year. With severe competition already seen among domestic and foreign commercial banks in the market, the launch of new banks will be a breath of fresh air in a banking and finance sector previously dominated by major players like Vietcombank, BIDV, ICB and Agribank.
The recent Government Decree No 141 obliges all joint stock, joint venture and foreign invested banks to have chartered capital of 1 trillion VND by 2008 and 3 trillion VND by 2010. Institutions that fail to do so may lose their licence. State owned commercial banks, meanwhile, are required to have chartered capital of 3 trillion VND by 2008.
With initial registered capital of 165 billion VND, An Binh Bank is pioneering the way in co-operating with large partners like EVN, PVFC, and Vinamilk, to increase its total capital to 1,130 billion VND. “An Binh is among the top ten joint stock commercial banks in terms of total registered capital,” according to Mr Nguyen Hoai Anh, Deputy General Director and Director of the Hanoi Branch.
EVN is a major state owned corporation with enormous financial capability, with capital mobilisation reaching 140,000 billion VND every year. “If EVN can transfer just a small amount of its capital volume through An Binh Bank, then we will have very large total assets,” said Mr Hoai Anh.
But is setting up a partnership with major corporations a wise choice? Vietnam’s banking and finance and market is still small but has potential for every player. Major banks and even foreign banks cannot cater to all customers. Those of the large state owned banks are mainly state owned enterprises, while the customers of foreign banks in Vietnam tend to be foreign owned enterprises.
According to Mr Hoai Anh, the four state owned commercial banks (SOCBs) hold a 70% market share in the banking sector.
In the process of global integration and under Vietnam’s WTO commitments, Prime Minister Nguyen Tan Dung has urged four SOCBs – the Bank for Foreign Trade of Vietnam (Vietcombank), the Mekong Housing Bank (MHB), the Bank for Investment and Development of Vietnam (BIDV) and the Industrial and Commercial Bank of Vietnam (Incombank) - to prepare for equitisation, in a bid to restructure the banks in the face of competition from foreign banks as the market opens up to fairer competition. Whether small players and large players will have an equal chance remains in question.
Mr Hoai Anh believes that both large banks and small banks have their own particular advantages. “Foreign banks have been providing services to foreign owned enterprises and high income earners with high fees, while domestic banks compete well with their simple banking services and reasonable fees.”
Together with the rapid development of the banking and finance sector and with a population exceeding 80 million people and annual economic growth of more than 8%, Vietnam has become increasingly in need of medium and long term capital sources to serve development.
Realising the capital demand of Vietnam’s financial and banking market, major state owned corporations have been looking for banks in a bid to expand operations into the banking sector and generate more profits. However, there are two kinds of benefit: short term and long term, according to Mr Trung from G-bank. Co-operating with small banks is just a springboard for the corporations in pursuing a long term ambition. Realising this ambition “may take time and will depend on many external factors,” said Mr Trung.
When VET asked Mr Hoai Anh about the possibility of major corporations like EVN setting up their own banks, he said that it’s difficult for major corporations to establish a bank because there is a shortage of high level human resources in the banking sector.
According to banking regulations, investors are subject to a limitation of 40% on capital contributions in a bank, so instead of opening their own bank it’s much easier for corporations like EVN to increase capital contributions to the maximum level. Banks are required to act as an independent entity and must not be a tool of any corporation. “The 40% limitation on capital contribution is acceptable because the banking sector needs to be transparent,” said Mr Hoai Anh.
Following the trend of setting up its own bank in Vietnam, a reliable source from the Vietnam Postal Savings Service Company (VPSC) - a subsidiary of VNPT - said that the company is planning to establish the Postal Bank. When VET asked Mr Nguyen Van Gam, Director of VPSC, about this plan he declined to provide any further information.
A recent survey conducted by ACNielson on personal finance management trends showed that banks in Vietnam have failed to penetrate the lending market. Conducted on 1,000 randomly selected respondents aged 18 to 50 in major cities like Hanoi and Ho Chi Minh City, only 2% said they have ever taken out a loan from a financial institution. So borrowing money from banks is not a common practice in Vietnam and people prefer to save for major purchases, pay in cash or urgent cases borrow money from friends or relatives.
The survey provides a valuable tool for Vietnamese banks to further understand their customers’ preferences and choice as well as future requirements, enabling the banks to plan strategies to launch new services to attract more customers.
The banking and finance market is still a fertile land for banks to do business, but changing the behaviour and habits of personal finance management is a task that banks must undertake in order to attract more customers.
Whether they target corporate or individual customers, banks in Vietnam must focus on service and product provision if they are to take a worthwhile stake in the country’s burgeoning banking and finance sector.
Source: VET
While the reasons for the charge are mixed, there appears to be a need to exercise a degree of control over such ventures.
Large state owned corporations like Electricity of Vietnam (EVN), the Vietnam Oil & Gas Corporation (PetroVietnam), and the Vietnam Post and Telematics Corporation (VNPT) are looking to join Bao Viet in setting up their own bank or investing in joint stock commercial banks in order to exploit the potential in the capital market.
As part of their strategies, EVN, PetroVietnam, VNPT and Bao Viet are looking to develop powerful groups and, within this model, setting up their own banks is a strategic goal to support capital mobilisation, providing transaction and credit services for the subsidiaries of these groups.
G-Bank, formerly known as the Ninh Binh Bank, plans to increase its chartered capital from 500 billion VND to 1 trillion VND next year as part of its change of focus from rural to urban areas. Previously a small rural bank with assets of 250 billion VND, the bank has now partnered with the PetroVietnam, with the corporation contributing up to 40% of its registered capital, and the total assets of the bank now stand at 2,000 billion VND. In a speech at its opening ceremony, the G-Bank Chairman said that both parties are pleased with the arrangement and it is a clear indication that PetroVietnam has ambitions to establish its own bank in the future.
The partnership between PetroVietnam and Ninh Binh Bank is expected to bring benefits to both sides. “The partnership with PetroVietnam is a chance to make this small bank’s dream come true once it partners with such a large and powerful corporation like PetroVietnam” said Mr Phan Duc Trung, General Director of G-Bank. PetroVietnam, he said, wishes to establish a financial organisation as part of its group and the arrangement with G-Bank was its desired choice.
At a financial and capital markets conference organised by EuroEvents, in cooperation with the Ministry of Finance, on January 22 and 23, Mr Hoang Van Hoan, Vice President of PetroVietnam, announced a plan to set up a petroleum bank in the second quarter of this year. With severe competition already seen among domestic and foreign commercial banks in the market, the launch of new banks will be a breath of fresh air in a banking and finance sector previously dominated by major players like Vietcombank, BIDV, ICB and Agribank.
The recent Government Decree No 141 obliges all joint stock, joint venture and foreign invested banks to have chartered capital of 1 trillion VND by 2008 and 3 trillion VND by 2010. Institutions that fail to do so may lose their licence. State owned commercial banks, meanwhile, are required to have chartered capital of 3 trillion VND by 2008.
With initial registered capital of 165 billion VND, An Binh Bank is pioneering the way in co-operating with large partners like EVN, PVFC, and Vinamilk, to increase its total capital to 1,130 billion VND. “An Binh is among the top ten joint stock commercial banks in terms of total registered capital,” according to Mr Nguyen Hoai Anh, Deputy General Director and Director of the Hanoi Branch.
EVN is a major state owned corporation with enormous financial capability, with capital mobilisation reaching 140,000 billion VND every year. “If EVN can transfer just a small amount of its capital volume through An Binh Bank, then we will have very large total assets,” said Mr Hoai Anh.
But is setting up a partnership with major corporations a wise choice? Vietnam’s banking and finance and market is still small but has potential for every player. Major banks and even foreign banks cannot cater to all customers. Those of the large state owned banks are mainly state owned enterprises, while the customers of foreign banks in Vietnam tend to be foreign owned enterprises.
According to Mr Hoai Anh, the four state owned commercial banks (SOCBs) hold a 70% market share in the banking sector.
In the process of global integration and under Vietnam’s WTO commitments, Prime Minister Nguyen Tan Dung has urged four SOCBs – the Bank for Foreign Trade of Vietnam (Vietcombank), the Mekong Housing Bank (MHB), the Bank for Investment and Development of Vietnam (BIDV) and the Industrial and Commercial Bank of Vietnam (Incombank) - to prepare for equitisation, in a bid to restructure the banks in the face of competition from foreign banks as the market opens up to fairer competition. Whether small players and large players will have an equal chance remains in question.
Mr Hoai Anh believes that both large banks and small banks have their own particular advantages. “Foreign banks have been providing services to foreign owned enterprises and high income earners with high fees, while domestic banks compete well with their simple banking services and reasonable fees.”
Together with the rapid development of the banking and finance sector and with a population exceeding 80 million people and annual economic growth of more than 8%, Vietnam has become increasingly in need of medium and long term capital sources to serve development.
Realising the capital demand of Vietnam’s financial and banking market, major state owned corporations have been looking for banks in a bid to expand operations into the banking sector and generate more profits. However, there are two kinds of benefit: short term and long term, according to Mr Trung from G-bank. Co-operating with small banks is just a springboard for the corporations in pursuing a long term ambition. Realising this ambition “may take time and will depend on many external factors,” said Mr Trung.
When VET asked Mr Hoai Anh about the possibility of major corporations like EVN setting up their own banks, he said that it’s difficult for major corporations to establish a bank because there is a shortage of high level human resources in the banking sector.
According to banking regulations, investors are subject to a limitation of 40% on capital contributions in a bank, so instead of opening their own bank it’s much easier for corporations like EVN to increase capital contributions to the maximum level. Banks are required to act as an independent entity and must not be a tool of any corporation. “The 40% limitation on capital contribution is acceptable because the banking sector needs to be transparent,” said Mr Hoai Anh.
Following the trend of setting up its own bank in Vietnam, a reliable source from the Vietnam Postal Savings Service Company (VPSC) - a subsidiary of VNPT - said that the company is planning to establish the Postal Bank. When VET asked Mr Nguyen Van Gam, Director of VPSC, about this plan he declined to provide any further information.
A recent survey conducted by ACNielson on personal finance management trends showed that banks in Vietnam have failed to penetrate the lending market. Conducted on 1,000 randomly selected respondents aged 18 to 50 in major cities like Hanoi and Ho Chi Minh City, only 2% said they have ever taken out a loan from a financial institution. So borrowing money from banks is not a common practice in Vietnam and people prefer to save for major purchases, pay in cash or urgent cases borrow money from friends or relatives.
The survey provides a valuable tool for Vietnamese banks to further understand their customers’ preferences and choice as well as future requirements, enabling the banks to plan strategies to launch new services to attract more customers.
The banking and finance market is still a fertile land for banks to do business, but changing the behaviour and habits of personal finance management is a task that banks must undertake in order to attract more customers.
Whether they target corporate or individual customers, banks in Vietnam must focus on service and product provision if they are to take a worthwhile stake in the country’s burgeoning banking and finance sector.
Source: VET
Vietnam faces 1 billion Kwh power shortage
Electricity of Vietnam (EVN) estimated output until May end to be 27 billion Kwh and demand to be nearly 28 billion kwh.
According to the National Load Dispatch Center, water levels have been falling in northern reservoirs used for electricity.
The level in the Hoa Binh reservoir, among the biggest, stands at 110.3 meter, a full meter less than last year’s level. The volume of water is equivalent to only 80% of last year’s storage.
EVN seeks to supply nearly 2.1 billion Kwh through the 500KV North-South Line by May but warned the high load could strain the line, adding any mishap could cause a widespread blackout in the north.
To cope with the expected shortfall, EVN plans to expand existing hydroelectricity plants in Quang Tri province in the central region, and a thermal power plant in the southern Ca Mau province, install a 220KV line in Lao Cai in the north to increase capacity to transmit electricity bought from China.
Source: Thanh Nien
According to the National Load Dispatch Center, water levels have been falling in northern reservoirs used for electricity.
The level in the Hoa Binh reservoir, among the biggest, stands at 110.3 meter, a full meter less than last year’s level. The volume of water is equivalent to only 80% of last year’s storage.
EVN seeks to supply nearly 2.1 billion Kwh through the 500KV North-South Line by May but warned the high load could strain the line, adding any mishap could cause a widespread blackout in the north.
To cope with the expected shortfall, EVN plans to expand existing hydroelectricity plants in Quang Tri province in the central region, and a thermal power plant in the southern Ca Mau province, install a 220KV line in Lao Cai in the north to increase capacity to transmit electricity bought from China.
Source: Thanh Nien
Tuesday, February 27, 2007
Vietnamese stock markets boom despite warnings
Viet Nam’s stock indexes kept climbing to new heights right after a ten-day break for the country’s traditional new year festival (Tet), despite warnings by analysts of the market overheating.
The VN Index, which measures the value of the Ho Chi Minh City Securities Trading Centre, on the Feb. 27 morning trading session rose to a record high of 1,167.36 points.
The previous day was the first time in the center’s six-year history that all stocks recorded gains. The prices of 103 of the 107 listed shares increased, bringing the VN Index to 1,129.02 points with a rise by nearly 45.77 points, or 4.23%. This was the first time VN Index passed the 1,100 point mark and also the first time it increased by more than 40 points.
The HaSTC Index on the Ha Noi Securities Trading Centre, meanwhile, rose to 433.83 points at the end of the morning session today after hitting 409.23 points on Feb. 26 thanks to a record increase by 31.64 points or 8.38%.
In HaSTC’s first session of the lunar new year, all but six stocks recorded gains with many approaching their price ceilings, including Bao Minh (BMI) and International Labour and Service (ILC).
The trading frenzy in both the north and south caused overcrowding at brokerages. Bao Viet, Sai Gon Securities all reported facilities being packed to capacity.
Dinh Chung, an investor from Ha Noi's Thanh Xuan District, said that he and a friend decided to pour more money into the market because they believed there is still room for further gains over the coming week, despite many stocks trading well above normal price-earnings ratios.
Tran Dac Sinh, director of the HCM City exchange, said there are a number of risks involved with buying into the market now and warned investors to be cautious.
Last week, Deputy Prime Minister Nguyen Sinh Hung denied claims made by press agencies that the Government would curb foreign capital flow in the stock market.
The Deputy PM said Viet Nam has no intention of controlling the market through administrative orders.
He was responding to reports by Bloomberg and AFP quoting ANZ Bank analysts as saying that bourse officials may adopt measures to restrict foreign capital flow in order to cool trading.
"Many say that the stock market has grown too hot, but I say it isn't hot," Hung told officials at the State Securities Commission (SCC) during a meeting on Friday. "The important thing is to ensure that the market develops in a stable and sustainable manner, and not to always worry about whether it's hot or not."
The Deputy PM also instructed the commission to punish investors who have violated securities laws.
SCC Director Vu Bang admitted regulators have been more concerned with market development, and less so with taking punitive action against investors and brokerages.
He assured officials, though that the commission is committed to bringing violators to justice.
Source: VNA
The VN Index, which measures the value of the Ho Chi Minh City Securities Trading Centre, on the Feb. 27 morning trading session rose to a record high of 1,167.36 points.
The previous day was the first time in the center’s six-year history that all stocks recorded gains. The prices of 103 of the 107 listed shares increased, bringing the VN Index to 1,129.02 points with a rise by nearly 45.77 points, or 4.23%. This was the first time VN Index passed the 1,100 point mark and also the first time it increased by more than 40 points.
The HaSTC Index on the Ha Noi Securities Trading Centre, meanwhile, rose to 433.83 points at the end of the morning session today after hitting 409.23 points on Feb. 26 thanks to a record increase by 31.64 points or 8.38%.
In HaSTC’s first session of the lunar new year, all but six stocks recorded gains with many approaching their price ceilings, including Bao Minh (BMI) and International Labour and Service (ILC).
The trading frenzy in both the north and south caused overcrowding at brokerages. Bao Viet, Sai Gon Securities all reported facilities being packed to capacity.
Dinh Chung, an investor from Ha Noi's Thanh Xuan District, said that he and a friend decided to pour more money into the market because they believed there is still room for further gains over the coming week, despite many stocks trading well above normal price-earnings ratios.
Tran Dac Sinh, director of the HCM City exchange, said there are a number of risks involved with buying into the market now and warned investors to be cautious.
Last week, Deputy Prime Minister Nguyen Sinh Hung denied claims made by press agencies that the Government would curb foreign capital flow in the stock market.
The Deputy PM said Viet Nam has no intention of controlling the market through administrative orders.
He was responding to reports by Bloomberg and AFP quoting ANZ Bank analysts as saying that bourse officials may adopt measures to restrict foreign capital flow in order to cool trading.
"Many say that the stock market has grown too hot, but I say it isn't hot," Hung told officials at the State Securities Commission (SCC) during a meeting on Friday. "The important thing is to ensure that the market develops in a stable and sustainable manner, and not to always worry about whether it's hot or not."
The Deputy PM also instructed the commission to punish investors who have violated securities laws.
SCC Director Vu Bang admitted regulators have been more concerned with market development, and less so with taking punitive action against investors and brokerages.
He assured officials, though that the commission is committed to bringing violators to justice.
Source: VNA
Banking mission for 2007
State Bank of Viet Nam Governor Le Duc Thuy has given instructions for the banking industry in 2007.
Accordingly, banking missions include operating flexible currency policies, ensuring the monetary stabilization, controlling inflation, promoting economic growth, maintaining interest rates not higher than the rates in last year and fluctuation of exchange rates at a reasonable level aiming to avoid the transferring of local currency into foreign currencies.
According to the evaluation of the State Bank of Viet Nam, last year the interest rates on the VND of credit agencies rose by 0.25% per annum in comparison with the end of 2005.
Early 2007, the mobilizing interest rates of commercial joint stock banks were adjusted, creating a new competitive pressure on interest rates.
Accordingly, Techcombank adjusts its e-saving interest rates in VND and US$. Saigon-Ha Noi Bank has increased the mobilizing interest rates on the VND and US$. ABBank has increased the US$-saving interest rates with an increase of 0.1-0.25% per annum for the periods of 1, 2, 3 and 6 months. G-Bank has also made an increase of interest rates of the VND on saving deposits at an average increase of 0.04%-0.3% per annum.
Source: VNEco
Accordingly, banking missions include operating flexible currency policies, ensuring the monetary stabilization, controlling inflation, promoting economic growth, maintaining interest rates not higher than the rates in last year and fluctuation of exchange rates at a reasonable level aiming to avoid the transferring of local currency into foreign currencies.
According to the evaluation of the State Bank of Viet Nam, last year the interest rates on the VND of credit agencies rose by 0.25% per annum in comparison with the end of 2005.
Early 2007, the mobilizing interest rates of commercial joint stock banks were adjusted, creating a new competitive pressure on interest rates.
Accordingly, Techcombank adjusts its e-saving interest rates in VND and US$. Saigon-Ha Noi Bank has increased the mobilizing interest rates on the VND and US$. ABBank has increased the US$-saving interest rates with an increase of 0.1-0.25% per annum for the periods of 1, 2, 3 and 6 months. G-Bank has also made an increase of interest rates of the VND on saving deposits at an average increase of 0.04%-0.3% per annum.
Source: VNEco
2 Gas producer to equitise next month
PetroVietnam Gas North plans to sell 4.2 million shares on the Ha Noi bourse on March 2. Each share will have an initial price of 10,500 VND (0.65 US$).
A week later, PetroVietnam Gas South plans to sell 4.7 million shares on the Ho Chi Minh City bourse.
Source: VNA
A week later, PetroVietnam Gas South plans to sell 4.7 million shares on the Ho Chi Minh City bourse.
Source: VNA
Real estate firm predicts more luxury offices and apartments
The number of luxury apartments and offices for lease is likely to soar by around 674, with prices ranging from 20-30US$ per sqm.
That was the prediction of general director of CB Richard Ellis (CBRE) Viet Nam Marc Towsend - a view supported by Chesterton Consulting Co’s representative in Viet Nam.
Chesterton attributed the increasing demand to the recent the influx of Asian businessmen into the city.
A senior official at a large domestic asset company said increasing demand for apartments and offices has brought opportunities for Vietnamese asset companies because foreign invested firms could not supply the market’s needs.
Although domestic companies have failed to capitalise on the need for apartments of a hundred square metres or more, they are handling deals for smaller apartments.
Lower fees for services fees over an acceptable period are these firms’ strong points, he said.
Luxury two-bedroom apartments currently cost 1,100-3,900US$ per month. Three-bedroom apartments now fetch 1,200-4,300US$ per month.
Despite growing demand, Chesterton believes rental prices will not increase much further in the coming months as more than 400 new apartments are expected to become available by this April.
However, Towsend said it was still difficult for foreign executives to find suitable accommodation in the heart of the city because only 1 per cent of city centre apartments are currently vacant.
According to asset companies in Ha Noi, 74,121sqm of "A-grade" apartment space is currently occupied, costing around 38US$ per square metre per month - far higher than Bangkok or Kuala Lumpur. However, 99.7 per cent of "B-grade" apartments have been taken, they say.
CBRE predicts that demand will increase over the next two to three years.
Ha Noi and HCM City are carrying out a number of projects to meet this demand, such as the construction of the North Asia Tower, the Opera Business Centre, Pacific Place, VIT Tower, Viglacera, Kinh Do and The Manor, which are expected to be completed this year.
Source: VNS
That was the prediction of general director of CB Richard Ellis (CBRE) Viet Nam Marc Towsend - a view supported by Chesterton Consulting Co’s representative in Viet Nam.
Chesterton attributed the increasing demand to the recent the influx of Asian businessmen into the city.
A senior official at a large domestic asset company said increasing demand for apartments and offices has brought opportunities for Vietnamese asset companies because foreign invested firms could not supply the market’s needs.
Although domestic companies have failed to capitalise on the need for apartments of a hundred square metres or more, they are handling deals for smaller apartments.
Lower fees for services fees over an acceptable period are these firms’ strong points, he said.
Luxury two-bedroom apartments currently cost 1,100-3,900US$ per month. Three-bedroom apartments now fetch 1,200-4,300US$ per month.
Despite growing demand, Chesterton believes rental prices will not increase much further in the coming months as more than 400 new apartments are expected to become available by this April.
However, Towsend said it was still difficult for foreign executives to find suitable accommodation in the heart of the city because only 1 per cent of city centre apartments are currently vacant.
According to asset companies in Ha Noi, 74,121sqm of "A-grade" apartment space is currently occupied, costing around 38US$ per square metre per month - far higher than Bangkok or Kuala Lumpur. However, 99.7 per cent of "B-grade" apartments have been taken, they say.
CBRE predicts that demand will increase over the next two to three years.
Ha Noi and HCM City are carrying out a number of projects to meet this demand, such as the construction of the North Asia Tower, the Opera Business Centre, Pacific Place, VIT Tower, Viglacera, Kinh Do and The Manor, which are expected to be completed this year.
Source: VNS
Supermarts will hold up to 20% of retail market share by 2010
The Government has approved the strategy on domestic trade development by 2010 and 2020, which said that by 2010, modern distribution channels will amount to 20% of the market share.
Trade centres, supermarkets and convenient stores will have the turnover of 160 trillion VND (10 billion US$) by 2010, holding up to 20% of the total trade turnover, and 800 trillion VND (50 billion US$) (40%) by 2020.
This proves to be an ambitious plan if compared to the current modest figure of 5-6%.
The Government has also laid down the policy to develop big trade groups, powerful enough to compete and cooperate with foreign distributors when Vietnam fully opens its distribution market.
By 2010, Vietnam is expected to see growth rate of the total goods and service retail turnover at 11% per annum by 2010, and more than 10% in the next period. The total goods and service retail turnover is targeted to reach 800 trillion VND by 2010 and 2,000 trillion VND (125 billion US$).
By 2010, the domestic trade will contribute 14.5% to GDP (200,000 billion VND or 12.5 billion US$), and the figure is expected to rise to 15% (450,000 billion VND or 28.125 billion US$) by 2020.
It took the Ministry of Trade two years to compile the strategy on domestic trade development. This is considered a very important plan, which aims to build up a healthy domestic trade, which is based on the suitable structuring of distribution channels, in which modern distribution modes will play the key role.
Source: VNE
Trade centres, supermarkets and convenient stores will have the turnover of 160 trillion VND (10 billion US$) by 2010, holding up to 20% of the total trade turnover, and 800 trillion VND (50 billion US$) (40%) by 2020.
This proves to be an ambitious plan if compared to the current modest figure of 5-6%.
The Government has also laid down the policy to develop big trade groups, powerful enough to compete and cooperate with foreign distributors when Vietnam fully opens its distribution market.
By 2010, Vietnam is expected to see growth rate of the total goods and service retail turnover at 11% per annum by 2010, and more than 10% in the next period. The total goods and service retail turnover is targeted to reach 800 trillion VND by 2010 and 2,000 trillion VND (125 billion US$).
By 2010, the domestic trade will contribute 14.5% to GDP (200,000 billion VND or 12.5 billion US$), and the figure is expected to rise to 15% (450,000 billion VND or 28.125 billion US$) by 2020.
It took the Ministry of Trade two years to compile the strategy on domestic trade development. This is considered a very important plan, which aims to build up a healthy domestic trade, which is based on the suitable structuring of distribution channels, in which modern distribution modes will play the key role.
Source: VNE
Lower petrol import tax proposed
Ministry of Trade has proposed to lower the tax rate on oil and petrol imports, following the continued increases in crude oil prices.
A source from the Ministry of Trade (MoT) said that the ministry has proposed to lower the tax rate on imported petrol in order to help petrol importers and distributors ease the financial burden. The oil price in the international market has been increasing continuously, while importers are not allowed to raise the selling prices of petrol.
According to MoT, after hovering stably at 50-55US$/barrel, the oil price has kept rising in the last two weeks, now trading at 60US$/barrel. In the morning of February 26, a barrel of oil was traded at 61US$.
The oil price increases have put big difficulties for the operation of key petrol importers, which has prompted MoT to ask the Government of the lowering of the tax rate on petrol imports.
Petrol importers said that the currently applied tax rate of 15% was defined by state management authorities when considering that the oil price stayed at 54-55US$/barrel. And it is understandable why petrol importers have been incurring losses while the oil price has hit the 60US$/barrel level. With the current tax rate and the current crude oil price level, petrol importers are suffering the loss of VND200/litre of petrol and VND100/litre of oil.
Earlier this year, when the crude oil price dropped to nearly 50US$/barrel, the Ministry of Finance decided to raise the petrol import tax to 15%, while MoT decided to lower the retail petrol price by VND400/litre.
Source: VNE
A source from the Ministry of Trade (MoT) said that the ministry has proposed to lower the tax rate on imported petrol in order to help petrol importers and distributors ease the financial burden. The oil price in the international market has been increasing continuously, while importers are not allowed to raise the selling prices of petrol.
According to MoT, after hovering stably at 50-55US$/barrel, the oil price has kept rising in the last two weeks, now trading at 60US$/barrel. In the morning of February 26, a barrel of oil was traded at 61US$.
The oil price increases have put big difficulties for the operation of key petrol importers, which has prompted MoT to ask the Government of the lowering of the tax rate on petrol imports.
Petrol importers said that the currently applied tax rate of 15% was defined by state management authorities when considering that the oil price stayed at 54-55US$/barrel. And it is understandable why petrol importers have been incurring losses while the oil price has hit the 60US$/barrel level. With the current tax rate and the current crude oil price level, petrol importers are suffering the loss of VND200/litre of petrol and VND100/litre of oil.
Earlier this year, when the crude oil price dropped to nearly 50US$/barrel, the Ministry of Finance decided to raise the petrol import tax to 15%, while MoT decided to lower the retail petrol price by VND400/litre.
Source: VNE
Vietcombank rated by Standard & Poor
The world’s leading credit rating firm Standard & Poor’s (S&P) has announced it gave BB/B to the Bank for Foreign Trade of Vietnam (Vietcombank).
According to the announcement, Vietcombank’s credit rating is at BB/B, outlook ‘stable’ and inner ability at ‘D’. The rating given by S&P to Vietcombank is equal to the national rating given by the same institution. This is the highest ranking S&P has given to a Vietnamese financial institution.
The ranking has well inflected the position of Vietcombank in Vietnam’s banking market and the outlook on possible support by the Government of Vietnam when necessary.
In the report about the rating, S&P emphasized the role and influence of the bank in the Vietnam’s banking system with its big competitiveness, big market share in capital mobilization, payment and card services. S&P thinks that in the future, Vietcomabank will retain its leading role in the domestic market if the bank strengthens its operation after the equitisation slated for this year.
S&P has suggested that Vietcombank should improve the operation in several fields, like diversifying clients, restructuring the turnover by raising the earnings from service fees.
Like other banks in Vietnam, the ranking given to Vietcombank could not exceed the ceiling ranking given to the national economy. Vietcombank is the third bank in Vietnam which apply international standardized credit rating, after the Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Technological and Commercial Joint Stock Bank (Techcombank).
S&P is also the insitution that gave a credit rating to the Government of Vietnam.
Source: VNE
According to the announcement, Vietcombank’s credit rating is at BB/B, outlook ‘stable’ and inner ability at ‘D’. The rating given by S&P to Vietcombank is equal to the national rating given by the same institution. This is the highest ranking S&P has given to a Vietnamese financial institution.
The ranking has well inflected the position of Vietcombank in Vietnam’s banking market and the outlook on possible support by the Government of Vietnam when necessary.
In the report about the rating, S&P emphasized the role and influence of the bank in the Vietnam’s banking system with its big competitiveness, big market share in capital mobilization, payment and card services. S&P thinks that in the future, Vietcomabank will retain its leading role in the domestic market if the bank strengthens its operation after the equitisation slated for this year.
S&P has suggested that Vietcombank should improve the operation in several fields, like diversifying clients, restructuring the turnover by raising the earnings from service fees.
Like other banks in Vietnam, the ranking given to Vietcombank could not exceed the ceiling ranking given to the national economy. Vietcombank is the third bank in Vietnam which apply international standardized credit rating, after the Bank for Investment and Development of Vietnam (BIDV) and the Vietnam Technological and Commercial Joint Stock Bank (Techcombank).
S&P is also the insitution that gave a credit rating to the Government of Vietnam.
Source: VNE
Strong demand for Vietnam Dong
Short-term Vietnamese dong lending rates eased on the interbank market after a long national holiday but are expected to firm in the coming weeks on strengthening loan demand, bankers said on Monday.
Four state-run banks, Vietnam's key lenders, offered overnight dong loans at a range of 5.0-6.0%, down from 5.5-6.5% two weeks ago and similar to the rates prior to Tet, the Lunar New Year festival that ended last week.
But rates on six-month loans also eased to a range of 8.2-8.6% from 8.2-9.0% two weeks ago.
The short-term dong rates rose in early February as companies sought funds to pay year-end bonuses to employees and to clear debts in the weeks leading to Tet.
"We expect very strong demand for dong loans from March especially those for long-term capital investment and infrastructure from both the state and private setors" a banker in Hanoi said.
Major projects include a scheme by the Transport Ministry to invest 20 billion US$to upgrade national roads and bridges in the next four years and a string of new power plants and grids.
Source: Reuters
Four state-run banks, Vietnam's key lenders, offered overnight dong loans at a range of 5.0-6.0%, down from 5.5-6.5% two weeks ago and similar to the rates prior to Tet, the Lunar New Year festival that ended last week.
But rates on six-month loans also eased to a range of 8.2-8.6% from 8.2-9.0% two weeks ago.
The short-term dong rates rose in early February as companies sought funds to pay year-end bonuses to employees and to clear debts in the weeks leading to Tet.
"We expect very strong demand for dong loans from March especially those for long-term capital investment and infrastructure from both the state and private setors" a banker in Hanoi said.
Major projects include a scheme by the Transport Ministry to invest 20 billion US$to upgrade national roads and bridges in the next four years and a string of new power plants and grids.
Source: Reuters
Southern Seed Co. increases chartered capital
Southern Seed Company (SSC) will issue 40 billion VND (2.5mio US$) in shares.
The company aims to mobilise cash to raise its chartered capital from 60 billion VND (3.8mio US$) to 100 billion VND (6.3mio US$).
Ninety percent of the new shares will go to existing stockholders. The company also plans to alter its annual dividend policy to 12%.
Source: VNA
The company aims to mobilise cash to raise its chartered capital from 60 billion VND (3.8mio US$) to 100 billion VND (6.3mio US$).
Ninety percent of the new shares will go to existing stockholders. The company also plans to alter its annual dividend policy to 12%.
Source: VNA
Experts foresee a stabilising stock market
The stock market is expected to continue growing this year but experts have said that the market's hot streak is coming to an end and stability is on the way.
Director of the French Jaccar Investment Fund Khong Van Minh said that the VN-Index, currently at 1,050 points, might climb as high as 1,400-1,500 points.
"The speculation period has passed," he said. "Now, investors can calm down and think carefully about their investment."
The stock market bloomed this year but capital earnings have not been invested into the economy. Profits have consistently returned to market, causing the current swell.
Many large State companies plan to capitalise this year, which will bring an influx of commodities to the market and trigger price reductions on a variety of goods currently on the market.
Economic expert Huynh Buu Son believes these reductions will bring stability to prices. "I am sure there won't be any hot pricing anymore," he said.
Nguyen Tien Dung from HCM City's Economics University said these new market sensibilities will force investors be more careful.
"If private investors don't educate themselves, they will be lost," Dung added. "The market is different and much tougher now."
He also recorgnised that more foreign investors will enter the Vietnamese market attracted by the equitisation of large companies.
"But foreign investors won't just pay any price to own shares," Dung warned.
Shares prices will increase thanks to the quality of shares and increasing number of both foreign and local investors, said Bui Viet, general director of the Eastern Asia Commercial Bank's Securities Company.
He also pointed out that other investment channels like gold, the US dollar and real estate have been cooling. Investors in these avenues are now looking for profits on stock markets. Many investors have decided to try long-term investment on the stock market rather than buy and sell for profit.
Amidst market growth, director of HCM City Securities Trading Centre Tran Dac Sinh stressed that the service quality of listed companies must be improved to develop the stock market.
He also said that policies must be clearly defined to create a clear financial system that will attract long-term capital from outside Viet Nam. "We should reduce short-term capital in the market," he said.
The Republic of Korea's LG Economics Research Institute has recently released a report about Viet Nam's investment potential for foreign investors.
Experts from the institute believe that the Vietnamese economy will develop significantly over the next 5-10 years.
The report confirms that Viet Nam is a good destination for long-term business and investment.
At present, the Republic of Korea has passed Hong Kong and the US as the top investor in Viet Nam with 2.7 billion US$.
In 2006, Viet Nam attracted 9 billion US$ in FDI, an impressive number for future development.
Source: VNA
Director of the French Jaccar Investment Fund Khong Van Minh said that the VN-Index, currently at 1,050 points, might climb as high as 1,400-1,500 points.
"The speculation period has passed," he said. "Now, investors can calm down and think carefully about their investment."
The stock market bloomed this year but capital earnings have not been invested into the economy. Profits have consistently returned to market, causing the current swell.
Many large State companies plan to capitalise this year, which will bring an influx of commodities to the market and trigger price reductions on a variety of goods currently on the market.
Economic expert Huynh Buu Son believes these reductions will bring stability to prices. "I am sure there won't be any hot pricing anymore," he said.
Nguyen Tien Dung from HCM City's Economics University said these new market sensibilities will force investors be more careful.
"If private investors don't educate themselves, they will be lost," Dung added. "The market is different and much tougher now."
He also recorgnised that more foreign investors will enter the Vietnamese market attracted by the equitisation of large companies.
"But foreign investors won't just pay any price to own shares," Dung warned.
Shares prices will increase thanks to the quality of shares and increasing number of both foreign and local investors, said Bui Viet, general director of the Eastern Asia Commercial Bank's Securities Company.
He also pointed out that other investment channels like gold, the US dollar and real estate have been cooling. Investors in these avenues are now looking for profits on stock markets. Many investors have decided to try long-term investment on the stock market rather than buy and sell for profit.
Amidst market growth, director of HCM City Securities Trading Centre Tran Dac Sinh stressed that the service quality of listed companies must be improved to develop the stock market.
He also said that policies must be clearly defined to create a clear financial system that will attract long-term capital from outside Viet Nam. "We should reduce short-term capital in the market," he said.
The Republic of Korea's LG Economics Research Institute has recently released a report about Viet Nam's investment potential for foreign investors.
Experts from the institute believe that the Vietnamese economy will develop significantly over the next 5-10 years.
The report confirms that Viet Nam is a good destination for long-term business and investment.
At present, the Republic of Korea has passed Hong Kong and the US as the top investor in Viet Nam with 2.7 billion US$.
In 2006, Viet Nam attracted 9 billion US$ in FDI, an impressive number for future development.
Source: VNA
VN-Index reaches new record
The prices of 103 of the 107 listed shares increased on the Feb. 26 session, bringing the VN Index to a new record of 1,129.02 points with a rise by nearly 45.77 points, or 4.23%.
This is the first time VN Index passed the 1,100 point mark and also the first time it increased by more than 40 points.
After a 10-day break, the stock market opened and became hot thanks to a series of good information and forecasts from market regulators and experts.
The first session of the stock market in the Year of the Pig (Dinh Hoi) saw a fairly high trading volume of 7.47 million shares worth nearly 995.7 billion VND.
The prices on only four shares remained unchanged, 19 others increased slightly and the remainders hit the ceiling.
Source: VNA
This is the first time VN Index passed the 1,100 point mark and also the first time it increased by more than 40 points.
After a 10-day break, the stock market opened and became hot thanks to a series of good information and forecasts from market regulators and experts.
The first session of the stock market in the Year of the Pig (Dinh Hoi) saw a fairly high trading volume of 7.47 million shares worth nearly 995.7 billion VND.
The prices on only four shares remained unchanged, 19 others increased slightly and the remainders hit the ceiling.
Source: VNA
Ministry of Trade: 10 predictions for 2007
The Vietnam Ministry of Trade has released 10 predictions for the country’s economy during its first year in the WTO, including hotter real estate, a cooler stock market and increased exports.
1 - The economy will grow faster than 2006. The National Assembly has targeted growth of at least 8.2-8.5%. The annual per capita Gross Domestic Product (GDP) could reach over 820US$, surpassing many developing countries’ rates.
2 – Consumer prices will climb moderately from March onwards, though some months may see a dip. Food prices will increase faster than industrial and services prices. In general, 2007’s consumer prices will rise slower than last year’s rate of 6.6%.
Gold prices will generally fluctuate along a sine curve, increasing slightly. US dollars will remain stable towards the Vietnamese dong at the rate of 1US$ to over VND16,200, only appreciating some 1%.
The real estate market will heat up; housing and land prices will rise. Hotels, supermarkets, trade centers, and convenience stores will be built on a wide scale. The stock market will cool and the VNindex will gently float up and down. The market will be worth over 10% of the national GDP. It is currently worth 20% of the GDP.
3 – Domestic consumption will increase faster than the rate of economic growth due to higher incomes and improved distribution outlets.
4 – Investment capital will be worth over 40% of the GDP. Private investment will account for one third of all social investment. Foreign investment will rise.
5 – Industry will continue to develop and 2007 will be the 17th year the sector has posted a double-digit growth rate. The service industry will grow particularly quickly and the industry and construction sectors will thrive.
6 – Exports will increase, especially in foreign-invested areas and in sectors previously hampered by quotas. Export volume will surpass 46 billion US$, accounting for two thirds of the national GDP.
Exports will increase at double the rate of the national GDP. But dumping lawsuits, copyright lawsuits and antibiotic residue checks will escalate. Technical barriers will be higher.
7 – Aggregate state income will rise slowly.
8 – The unemployment rate may rise as many enterprises’ competitiveness will drop when barriers such as technical requirements and high tariffs are eliminated. Poverty alleviation will proceed slower than last year.
9 – Though the number of Chinese tourists visiting Vietnam will continue to drop, the country is expected to receive over 4 million international tourists, 10% more than last year.
10 – Natural calamities and disease will occur. A prolonged and widespread drought could happen and affect agriculture and hydroelectricity output. Disease in cattle and fowls may erupt.
Source: Thanh Nien
1 - The economy will grow faster than 2006. The National Assembly has targeted growth of at least 8.2-8.5%. The annual per capita Gross Domestic Product (GDP) could reach over 820US$, surpassing many developing countries’ rates.
2 – Consumer prices will climb moderately from March onwards, though some months may see a dip. Food prices will increase faster than industrial and services prices. In general, 2007’s consumer prices will rise slower than last year’s rate of 6.6%.
Gold prices will generally fluctuate along a sine curve, increasing slightly. US dollars will remain stable towards the Vietnamese dong at the rate of 1US$ to over VND16,200, only appreciating some 1%.
The real estate market will heat up; housing and land prices will rise. Hotels, supermarkets, trade centers, and convenience stores will be built on a wide scale. The stock market will cool and the VNindex will gently float up and down. The market will be worth over 10% of the national GDP. It is currently worth 20% of the GDP.
3 – Domestic consumption will increase faster than the rate of economic growth due to higher incomes and improved distribution outlets.
4 – Investment capital will be worth over 40% of the GDP. Private investment will account for one third of all social investment. Foreign investment will rise.
5 – Industry will continue to develop and 2007 will be the 17th year the sector has posted a double-digit growth rate. The service industry will grow particularly quickly and the industry and construction sectors will thrive.
6 – Exports will increase, especially in foreign-invested areas and in sectors previously hampered by quotas. Export volume will surpass 46 billion US$, accounting for two thirds of the national GDP.
Exports will increase at double the rate of the national GDP. But dumping lawsuits, copyright lawsuits and antibiotic residue checks will escalate. Technical barriers will be higher.
7 – Aggregate state income will rise slowly.
8 – The unemployment rate may rise as many enterprises’ competitiveness will drop when barriers such as technical requirements and high tariffs are eliminated. Poverty alleviation will proceed slower than last year.
9 – Though the number of Chinese tourists visiting Vietnam will continue to drop, the country is expected to receive over 4 million international tourists, 10% more than last year.
10 – Natural calamities and disease will occur. A prolonged and widespread drought could happen and affect agriculture and hydroelectricity output. Disease in cattle and fowls may erupt.
Source: Thanh Nien
Monday, February 26, 2007
Price increase for diary products
The US-owned Abbott dairy firm told Vietnamese agents its powdered milk products would rise for a second time since March 2006.
Gain IQ for kids aged one to three is set to increase from VND194,000 to VND204,000 a can, and Pediasure from VND260,000 to VND275,000.
Earlier this month Vietnam's top dairy company Vinamilk increased yogurt prices by 12%.
Source: Thanh Nien Equity Mekong Capital Vinacapital
Gain IQ for kids aged one to three is set to increase from VND194,000 to VND204,000 a can, and Pediasure from VND260,000 to VND275,000.
Earlier this month Vietnam's top dairy company Vinamilk increased yogurt prices by 12%.
Source: Thanh Nien Equity Mekong Capital Vinacapital
Gold prices rise
Gold prices continued to rise in Vietnam Thursday on the back of higher global prices propelled by a sharp rise in crude oil prices.
To add to consumers’ woes, dairy producers also announced price hikes.
Saigon Jewelry Company’s gold prices rose by VND220,000 (13.76US$) per tael (1.25 oz) to VND12.84 million (801US$).
Globally, the precious metal gained 20US$/ounce over Wednesday to close at 678US$.
Analysts attributed this to the rise in international crude prices to over 60US$/barrel.
Source: Thanh Nien
To add to consumers’ woes, dairy producers also announced price hikes.
Saigon Jewelry Company’s gold prices rose by VND220,000 (13.76US$) per tael (1.25 oz) to VND12.84 million (801US$).
Globally, the precious metal gained 20US$/ounce over Wednesday to close at 678US$.
Analysts attributed this to the rise in international crude prices to over 60US$/barrel.
Source: Thanh Nien
Fierce competition in the Vietnamese beer market
Viet Nam’s beer market is set for an eventful year as new brands hit the domestic market while beer producers in Viet Nam invest in expanding their market share.
Construction of a plant producing Kronenbourg beer is planned to start in March in Long An Province. The plant, a joint venture between Viet Nam Tobacco Corporation (Vinataba) and Scottish and Newcastle Group, will be able to produce 150 million litres each year. Each partner holds half of the plant’s total investment of 75mio US$.
Patrick Dougan, general managing director of Viet Nam Kronenbourg and development director of the company’s Asia-Pacific arm, said Scottish and Newcastle Group has carefully carried out market research in Viet Nam.
The domestic beer market has an annual growth rate between 9 to 11% and already enjoys fierce competition with many well-known beer brands, including Sai Gon, Ha Noi, Tiger and Heineken, said Dougan.
Viet Nam has 300 plants producing beer and alcohol products. Some of them have boosted expansion of production, including Sai Gon Beer, Alcohol and Beverage Corporation (Sabeco) and Viet Nam Beer Company.
Sabeco has 10 projects on expanding production, boosting co-operation in production and building new factories in provinces and cities, including Cu Chi District - HCM City, Vinh Long Province and Dung Quat - Quang Ngai Province.
The company expects to increase its total annual capacity to 800 million litres of beer in 2009. Sabeco has recently launched the Irish black beer brand Guiness with production of the new brand set for Sabeco’s factory in Binh Duong Province from June, said a Sabeco official.
In addition to buying foreign beer brand franchises, Sabeco has co-operated with Asahi, a Japanese leading beverage producer.
Asia Pacific Breweries Limited (APB) has registered to increase its HCM City-based Viet Nam Beer Factory’s total annual capacity of beer from 150 million litres to 230 million litres.
The APB is carrying out its plan on expanding production by co-operating with Quy Nhon Beer Company to boost the company’s annual capacity from 20 million litres to 100 million litres and to make beer for the region with Quang Nam Beer Company, which has an annual capacity of 25 million litres.
Last October, APB took control of beer factories in Da Nang and Tien Giang and trade marks of BGI, Larue, Larue Export and Larue Superior, owned by Foster’s Group in Viet Nam under an agreement signed between Foster’s and APB two months ago. Under the agreement, APB is solely responsible for producing, packaging, distributing and trading of Foster’s Lager Beer in Viet Nam.
Source: VNS
Construction of a plant producing Kronenbourg beer is planned to start in March in Long An Province. The plant, a joint venture between Viet Nam Tobacco Corporation (Vinataba) and Scottish and Newcastle Group, will be able to produce 150 million litres each year. Each partner holds half of the plant’s total investment of 75mio US$.
Patrick Dougan, general managing director of Viet Nam Kronenbourg and development director of the company’s Asia-Pacific arm, said Scottish and Newcastle Group has carefully carried out market research in Viet Nam.
The domestic beer market has an annual growth rate between 9 to 11% and already enjoys fierce competition with many well-known beer brands, including Sai Gon, Ha Noi, Tiger and Heineken, said Dougan.
Viet Nam has 300 plants producing beer and alcohol products. Some of them have boosted expansion of production, including Sai Gon Beer, Alcohol and Beverage Corporation (Sabeco) and Viet Nam Beer Company.
Sabeco has 10 projects on expanding production, boosting co-operation in production and building new factories in provinces and cities, including Cu Chi District - HCM City, Vinh Long Province and Dung Quat - Quang Ngai Province.
The company expects to increase its total annual capacity to 800 million litres of beer in 2009. Sabeco has recently launched the Irish black beer brand Guiness with production of the new brand set for Sabeco’s factory in Binh Duong Province from June, said a Sabeco official.
In addition to buying foreign beer brand franchises, Sabeco has co-operated with Asahi, a Japanese leading beverage producer.
Asia Pacific Breweries Limited (APB) has registered to increase its HCM City-based Viet Nam Beer Factory’s total annual capacity of beer from 150 million litres to 230 million litres.
The APB is carrying out its plan on expanding production by co-operating with Quy Nhon Beer Company to boost the company’s annual capacity from 20 million litres to 100 million litres and to make beer for the region with Quang Nam Beer Company, which has an annual capacity of 25 million litres.
Last October, APB took control of beer factories in Da Nang and Tien Giang and trade marks of BGI, Larue, Larue Export and Larue Superior, owned by Foster’s Group in Viet Nam under an agreement signed between Foster’s and APB two months ago. Under the agreement, APB is solely responsible for producing, packaging, distributing and trading of Foster’s Lager Beer in Viet Nam.
Source: VNS
High demand for Vietcombank bonds
Investors are snatching up convertible bonds of Vietcombank as the major State-owned bank nears its equitisation this year. With shares in the bank expected to skyrocket in value following the initial public offering, the bonds have suddenly drawn increased interest.
"The value of bonds will be converted into a certain number of shares," said Vietcombank CEO Nguyen Hoa Binh.
Existing bondholders have seen the value of their bonds on the securities market rise accordingly in anticipation of equitisation.
However, recent increases in Vietcombank bond values by 2.5-2.8 times was unreasonable compared to the face value of 100,000 VND (6.25 US$), Binh suggested.
"Obviously, someone who already holds convertable bonds of the bank following the IPO will benefit. But that benefit may be erased for others buying the bonds now if they pay too high a price for them. The bonds pay only 6% interest, lower than current market rates."
Binh also noted, "It is difficult for me or other senior officials to say now what the convertible rate of Vietcombank bonds will be as we are not yet a joint stock bank. The market will determine the value, but I think the rate will be the best mirror for reflecting the true value of the bank."
Foreign investors, Binh pointed out, were allowed to buy Vietcombank bonds but could not exercise rights to convert bonds into shares in the bank.
Another senior official of Vietcombank said that thousands of Vietcombank employees were awaiting the moment when Vietcombank would be equitised. Their foremost concern was what priority they would be given in buying shares.
"The priority given to employees of the bank would partialy affect their dedication to the bank. The bank pays slightly lower salaries than other joint stock banks which also offer rights to their employees to buy shares," the officer said.
"We expect to list and make our IPO at the HCM City Securities Trading Center by July of this year," said Vietcombank general director Vu Viet Ngoan.
Source: VNS Equity Mekong Capital Vinacapital
"The value of bonds will be converted into a certain number of shares," said Vietcombank CEO Nguyen Hoa Binh.
Existing bondholders have seen the value of their bonds on the securities market rise accordingly in anticipation of equitisation.
However, recent increases in Vietcombank bond values by 2.5-2.8 times was unreasonable compared to the face value of 100,000 VND (6.25 US$), Binh suggested.
"Obviously, someone who already holds convertable bonds of the bank following the IPO will benefit. But that benefit may be erased for others buying the bonds now if they pay too high a price for them. The bonds pay only 6% interest, lower than current market rates."
Binh also noted, "It is difficult for me or other senior officials to say now what the convertible rate of Vietcombank bonds will be as we are not yet a joint stock bank. The market will determine the value, but I think the rate will be the best mirror for reflecting the true value of the bank."
Foreign investors, Binh pointed out, were allowed to buy Vietcombank bonds but could not exercise rights to convert bonds into shares in the bank.
Another senior official of Vietcombank said that thousands of Vietcombank employees were awaiting the moment when Vietcombank would be equitised. Their foremost concern was what priority they would be given in buying shares.
"The priority given to employees of the bank would partialy affect their dedication to the bank. The bank pays slightly lower salaries than other joint stock banks which also offer rights to their employees to buy shares," the officer said.
"We expect to list and make our IPO at the HCM City Securities Trading Center by July of this year," said Vietcombank general director Vu Viet Ngoan.
Source: VNS Equity Mekong Capital Vinacapital
Vietnamese trade deficit to hit 1billion US$
Vietnam's trade deficit is expected to hit 1.03 billion US$ in the first two months of this year following a 45.8% surge in imports, a state-run newspaper reported on Monday.
Exports in the January-February period were estimated at 6.8 billion US$, a rise of 23.5% from the same period last year, when Vietnam had a trade surplus of 140 million US$, the Vietnam News daily said.
But imports would reach 7.83 billion US$, with imports of heavy machinery surging 80.5% to 1.4 billion US$, it quoted a government statistics office report as saying.
That was expected after the Trade Ministry said in a report earlier this month "the import of machinery and equipment, material used for domestic production and for the processing of export goods", would be given priority.
The General Statistics Office is expected to release full trade figures later this week.
Source: Reuters
Exports in the January-February period were estimated at 6.8 billion US$, a rise of 23.5% from the same period last year, when Vietnam had a trade surplus of 140 million US$, the Vietnam News daily said.
But imports would reach 7.83 billion US$, with imports of heavy machinery surging 80.5% to 1.4 billion US$, it quoted a government statistics office report as saying.
That was expected after the Trade Ministry said in a report earlier this month "the import of machinery and equipment, material used for domestic production and for the processing of export goods", would be given priority.
The General Statistics Office is expected to release full trade figures later this week.
Source: Reuters
State Bank of Vietnam plans to stabilise financial industry
The central bank’s deputy governor, Tran Minh Tuan, told Nhan Dan (People) newspaper in an interview that these measures would help promote stability, security, growth, and crisis prevention.
First, he said, banks must prepare for equitization to become more competitive and profitable. Smaller banks would consolidate at this time.
Second, financial institutions must address their large quantity of bad debts.
Third, banks should tighten control on loans using a borrowers' credit rating system devised by experts.
Fourth, banks must create risk security funds and contribute to the National Reserve Fund.
Fifth, to improve transparency, they must allow monitoring by state agencies and make their financial records public.
Sixth, commercial banks must create a network with other domestic and international financial institutions.
Seventh, more modern banking technologies should be introduced and the security of electronic transactions ensured.
Eighth, banks must plan ahead for challenges they would face during the country's integration into the World Trade Organization.
Finally, preventive measures should be taken to tackle fraud.
If these measures were strictly implemented, commercial banks would have few worries and develop in a sustainable and efficient manner, he assured.
The central bank would keep watch to ensure they were strictly and lawfully enforced, he added.
Source: VNA
First, he said, banks must prepare for equitization to become more competitive and profitable. Smaller banks would consolidate at this time.
Second, financial institutions must address their large quantity of bad debts.
Third, banks should tighten control on loans using a borrowers' credit rating system devised by experts.
Fourth, banks must create risk security funds and contribute to the National Reserve Fund.
Fifth, to improve transparency, they must allow monitoring by state agencies and make their financial records public.
Sixth, commercial banks must create a network with other domestic and international financial institutions.
Seventh, more modern banking technologies should be introduced and the security of electronic transactions ensured.
Eighth, banks must plan ahead for challenges they would face during the country's integration into the World Trade Organization.
Finally, preventive measures should be taken to tackle fraud.
If these measures were strictly implemented, commercial banks would have few worries and develop in a sustainable and efficient manner, he assured.
The central bank would keep watch to ensure they were strictly and lawfully enforced, he added.
Source: VNA
Saturday, February 24, 2007
High inflation in Februrary
The February consumer price index (CPI) rose 2.17% over that of January and 6.5% over the same month last year as predicted earlier by economic experts, said a senior official of the General Statistics Office (GSO).
According to Nguyen Duc Thang, Deputy Head of the Department for Trade, Price and Services, the sharp rise in the February CPI was in line with the market rule during the Lunar New Year festival (Tet) when demand for consumer goods and entertainment was high.
The food and food service group saw the highest rise of 3.45%, followed by the beverage and tobacco group, 2.52%, and the home appliances and other services group, 2.26%.
Ho Chi Minh City reported the highest CPI increase of 3.05% among ten surveyed provinces and cities, 0.88% higher than the national average, followed by Dak Lak, with 2.94%, and Ha Noi, 2.09%.
In February, gold price increased 2.08% due to high demand for gold as the 2007 wedding season is approaching.
Thang forecasts that the March CPI may decrease by 0.2% as usually seen after Tet in many years.
Source: VNA
According to Nguyen Duc Thang, Deputy Head of the Department for Trade, Price and Services, the sharp rise in the February CPI was in line with the market rule during the Lunar New Year festival (Tet) when demand for consumer goods and entertainment was high.
The food and food service group saw the highest rise of 3.45%, followed by the beverage and tobacco group, 2.52%, and the home appliances and other services group, 2.26%.
Ho Chi Minh City reported the highest CPI increase of 3.05% among ten surveyed provinces and cities, 0.88% higher than the national average, followed by Dak Lak, with 2.94%, and Ha Noi, 2.09%.
In February, gold price increased 2.08% due to high demand for gold as the 2007 wedding season is approaching.
Thang forecasts that the March CPI may decrease by 0.2% as usually seen after Tet in many years.
Source: VNA
Promising year for Vietnamese securities market
The groundwork has been done for the securities market to grow in 2007 with the taking effect of the Securities Law and the completion of necessary institution and technology, said a senior governmental official.
At a working session with the State Securities Commission (SSC) in Ha Noi on Feb. 23, Deputy Prime Minister Nguyen Sinh Hung said although the market expanded in scale in 2005-06, its growth was not stable due to the imbalance between supply and demand. He said things are expected to change as economic restructuring has created a level playing ground for local businesses and attracted more foreign investors to invest in Viet Nam.
A large number of local enterprises are continuing to hasten their equitisation process and join the securities market, he added.
The deputy PM urged the SSC to map out concrete measures to maintain the development pace of the securities market and build up a flexible foreign exchange rate in line with the market.
It is also a must to continue to improve the investment environment, particularly the legal framework and institution in order to ensure long-term foreign investment in Viet Nam, added Hung.
He said there should be policies to ensure the market's quality, sustainable development of businesses and capital of investors.
Source: VNA
At a working session with the State Securities Commission (SSC) in Ha Noi on Feb. 23, Deputy Prime Minister Nguyen Sinh Hung said although the market expanded in scale in 2005-06, its growth was not stable due to the imbalance between supply and demand. He said things are expected to change as economic restructuring has created a level playing ground for local businesses and attracted more foreign investors to invest in Viet Nam.
A large number of local enterprises are continuing to hasten their equitisation process and join the securities market, he added.
The deputy PM urged the SSC to map out concrete measures to maintain the development pace of the securities market and build up a flexible foreign exchange rate in line with the market.
It is also a must to continue to improve the investment environment, particularly the legal framework and institution in order to ensure long-term foreign investment in Viet Nam, added Hung.
He said there should be policies to ensure the market's quality, sustainable development of businesses and capital of investors.
Source: VNA
Friday, February 23, 2007
Official denies restrictions on foreign investment
An official from the State Bank of Vietnam (SBV) has rejected allegations by some international news agencies that the country may restrict foreign investment to cool its overvalued securities market.
The official wishing to remain anonymous told Thanh Nien on Thursday that SBV has never issued any such regulation and would consider a variety of measures in line with international norms to deflate and stabilize the market.
On February 14, some international news agencies reported that the bank intended to restrict investment flows in and out of the Vietnamese securities market, where the umbrella index, VN-Index, has surpassed 1,000 points, causing fears that the bubble may burst and the market may crash.
The news agencies reported that the Vietnamese government is considering banning foreign investors from selling their bonds and stocks for one year after buying securities on the Vietnamese market.
In reaction to the news, Bui Thi Kim Oanh, representative of the Thailand-based Finansa fund management firm, said one effective measure currently acting to cool the overheating market is Vietnam’s regulation restricting foreign investors to a maximum of 49% stake in listed companies and 30% in listed banks.
The other alleged measures are to restrict short-term investment but Oanh believes the market needs both long and short term investment.
Following the agencies’ claims, other allegations arose inside Vietnam that the central bank plans to strictly monitor the transfer of profits from indirect investment and that the government will restrict the opening of foreign investment funds by adding more bulky paperwork.
Another representative of a foreign investment fund said that the VNindex has been driven up recently by domestic investors mostly, especially individual ones, not by foreigners. Domestic investors account for 80 percent of total the transaction volume.
Thus, he said that applying restrictive measures as alleged would be ineffective.
A senior official from the State Securities Commission, a government stocks and bonds watchdog, said that the agencies’ claims are sensitive and have been exacerbated by authorities’ official silence, which has only added to foreign investors’ worries.
Source: Thanh Nien Mekong capital vinacapital
The official wishing to remain anonymous told Thanh Nien on Thursday that SBV has never issued any such regulation and would consider a variety of measures in line with international norms to deflate and stabilize the market.
On February 14, some international news agencies reported that the bank intended to restrict investment flows in and out of the Vietnamese securities market, where the umbrella index, VN-Index, has surpassed 1,000 points, causing fears that the bubble may burst and the market may crash.
The news agencies reported that the Vietnamese government is considering banning foreign investors from selling their bonds and stocks for one year after buying securities on the Vietnamese market.
In reaction to the news, Bui Thi Kim Oanh, representative of the Thailand-based Finansa fund management firm, said one effective measure currently acting to cool the overheating market is Vietnam’s regulation restricting foreign investors to a maximum of 49% stake in listed companies and 30% in listed banks.
The other alleged measures are to restrict short-term investment but Oanh believes the market needs both long and short term investment.
Following the agencies’ claims, other allegations arose inside Vietnam that the central bank plans to strictly monitor the transfer of profits from indirect investment and that the government will restrict the opening of foreign investment funds by adding more bulky paperwork.
Another representative of a foreign investment fund said that the VNindex has been driven up recently by domestic investors mostly, especially individual ones, not by foreigners. Domestic investors account for 80 percent of total the transaction volume.
Thus, he said that applying restrictive measures as alleged would be ineffective.
A senior official from the State Securities Commission, a government stocks and bonds watchdog, said that the agencies’ claims are sensitive and have been exacerbated by authorities’ official silence, which has only added to foreign investors’ worries.
Source: Thanh Nien Mekong capital vinacapital
Japanese companies continue expansion in Vietnam
Japanese enterprises in Vietnam continued expanding their operation in 2006 with the number of local employees posting a double digit increase, a local newspaper said.
Japanese investors have increasingly focused on the attractive market as the number of Vietnamese employees working in Japanese companies rose by 12.4% over 2005, Nihon Keizai newspaper reported on Feb. 19.
The paper attributed the trend to the country's low labour costs compared to other markets.
It is estimated that the average wage in Vietnam would be still lower than other countries and territories in 2007, creating a strong competitive edge for the investors, said the paper.
Source: VNA
Japanese investors have increasingly focused on the attractive market as the number of Vietnamese employees working in Japanese companies rose by 12.4% over 2005, Nihon Keizai newspaper reported on Feb. 19.
The paper attributed the trend to the country's low labour costs compared to other markets.
It is estimated that the average wage in Vietnam would be still lower than other countries and territories in 2007, creating a strong competitive edge for the investors, said the paper.
Source: VNA
Catfish prices continue to rise
Catfish prices have continued to rise in the Mekong Delta after the Vietnamese New Year last Saturday, reaching a record level of nearly 17,000 VND (1.06 US$) per kilogram.
Some businesses said the low output of tra and basa catfish on farms this year had forced their prices up.
The higher prices have encouraged more farmers in the delta to invest in expanding their fish farms, also forcing up breeding stock prices considerably. It now costs 2,200 VND to 4,000 VND per fry.
Last year Vietnam exported tra and basa to 65 countries and territories, earning a record 700mio US$. The major markets included the European Union which bought almost half its exports, Russia, and the US.
The country hoped to earn 1 billion US$ from catfish exports this year, said Ngo Phuoc Hau, chairman of the Vietnam Association of Seafood Exporters and Processors (VASEP)’s Mekong Fresh Fish Committee.
Tra and basa, inhabitants of the Mekong River in Vietnam, Laos, Cambodia, and Thailand, were brought for cultivation in ponds, lagoons, and rivers in Vietnam’s southern An Giang and Dong Thap provinces in the middle of the last century. Scientists started artificially breeding tra in 1978 and basa in 1990.
Nowadays, the catfish are bred in half the Mekong Delta provinces besides several central and northern provinces. Its cultivation and processing have created jobs for thousands of farmers.
With support from EUROGAP, a Swiss organization issuing quality certification for aquatic produce, VASEP and the Vietnam Aqua Service Company have been working on quality standards for Vietnamese catfish. The task is expected to be completed this year.
Source: Thanh Nien mekong capital vinacapital
Some businesses said the low output of tra and basa catfish on farms this year had forced their prices up.
The higher prices have encouraged more farmers in the delta to invest in expanding their fish farms, also forcing up breeding stock prices considerably. It now costs 2,200 VND to 4,000 VND per fry.
Last year Vietnam exported tra and basa to 65 countries and territories, earning a record 700mio US$. The major markets included the European Union which bought almost half its exports, Russia, and the US.
The country hoped to earn 1 billion US$ from catfish exports this year, said Ngo Phuoc Hau, chairman of the Vietnam Association of Seafood Exporters and Processors (VASEP)’s Mekong Fresh Fish Committee.
Tra and basa, inhabitants of the Mekong River in Vietnam, Laos, Cambodia, and Thailand, were brought for cultivation in ponds, lagoons, and rivers in Vietnam’s southern An Giang and Dong Thap provinces in the middle of the last century. Scientists started artificially breeding tra in 1978 and basa in 1990.
Nowadays, the catfish are bred in half the Mekong Delta provinces besides several central and northern provinces. Its cultivation and processing have created jobs for thousands of farmers.
With support from EUROGAP, a Swiss organization issuing quality certification for aquatic produce, VASEP and the Vietnam Aqua Service Company have been working on quality standards for Vietnamese catfish. The task is expected to be completed this year.
Source: Thanh Nien mekong capital vinacapital
Political leader urges BIDV
Deputy Prime Minister Nguyen Sinh Hung has urged the Bank for Investment and Development of Viet Nam (BIDV) to become a multi-functional finance investment group to help propel economic growth.
At his working session with the bank in Ha Noi yesterday, the Deputy PM said BIDV should build up its financial strength and a staff of qualified experts, and provide diverse services in order to win trust from local and foreign customers.
He said the Government aims to turn the country into an industrialised country with a GDP of around 250 billion USD by 2020.
Towards the goal, credit supply must be half as much against the GDP, or 300 billion USD, which is six-fold the current level. Credit organisations have to hold at least 30 percent of the figure, or about 100 billion USD, said Hung, who was former finance minister.
According to BIDV Director General Tran Bac Ha, the bank planned for 1 billion US$ in profit by 2011. He said BIDV also aims to become a strong and multi-functional finance group by that year.
By the end of 2006, BIDV's total property was worth 167 trillion VND and its pre-tax profit was over 1.3 trillion VND.
Source: VNA
At his working session with the bank in Ha Noi yesterday, the Deputy PM said BIDV should build up its financial strength and a staff of qualified experts, and provide diverse services in order to win trust from local and foreign customers.
He said the Government aims to turn the country into an industrialised country with a GDP of around 250 billion USD by 2020.
Towards the goal, credit supply must be half as much against the GDP, or 300 billion USD, which is six-fold the current level. Credit organisations have to hold at least 30 percent of the figure, or about 100 billion USD, said Hung, who was former finance minister.
According to BIDV Director General Tran Bac Ha, the bank planned for 1 billion US$ in profit by 2011. He said BIDV also aims to become a strong and multi-functional finance group by that year.
By the end of 2006, BIDV's total property was worth 167 trillion VND and its pre-tax profit was over 1.3 trillion VND.
Source: VNA
Thursday, February 22, 2007
Pha Lai Thermal Power Company to auction government's shares
Pha Lai Thermal Power Co. (PPC), Vietnam's third-largest listed company, will auction more than 85 million state-held shares to reduce government ownership of the firm, market regulators said.
The State Securities Commission said in a statement it had allowed the firm to auction shares held by state utility Vietnam Electricity (EVN) representing a 27.4% stake in Pha Lai.
The sale would reduce state ownership of Pha Lai to 51% from 78.4%. The statement, seen on Thursday, did not say how much the auction was expected to raise and PPC has yet to announce details of the sale.
The stock closed flat at 95,000 Vietnam Dong on Feb. 15, the last trading day before Vietnam closed the stock market from Feb. 16 to Feb. 23 for the Lunar New Year holiday.
The sale of EVN shares in PPC is part of EVN's plan to divest ownership in smaller power plants to raise funds for new projects.
The Industry Ministry said last month unlisted ENV would invest 2.63 billion US$ in power generation and grids this year, 23.4% more than in 2006, to meet soaring industrial and consumer demand.
PPC made its debut last month on the Ho Chi Minh City Securities Trading Center, Vietnam's main stock market, after moving its listing from the Hanoi over-the-counter market.
With a market capitalisation of 29.52 trillion dong (1.84 billion US$), the company is the third-largest listed after information technology firm FPT (FPT) and top dairy product maker Vinamilk (VNM).
PPC's two power plants in the northern province of Hai Duong, 65 km (40 miles) east of Hanoi, have a combined capacity of 1,040 megawatts. They produce nearly 6 billion kilowatt hours of electricity per year, 10% of Vietnam's output.
Source: Reuters
The State Securities Commission said in a statement it had allowed the firm to auction shares held by state utility Vietnam Electricity (EVN) representing a 27.4% stake in Pha Lai.
The sale would reduce state ownership of Pha Lai to 51% from 78.4%. The statement, seen on Thursday, did not say how much the auction was expected to raise and PPC has yet to announce details of the sale.
The stock closed flat at 95,000 Vietnam Dong on Feb. 15, the last trading day before Vietnam closed the stock market from Feb. 16 to Feb. 23 for the Lunar New Year holiday.
The sale of EVN shares in PPC is part of EVN's plan to divest ownership in smaller power plants to raise funds for new projects.
The Industry Ministry said last month unlisted ENV would invest 2.63 billion US$ in power generation and grids this year, 23.4% more than in 2006, to meet soaring industrial and consumer demand.
PPC made its debut last month on the Ho Chi Minh City Securities Trading Center, Vietnam's main stock market, after moving its listing from the Hanoi over-the-counter market.
With a market capitalisation of 29.52 trillion dong (1.84 billion US$), the company is the third-largest listed after information technology firm FPT (FPT) and top dairy product maker Vinamilk (VNM).
PPC's two power plants in the northern province of Hai Duong, 65 km (40 miles) east of Hanoi, have a combined capacity of 1,040 megawatts. They produce nearly 6 billion kilowatt hours of electricity per year, 10% of Vietnam's output.
Source: Reuters
SSC fails in penalising brokers
A series of violations of regulations by securities brokerages has many investors wondering out loud why the State Securities Commission has only required these firms to correct violating practices without imposing any sanctions or penalties.
The commission has yet to mete out any punishment in any of these cases, only requiring securities companies to change their behaviour.
For example, the Vietcombank in-house brokerage, Vietcombank Securities, was found guilty of six infractions but only requested to amend order procedures and stop direct trading by certain investors.
Asia Commercial Bank subsidiary ACB Securities was told to stop allowing investors from using stock collateral between the time shares are bought to the termination date.
Le Thanh, an investor on the bourse and client of Vietcombank Securities, said that he felt angry when placing stock buy or sell orders, knowing the broker would place larger institutional orders in the queue ahead of him.
The brokerage firm needed to be aware of its capacity to supply services, Thanh said. If the firm could not satisfy investor demands, he wondered, why was it still opening new accounts?.
Hoang Duc Long, director of the State Securities Commission’s Investigative Department, could not offer a reasonable explanation for the commission’s laxity in handling brokerage violations.
Thanh reckoned that the commission should strictly penalise Vietcombank Securities for its violations to ensure a fair market environment and maintain investor confidence in the nation’s stock market.
However, a newly-issued decree providing regulations guiding implementation of the Securities Law does not specify punishment levels for specific illegal practices.
A financial expert said that it was undeniable that securities firms were making mistakes but, to some extent, these were a natural aspect of the evolution of the stock market. The blame also lied in part with the administrative systems of the authorities.
For instance, the software used by the HCM City Securities Trading Centre has not been updated in seven years and matches orders in three phases, creating bottlenecks during active trading.
In light of the problems, the Prime Minister recently requested the Ministry of Finance, in co-ordination with other ministries and sectors, to formulate a proposal in the first quarter of this year for the establishment of an authorised body independent of the Securities Commission and the State Bank of Viet Nam to supervise activities on the stock and monetary markets.
One of the main functions of the body would be to supervise trading activities on stock exchanges and activities of securities firms such as brokerage and consulting, as well as ensure compliance with securities deposit procedures and payment procedures.
Nguyen Hoang Hai, general secretary of the Viet Nam Association of Financial Investors, said that it was suitable and necessary to establish an indepenent supervisory body. Countries like Singapore, Japan, and South Korea also have such organisations.
The State Securities Commission has not fulfilled its function as a market regulator, and recent investigations of unlawful practices on the market were conducted were due to the pressure of public opinion rather than at the initiative of the commission.
Nguyen Van Dung, deputy director of the Ha Noi Securities Trading Centre, also agreed with the need to establish a powerful, functional organisation to monitor the market, to keep a close watch on market performance and capital circulation on the market.
Source: VNS
The commission has yet to mete out any punishment in any of these cases, only requiring securities companies to change their behaviour.
For example, the Vietcombank in-house brokerage, Vietcombank Securities, was found guilty of six infractions but only requested to amend order procedures and stop direct trading by certain investors.
Asia Commercial Bank subsidiary ACB Securities was told to stop allowing investors from using stock collateral between the time shares are bought to the termination date.
Le Thanh, an investor on the bourse and client of Vietcombank Securities, said that he felt angry when placing stock buy or sell orders, knowing the broker would place larger institutional orders in the queue ahead of him.
The brokerage firm needed to be aware of its capacity to supply services, Thanh said. If the firm could not satisfy investor demands, he wondered, why was it still opening new accounts?.
Hoang Duc Long, director of the State Securities Commission’s Investigative Department, could not offer a reasonable explanation for the commission’s laxity in handling brokerage violations.
Thanh reckoned that the commission should strictly penalise Vietcombank Securities for its violations to ensure a fair market environment and maintain investor confidence in the nation’s stock market.
However, a newly-issued decree providing regulations guiding implementation of the Securities Law does not specify punishment levels for specific illegal practices.
A financial expert said that it was undeniable that securities firms were making mistakes but, to some extent, these were a natural aspect of the evolution of the stock market. The blame also lied in part with the administrative systems of the authorities.
For instance, the software used by the HCM City Securities Trading Centre has not been updated in seven years and matches orders in three phases, creating bottlenecks during active trading.
In light of the problems, the Prime Minister recently requested the Ministry of Finance, in co-ordination with other ministries and sectors, to formulate a proposal in the first quarter of this year for the establishment of an authorised body independent of the Securities Commission and the State Bank of Viet Nam to supervise activities on the stock and monetary markets.
One of the main functions of the body would be to supervise trading activities on stock exchanges and activities of securities firms such as brokerage and consulting, as well as ensure compliance with securities deposit procedures and payment procedures.
Nguyen Hoang Hai, general secretary of the Viet Nam Association of Financial Investors, said that it was suitable and necessary to establish an indepenent supervisory body. Countries like Singapore, Japan, and South Korea also have such organisations.
The State Securities Commission has not fulfilled its function as a market regulator, and recent investigations of unlawful practices on the market were conducted were due to the pressure of public opinion rather than at the initiative of the commission.
Nguyen Van Dung, deputy director of the Ha Noi Securities Trading Centre, also agreed with the need to establish a powerful, functional organisation to monitor the market, to keep a close watch on market performance and capital circulation on the market.
Source: VNS
Techcombank forecasts revenues
Techcombank projects pre-tax profits this year of VND500 billion (31mio US$) , according to the bank’s general director, Nguyen Duc Vinh.
The bank would also raise its chartered capital to VND3 trillion (186mio US$) by the end of the year, doubling the current level of VND1.5 trillion (93mio US$), Vinh said. It would also expand its current network of six branches and 40 transaction offices to a total of 120 offices nationwide this year.
Techcombank plans to continue focusing on individual customers and small- and medium-sized enterprises by developing new services and products, he added.
To improve business performance, the bank would implement the Temenos 24 core banking software system which would form a firm foundation for the bank to develop new products and provide a higher quality service.
Earlier this month, HSBC reached an agreement with Techcombank to acquire an additional 10% of shares in the bank once the State Bank of Viet Nam approves the deal.
Under current regulations, a single foreign institution can only hold as much as 10% in a domestic bank, and HSBC already holds a 10% share in the bank. HSBC was waiting for the State Bank to change the regulation and lift the foreign ownership ceiling to 20%.
HSBC has already formed a strategic partnership with Techcombank, assisting the latter in corporate governance, technical support and risk management.
Vinh said that co-operation with a foreign bank was effective if the local bank itself was willing to look carefully into all aspects of banking operations from technology to human resources.
Techcombank has defined HSBC as its exclusive strategic partner and does not plan to enter into a relationship with an additional foreign or domestic partner, Vinh noted.
Source: VNS
The bank would also raise its chartered capital to VND3 trillion (186mio US$) by the end of the year, doubling the current level of VND1.5 trillion (93mio US$), Vinh said. It would also expand its current network of six branches and 40 transaction offices to a total of 120 offices nationwide this year.
Techcombank plans to continue focusing on individual customers and small- and medium-sized enterprises by developing new services and products, he added.
To improve business performance, the bank would implement the Temenos 24 core banking software system which would form a firm foundation for the bank to develop new products and provide a higher quality service.
Earlier this month, HSBC reached an agreement with Techcombank to acquire an additional 10% of shares in the bank once the State Bank of Viet Nam approves the deal.
Under current regulations, a single foreign institution can only hold as much as 10% in a domestic bank, and HSBC already holds a 10% share in the bank. HSBC was waiting for the State Bank to change the regulation and lift the foreign ownership ceiling to 20%.
HSBC has already formed a strategic partnership with Techcombank, assisting the latter in corporate governance, technical support and risk management.
Vinh said that co-operation with a foreign bank was effective if the local bank itself was willing to look carefully into all aspects of banking operations from technology to human resources.
Techcombank has defined HSBC as its exclusive strategic partner and does not plan to enter into a relationship with an additional foreign or domestic partner, Vinh noted.
Source: VNS
Ministry of Industry publishes planned investments
Food processing and consumer goods companies plan to invest about VND6.91 trillion (431.9mio US$) to implement new projects this year, according to the Ministry of Industry.
Under the planned investments, there are large-scale projects such as the second phase of the Bai Bang Paper Company; construction of two breweries, each able to make 100 million litres of beer a year; and capacity expansion by the Viet Nam Garment and Textile Corporation.
The Ministry of Industry has suggested that companies accelerate development efforts and take the initiative to look for new capital resources, as well as reduce construction investment risks. Investors also need to focus on the new projects aimed at modernising the industry, say officials.
In the past, investments have not ended in positive results due to difficulties with land clearance and insufficient capital resources, according to the ministry.
The country’s industrial output in January was estimated at VND46.15 trillion (2.88 billion US$), up 26 per cent over the same period last year.
Source: VNS
Under the planned investments, there are large-scale projects such as the second phase of the Bai Bang Paper Company; construction of two breweries, each able to make 100 million litres of beer a year; and capacity expansion by the Viet Nam Garment and Textile Corporation.
The Ministry of Industry has suggested that companies accelerate development efforts and take the initiative to look for new capital resources, as well as reduce construction investment risks. Investors also need to focus on the new projects aimed at modernising the industry, say officials.
In the past, investments have not ended in positive results due to difficulties with land clearance and insufficient capital resources, according to the ministry.
The country’s industrial output in January was estimated at VND46.15 trillion (2.88 billion US$), up 26 per cent over the same period last year.
Source: VNS
Petrolimex forecasts revenues for 2007
Viet Nam National Petroleum Corporation (Petrolimex) is forecasting revenues of VND64.8 trillion (4.05 billion US$) this year, says the company’s Deputy General Director Bui Ngoc Bao.
The corporation, on such revenues, could earn VND565 billion (35.31mio US$) and contribute VND10.85 trillion (678.13mio US$) to the national budget, Bao added.
He also expects the company to import a total of 8.18 million tonnes of gasoline, equalling the total output in annual sales this year. This represents an increase of 5.1% last year.
The volume of petrol sold at home would increase by 6% to reach 7.18 million tonnes. The remaining one million tonnes would be re-exported.
The corporation aims to ensure domestic demand will be met as part of its efforts to stabilise the domestic petrol market, said Bao.
To achieve the goals for 2007, he said, the corporation must closely follow domestic and world oil market developments and tightly co-ordinate with major petrol importers and relevant agencies to manage petrol trading and trading policies.
The company also looks to fine-tune its financial controls and increase investment in its infrastructure.
According to Bao, Petrolimex is being reorganised for conversion into a parent company with various subsidiaries. The result will be Petrolimex Economic Corporation by 2010.
Bao suggested that the Goverment considers tightening rules under which enterprises would be authorised to deal in petrol. The number of general agents should be reduced to make supervision easier, he believes, and to assist that remaining agents meet safety and environmental standards. Small fuel stations may eventually be abolished.
Bao also suggested the Goverment fixes schedules to collect import duties (after six or twelve months) to make it easier for enterprises to work out long-term business plans and produce stable incomes for the national budget.
The Government should soon authorise enterprises to fix petrol prices, he said. It should intervene in the petrol market with administrative and economic measures only when the world petrol prices see great fluctuation that could harm the national economy.
Ministries and sectors should work out price adjustment plans to submit to the Goverment for consideration at the beginning of each year or every six months, he said.
Bao suggested increasing national petrol reserves, which could be used to stabilise the market when it becomes especially volatile.
Source: VNS
The corporation, on such revenues, could earn VND565 billion (35.31mio US$) and contribute VND10.85 trillion (678.13mio US$) to the national budget, Bao added.
He also expects the company to import a total of 8.18 million tonnes of gasoline, equalling the total output in annual sales this year. This represents an increase of 5.1% last year.
The volume of petrol sold at home would increase by 6% to reach 7.18 million tonnes. The remaining one million tonnes would be re-exported.
The corporation aims to ensure domestic demand will be met as part of its efforts to stabilise the domestic petrol market, said Bao.
To achieve the goals for 2007, he said, the corporation must closely follow domestic and world oil market developments and tightly co-ordinate with major petrol importers and relevant agencies to manage petrol trading and trading policies.
The company also looks to fine-tune its financial controls and increase investment in its infrastructure.
According to Bao, Petrolimex is being reorganised for conversion into a parent company with various subsidiaries. The result will be Petrolimex Economic Corporation by 2010.
Bao suggested that the Goverment considers tightening rules under which enterprises would be authorised to deal in petrol. The number of general agents should be reduced to make supervision easier, he believes, and to assist that remaining agents meet safety and environmental standards. Small fuel stations may eventually be abolished.
Bao also suggested the Goverment fixes schedules to collect import duties (after six or twelve months) to make it easier for enterprises to work out long-term business plans and produce stable incomes for the national budget.
The Government should soon authorise enterprises to fix petrol prices, he said. It should intervene in the petrol market with administrative and economic measures only when the world petrol prices see great fluctuation that could harm the national economy.
Ministries and sectors should work out price adjustment plans to submit to the Goverment for consideration at the beginning of each year or every six months, he said.
Bao suggested increasing national petrol reserves, which could be used to stabilise the market when it becomes especially volatile.
Source: VNS
Korean experts warn: Vietnamese stock market overheated!
As retail investors from the Republic of Korea flock to the Vietnamese stock market, fund managers and financial regulators in that country fear they may be managing their risks poorly.
These investors faced possible losses once speculative money exited the booming market, the experts warned.
The Vietnamese market has seen exponential growth in the last couple of years. It has come to a head with the combined market capitalization of the Ho Chi Minh City and the Hanoi stock markets jumping from 12.8 billion US$ at the end of 2006 to 20.3 billion US$ by the first week of February this year.
The HCMC exchange’s VN-Index went up from about 400 in July 2006 to 750 by the end of the year.
The experts attributed the growth to increasing equitization of state-owned enterprises, but also noted that the price-to-earnings valuation of Vietnamese shares had also jumped substantially.
Vietnamese shares are traded at an average price earnings of 40 to 50, compared to the benchmark Korea Composite Stock Index's 11, and Samsung Electronics Co.'s 13.
While listed Vietnamese companies were seeing a steep net earnings growth – with the HCMC exchange's average listed company seeing a 73.56% growth last year – many South Korean experts were concerned about the sheer pace of this growth.
Of the 25.6 billion US$ South Koreans have invested in overseas securities, nearly 1.06 billion US$ are Vietnam-related.
"Emerging markets are typically volatile, and the Vietnam market in particular grew substantially in a short period of time," Choi Sang-gil, executive director at the fund tracker Zeronin, said.
"I wouldn't deny that in the long-term, the Vietnamese market is promising, but in the short-term, there is a high possibility of a correction. The market is still in its infancy, and has not been tested yet. And there are plenty of factors that could swing the market," he warned.
Following a recent warning by the Financial Supervisory Service on Vietnam equities investment, a number of local asset managers including the Vietnam fund pioneer Korea Investment & Securities, said they would no longer be opening a new Vietnam fund for the time being.
"The VN index jumped 38.5% this year, there is no doubt about its being overheated," a Mirae Asset Group official said.
Source: Thanh Nien
These investors faced possible losses once speculative money exited the booming market, the experts warned.
The Vietnamese market has seen exponential growth in the last couple of years. It has come to a head with the combined market capitalization of the Ho Chi Minh City and the Hanoi stock markets jumping from 12.8 billion US$ at the end of 2006 to 20.3 billion US$ by the first week of February this year.
The HCMC exchange’s VN-Index went up from about 400 in July 2006 to 750 by the end of the year.
The experts attributed the growth to increasing equitization of state-owned enterprises, but also noted that the price-to-earnings valuation of Vietnamese shares had also jumped substantially.
Vietnamese shares are traded at an average price earnings of 40 to 50, compared to the benchmark Korea Composite Stock Index's 11, and Samsung Electronics Co.'s 13.
While listed Vietnamese companies were seeing a steep net earnings growth – with the HCMC exchange's average listed company seeing a 73.56% growth last year – many South Korean experts were concerned about the sheer pace of this growth.
Of the 25.6 billion US$ South Koreans have invested in overseas securities, nearly 1.06 billion US$ are Vietnam-related.
"Emerging markets are typically volatile, and the Vietnam market in particular grew substantially in a short period of time," Choi Sang-gil, executive director at the fund tracker Zeronin, said.
"I wouldn't deny that in the long-term, the Vietnamese market is promising, but in the short-term, there is a high possibility of a correction. The market is still in its infancy, and has not been tested yet. And there are plenty of factors that could swing the market," he warned.
Following a recent warning by the Financial Supervisory Service on Vietnam equities investment, a number of local asset managers including the Vietnam fund pioneer Korea Investment & Securities, said they would no longer be opening a new Vietnam fund for the time being.
"The VN index jumped 38.5% this year, there is no doubt about its being overheated," a Mirae Asset Group official said.
Source: Thanh Nien
Indochina Capital seeks London listing for Vietnam vehicle
Indochina Capital Vietnam Holdings aims to raise at least 325mio US$, but may increase the offering to 500mio US$.
One might question whether there will ever be a wrong time to launch a Vietnamese investment opportunity, given how “hot” the country currently is in the eyes of international investors.
Still, a new investment company focused on Vietnam to be listed by Indochina Capital Corporation in London on March 2 has timed its public debut well.
Having started marketing this week, the offering comes just weeks after Vietnam entered the World Trade Organization and at a time when the economy continues to fire on all cylinders - economists are forecasting 8% GDP growth both this year and next.
Add to this a wave of expected equitization of major state-owned enterprises this year, and the limited investment opportunities available, and it’s not hard to imagine a flurry of investor demand.
The Vietnamese stock market was already the best performer in Asia last year with a 144% gain and it has added another 44% so far this year.
At 10 billion US$, its total market capitalization is still tiny so the growth comes from a low base, but many market participants project the market will again double in size during the course of this year.
Indochina Capital Vietnam Holdings will be structured as a closed-end investment company and will invest in equities listed on the Ho Chi Minh Stock Exchange, over-the-counter stocks, private equity and potentially some derivatives and debt securities.
It can also invest in non-Vietnamese companies which have a material portion of their business or assets in Vietnam.
There are already eight other Vietnam-focused funds or investment companies listed on London’s Alternative Investment Market or in Dublin, but this will be the first to list on London’s main board.
That should be an advantage given that it is a much more liquid market, allowing investors greater possibilities to trade in and out.
“There still are restrictions on foreigners going into Vietnam directly so these vehicles do provide access and if you consider the expected economic growth and the equitization program, the country can clearly absorb the 1 billion to 2 billion US$ that has been raised so far through various opportunity funds,” one observer says with regard to the potential interest.
Indochina Capital Vietnam, which is marketing itself as a growth play, intends to raise 325mio US$ to 350mio US$ through a share offer arranged by Credit Suisse.
According to an announcement published on the London Stock Exchange Web site, a majority of this will go to cornerstone investors which have already committed to buying a combined 225mio US$, meaning as little as 100mio US$ may be available to other investors.
A source familiar with the offering notes, however, that the board has the ability to increase the size of the IPO to a maximum 500mio US$, which could increase the portion available to non-cornerstone investors to as much as 275mio US$.
And in case of very strong demand, one or two of the up to seven cornerstones may also see their allocations scaled back somewhat, the source says.
Still, a key risk with an investment company like this that has committed none of its money at the time of listing is that it will take time to put the whole cash pool to work.
This is especially true for a small and illiquid market like Vietnam and investors will be keenly aware that the longer the a portion of the cash stays idle, the lower the potential return on equity is likely to be.
Consequently, Indochina Capital wouldn’t want to raise “too much” in one go, the source says, adding: “You cannot put it all to work over night and you can always come back to the market.”
The shares will be offered at a fixed price of 10 US$ apiece and as the company will have no debt at the time of listing, the offer price will also be equal to the net asset value.
In turn this means the vehicle will be sold at par, which makes it looks cheap compared with some of the other listed Vietnam funds that tend to trade at premiums to NAV of between 35% and as much as 50%.
Investors who have met with the sponsors in the first few days of the roadshow also like the fee structure, which they say is slightly lower than for the major comps, and the experience of the management team.
The latter includes Chairman Miles Morland, the founder of Blakeney Management which is one of the pioneers of investing in Africa and the Middle East and specializes in investments into “inefficient” stock markets.
Indochina Capital, which will be the manager of the investment company through its wholly-owned subsidiary Indochina Capital Advisers, has a seven-year track record of investing in Vietnam on a proprietary basis and its two founding principles have been active in the Vietnamese market for 14 years. The company also has a private equity fund focused on Vietnamese real estate.
Marc Faber, a Hong Kong-based investor known as much for his investment prowess as for his Gloom, Boom & Doom Report, is a member of the firm’s advisory committee.
The strong interest in Vietnam and other “new” growth markets was evident when Merrill Lynch organized its second annual conference focused on Pakistan, Vietnam, Sri Lanka and Mongolia – or the New Frontier markets, as the bank calls them.
The three-day conference, which was held in Singapore just before the Chinese New Year holidays attracted more than 100 investors and saw more than 700 one-on-one meetings.
In a note summing up its views on these markets, Merrill argues that Vietnam’s key selling argument is its large population of close to 90 million.
The bank also likes the country’s ability to compete against China in manufacturing and its strong government and free market policies.
However, the hefty rise in the past year has left the Vietnam stock market almost three times as expensive as Pakistan, which leads its strategist team to project that among the four, Pakistan will be the outperformer this year.
Source: Thanh Nien
One might question whether there will ever be a wrong time to launch a Vietnamese investment opportunity, given how “hot” the country currently is in the eyes of international investors.
Still, a new investment company focused on Vietnam to be listed by Indochina Capital Corporation in London on March 2 has timed its public debut well.
Having started marketing this week, the offering comes just weeks after Vietnam entered the World Trade Organization and at a time when the economy continues to fire on all cylinders - economists are forecasting 8% GDP growth both this year and next.
Add to this a wave of expected equitization of major state-owned enterprises this year, and the limited investment opportunities available, and it’s not hard to imagine a flurry of investor demand.
The Vietnamese stock market was already the best performer in Asia last year with a 144% gain and it has added another 44% so far this year.
At 10 billion US$, its total market capitalization is still tiny so the growth comes from a low base, but many market participants project the market will again double in size during the course of this year.
Indochina Capital Vietnam Holdings will be structured as a closed-end investment company and will invest in equities listed on the Ho Chi Minh Stock Exchange, over-the-counter stocks, private equity and potentially some derivatives and debt securities.
It can also invest in non-Vietnamese companies which have a material portion of their business or assets in Vietnam.
There are already eight other Vietnam-focused funds or investment companies listed on London’s Alternative Investment Market or in Dublin, but this will be the first to list on London’s main board.
That should be an advantage given that it is a much more liquid market, allowing investors greater possibilities to trade in and out.
“There still are restrictions on foreigners going into Vietnam directly so these vehicles do provide access and if you consider the expected economic growth and the equitization program, the country can clearly absorb the 1 billion to 2 billion US$ that has been raised so far through various opportunity funds,” one observer says with regard to the potential interest.
Indochina Capital Vietnam, which is marketing itself as a growth play, intends to raise 325mio US$ to 350mio US$ through a share offer arranged by Credit Suisse.
According to an announcement published on the London Stock Exchange Web site, a majority of this will go to cornerstone investors which have already committed to buying a combined 225mio US$, meaning as little as 100mio US$ may be available to other investors.
A source familiar with the offering notes, however, that the board has the ability to increase the size of the IPO to a maximum 500mio US$, which could increase the portion available to non-cornerstone investors to as much as 275mio US$.
And in case of very strong demand, one or two of the up to seven cornerstones may also see their allocations scaled back somewhat, the source says.
Still, a key risk with an investment company like this that has committed none of its money at the time of listing is that it will take time to put the whole cash pool to work.
This is especially true for a small and illiquid market like Vietnam and investors will be keenly aware that the longer the a portion of the cash stays idle, the lower the potential return on equity is likely to be.
Consequently, Indochina Capital wouldn’t want to raise “too much” in one go, the source says, adding: “You cannot put it all to work over night and you can always come back to the market.”
The shares will be offered at a fixed price of 10 US$ apiece and as the company will have no debt at the time of listing, the offer price will also be equal to the net asset value.
In turn this means the vehicle will be sold at par, which makes it looks cheap compared with some of the other listed Vietnam funds that tend to trade at premiums to NAV of between 35% and as much as 50%.
Investors who have met with the sponsors in the first few days of the roadshow also like the fee structure, which they say is slightly lower than for the major comps, and the experience of the management team.
The latter includes Chairman Miles Morland, the founder of Blakeney Management which is one of the pioneers of investing in Africa and the Middle East and specializes in investments into “inefficient” stock markets.
Indochina Capital, which will be the manager of the investment company through its wholly-owned subsidiary Indochina Capital Advisers, has a seven-year track record of investing in Vietnam on a proprietary basis and its two founding principles have been active in the Vietnamese market for 14 years. The company also has a private equity fund focused on Vietnamese real estate.
Marc Faber, a Hong Kong-based investor known as much for his investment prowess as for his Gloom, Boom & Doom Report, is a member of the firm’s advisory committee.
The strong interest in Vietnam and other “new” growth markets was evident when Merrill Lynch organized its second annual conference focused on Pakistan, Vietnam, Sri Lanka and Mongolia – or the New Frontier markets, as the bank calls them.
The three-day conference, which was held in Singapore just before the Chinese New Year holidays attracted more than 100 investors and saw more than 700 one-on-one meetings.
In a note summing up its views on these markets, Merrill argues that Vietnam’s key selling argument is its large population of close to 90 million.
The bank also likes the country’s ability to compete against China in manufacturing and its strong government and free market policies.
However, the hefty rise in the past year has left the Vietnam stock market almost three times as expensive as Pakistan, which leads its strategist team to project that among the four, Pakistan will be the outperformer this year.
Source: Thanh Nien
Wednesday, February 14, 2007
Vietnamese stock markets January performance
In January, securities from the securities trading centres in Hanoi and Ho Chi Minh City saw sharp increases in both volume and value, according to a report announced by the State Securities Commission of Vietnam.
At the Ho Chi Minh City Securities Trading Centre (HoSTC), the VN-Index stood at 725 points at the last trading session of December 2006. It climbed to 1,041 at the close on January 31, 2007, registering an average increase of 1.5% a day.
At the Hanoi Securities Trading Centre (HASTC), the HASTC-Index also increased consecutively. On January 2, it was 241.92 points and it reached 348.52 points on January 31, with an average growth of 1.8% a day.
The recent increase in prices of shares of listed companies started on December 27, 2006. At that time, the VN-Index was 751.77 and currently it exceeds over 1,000 points, up 140%. The market average P/E ratio is 43.24.
Of the 107 listed companies at the HoSTC, 17 has their P/E ratios bigger than the average ratio and more than half of them were shares of companies with sharp increases in prices. As many as 46 company shares have their P/E ratios bigger than 20 and the remaining 61 companies have their P/E ratio below 20.
At developed markets, the P/E ratio averages from 8-15. If this ratio is bigger than 20, the companies are marked to be good and investors expect the earnings per share of the company will increase sharply in the future.
Thus, the fact that 61 out of 107 listed companies have their P/E ratio lower than 20 is normal.
However, 17 out of these 107 companies have their P/E ratio bigger than the average P/E ratio of 43, shows that the market is showing signals of too high expectations. Especially, three companies have their P/E ratio bigger than 100. These include PVD (328), VIP (112) and HBC (162).
According to the SSC, the sharp growth of the stock market recently are due to the following reasons:
First, the overly high expectations of domestic and foreign investors in the securities market.
Secondly, the securities market is still new in Vietnam. Many investors are still influenced by demands from foreign investors.
Thirdly, some foreign and domestic investors are of the view that listed companies are mostly State-owned enterprises which have been equitised at an artificially at low price. Therefore, they hope that the price of these shares will remain cheap.
Fourthly, the sharp increase of shares of some listed companies is due to the fact that investors expect a sudden growth of some enterprises working in special sectors.
The last reason might be the capability that some big investors want to control the prices of some newly-listed shares.
Source: VNE
At the Ho Chi Minh City Securities Trading Centre (HoSTC), the VN-Index stood at 725 points at the last trading session of December 2006. It climbed to 1,041 at the close on January 31, 2007, registering an average increase of 1.5% a day.
At the Hanoi Securities Trading Centre (HASTC), the HASTC-Index also increased consecutively. On January 2, it was 241.92 points and it reached 348.52 points on January 31, with an average growth of 1.8% a day.
The recent increase in prices of shares of listed companies started on December 27, 2006. At that time, the VN-Index was 751.77 and currently it exceeds over 1,000 points, up 140%. The market average P/E ratio is 43.24.
Of the 107 listed companies at the HoSTC, 17 has their P/E ratios bigger than the average ratio and more than half of them were shares of companies with sharp increases in prices. As many as 46 company shares have their P/E ratios bigger than 20 and the remaining 61 companies have their P/E ratio below 20.
At developed markets, the P/E ratio averages from 8-15. If this ratio is bigger than 20, the companies are marked to be good and investors expect the earnings per share of the company will increase sharply in the future.
Thus, the fact that 61 out of 107 listed companies have their P/E ratio lower than 20 is normal.
However, 17 out of these 107 companies have their P/E ratio bigger than the average P/E ratio of 43, shows that the market is showing signals of too high expectations. Especially, three companies have their P/E ratio bigger than 100. These include PVD (328), VIP (112) and HBC (162).
According to the SSC, the sharp growth of the stock market recently are due to the following reasons:
First, the overly high expectations of domestic and foreign investors in the securities market.
Secondly, the securities market is still new in Vietnam. Many investors are still influenced by demands from foreign investors.
Thirdly, some foreign and domestic investors are of the view that listed companies are mostly State-owned enterprises which have been equitised at an artificially at low price. Therefore, they hope that the price of these shares will remain cheap.
Fourthly, the sharp increase of shares of some listed companies is due to the fact that investors expect a sudden growth of some enterprises working in special sectors.
The last reason might be the capability that some big investors want to control the prices of some newly-listed shares.
Source: VNE
Tuesday, February 13, 2007
Vietcombank will sell shares to foreign financial group
The Bank for Foreign Trade of Vietnam (Vietcombank) and Switzerland’s Credit Suisse yesterday signed the contract on equitisation consultancy services.
Under the contract, Credit Suisse will provide a package of services, including the solution to convert the bonds into shares, skills for corporate governance, bad debt management training, risk and asset management.
Speaking at the press conference held in Hanoi yesterday, Vu Viet Ngoan, Vietcombank’s Director General said that the bank has got the permission from the Government to choose a foreign strategic shareholder, to whom Vietcombank will sell 10% of its shares. The foreign strategic partner must be a world’s leading financial group, which is interested in Vietnam’s market.
Mr Ngoan said that under the consultancy of Credit Suisse, the IPO in the domestic market will be carried out in July 2007. The selection of strategic shareholder will be done in October 2007 and the IPO in the international market will be undertaken in 2008.
Mr Ngoan said that in the first phase of the equitisation, the state will remain the main shareholder with 70% of total capital. Only 10% of chartered capital will be available for every time of IPO. In the long term, the proportion of state owned shares in Vietcombank will decrease, but the state will still hold the controlling stake proportion of 51%.
In principle, Vietcombank may sell 20% of its stakes to foreign strategic shareholders at maximum, however, the deal must be approved by the Government.
Mr Ngoan has confirmed that Credit Suisse is the only financial consultant for Vietcombank in the equitisation process, and it will not become the strategic shareholder of Vietcombank.
On February 12, the world’s leading credit rating firm Standard & Poor’s announced it gave Vietcombank BB/B (stable outlook) in credit ranking. The rating given to Vietcombank is equivalent to the national credit rating. This is the highest ever credit rating given by Standard & Poor’s to a Vietnam-based financial institution.
Source: VNE
Under the contract, Credit Suisse will provide a package of services, including the solution to convert the bonds into shares, skills for corporate governance, bad debt management training, risk and asset management.
Speaking at the press conference held in Hanoi yesterday, Vu Viet Ngoan, Vietcombank’s Director General said that the bank has got the permission from the Government to choose a foreign strategic shareholder, to whom Vietcombank will sell 10% of its shares. The foreign strategic partner must be a world’s leading financial group, which is interested in Vietnam’s market.
Mr Ngoan said that under the consultancy of Credit Suisse, the IPO in the domestic market will be carried out in July 2007. The selection of strategic shareholder will be done in October 2007 and the IPO in the international market will be undertaken in 2008.
Mr Ngoan said that in the first phase of the equitisation, the state will remain the main shareholder with 70% of total capital. Only 10% of chartered capital will be available for every time of IPO. In the long term, the proportion of state owned shares in Vietcombank will decrease, but the state will still hold the controlling stake proportion of 51%.
In principle, Vietcombank may sell 20% of its stakes to foreign strategic shareholders at maximum, however, the deal must be approved by the Government.
Mr Ngoan has confirmed that Credit Suisse is the only financial consultant for Vietcombank in the equitisation process, and it will not become the strategic shareholder of Vietcombank.
On February 12, the world’s leading credit rating firm Standard & Poor’s announced it gave Vietcombank BB/B (stable outlook) in credit ranking. The rating given to Vietcombank is equivalent to the national credit rating. This is the highest ever credit rating given by Standard & Poor’s to a Vietnam-based financial institution.
Source: VNE
Vietcombank IPO this summer
State-run Bank for Foreign Trade (Vietcombank), Vietnam's second-largest bank, is expected to offer shares to the public in July or August and its domestic listing would follow within six to eight weeks, officials said.
Hanoi-based Vietcombank, along with Vietindebank, Incombank and the Mekong Delta Housing Development Bank, are four state-run banks ordered by the government to privatise partially in 2007.
Agribank, the country's largest bank, will follow in 2008 to complete part of the banking sector reform viewed by foreign investors as a test for the communist-run Southeast Asian country in realising commitments it made when joining the World Trade Organisation in January.
"We hope that in July or August the IPO of Vietcombank will be executed," Pham Viet Muon, deputy head of the Government Office, said on Monday, giving the bank's IPO timetable for the first time.
Muon was speaking shortly before Vietcombank signed a contract to hire global investment bank Credit Suisse to advise on its partial privatisation.
Source: Reuters
Hanoi-based Vietcombank, along with Vietindebank, Incombank and the Mekong Delta Housing Development Bank, are four state-run banks ordered by the government to privatise partially in 2007.
Agribank, the country's largest bank, will follow in 2008 to complete part of the banking sector reform viewed by foreign investors as a test for the communist-run Southeast Asian country in realising commitments it made when joining the World Trade Organisation in January.
"We hope that in July or August the IPO of Vietcombank will be executed," Pham Viet Muon, deputy head of the Government Office, said on Monday, giving the bank's IPO timetable for the first time.
Muon was speaking shortly before Vietcombank signed a contract to hire global investment bank Credit Suisse to advise on its partial privatisation.
Source: Reuters
Seafood exports expected to increase by 9.3%
Vietnamese seafood processing businesses are striving to earn an export turnover of 3.6 billion US$ in 2007, according to the Viet Nam Association of Seafood Exporters and Processors (VASEP).
The businesses, including large ones, Minh Phu, Camimex, Jostoco and Agifish, invested in modernising technologies to raise production capacity and diversify export items.
The fisheries sector will also help businesses improve their capacity of examining antibiotic residues in materials. Seafood export revenues were at 3.36 billion US$ in 2006, surpassing the yearly plan of 2.8 billion US$.
Source: VNA
The businesses, including large ones, Minh Phu, Camimex, Jostoco and Agifish, invested in modernising technologies to raise production capacity and diversify export items.
The fisheries sector will also help businesses improve their capacity of examining antibiotic residues in materials. Seafood export revenues were at 3.36 billion US$ in 2006, surpassing the yearly plan of 2.8 billion US$.
Source: VNA
Government bonds on auction
The Vietnam gov’t is set to auction 300 billion VND (18.8mio US$) in bonds February 26 at the Hanoi Securities Trading Center (HASTC), with funds to assist socio-economic development. The finance ministry forecast that government backed bonds would lure about 60-70 trillion VND (3.7- 4.3mio US$) annually in the near future.
The five-year bonds bear a face value of 100,000 VND and will be issued the State Treasury on February 28 and listed in the Hanoi bourse.
The government has successfully raised 500 billion VND (31mio US$) through a bond issue on also HASTC on February 5.
The five-year bonds, oversubscribed by nearly five times, have a coupon of 7.62% per annum.
The state treasury-issued report said Hanoi and Ho Chi Minh City had generated about 2.5 trillion VND (US$156 million), bringing municipal outstanding bond debt to 10 trillion VND($625 million) last year.
The development of a bond market has been viewed as an effective way to tap capital sources and also an important step in controlling inflation and currency fluctuation, the treasury said.
Foreign financiers said the debt market was still small compared to the regional exchanges in the Philippines, Malaysia and Singapore though the volume of government bonds has been increased since 2000.
They added that reforms were necessary to assist bond traders in accessing markets, tackling risks and controlling expenses.
The government should not be involved in setting price ceilings or interest rates, which limits the market’s competitiveness in the region.
The Ministry of Finance said recently it was restructuring the bond market to boost liquidity and transparency to attract investors and ensure funds for an economy growing at 8% a year.
Too many types of government bonds were now listed on the stock market and their small, fragmented nature limited the market’s development.
Starting this year, government bond issues would be larger and be traded on the Hanoi over-the-counter market.
The government planned to raise 500mio US$ 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$.
Source: Thanh Nien
The five-year bonds bear a face value of 100,000 VND and will be issued the State Treasury on February 28 and listed in the Hanoi bourse.
The government has successfully raised 500 billion VND (31mio US$) through a bond issue on also HASTC on February 5.
The five-year bonds, oversubscribed by nearly five times, have a coupon of 7.62% per annum.
The state treasury-issued report said Hanoi and Ho Chi Minh City had generated about 2.5 trillion VND (US$156 million), bringing municipal outstanding bond debt to 10 trillion VND($625 million) last year.
The development of a bond market has been viewed as an effective way to tap capital sources and also an important step in controlling inflation and currency fluctuation, the treasury said.
Foreign financiers said the debt market was still small compared to the regional exchanges in the Philippines, Malaysia and Singapore though the volume of government bonds has been increased since 2000.
They added that reforms were necessary to assist bond traders in accessing markets, tackling risks and controlling expenses.
The government should not be involved in setting price ceilings or interest rates, which limits the market’s competitiveness in the region.
The Ministry of Finance said recently it was restructuring the bond market to boost liquidity and transparency to attract investors and ensure funds for an economy growing at 8% a year.
Too many types of government bonds were now listed on the stock market and their small, fragmented nature limited the market’s development.
Starting this year, government bond issues would be larger and be traded on the Hanoi over-the-counter market.
The government planned to raise 500mio US$ 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
Monday, February 12, 2007
VN-Index dropped before Tet
The market plunged Friday as investors offloaded shares ahead of the Lunar New Year holiday.
The VN-Index lost 21.96 points to close at 1,030.90.
Analysts explained that some investors bailed out to move cash into real estate which has signaled a recovery while a bubble seems to be building in the stock market since December.
Many blue chips lost. IT giant FPT fell by VND30,000 to VND574,000, confectioner Kinh Do Corp lost VND10,000 to close at VND204,000, and dairy biggie Vinamilk lost VND9,000 to close at VND181,000.
In contrast to the HCMC market, Hanoi gained 0.27 points Friday to close at 340.53.
Source: Thanh Nien
The VN-Index lost 21.96 points to close at 1,030.90.
Analysts explained that some investors bailed out to move cash into real estate which has signaled a recovery while a bubble seems to be building in the stock market since December.
Many blue chips lost. IT giant FPT fell by VND30,000 to VND574,000, confectioner Kinh Do Corp lost VND10,000 to close at VND204,000, and dairy biggie Vinamilk lost VND9,000 to close at VND181,000.
In contrast to the HCMC market, Hanoi gained 0.27 points Friday to close at 340.53.
Source: Thanh Nien
SSC found irregularities at security companies
The State Securities Commission (SSC) began a probe into Vietcombank Securities (VCBS), Ho Chi Minh City Securities (HSC), and ACB Securities belonging to Asia Commercial Bank following a stream of complaints from investors.
The investigation showed that VCBS gave priority to orders from certain individuals and institutions, putting them through whatever time they came and not following the stock market rules.
Besides, 13 of its 22 employees involved in securities trading were not formally qualified for the job.
HSC, though mostly following the rules, did not maintain proper records for transactions like custodial services, mortgages, and share transfers, while the dates on some records did not match those at the bourse.
ACB Securities was allowing investors to use their stocks as collateral even before they were transferred to their accounts.
Also, it carried out some of the tasks manually, increasing the risk and making examination difficult.
The SSC has asked the three firms to follow the rules, warning if they continued with their errant ways it would slap harsh penalties.
The watchdog also plans to examine other stock brokerages following complaints from investors and some listed companies whose stocks have gained sharply.
Source: Thanh Nien
The investigation showed that VCBS gave priority to orders from certain individuals and institutions, putting them through whatever time they came and not following the stock market rules.
Besides, 13 of its 22 employees involved in securities trading were not formally qualified for the job.
HSC, though mostly following the rules, did not maintain proper records for transactions like custodial services, mortgages, and share transfers, while the dates on some records did not match those at the bourse.
ACB Securities was allowing investors to use their stocks as collateral even before they were transferred to their accounts.
Also, it carried out some of the tasks manually, increasing the risk and making examination difficult.
The SSC has asked the three firms to follow the rules, warning if they continued with their errant ways it would slap harsh penalties.
The watchdog also plans to examine other stock brokerages following complaints from investors and some listed companies whose stocks have gained sharply.
Source: Thanh Nien
Food processor to increase capital
The Ha Long Canned Food Stock Corporation (Ha Long Canfoco) has listed 1.5 million additional shares, raising the firm's total shares trading on the on Ho Chi Minh City bourse to 5 million, worth 50 billion VND (3.1mio US$).
The latest issue helped the company raise over 30 billion VND (1.9mio US$).
In 2006, Ha Long Canfoco reaped profits of 8.5 billion VND (531,250 US$) in revenues of 205 billion VND (12.8mio US$).
Source: VNAVietcombank launches 2nd fund
Vietcombank Fund Management (VCBF) launched its second fund Friday, 120mio US$ closed-end private-equity fund.
Vietcombank Partners Fund 2 had been mobilized from regional and global financial institutions, Vu Viet Ngoan, general director of Vietcombank, the country’s leading foreign trade lender and majority stakeholder in VCBF, said.
The money raised would be invested in unlisted firms, especially large public companies or state-run corporations, that planned to go public soon.
The eight-year fund would also invest a small portion in listed stocks.
Like Partners Fund 1, the new fund would also focus on the oil and gas, banking, insurance, IT, and telecom industries.
Partners Fund 1, which raised 200 billion VND(12.5mio US$) in January last year, is fully invested in unlisted firms some of which will list this year.
It was subscribed by Vietnamese and foreign financial institutions.
VCBF is a joint venture in which the Bank for Foreign Trade of Viet Nam (Vietcombank) holds 51 percent, and Viet Capital Holding Pte. of Singapore the rest.
VCBF has also inked a memorandum of understanding with London Asia Capital, a London-listed Asia-focused merchant banking group, to set up an investment fund.
London Asia Capital will raise capital from investors abroad for the fund while the Vietnamese partner will locate projects in the country for investment.
The fund, whose corpus is yet to be decided, will invest in Vietnamese companies that are in the process of equitization or seeking to list globally.
It will target companies whose products and services benefit from Vietnam’s rapid economic growth, increasing wealth, and accession to the World Trade Organization.
Source: Thanh Nien
Vietcombank Partners Fund 2 had been mobilized from regional and global financial institutions, Vu Viet Ngoan, general director of Vietcombank, the country’s leading foreign trade lender and majority stakeholder in VCBF, said.
The money raised would be invested in unlisted firms, especially large public companies or state-run corporations, that planned to go public soon.
The eight-year fund would also invest a small portion in listed stocks.
Like Partners Fund 1, the new fund would also focus on the oil and gas, banking, insurance, IT, and telecom industries.
Partners Fund 1, which raised 200 billion VND(12.5mio US$) in January last year, is fully invested in unlisted firms some of which will list this year.
It was subscribed by Vietnamese and foreign financial institutions.
VCBF is a joint venture in which the Bank for Foreign Trade of Viet Nam (Vietcombank) holds 51 percent, and Viet Capital Holding Pte. of Singapore the rest.
VCBF has also inked a memorandum of understanding with London Asia Capital, a London-listed Asia-focused merchant banking group, to set up an investment fund.
London Asia Capital will raise capital from investors abroad for the fund while the Vietnamese partner will locate projects in the country for investment.
The fund, whose corpus is yet to be decided, will invest in Vietnamese companies that are in the process of equitization or seeking to list globally.
It will target companies whose products and services benefit from Vietnam’s rapid economic growth, increasing wealth, and accession to the World Trade Organization.
Source: Thanh Nien
Saturday, February 10, 2007
Kinh Do becomes Eximbank's shareholder
Confectionery and property company Kinh Do Group signed a deal to pick up 6.42% stake in Viet Nam Export Import Bank (Eximbank) for 90mio US$.
The strategic cooperation agreement means Kinh Do will pay a premium since the bank's chartered capital is only 2.8 trillion VND (175mio US$).
"The cooperation will allow us to share our networks in selling products and services," Le Phung Hao, Kinh Do depute general director, said. The two will also support each other's investment projects.
Viet Nam Eximbank is a leading joint stock commercial bank with total assets of 18.332 trillion VND. By the end of 2006 it had outstanding loans of more than 10 trillion VND. Its import-export payments during the year amounted to 2.3 billion USD and gross profit to VND 359 billion VND. It has agency relationships with 650 banks in 65 countries.
This year the bank expects to increase its assets to 31.7 trillion VND, outstanding loans to 15 trillion VND, and profits to 605 billion VND, Deputy General Director Nguyen Quoc Huong said.
Kinh Do Group comprises of nine companies, three of them listed, and has interests in confectionery, beverages, ice cream, and real estate. It holds almost 40% of the country's confectionery market besides exporting to over 30 foreign markets.
Source: VNA
The strategic cooperation agreement means Kinh Do will pay a premium since the bank's chartered capital is only 2.8 trillion VND (175mio US$).
"The cooperation will allow us to share our networks in selling products and services," Le Phung Hao, Kinh Do depute general director, said. The two will also support each other's investment projects.
Viet Nam Eximbank is a leading joint stock commercial bank with total assets of 18.332 trillion VND. By the end of 2006 it had outstanding loans of more than 10 trillion VND. Its import-export payments during the year amounted to 2.3 billion USD and gross profit to VND 359 billion VND. It has agency relationships with 650 banks in 65 countries.
This year the bank expects to increase its assets to 31.7 trillion VND, outstanding loans to 15 trillion VND, and profits to 605 billion VND, Deputy General Director Nguyen Quoc Huong said.
Kinh Do Group comprises of nine companies, three of them listed, and has interests in confectionery, beverages, ice cream, and real estate. It holds almost 40% of the country's confectionery market besides exporting to over 30 foreign markets.
Source: VNA
BIDV's IPO plans
Vietnam's third-largest bank, the state-run Bank for Investment and Development (BIDV or Vietindebank), will seek an initial public offering in the fourth quarter of this year and list shares by the second quarter of 2008.
But Vietindebank General Director Tran Bac Ha did not say how much the bank, which had total assets of 10 billion US$ at the end of 2006, wanted to raise at the share offering.
"After the IPO we will hold a shareholder meeting, and there is a process to follow, so the share listing would be in the first or the second quarter of 2008," he said late on Thursday.
Hanoi-based Vietindebank, along with Vietcombank, Incombank and the Mekong Delta Housing Development Bank are the state-run banks ordered by the government to equitize in 2007.
Agribank, the country's largest bank, will follow in 2008 to complete part of the banking sector reform viewed by foreign investors as a test for Vietnam in realizing commitments made when it joined the World Trade Organization in January.
Vietindebank officials said the lender would pick a foreign consultant for its equitization process, similar to steps taken by Vietcombank, the country's second-largest bank, and the Mekong Delta Housing Development Bank.
Vietcombank will sign a deal on Monday to hire global investment bank Credit Suisse for its equitization and Deutsche Bank has been chosen to help the Mekong Delta housing bank, banking officials said.
Pending a government approval on the IPO, Vietindebank has been diversifying business to build finance strength.
Last year, Moody's Investors Service ranked the bank's creditworthiness as Ba1 for an issuer of Vietnamese dong with a stable outlook.
"We aim for an asset of VND200 trillion (12.5 billion US$) at the end of this year," Ha said before signing a strategic partnership agreement with Vietnam's largest telecoms firm, VNPT.
The agreement allows the two to use each other's nationwide network and services and gives them the right to become each other's strategic shareholders when conducting IPOs.
The unlisted bank projected its gross profit this year to jump 63.5% on 2006 to VND2 trillion, Ha said.
"Overall we aim for growth of 23% this year," he added.
Vietindebank said it would prioritize to use VNPT's telecoms services and widen banking services to more areas where VNPT already has post offices. VNPT runs Vinaphone and
MobiFone, Vietnam's largest mobile-phone networks which also plan IPOs soon.
Vietindebank will form two investment funds with VNPT, the Vietnam Oil and Gas group, state utility Vietnam Electricity group and several domestic firms to raise around 1 billion US$to build power plants, roads and ports.
Last month, the bank signed partnership deals with a policy bank, the Vietnam Development Bank, and a Vietnamese firm, the Hoa Phat group that deals with steel production, construction and trading to expand lending and financial investment.
Sacombank, Vietnam's first listed bank, bought this week 1 million shares in Hoang Anh Gia Lai group that has business from wood processing to tourism to real estate.
Source: VNA
But Vietindebank General Director Tran Bac Ha did not say how much the bank, which had total assets of 10 billion US$ at the end of 2006, wanted to raise at the share offering.
"After the IPO we will hold a shareholder meeting, and there is a process to follow, so the share listing would be in the first or the second quarter of 2008," he said late on Thursday.
Hanoi-based Vietindebank, along with Vietcombank, Incombank and the Mekong Delta Housing Development Bank are the state-run banks ordered by the government to equitize in 2007.
Agribank, the country's largest bank, will follow in 2008 to complete part of the banking sector reform viewed by foreign investors as a test for Vietnam in realizing commitments made when it joined the World Trade Organization in January.
Vietindebank officials said the lender would pick a foreign consultant for its equitization process, similar to steps taken by Vietcombank, the country's second-largest bank, and the Mekong Delta Housing Development Bank.
Vietcombank will sign a deal on Monday to hire global investment bank Credit Suisse for its equitization and Deutsche Bank has been chosen to help the Mekong Delta housing bank, banking officials said.
Pending a government approval on the IPO, Vietindebank has been diversifying business to build finance strength.
Last year, Moody's Investors Service ranked the bank's creditworthiness as Ba1 for an issuer of Vietnamese dong with a stable outlook.
"We aim for an asset of VND200 trillion (12.5 billion US$) at the end of this year," Ha said before signing a strategic partnership agreement with Vietnam's largest telecoms firm, VNPT.
The agreement allows the two to use each other's nationwide network and services and gives them the right to become each other's strategic shareholders when conducting IPOs.
The unlisted bank projected its gross profit this year to jump 63.5% on 2006 to VND2 trillion, Ha said.
"Overall we aim for growth of 23% this year," he added.
Vietindebank said it would prioritize to use VNPT's telecoms services and widen banking services to more areas where VNPT already has post offices. VNPT runs Vinaphone and
MobiFone, Vietnam's largest mobile-phone networks which also plan IPOs soon.
Vietindebank will form two investment funds with VNPT, the Vietnam Oil and Gas group, state utility Vietnam Electricity group and several domestic firms to raise around 1 billion US$to build power plants, roads and ports.
Last month, the bank signed partnership deals with a policy bank, the Vietnam Development Bank, and a Vietnamese firm, the Hoa Phat group that deals with steel production, construction and trading to expand lending and financial investment.
Sacombank, Vietnam's first listed bank, bought this week 1 million shares in Hoang Anh Gia Lai group that has business from wood processing to tourism to real estate.
Source: VNA
Friday, February 09, 2007
Fisheries exports up 8.2% in January
Seafood exports last month increased 8.2% year-on-year to 192mio US$, according to the Ministry of Fisheries, due in part to a seasonal rise in demand.
In January, companies exported 47,470 tonnes of seafood, including 8,500 tonnes of frozen shrimp, 4,370 tonnes of cuttlefish and octopus, and 26,000 tonnes of fish.
Despite declining prices in local market, shrimp farmers were able to sell their goods to the US at 12.7 US$ a kilogram. In Soc Trang province, shrimp sold at 155,000 VN$ a kilogram, down by 10,000-15,000 VND against prices in mid-December.
Meanwhile, the price of tra and basa catfish surged on a month-on-month comparison. Officials attribute the trend to rising demand during the Christmas to Tet festive season and limited supplies from local ponds.
Despite the increase in the overall export value, revenues were kept in check by new hygiene standards imposed by Japan.
Deputy Fisheries Minister Nguyen Hong Minh has urged companies to improve quality and hygiene controls soon, given Japan is not the only country tightening inspection. Russia and Australia are also requiring new safety checks before seafood products enter their market.
Source: VNA
In January, companies exported 47,470 tonnes of seafood, including 8,500 tonnes of frozen shrimp, 4,370 tonnes of cuttlefish and octopus, and 26,000 tonnes of fish.
Despite declining prices in local market, shrimp farmers were able to sell their goods to the US at 12.7 US$ a kilogram. In Soc Trang province, shrimp sold at 155,000 VN$ a kilogram, down by 10,000-15,000 VND against prices in mid-December.
Meanwhile, the price of tra and basa catfish surged on a month-on-month comparison. Officials attribute the trend to rising demand during the Christmas to Tet festive season and limited supplies from local ponds.
Despite the increase in the overall export value, revenues were kept in check by new hygiene standards imposed by Japan.
Deputy Fisheries Minister Nguyen Hong Minh has urged companies to improve quality and hygiene controls soon, given Japan is not the only country tightening inspection. Russia and Australia are also requiring new safety checks before seafood products enter their market.
Source: VNA
MobiFone goes public this year
Mr Minh, the director of the Vietnam Mobile Telecom Service Company (VMS), said that the difficulties the company has to face during the equitisation process have nearly been resolved. The BCC (business cooperation contract) with Swedish Comvik has been liquidated, while the company has received direct instructions from the Government on detailed problems.
Now VMS is selecting the foreign consultant who will help build up the project on the company’s equitisation as requested by the Prime Minister. “Several experienced and prestigious consultants have contacted VMS, and we will choose suitable consultants in some days,” said Mr Minh.
“Our goal is to finish the equitisation in 2007,” he added.
Prior to that, the high ranking of the Ministry of Post and Telematics and the Vietnam Post and Telecommunication Group (VNPT) have also committed to undertake and complete MobiFone’s equitisation in 2007.
When talking about the attractiveness of VMS’s shares on the stock market, Mr Minh said that MobiFone itself now is a big trademark in Vietnam’s and regional markets. When it lists on the bourse, it would be a good opportunity for the company to develop and grow its trademark further.
In a recent survey conducted by Thoi bao kinh te Vietnam on the most attractive share items, the shares of the telecom companies proved to be the third attractive share item in the eyes of investors, after the finance and banking, and oil and gas industry, and more attractive than real estate, power and high technologies.
MobiFone plans to have 2.5mil subscribers more in 2007 and install 3,000 BTS (base transceiver stations) more in order to expand the coverage area.
Source: VNE
Now VMS is selecting the foreign consultant who will help build up the project on the company’s equitisation as requested by the Prime Minister. “Several experienced and prestigious consultants have contacted VMS, and we will choose suitable consultants in some days,” said Mr Minh.
“Our goal is to finish the equitisation in 2007,” he added.
Prior to that, the high ranking of the Ministry of Post and Telematics and the Vietnam Post and Telecommunication Group (VNPT) have also committed to undertake and complete MobiFone’s equitisation in 2007.
When talking about the attractiveness of VMS’s shares on the stock market, Mr Minh said that MobiFone itself now is a big trademark in Vietnam’s and regional markets. When it lists on the bourse, it would be a good opportunity for the company to develop and grow its trademark further.
In a recent survey conducted by Thoi bao kinh te Vietnam on the most attractive share items, the shares of the telecom companies proved to be the third attractive share item in the eyes of investors, after the finance and banking, and oil and gas industry, and more attractive than real estate, power and high technologies.
MobiFone plans to have 2.5mil subscribers more in 2007 and install 3,000 BTS (base transceiver stations) more in order to expand the coverage area.
Source: VNE
Sensitive OTC market
Shares of several big banks like Eximbank, EAB, An Binh, Phuong Nam and Habubank have been trading well; however, the prices have decreased by 2-5% compared to last week.
Prices have been decreasing since investors heard the warnings about the overly high prices of unlisted shares, which proved to exceed the actual values, though joint stock banks all announced good business performances in 2006.
Big lots of shares (1,000 shares and more) found it hard to be sold on February 5 and 6. Hot share items including Mai Linh, Alphanam and PVI have all seen price decreases.
Mai Linh shares are being offered at 43-48,000 VND/share. However, transactions succeeded at 42,000 VND/share, while no investor dares buy large lots of shares (5-10,000 shares) at this moment.
PVI, which once hit the 175,000 VND/share level, was traded at 165,000 VND/share on February 6. There are a lot of offers for sale of these share items on OTC websites, while very few offers for buying were found.
SSI, which were once traded at more than 80,000 VND/share, now are being offered at 75,000 VND/share.
The OTC market proves to be more sensitive than the official stock market. Investors sell shares immediately when prices begin going down. As the volume of shares sold has been too big, no one dares buy unlisted shares at this moment. Shares issued by Gia Dinh, Cho Lon Water Supply Companies cannot find customers now, and nor can shares of seafood, real estate and rubber companies. The offers for large lots of shares (more than 5,000 shares) of the non-bank and non-insurance companies these days prove to be hard to be successful.
Explaining the “shift of the wind”, the deputy director of a big securities company said that the information about the stricter control to be put over the OTC market had prompted investors to sell shares. There are too many share items on the OTC market, some 850 items, and the trading has been on a mess.
Meanwhile, Tran Quang Long, an investor at SSI’s trading floor, said that investors wanted to sell shares to take back capital as Tet was approaching. Many investors have to borrow money to trade securities and it is the right time to pay debts.
Source: VNE
Prices have been decreasing since investors heard the warnings about the overly high prices of unlisted shares, which proved to exceed the actual values, though joint stock banks all announced good business performances in 2006.
Big lots of shares (1,000 shares and more) found it hard to be sold on February 5 and 6. Hot share items including Mai Linh, Alphanam and PVI have all seen price decreases.
Mai Linh shares are being offered at 43-48,000 VND/share. However, transactions succeeded at 42,000 VND/share, while no investor dares buy large lots of shares (5-10,000 shares) at this moment.
PVI, which once hit the 175,000 VND/share level, was traded at 165,000 VND/share on February 6. There are a lot of offers for sale of these share items on OTC websites, while very few offers for buying were found.
SSI, which were once traded at more than 80,000 VND/share, now are being offered at 75,000 VND/share.
The OTC market proves to be more sensitive than the official stock market. Investors sell shares immediately when prices begin going down. As the volume of shares sold has been too big, no one dares buy unlisted shares at this moment. Shares issued by Gia Dinh, Cho Lon Water Supply Companies cannot find customers now, and nor can shares of seafood, real estate and rubber companies. The offers for large lots of shares (more than 5,000 shares) of the non-bank and non-insurance companies these days prove to be hard to be successful.
Explaining the “shift of the wind”, the deputy director of a big securities company said that the information about the stricter control to be put over the OTC market had prompted investors to sell shares. There are too many share items on the OTC market, some 850 items, and the trading has been on a mess.
Meanwhile, Tran Quang Long, an investor at SSI’s trading floor, said that investors wanted to sell shares to take back capital as Tet was approaching. Many investors have to borrow money to trade securities and it is the right time to pay debts.
Source: VNE
VNPT and BIDV start alliance
Under the deal signed Thursday in Hanoi, the Vietnam Post and Telecom Group (VNPT) and Bank for Development of Vietnam (BIDV) will work together as strategic partners, each reserving a major chunk of shares for the other to purchase on a mutual basis.
The two giant state corporations will utilize services including money transfers through their network of post agents, office transactions, automatic teller machines (ATMs), phone banking and internet banking.
The leading telecoms and banking providers plan to establish fund managers in various fields including energy, telecoms, property and mining.
They will also assist each other in training staff, according to the agreement.
Both sides will act as strategic founding members of fund management companies.
A BIDV representative said the two parties had also discussed either setting up or controlling a major portion of stakes in companies involved in the country’s forthcoming key mega projects.
These comprise the express way connecting the Ho Chi Minh City – Long Thanh – Dau Giay, the Vietnam-Laos Hydropower plant, Vietnam – Cambodia Hydropower plant, and a bank for trade, industry and services of Vietnam.
BIDV and VNPT have long established a close relationship as the bank had used VNPT-sourced services in return for short, medium and long term credit and syndicated loans for telecom projects.
The new formal strategic cooperation with a leading bank will enable VNPT to expand services and develop financial operations with the telecom business.
VNPT, last year, became a member of the ASEAN Telecom Holding Company (ATH/ACASIA), one of the Association of Southeast Asian Nations (ASEAN)'s leading primary network service providers, made up of the six leading telecom providers in the region, namely CAT, Indosat, JTB, PLDT, Singtel and Telekom Malaysia.
Source: Thanh Nien
New policies may stimulate growth
A securities executive forecast that Viet Nam's stock exchange would receive an influx of new-comers with strong financial portforlio in 2007 after the Government issued a series of policies in support of the financial and monetary markets.
Bui Nguyen Hoa, Head of the HCM City Branch Office of the State Securities Commission (SSC), told a workshop on the development and integration of the Viet Nam Securities Market, that the Government has always prioritised policies to promote reforms and development of relevant markets.
These policies always aim to attract businesses from all economic sectors, ensure effective management and support sustainable development, said the bourse executive. He also unveiled a SSC's plan to work with relevant Government agencies in gearing the legal system towards an open market in line with the nation's commitments to the World Trade Organisation. SSC will take firm measures to ensure careful but flexible enforcement of financial management policies in an effort to create a stable socio-political environment in favour of investment and economic development, concluded Hoa.
Source: VNA
Thursday, February 08, 2007
Carlsberg aims minority stake of Habeco
The state-owned Hanoi Beer Company (Habeco) recently announced plans to begin operating this year as a equitized company, offering a potentially lucrative investment for foreign brewers. The announcement is particularly interesting for Carlsberg, which has already established links with Habeco for a possible partnership in the country.
Carlsberg views Vietnam as a driving force in the development of the region's beer market.
Expected average annual growth for beer production in Vietnam is around 8%, according to Carlsberg's own figures.
This the company expects will see beer sales in the country - which totaled 15.2 million hectoliters in 2006, rise to 28.1 million hectoliters by 2015, making the market the third largest in Asia.
Under the terms of the equitization, the Vietnamese government will retain a 76% stake of Habeco, with the remaining 24% distributed between staff and investors.
Of this 24%, only 10 percent will be available for purchase by a strategic business partner, leaving Carlsberg at best with the potential of a minority stake in the group.
Jens Peter Skaarup, Carlsberg's international spokesperson said that the company was prepared for a gradual approach to expanding its operations within the country, and would persevere with its plans.
Source: Thanh Nien
Saigon brewery to sell equity
The State-owned Sai Gon Beverage Company (SABECO) plans to issue 20% of the company's value in the first phase to become a joint stock firm.
The sale, to strategic partners, employees and the public as well, is scheduled in June. It is in the process to select a consultant for its corporate evaluation.
Last year, SABECO sold 534 million litres of beer, its major product, in Viet Nam and overseas markets including China, Japan, the US and Canada with the export value worth 10 million USD. This year the figures are expected to rise 18% and 147% respectively.
Source: VNA
The sale, to strategic partners, employees and the public as well, is scheduled in June. It is in the process to select a consultant for its corporate evaluation.
Last year, SABECO sold 534 million litres of beer, its major product, in Viet Nam and overseas markets including China, Japan, the US and Canada with the export value worth 10 million USD. This year the figures are expected to rise 18% and 147% respectively.
Source: VNA
Monday, February 05, 2007
Vinamilk increased profit in 2006
Vietnam's top dairy product maker, Vinamilk, posted a 21%-increase in 2006 net profit to 733.23 billion VND (45.6mio US$), a company statement released at the stock exchange said.
Revenues of Vinamilk, Vietnam's second-largest listed company, increased 17.7% from 2005 to 6.66 trillion dong (414mio US$), the statement said.
Source: Reuters
Revenues of Vinamilk, Vietnam's second-largest listed company, increased 17.7% from 2005 to 6.66 trillion dong (414mio US$), the statement said.
Source: Reuters
Sai Gon Bank plans IPO
The Sai gon Bank announced it will issue shares worth 330 billion VND (20.6mio US$) this year.
The bank hopes to almost double its chartered capital from 690 billion VND (43.1mio US$) to 1.02 trillion VND (63.7mio US$).
The bank also plans to issues convertible bonds worth 1 trillion VND (62.5mio US$). Each 10-month bond will yield an interest rate of 9%.
Source: VNA
The bank hopes to almost double its chartered capital from 690 billion VND (43.1mio US$) to 1.02 trillion VND (63.7mio US$).
The bank also plans to issues convertible bonds worth 1 trillion VND (62.5mio US$). Each 10-month bond will yield an interest rate of 9%.
Source: VNA
Sunday, February 04, 2007
HaSTC to upgrade trading systems
The Ha Noi Securities Trading Centre (HaSTC) will focus on building the secondary market in a safe and efficient manner as one of its key tasks in 2007, a HaSTC executive said on Feb. 2.
HaSTC will put into operation a distant trading system, which will directly connect with securities companies, rather than conducting transactions at trading floor as at present so as to better meet the market's requirements and improve its operation efficiency, HaSTC's Director Tran Van Dung said.
Dung added that HaSTC will upgrade the existing bond trading system into a professional secondary system and will establish a network managing over-the-counter (OTC) transactions to help increase the efficiency of the management of unlisted share trading, reduce risks for investors and increase market transparency.
The director continued that his fledgling stock exchange, which began its operation in March 2005, has witnessed a robust growth in transaction scale and value with effective supervision and information announcement.
Within over a year, the number of businesses registered for trading on the Ha Noi stock exchange increased 14 fold, from six to 87, with a total registered capital of more than 11.3 trillion VND, he said, adding that the total value of the market also rose from 2 trillion VND at the beginning of 2006 to more than 73 trillion on Dec. 29, 2006.
Source: VNA
HaSTC will put into operation a distant trading system, which will directly connect with securities companies, rather than conducting transactions at trading floor as at present so as to better meet the market's requirements and improve its operation efficiency, HaSTC's Director Tran Van Dung said.
Dung added that HaSTC will upgrade the existing bond trading system into a professional secondary system and will establish a network managing over-the-counter (OTC) transactions to help increase the efficiency of the management of unlisted share trading, reduce risks for investors and increase market transparency.
The director continued that his fledgling stock exchange, which began its operation in March 2005, has witnessed a robust growth in transaction scale and value with effective supervision and information announcement.
Within over a year, the number of businesses registered for trading on the Ha Noi stock exchange increased 14 fold, from six to 87, with a total registered capital of more than 11.3 trillion VND, he said, adding that the total value of the market also rose from 2 trillion VND at the beginning of 2006 to more than 73 trillion on Dec. 29, 2006.
Source: VNA
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