The prices of OTC shares have dropped by 40-50% on average since February 2007, when the market entered a new stage after a long period of heating up.
OTC shares all have been witnessing sharp price decreases, including the blue-chips. Analysts have said that banks’ shares have seen the biggest price decreases, by 40-50%, from their highest peaks. Shares of construction material companies also have seen considerable price decreases, by 30-40%, while shares of petroleum, power, mineral and securities trading companies have decreased by 20-30% in price from those seen during the February “share fever”. The price decreases have been slighter, 10-20%, for shares of financial, insurance and mechanics companies.
Analysts have identified five main reasons for the cooling of the OTC market.
First, both demand and supply are weak now on the OTC market. Investors now do not have money to buy OTC shares because they nearly emptied their pockets to buy shares in the period from October 2006 to January 2007. During that time, share prices skyrocketed, exceeding their actual values, though a lot of companies issued shares in order to raise their chartered capital.
Second, it is now the cycle of the OTC market to freeze. In previous years, the second quarter of year is always the time of freezing of the OTC market. Good information that may help stimulate share price increases is still absent at this moment. Companies have reported their business performances already; short-term investors are not braving danger at this moment by buying shares when prices are going down.
Meanwhile, the periodic falls of the official market have impacted the OTC market. Experts said that the share prices on the official bourse would further decrease before they bounced back at the end of the year.
Third, investors have been disappointed by the sharp decreases of banks’ share prices. Bank shares once accounted for 70% of the total transaction value on the OTC market, and bank share prices were once pushed up to abnormally high levels, 6-15 fold higher than their nominal value.
Fourth, investors are all anticipating the IPOs of big corporations, and they are not making deals at this moment. Moreover, they have other channels to make investment, including real estate projects, purchasing dollars and gold.
Fifth, state management authorities have warned about the big risks investors have to cope with when buying OTC shares at overly high prices. Meanwhile, the central bank has decided to limit the cash inflow from banks to the stock market by requesting that commercial banks limit lending for securities investment deals: commercial banks are not allowed have loans for securities investments in excess of 3% of their outstanding loans. Investors have been asked to pay debts, and they have more choices than selling shares to take money back.
Source: VNE
Friday, June 29, 2007
Vietnam's retail market attractiveness falls back
AT Kearney has released its report on the Global Retail Development Index (GRDI), selecting the 30 economies that have the most attractive retail markets in the world, in which Vietnam ranks fourth, after India (92 marks), Russia (89 marks) and China (86 marks).
The fourth position for Vietnam proves to be a step back compared to the ranking Vietnam held in the previous AT Kearney report. In 2004, Vietnam ranked 7th in GRDI (after Russia, India, China, Slovenia, Croatia and Latvia). The ranking did not improve in 2005 (8th) even with Vietnam obtaining 79 marks. However, Vietnam made a big leap in 2006 when the country jumped into the third position. Therefore, it should be considered a step back with Vietnam falling to fourth position this year.
Over the last three years, from 2004 to 2006, Vietnam’s gained eight marks more only, while it lost 10 marks just in one year, 2007, and this, according to experts, is worth worrying about as it shows unstable development, thus making Vietnam’s retail market less attractive.
AT Kearney has selected the most attractive retail markets in the world among 185 countries based on four criteria: country risks, market attractiveness, market saturation level and time pressure.
Vietnam has made improvement in terms of country risks, but at a slow pace. In 2004, Vietnam got 52 marks, in 2005, it got 54 marks, in 2006: 43 points, and in 2007: 57 marks. Meanwhile, in 2007, China got 75 marks, Russia 62 marks, while India, 67 marks.
Vietnam made the most encouraging improvement in terms of attractiveness, but the improvement proves to be far below the one gained by the three other countries. Vietnam got 29 marks in 2004 and 2005, 24 marks in 2006 and 34 marks in 2007, much lower than India (42 marks), China (46), and Russia (52).
Meanwhile, Vietnam’s saw sharp declines in the other two criteria: it got 90 marks for market saturation level in 2004, 88 marks in 2005, 87 marks in 2006 and 76 marks only in 2007. The biggest problem occurred with the last variable, time pressure. Vietnam got 59 only in ‘time pressure’, falling by 22 marks over the previous year, a big fall considering that China lost four marks only over the last year. India got 74 marks, China 84 and Russia 90.
Source: VNE
The fourth position for Vietnam proves to be a step back compared to the ranking Vietnam held in the previous AT Kearney report. In 2004, Vietnam ranked 7th in GRDI (after Russia, India, China, Slovenia, Croatia and Latvia). The ranking did not improve in 2005 (8th) even with Vietnam obtaining 79 marks. However, Vietnam made a big leap in 2006 when the country jumped into the third position. Therefore, it should be considered a step back with Vietnam falling to fourth position this year.
Over the last three years, from 2004 to 2006, Vietnam’s gained eight marks more only, while it lost 10 marks just in one year, 2007, and this, according to experts, is worth worrying about as it shows unstable development, thus making Vietnam’s retail market less attractive.
AT Kearney has selected the most attractive retail markets in the world among 185 countries based on four criteria: country risks, market attractiveness, market saturation level and time pressure.
Vietnam has made improvement in terms of country risks, but at a slow pace. In 2004, Vietnam got 52 marks, in 2005, it got 54 marks, in 2006: 43 points, and in 2007: 57 marks. Meanwhile, in 2007, China got 75 marks, Russia 62 marks, while India, 67 marks.
Vietnam made the most encouraging improvement in terms of attractiveness, but the improvement proves to be far below the one gained by the three other countries. Vietnam got 29 marks in 2004 and 2005, 24 marks in 2006 and 34 marks in 2007, much lower than India (42 marks), China (46), and Russia (52).
Meanwhile, Vietnam’s saw sharp declines in the other two criteria: it got 90 marks for market saturation level in 2004, 88 marks in 2005, 87 marks in 2006 and 76 marks only in 2007. The biggest problem occurred with the last variable, time pressure. Vietnam got 59 only in ‘time pressure’, falling by 22 marks over the previous year, a big fall considering that China lost four marks only over the last year. India got 74 marks, China 84 and Russia 90.
Source: VNE
VN-Index up slightly, HaSTC-Index down
Blue chips, Hau Giang Pharmaceutical and urban developer Song Da led a rally on the VN-Index that saw the country's largest bourse finish slightly up by the end of the June 29 trading session.
By closing, the VN-Index at the Ho Chi Minh City-based exchange rose by 0.64 points to end at 1,024.68 points.
The market saw 56 shares fall, 26 shares remain unchanged and 27 shares gain. A total of 4,340,530 shares, worth more than 461.618 billion VND, were traded.
Meanwhile, the HaSTC-Index at the Ha Noi Securities Trading Centre dropped by 4.2 points to close at 284.7 points by the end of the trading as 50 of the exchange's 87 listed shares fell.
However, trading volumes saw a modest rise over the previous session with 1.23 million shares worth 115.37 billion VND changing hands.
Source: VNA
By closing, the VN-Index at the Ho Chi Minh City-based exchange rose by 0.64 points to end at 1,024.68 points.
The market saw 56 shares fall, 26 shares remain unchanged and 27 shares gain. A total of 4,340,530 shares, worth more than 461.618 billion VND, were traded.
Meanwhile, the HaSTC-Index at the Ha Noi Securities Trading Centre dropped by 4.2 points to close at 284.7 points by the end of the trading as 50 of the exchange's 87 listed shares fell.
However, trading volumes saw a modest rise over the previous session with 1.23 million shares worth 115.37 billion VND changing hands.
Source: VNA
Vietnam limits stock loans to 3 pct of banks' debt
Vietnam's central bank has ordered banks to limit lending to stock investors to 3 percent of their total outstanding debt, as part of measures to stabilise the fledgling but fast-expanding stock markets.
Commercial banks must reduce loans to stock investors to a maximum of 3 percent of total outstanding debt by Dec. 31 this year, the Vietnam News Agency on Friday quoted Nguyen Danh Trong, deputy director of the bank's monetary policy department, as saying.
Banks which are already under the 3 percent limit must implement the cap from July 1, the central bank ruled.
"Banks should review the risk associated with stock lending before making the decision to lend," Trong was quoted as saying by Lao Dong newspaper.
Trong said lending to stock investors by the overall banking system now stood at an average of 2.5 percent to total outstanding debt and there were about 12 banks which had exceeded the limit to about 7 percent.
"The big risk in stock investment is the loss of liquidity," Trong added.
The central bank said in its first-half review of the stock markets that total market capitalisation had jumped about 43 percent to $20 billion at the end of June from $14 billion recorded at the end of 2006.
The main Ho Chi Minh Stock Exchange index grew a massive 144.5 percent in 2006 and about 36 percent this year with a market capitalisation of about $14 billion.
Source: Reuters
Commercial banks must reduce loans to stock investors to a maximum of 3 percent of total outstanding debt by Dec. 31 this year, the Vietnam News Agency on Friday quoted Nguyen Danh Trong, deputy director of the bank's monetary policy department, as saying.
Banks which are already under the 3 percent limit must implement the cap from July 1, the central bank ruled.
"Banks should review the risk associated with stock lending before making the decision to lend," Trong was quoted as saying by Lao Dong newspaper.
Trong said lending to stock investors by the overall banking system now stood at an average of 2.5 percent to total outstanding debt and there were about 12 banks which had exceeded the limit to about 7 percent.
"The big risk in stock investment is the loss of liquidity," Trong added.
The central bank said in its first-half review of the stock markets that total market capitalisation had jumped about 43 percent to $20 billion at the end of June from $14 billion recorded at the end of 2006.
The main Ho Chi Minh Stock Exchange index grew a massive 144.5 percent in 2006 and about 36 percent this year with a market capitalisation of about $14 billion.
Source: Reuters
Vietnam's Nutifood plans IPO, listing in Q4
Vietnam's fourth-largest dairy product maker, Nutifood, plans to hold a maiden share auction and list on the Ho Chi Minh Stock Exchange in the fourth quarter of this year, a company spokesman said on Friday.
"We are still working with our IPO advisor on the details of the auction and we aim to float Nutifood shares in the fourth quarter," he said.
The Ho Chi Minh City-based firm, which has a registered capital of 120 billion dong ($7.4 million), expects its profit to rise 69 percent to 44 billion dong ($2.7 million) this year from 2006.
"Our target is to grow our business by between 30 percent to 35 percent per year in the next couple of years," the spokesman said, adding the firm had set up about 60,000 outlets for its products which include milk powder and other nutrition drinks.
Nutifood shares are being traded on the unofficial market at around 60,000 dong to 90,000 dong ($3.7-$5.6) each.
The company plans to invest about 205 billion dong ($12.7 million) in a dairy processing plant in the southern province of Binh Duong near Ho Chi Minh City.
The domestic market for dairy products is dominated by Vinamilk (VNM) which commands a lion's share of 75 percent.
Other competitors include Dutch Lady Milk Industrie and Abbott Laboratories.
"We are still working with our IPO advisor on the details of the auction and we aim to float Nutifood shares in the fourth quarter," he said.
The Ho Chi Minh City-based firm, which has a registered capital of 120 billion dong ($7.4 million), expects its profit to rise 69 percent to 44 billion dong ($2.7 million) this year from 2006.
"Our target is to grow our business by between 30 percent to 35 percent per year in the next couple of years," the spokesman said, adding the firm had set up about 60,000 outlets for its products which include milk powder and other nutrition drinks.
Nutifood shares are being traded on the unofficial market at around 60,000 dong to 90,000 dong ($3.7-$5.6) each.
The company plans to invest about 205 billion dong ($12.7 million) in a dairy processing plant in the southern province of Binh Duong near Ho Chi Minh City.
The domestic market for dairy products is dominated by Vinamilk (VNM) which commands a lion's share of 75 percent.
Other competitors include Dutch Lady Milk Industrie and Abbott Laboratories.
Vietnam H1 GDP up 7.87 percent on year
Vietnam's economy in the first half grew an estimated 7.87 percent from a year earlier, led by industrial and construction sectors, the country's statistics office said on Friday.
The figures suggested, however, growth was running at a slower pace than the government's full-year target of between 8.2 percent and 8.5 percent.
"There remains a lot to be done in the second half of the year to meet the annual growth rate. The obstacles to be faced include low growth in agricultural production, a soaring trade deficit due to slower growth in exports," the General Statistics Office said in a statement.
It said industrial and construction sectors in the first half were estimated to have expanded 9.88 percent from a year earlier, followed by the service sector's growth of 8.41 percent.
The agriculture sector, which include key exports such as rice and coffee, only expanded 1.7 percent in the first half.
The office estimated earlier this week that the trade deficit in the January-June period more than doubled to $4.78 billion from a year earlier, due largely to a surge in imports for the construction of state projects and falling output of crude oil, the country's largest export item.
Foreign direct investment (FDI), including new pledges and increased funds for existing projects, was expected to reach $5.2 billion in the first six months of the year, an increase of 8 percent over the same period last year.
In May, the World Bank estimated Vietnam's economic growth this year would reach between 8 percent and 8.5 percent, compared with 8.17 percent in 2006.
World Bank officials have said Vietnam was now entering "the second generation of reform", which involves not only competition and opening up to the world but also dealing with complex issues in implementing WTO commitments.
Life insurance still facing crisis
The crisis in the life insurance sector is in its third year without any sign of ending as the numbers of new contracts and agents continue to fall.
Meanwhile, life insurance companies haven’t sat together yet to confront the fierce competition of other capital raising channels in the market, such as banks and the stock market.
According to the Vietnam Insurance Association, the 2006 premium of life insurance firms reaches nearly VND8,500 billion (US$531.25 million), up by 4.34% compared to 2005.
Of this number, the total premium from new contracts is VND1,289 billion ($80.56 million), equivalent to 97.6% of 2005, the lowest level since 2000.
Vietnamese people are abandoning life insurance and this fact is seen through the number of new contracts.
In 2006, the number of new contracts (for major life insurance products only) is 488,000, a fall of 17.1% over 2005. This fall means that the premiums collected in the years after 2006 will be low.
In addition, the number of cancelled contracts has been increasing. Clients canceling their life insurance contracts means that they will not continue to pay more money and suffer losses because they feel that life insurance products are less attractive than banking deposits or investing in stocks. In 2006, 431,023 contracts were canceled.
However, the major problem that threatens the development of life insurance companies is not the reduction of revenue growth, but the departure of agents.
Last year AIA had 8,632 agents, a reduction of up to 52.28% compared to 2005. The figures are 21,529 and 15.44% for Bao Viet Nhan Tho; 2,821 and 24.21% for Manulife; 20,980 and 44.53% for Prudential. Dai-ichi Life saw the lowest reduction of agents, with 2.44%. Only ACE Life had the number of its agents increase in 2006.
Notably, around 60% of the current agents are new ones. The change of agents can affect the quality of customer care services and the trust of customers in life insurers.
One of the reasons that have made customers neglect life insurance is that life insurance products are still simple and unattractive.
Life insurers now offer around 100 products but most of them are still death insurance adding savings. Vietnamese people don’t want to buy insurance for accidents or death while savings products have too low dividends.
Life insurance companies mainly invest premiums into bonds to gain safety so the profit they earn is only 12-13% per year. As a result, dividends paid to clients by life insurance firms is up to 6-8% per year only, much lower than banking interest rates and securities.
In Asia, life insurance is no longer based on death insurance and savings products but ‘revolutionary’ products such as insurance-investment or retirement insurance (as a support for compulsory social insurance).
In Vietnam, insurance-investment products (depending on contracts signed with clients, insurance firms can use part of the premium to invest in investment funds to bring higher profit for insurance buyers) have been prepared by some foreign-invested insurance companies for years but they have not been applied yet.
There are two reasons. The first is the lack of a legal framework. Only recently the Finance Ministry approved a document on the supply of life insurance-investment products. An official of the Finance Ministry said that these were new products and the ministry needed time to evaluate them.
However, some said that the Finance Ministry wanted to wait till Bao Viet Nhan Tho was ready to provide this product to allow the offer of this product in Vietnam. This product is considered a breakthrough for life insurance firms, while Bao Viet is under the aegis of the Finance Ministry so the ministry can’t let foreign companies be in advance of Bao Viet.
The lateness in offering this product to the market is perhaps not because it is too complicated but the intention of management agencies.
The second is Vietnam still has too few investment funds. Insurance firms can work with several funds like VF1, PRUBF1 and several unlisted funds. Insurance-investment products don’t allow insurance companies to directly invest in stocks so they may have to establish funds PRUBF1 of Prudential.
When will the life insurance market regains its growth? It is unclear. In the crisis, there are still businesses that gain high growth rate like ACE Life but the scale of ACE Life is too small, accounting for 0.62% of the life insurance market only (statistics by December 31, 2006).
Source: VNE
Meanwhile, life insurance companies haven’t sat together yet to confront the fierce competition of other capital raising channels in the market, such as banks and the stock market.
According to the Vietnam Insurance Association, the 2006 premium of life insurance firms reaches nearly VND8,500 billion (US$531.25 million), up by 4.34% compared to 2005.
Of this number, the total premium from new contracts is VND1,289 billion ($80.56 million), equivalent to 97.6% of 2005, the lowest level since 2000.
Vietnamese people are abandoning life insurance and this fact is seen through the number of new contracts.
In 2006, the number of new contracts (for major life insurance products only) is 488,000, a fall of 17.1% over 2005. This fall means that the premiums collected in the years after 2006 will be low.
In addition, the number of cancelled contracts has been increasing. Clients canceling their life insurance contracts means that they will not continue to pay more money and suffer losses because they feel that life insurance products are less attractive than banking deposits or investing in stocks. In 2006, 431,023 contracts were canceled.
However, the major problem that threatens the development of life insurance companies is not the reduction of revenue growth, but the departure of agents.
Last year AIA had 8,632 agents, a reduction of up to 52.28% compared to 2005. The figures are 21,529 and 15.44% for Bao Viet Nhan Tho; 2,821 and 24.21% for Manulife; 20,980 and 44.53% for Prudential. Dai-ichi Life saw the lowest reduction of agents, with 2.44%. Only ACE Life had the number of its agents increase in 2006.
Notably, around 60% of the current agents are new ones. The change of agents can affect the quality of customer care services and the trust of customers in life insurers.
One of the reasons that have made customers neglect life insurance is that life insurance products are still simple and unattractive.
Life insurers now offer around 100 products but most of them are still death insurance adding savings. Vietnamese people don’t want to buy insurance for accidents or death while savings products have too low dividends.
Life insurance companies mainly invest premiums into bonds to gain safety so the profit they earn is only 12-13% per year. As a result, dividends paid to clients by life insurance firms is up to 6-8% per year only, much lower than banking interest rates and securities.
In Asia, life insurance is no longer based on death insurance and savings products but ‘revolutionary’ products such as insurance-investment or retirement insurance (as a support for compulsory social insurance).
In Vietnam, insurance-investment products (depending on contracts signed with clients, insurance firms can use part of the premium to invest in investment funds to bring higher profit for insurance buyers) have been prepared by some foreign-invested insurance companies for years but they have not been applied yet.
There are two reasons. The first is the lack of a legal framework. Only recently the Finance Ministry approved a document on the supply of life insurance-investment products. An official of the Finance Ministry said that these were new products and the ministry needed time to evaluate them.
However, some said that the Finance Ministry wanted to wait till Bao Viet Nhan Tho was ready to provide this product to allow the offer of this product in Vietnam. This product is considered a breakthrough for life insurance firms, while Bao Viet is under the aegis of the Finance Ministry so the ministry can’t let foreign companies be in advance of Bao Viet.
The lateness in offering this product to the market is perhaps not because it is too complicated but the intention of management agencies.
The second is Vietnam still has too few investment funds. Insurance firms can work with several funds like VF1, PRUBF1 and several unlisted funds. Insurance-investment products don’t allow insurance companies to directly invest in stocks so they may have to establish funds PRUBF1 of Prudential.
When will the life insurance market regains its growth? It is unclear. In the crisis, there are still businesses that gain high growth rate like ACE Life but the scale of ACE Life is too small, accounting for 0.62% of the life insurance market only (statistics by December 31, 2006).
Source: VNE
Abundance of IPOs deals blow to investors
The OTC market had not yet recovered from the two big IPOs by the Phu My Fertiliser and Bao Viet when it received another ‘blow’, the IPO of 10mil shares by PetroVietnam Insurance (PVI) on June 26.
Before the PVI auction on June 26, PVI shares were traded at VND110,000/share on OTC market. The price dropped dramatically on June 27 after the final average price of the auction at VND75,499/share was announced. On OTC websites, PVI shares are being offered at VND75,000/share.
A lot of other OTC share items got involved in the misfortune when the prices dropped dramatically and they are unsalable because investors fear that more IPOs will take place in the coming time.
PVI shares have become the obsession of many investors as they set a record in price decrease, though PVI announced impressive business performance. Le Van Hung, Chairman of PVI, said that PVI expected to obtain the turnover of VND1,768bil, or more than $100mil.
There are two ways for investors to go now, either to hold shares with the hope that the PVI share price will increase when they are listed, or to sell the shares right now for fear that the price will further decrease.
In fact, PVI’s price has decreased not because PVI’s business is bad, but because of too many commodities on the market.
Experts have warned that if the IPOs of big corporations took place in the time to come as previously planned, the supply of securities will far exceed the demand, which will result in the dramatic drop of prices and the fall of the market.
Kim Thanh, an expert with the State Bank of Vietnam’s Monetary Policy Department, said that 40 IPOs had been made so far this year, with 451mil shares sold.
Soon after the IPO by PVI on June 26, Vincom will sell 5mil of shares to the public in early July at the starting price at VND80,000/share. Other IPOs will come in August (Vietcombank), October Mekong Housing Bank (MHB), while other big corporations have announced IPOs for the fourth quarter of 2007, including MobiFone and Sabeco.
A question has been raised: do investors have enough money for the large and massive number of IPOs?
Phan Vu Hung, an investor in HCM City thinks that enterprises should delay their IPOs. He said that domestic investors would not have money to buy all the shares to be issued, especially with commercial banks limiting loans for securities investment.
Ngoc Lan, an investor on Bao Viet Securities Company’s trading floor, said that a massive number of IPOs would cause indigestion in the market and not bring much money to the securities issuers as public capital is not unlimited.
Unlike the IPOs made last year, the final prices from this year’s share auctions are just a bit higher than the starting prices. Several issuers have to organise auctions twice as they cannot sell all the shares in one auction. The Phu My Thermo Power Company, for example, had 4.8mil unsold shares after the first auction, while the percentage of Thac Mo Hydropower Plant’s shares left unsold accounted for 38%.
Tran Bac Ha, Director General of the Bank for Investment and Development (BIDV) has warned that at least six IPOs of big corporations will take place from now until the end of the year. Mr Ha said that the IPOs will make supply far exceed demand, thus badly affecting the market.
Source: VNE
Before the PVI auction on June 26, PVI shares were traded at VND110,000/share on OTC market. The price dropped dramatically on June 27 after the final average price of the auction at VND75,499/share was announced. On OTC websites, PVI shares are being offered at VND75,000/share.
A lot of other OTC share items got involved in the misfortune when the prices dropped dramatically and they are unsalable because investors fear that more IPOs will take place in the coming time.
PVI shares have become the obsession of many investors as they set a record in price decrease, though PVI announced impressive business performance. Le Van Hung, Chairman of PVI, said that PVI expected to obtain the turnover of VND1,768bil, or more than $100mil.
There are two ways for investors to go now, either to hold shares with the hope that the PVI share price will increase when they are listed, or to sell the shares right now for fear that the price will further decrease.
In fact, PVI’s price has decreased not because PVI’s business is bad, but because of too many commodities on the market.
Experts have warned that if the IPOs of big corporations took place in the time to come as previously planned, the supply of securities will far exceed the demand, which will result in the dramatic drop of prices and the fall of the market.
Kim Thanh, an expert with the State Bank of Vietnam’s Monetary Policy Department, said that 40 IPOs had been made so far this year, with 451mil shares sold.
Soon after the IPO by PVI on June 26, Vincom will sell 5mil of shares to the public in early July at the starting price at VND80,000/share. Other IPOs will come in August (Vietcombank), October Mekong Housing Bank (MHB), while other big corporations have announced IPOs for the fourth quarter of 2007, including MobiFone and Sabeco.
A question has been raised: do investors have enough money for the large and massive number of IPOs?
Phan Vu Hung, an investor in HCM City thinks that enterprises should delay their IPOs. He said that domestic investors would not have money to buy all the shares to be issued, especially with commercial banks limiting loans for securities investment.
Ngoc Lan, an investor on Bao Viet Securities Company’s trading floor, said that a massive number of IPOs would cause indigestion in the market and not bring much money to the securities issuers as public capital is not unlimited.
Unlike the IPOs made last year, the final prices from this year’s share auctions are just a bit higher than the starting prices. Several issuers have to organise auctions twice as they cannot sell all the shares in one auction. The Phu My Thermo Power Company, for example, had 4.8mil unsold shares after the first auction, while the percentage of Thac Mo Hydropower Plant’s shares left unsold accounted for 38%.
Tran Bac Ha, Director General of the Bank for Investment and Development (BIDV) has warned that at least six IPOs of big corporations will take place from now until the end of the year. Mr Ha said that the IPOs will make supply far exceed demand, thus badly affecting the market.
Source: VNE
Loaning for securities investment: 2.5%, 7% or 40%?
The leader of the State Bank of Vietnam’s Monetary Policy Department this morning revealed figures on loans for securities investments of a few banks, which may startle everyone, because they amount to 40-50% of the bank’s total outstanding loans.
Experts and investors sighed relief when the State Bank of Vietnam announced a low percentage of loans for securities investments, at 2.5% of total outstanding loans on average, or 0.1% lower than earlier this year.
In fact, only state owned banks and foreign bank branches have low ratios of loans funding securities investments. The ratio is much higher, at 7%, for many joint stock banks.
Twelve joint stock banks have been found as having a percentage of loans funding securities investments higher than the allowed level at 3% of total outstanding loans.
The figures have been made public by the State Bank of Vietnam. However, it did not release other figures, which may surprise everyone. A leader from the Monetary Policy Department this morning revealed that the ratios in a few banks were 40-50% of total outstanding loans.
The source said that such a high percentage can be seen in very few small banks only, but it was enough to ring the alarm bell over the operation of banks. He said that such a high ratio had never been seen in any kind of loaning so far.
The official has declined to reveal the names of the banks, saying that this was a very ‘sensitive’ problem.
He stressed that it was necessary for the central bank to intervene in this case in order to avoid risks for the banking system as a whole.
Prior to that, investors and bankers voiced protest against the central bank’s decision to limit loaning for securities investments, saying that the central bank was too cautious in this issue, and thus was interfering with banks’ operations.
However, Governor of the State Bank Le Duc Thuy insisted on tightening the loaning for securities investments.
According to Mr Thuy, a world-famous economist, Vietnam is the only country in the world that allows banks to provide loans to fund securities investment. Other countries never allow their banks to get involved in funding securities investment deals.
“I know some banks have percentages of loans for securities investments far exceeding the allowed 3% level. They think risks will not come, but I have the responsibility to stop them, because if risks occur, the whole banking system will shake violently,” Mr Thuy said.
Source: VNE
Experts and investors sighed relief when the State Bank of Vietnam announced a low percentage of loans for securities investments, at 2.5% of total outstanding loans on average, or 0.1% lower than earlier this year.
In fact, only state owned banks and foreign bank branches have low ratios of loans funding securities investments. The ratio is much higher, at 7%, for many joint stock banks.
Twelve joint stock banks have been found as having a percentage of loans funding securities investments higher than the allowed level at 3% of total outstanding loans.
The figures have been made public by the State Bank of Vietnam. However, it did not release other figures, which may surprise everyone. A leader from the Monetary Policy Department this morning revealed that the ratios in a few banks were 40-50% of total outstanding loans.
The source said that such a high percentage can be seen in very few small banks only, but it was enough to ring the alarm bell over the operation of banks. He said that such a high ratio had never been seen in any kind of loaning so far.
The official has declined to reveal the names of the banks, saying that this was a very ‘sensitive’ problem.
He stressed that it was necessary for the central bank to intervene in this case in order to avoid risks for the banking system as a whole.
Prior to that, investors and bankers voiced protest against the central bank’s decision to limit loaning for securities investments, saying that the central bank was too cautious in this issue, and thus was interfering with banks’ operations.
However, Governor of the State Bank Le Duc Thuy insisted on tightening the loaning for securities investments.
According to Mr Thuy, a world-famous economist, Vietnam is the only country in the world that allows banks to provide loans to fund securities investment. Other countries never allow their banks to get involved in funding securities investment deals.
“I know some banks have percentages of loans for securities investments far exceeding the allowed 3% level. They think risks will not come, but I have the responsibility to stop them, because if risks occur, the whole banking system will shake violently,” Mr Thuy said.
Source: VNE
Credit Suisse tips 9 percent growth for Vietnam in 2007
One of the world’s leading international investment banks has predicted Vietnam’s growth rate at 9 percent while the average growth rate in Asia, excluding Japan, will likely hover around 8.6 percent in 2007.
According to the June 27 report by Credit Suisse bank of Switzerland, the strong growth in Asia is mainly driven by China, Asia’s main economic propeller, tipped to expand by 11.2 percent in 2007.
The bank's regional director for Asia economics, Sailesh Jha, voiced an optimistic view on the future of Asian exports, a key factor in growth, as a pickup in the US consumer spending and Japanese retail sales for the second half of this year is very likely.
"So with this view of recovery in both US and Japanese retail sales, we are fairly optimistic for the outlook for Asian exports," he said.
For the rest of the region, Indonesia's economy is projected to grow by 6.5 percent this year, Singapore at 7.0 percent, Malaysia at 6.0 percent and Thailand at 4.0 percent, the bank’s report said.
Thai economy is expected to pick up in 2008 to develop at 5.8 percent from current gloomy predictions due to sluggish growth and weak domestic demand, Credit Suisse said.
Source: VNE
According to the June 27 report by Credit Suisse bank of Switzerland, the strong growth in Asia is mainly driven by China, Asia’s main economic propeller, tipped to expand by 11.2 percent in 2007.
The bank's regional director for Asia economics, Sailesh Jha, voiced an optimistic view on the future of Asian exports, a key factor in growth, as a pickup in the US consumer spending and Japanese retail sales for the second half of this year is very likely.
"So with this view of recovery in both US and Japanese retail sales, we are fairly optimistic for the outlook for Asian exports," he said.
For the rest of the region, Indonesia's economy is projected to grow by 6.5 percent this year, Singapore at 7.0 percent, Malaysia at 6.0 percent and Thailand at 4.0 percent, the bank’s report said.
Thai economy is expected to pick up in 2008 to develop at 5.8 percent from current gloomy predictions due to sluggish growth and weak domestic demand, Credit Suisse said.
Source: VNE
EVN mulls blackouts for July
Vietnam’s State-run electricity provider is considering rolling blackouts next month when it is scheduled to shut down a major oil field for maintenance, company officials announced this week.
Electricity of Vietnam could cut off power to homes for one to two hours a day during periods of high demand, said Ngo Son Hai, deputy director of the company’s National Electricity Dispatching Centre.
The company used rolling blackouts in May to contend with another shortage. The latest conservation efforts could stretch into September, Hai said.
The power company is scheduled to close down the Nam Con Son oil field in three stages; from July 1 to 6, August 29 to September 16 and finally September 20 to 30. The maintenance was planned one year ago.
The field provides fuel for generators at the Phu My power complex, which produces 4,000 MW, one-third of the country’s total production. Electricity of Vietnam is expecting a shortfall of almost 1,000MW.
Thermo-electric plants in the north, including those in Pha Lai and Uong Bi, would also be closed for maintenance, adding to the shortage, Hai said. The hot July temperatures also cause hydro-electric reservoirs to evaporate.
Electricity of Vietnam planned to increase the amount of power it buys from China, adjust its maintenance schedule and maximising output at other plants, Hai said.
The company was guarding against shortages at hospitals, schools, military bases and other public security institutions, he said.
The announcement of blackouts was met with disapproval by-homeowners and agencies like the Vietnam Electrical Industry Association, which criticised the timing of the maintenance at Nam Con Son.
The work comes as water levels are as their lowest and as thousands of students take university entrance exams.
Source: VNE
Electricity of Vietnam could cut off power to homes for one to two hours a day during periods of high demand, said Ngo Son Hai, deputy director of the company’s National Electricity Dispatching Centre.
The company used rolling blackouts in May to contend with another shortage. The latest conservation efforts could stretch into September, Hai said.
The power company is scheduled to close down the Nam Con Son oil field in three stages; from July 1 to 6, August 29 to September 16 and finally September 20 to 30. The maintenance was planned one year ago.
The field provides fuel for generators at the Phu My power complex, which produces 4,000 MW, one-third of the country’s total production. Electricity of Vietnam is expecting a shortfall of almost 1,000MW.
Thermo-electric plants in the north, including those in Pha Lai and Uong Bi, would also be closed for maintenance, adding to the shortage, Hai said. The hot July temperatures also cause hydro-electric reservoirs to evaporate.
Electricity of Vietnam planned to increase the amount of power it buys from China, adjust its maintenance schedule and maximising output at other plants, Hai said.
The company was guarding against shortages at hospitals, schools, military bases and other public security institutions, he said.
The announcement of blackouts was met with disapproval by-homeowners and agencies like the Vietnam Electrical Industry Association, which criticised the timing of the maintenance at Nam Con Son.
The work comes as water levels are as their lowest and as thousands of students take university entrance exams.
Source: VNE
Thursday, June 28, 2007
Vietnam to auction $87 mln bonds
Vietnam plans to sell 1.4 trillion dong ($86.8 million) worth of government bonds at two auctions early next month, the Hanoi stock market said on Thursday.
The exchange said it would sell 10-year bonds to raise 700 billion dong ($43.4 million) on July 3 for maturity on July 5, 2017. The bond issuer is Vietnam Development Bank (VDB), one of the country's two state-run policy banks.
On July 9, the market will auction a 5-year bond worth 700 billion dong ($43.4 million) for maturity on July 11, 2012. The State Treasury will issue the debt.
On June 18, the exchange said it sold 500 billion dong of 15-years bonds issued by VDB at an annual yield of 8 percent.
In another auction on June 25, it sold 500 billion dong of 5-year bonds, offered by the State Treasury, at an annual coupon of 7.25 percent.
The Finance Ministry aims to sell 22 trillion dong ($1.37 billion) worth of government bonds between March and the end of this year to invest in transport and irrigation projects.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable.
It assigned a Ba3 rating for the country's dong-denominated debt.
Source: Reuters
The exchange said it would sell 10-year bonds to raise 700 billion dong ($43.4 million) on July 3 for maturity on July 5, 2017. The bond issuer is Vietnam Development Bank (VDB), one of the country's two state-run policy banks.
On July 9, the market will auction a 5-year bond worth 700 billion dong ($43.4 million) for maturity on July 11, 2012. The State Treasury will issue the debt.
On June 18, the exchange said it sold 500 billion dong of 15-years bonds issued by VDB at an annual yield of 8 percent.
In another auction on June 25, it sold 500 billion dong of 5-year bonds, offered by the State Treasury, at an annual coupon of 7.25 percent.
The Finance Ministry aims to sell 22 trillion dong ($1.37 billion) worth of government bonds between March and the end of this year to invest in transport and irrigation projects.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable.
It assigned a Ba3 rating for the country's dong-denominated debt.
Source: Reuters
Vietnam gold trader PNJ to sell $3.7 mln shares
Vietnam's gold trading firm PNJ plans to sell 600,000 new shares, or 20 percent of the company, in an auction next month to raise at least $3.7 million, state media reported on Thursday.
The Ho Chi MinH City-based firm planned to use the proceeds from the auction, reserved for strategic investors, to raise its registered capital to 300 billion dong ($18.6 million), the Saigon Economic Times quoted company officials as saying.
The auction will be held at Dong A Securities Company on July 12.
Shares in PNJ, which plans to list on a domestic stock exchange early next year, have a face value of 100,000 dong ($6.2) but are being traded in the unofficial market at about 1.1 million dong ($68).
The company, whose full name is Phu Nhuan Jewellery Company, said on its Web site (www.pnj.com.vn) it had assets of about 695 billion dong ($43 million).
Source: Reuters
The Ho Chi MinH City-based firm planned to use the proceeds from the auction, reserved for strategic investors, to raise its registered capital to 300 billion dong ($18.6 million), the Saigon Economic Times quoted company officials as saying.
The auction will be held at Dong A Securities Company on July 12.
Shares in PNJ, which plans to list on a domestic stock exchange early next year, have a face value of 100,000 dong ($6.2) but are being traded in the unofficial market at about 1.1 million dong ($68).
The company, whose full name is Phu Nhuan Jewellery Company, said on its Web site (www.pnj.com.vn) it had assets of about 695 billion dong ($43 million).
Source: Reuters
BIDV signs deal with AIG
American International Group, the world's largest insurer, on Thursday said it will extend its partnership with the Bank of Investment and Development of Vietnam (BIDV), becoming the latest foreign financial firm to strengthen ties in the fast-growing economy.
The memorandum of understanding (MOU) will focus on banking, insurance and finance. The two companies have been linked since 2005 through a business cooperation with AIA Vietnam, AIG's life insurance unit.
Its latest agreement will extend the partnership to include general insurance, consumer finance, asset management, banking services and training support.
AIG said it was attracted by economic growth of 7 to 8 percent annually in Vietnam for the past six years.
BIDV, which has $12.5 billion in assets and is also known as Vietindebank, is planning an IPO for the fourth quarter. It is Vietnam's third-largest bank.
Foriegn financial services companies Morgan Stanley, Citigroup, Credit Suisse and Deutsche Bank are all forging ties to Vietnam by linking up with local partners and making equity investments.
Source: Reuters
The memorandum of understanding (MOU) will focus on banking, insurance and finance. The two companies have been linked since 2005 through a business cooperation with AIA Vietnam, AIG's life insurance unit.
Its latest agreement will extend the partnership to include general insurance, consumer finance, asset management, banking services and training support.
AIG said it was attracted by economic growth of 7 to 8 percent annually in Vietnam for the past six years.
BIDV, which has $12.5 billion in assets and is also known as Vietindebank, is planning an IPO for the fourth quarter. It is Vietnam's third-largest bank.
Foriegn financial services companies Morgan Stanley, Citigroup, Credit Suisse and Deutsche Bank are all forging ties to Vietnam by linking up with local partners and making equity investments.
Source: Reuters
Cobovina to sell shares to build hospital
Vietnam cotton products maker Cobovina (BBT) plans to issue 10 million new shares to raise funds for a $12.4-million a hospital in Ho Chi Minh City, state media reported on Thursday.
The shares would be sold to existing investors at a face value price of 10,000 dong each ($0.62), the Dau Tu Chung Khoan magazine quoted a shareholder meeting resolution as saying.
The proceeds would boost Cobovina's registered capital to 190 billion dong ($11.8 million) from 90 billion dong.
The Ho Chi Minh City-based firm, which controls about 90 percent of the domestic market for cotton products for medical use, plans to put its first hospital into operation by July 2009.
Cobovina aimed for revenues of 73 billion dong ($4.5 million) and a pre-tax profit of 6.1 billion dong this year, the report said without giving comparative figures.
Shares in the firm jumped 4.68 percent on Thursday on the Ho Chi Minh City Exchange to close at 24,600 dong ($1.5).
Source: Reuters
The shares would be sold to existing investors at a face value price of 10,000 dong each ($0.62), the Dau Tu Chung Khoan magazine quoted a shareholder meeting resolution as saying.
The proceeds would boost Cobovina's registered capital to 190 billion dong ($11.8 million) from 90 billion dong.
The Ho Chi Minh City-based firm, which controls about 90 percent of the domestic market for cotton products for medical use, plans to put its first hospital into operation by July 2009.
Cobovina aimed for revenues of 73 billion dong ($4.5 million) and a pre-tax profit of 6.1 billion dong this year, the report said without giving comparative figures.
Shares in the firm jumped 4.68 percent on Thursday on the Ho Chi Minh City Exchange to close at 24,600 dong ($1.5).
Source: Reuters
Viet Nam's stock indexes close lower
The VN-Index at the Ho Chi Minh City Securities Trading Centre closed at 1,024.04 points by the end of the June 28 trading session, down 8.92 points or 0.86 percent over the previous session.
A total of 4,309,500 shares, worth more than 437.76 billion VND, were traded on the day with as many as 67 shares falling, 20 stocks remaining unchanged and 22 shares gaining.
Hau Giang pharmaceutical (DHG) topped the list of big movers, increasing by 6,000 VND to finish at 415,000 VND per share, followed by Hang Xanh JSC (HAX) and PV drilling (PVD), up 2,000 VND per share each.
Saigon Thuong Tin Commercial Bank (STB), Corporation for Financing and Promoting Technology (FPT) and Refrigeration Electrical Engineering (REE) were still among stocks recording the highest trading volumes.
At the Ha Noi Securities Trading Centre, blue chips, such as Asia Commercial Bank (ACB), Saigon Securities Incorporation (SSI) and Bao Minh Insurance (BMI) continued their downward trends.
The HaSTC-Index closed at 288.9 points; 4.24 points lower than the previous trading session.
The day saw 947,600 shares, worth 86.73 billion VND changing hands.
Source: VNA
A total of 4,309,500 shares, worth more than 437.76 billion VND, were traded on the day with as many as 67 shares falling, 20 stocks remaining unchanged and 22 shares gaining.
Hau Giang pharmaceutical (DHG) topped the list of big movers, increasing by 6,000 VND to finish at 415,000 VND per share, followed by Hang Xanh JSC (HAX) and PV drilling (PVD), up 2,000 VND per share each.
Saigon Thuong Tin Commercial Bank (STB), Corporation for Financing and Promoting Technology (FPT) and Refrigeration Electrical Engineering (REE) were still among stocks recording the highest trading volumes.
At the Ha Noi Securities Trading Centre, blue chips, such as Asia Commercial Bank (ACB), Saigon Securities Incorporation (SSI) and Bao Minh Insurance (BMI) continued their downward trends.
The HaSTC-Index closed at 288.9 points; 4.24 points lower than the previous trading session.
The day saw 947,600 shares, worth 86.73 billion VND changing hands.
Source: VNA
Foreign financial institutions allowed to buy SOEs
The Prime Minister has released the decree on assigning and selling the enterprises that the State holds 100% of chartered capital, under which, foreign investors, foreign invested enterprises in Vietnam and the organizations established in accordance with foreign laws, operating in foreign countries or in Vietnam, foreign individuals all can purchase 100% state owned enterprises (SOEs).
Besides, the sale of 100% SOEs is also open for the labourers of the enterprises, Vietnamese institutions and individual investors. The labourers who are working for the enterprises may be assigned by the enterprises to run them if they can meet set requirements.
Under the decree, the SOEs to be assigned to labourers for management are the ones with the chartered capital of less than VND5bil. These enterprises are listed among those which need to be equitised or restructured, but cannot be equitised for several reasons. Besides, the SOEs to be assigned must be the ones that do not have advantages in land and position.
The decree allows the sale of SOEs in the whole, no matter which capital scale they have, but these SOEs must meet several other requirements: they must list among the SOEs subject to equitisation, but cannot be equitised so far.
Those who purchase SOEs, can use the assets they buy in their own way. They can choose other fields of business. They can also change the apparatus of management of enterprises, select the mode of enterprises’ ownership, and continue leasing land as stipulated by laws. If maintaining the previous business fields, the buyers will be able to inherit the benefit of the business contracts previously signed.
Source: Thanh Nien
Besides, the sale of 100% SOEs is also open for the labourers of the enterprises, Vietnamese institutions and individual investors. The labourers who are working for the enterprises may be assigned by the enterprises to run them if they can meet set requirements.
Under the decree, the SOEs to be assigned to labourers for management are the ones with the chartered capital of less than VND5bil. These enterprises are listed among those which need to be equitised or restructured, but cannot be equitised for several reasons. Besides, the SOEs to be assigned must be the ones that do not have advantages in land and position.
The decree allows the sale of SOEs in the whole, no matter which capital scale they have, but these SOEs must meet several other requirements: they must list among the SOEs subject to equitisation, but cannot be equitised so far.
Those who purchase SOEs, can use the assets they buy in their own way. They can choose other fields of business. They can also change the apparatus of management of enterprises, select the mode of enterprises’ ownership, and continue leasing land as stipulated by laws. If maintaining the previous business fields, the buyers will be able to inherit the benefit of the business contracts previously signed.
Source: Thanh Nien
Vietnam consumer confidence still rising
Vietnam has enjoyed a steady increase in consumer confidence, making its way into the world’s top five markets in the first half this year, a survey by a global marketing information company has found.
A market increasingly in the spotlight, Vietnam registered a confidence index of 118,
ACNielsen’s latest Global Consumer Confidence Study said.
The index recorded 116 in the second half of last year.
India again led the world with its latest consumer confidence index reaching 137, followed by Norway (132) and Denmark (127), all of them down by two points from November 2006.
The world’s most pessimistic consumers were from Europe, while South Korea (50), Japan (68), and Taiwan (75) remained at the bottom in Asia.
Globally, Portugal, South Korea, Japan, Taiwan and Hungary were the most pessimistic about the job market, state of their personal finances, and readiness to spend.
ACNielsen’s survey polled over 26,000 internet users in 47 markets in Europe, the Asia-Pacific, North America, and the Middle East about their job prospects, state of finances, and what they do with their spare cash.
Over 500 people aged 15 and above were interviewed in Vietnam.
Source: Thanh Nien
A market increasingly in the spotlight, Vietnam registered a confidence index of 118,
ACNielsen’s latest Global Consumer Confidence Study said.
The index recorded 116 in the second half of last year.
India again led the world with its latest consumer confidence index reaching 137, followed by Norway (132) and Denmark (127), all of them down by two points from November 2006.
The world’s most pessimistic consumers were from Europe, while South Korea (50), Japan (68), and Taiwan (75) remained at the bottom in Asia.
Globally, Portugal, South Korea, Japan, Taiwan and Hungary were the most pessimistic about the job market, state of their personal finances, and readiness to spend.
ACNielsen’s survey polled over 26,000 internet users in 47 markets in Europe, the Asia-Pacific, North America, and the Middle East about their job prospects, state of finances, and what they do with their spare cash.
Over 500 people aged 15 and above were interviewed in Vietnam.
Source: Thanh Nien
No more securities trading companies to be licenced?
Some 50 applications for the establishment of securities trading companies have been sent to the competent agencies but the Vietnam Association of Securities Businesses has asked for the temporary halt of the licencing of new securities trading firms.
Representatives of securities trading companies, meanwhile, have said that stopping the licencing of new securities trading companies is a measure contrary to the Enterprise Law and harms the business environment.
Phan Vu Tuan, Deputy Director of the International Securities Trading Company said: “The stock market is developing and administrative measures should not be used to control the development of securities trading companies.”
Tran Thien The, General Director of the De Nhat securities trading company, said that the Enterprise Law stipulated clearly that any company that met conditions must be licenced.
“We should not create a narrow market by restricting the establishment of securities trading companies. In the free market that we are building, it is necessary to have newly born and dying businesses because it is not known if existing securities trading companies run better than the ones that are asking for licences,” said Nguyen Chi Thanh, Chairman of the Board of Directors of the Quoc Gia securities trading company.
One of the reasons that the Vietnam Association of Securities Businesses cited in its proposal to halt licencing is: “Compared with other countries in the region, the number of securities trading companies in Vietnam is now sufficient.”
But operating securities trading companies said that the market was still wide and only the HCM City Securities Trading Centre lacked space for representatives. They also said that the slow development in terms of technology of the centre was a hindrance to the development of securities trading companies.
An official of the ACBC securities trading company said that if 20% of the Vietnamese population invested in stocks and if the technological infrastructure was good and ACBS could freely develop its branches to be able to serve 1 million investors, the Vietnamese stock market would only need 20 companies like ACBS. But ACBS currently has only 50,000 accounts.
In fact, the stock market is only developing in big cities of Vietnam like Hanoi and HCM City. Recently, some securities trading companies have opened branches in Hai Phong and Can Tho. While securities trading companies are keen on developing their market in big cities, who will develop the stock market in other provinces if not the newly established ones? It is noted that the ratio of people investing in stocks in Vietnam is very low compared to Hong Kong, Thailand, Taiwan.
If the state worries about the collapse of securities trading companies leading to adverse impacts on society and if the number of securities trading companies is enough, as the state wants to direct investment in more effective fields of investment, what can it do instead of stopping the licencing of new securities trading companies?
According to operating securities trading companies, the state can increase the requirements for establishing securities trading companies and control the operating quality of securities trading companies.
However, despite any solution, the bankruptcy of securities trading companies should be considered objectively as the rules of the market economy, under which potential companies will develop while small ones will have to merge or go bankrupt. This rule has unfolded thusly in many economies and will in Vietnam as well and what the country can do to diminish its adverse impacts should not go against the rules of the market economy.
Source: VNE
Representatives of securities trading companies, meanwhile, have said that stopping the licencing of new securities trading companies is a measure contrary to the Enterprise Law and harms the business environment.
Phan Vu Tuan, Deputy Director of the International Securities Trading Company said: “The stock market is developing and administrative measures should not be used to control the development of securities trading companies.”
Tran Thien The, General Director of the De Nhat securities trading company, said that the Enterprise Law stipulated clearly that any company that met conditions must be licenced.
“We should not create a narrow market by restricting the establishment of securities trading companies. In the free market that we are building, it is necessary to have newly born and dying businesses because it is not known if existing securities trading companies run better than the ones that are asking for licences,” said Nguyen Chi Thanh, Chairman of the Board of Directors of the Quoc Gia securities trading company.
One of the reasons that the Vietnam Association of Securities Businesses cited in its proposal to halt licencing is: “Compared with other countries in the region, the number of securities trading companies in Vietnam is now sufficient.”
But operating securities trading companies said that the market was still wide and only the HCM City Securities Trading Centre lacked space for representatives. They also said that the slow development in terms of technology of the centre was a hindrance to the development of securities trading companies.
An official of the ACBC securities trading company said that if 20% of the Vietnamese population invested in stocks and if the technological infrastructure was good and ACBS could freely develop its branches to be able to serve 1 million investors, the Vietnamese stock market would only need 20 companies like ACBS. But ACBS currently has only 50,000 accounts.
In fact, the stock market is only developing in big cities of Vietnam like Hanoi and HCM City. Recently, some securities trading companies have opened branches in Hai Phong and Can Tho. While securities trading companies are keen on developing their market in big cities, who will develop the stock market in other provinces if not the newly established ones? It is noted that the ratio of people investing in stocks in Vietnam is very low compared to Hong Kong, Thailand, Taiwan.
If the state worries about the collapse of securities trading companies leading to adverse impacts on society and if the number of securities trading companies is enough, as the state wants to direct investment in more effective fields of investment, what can it do instead of stopping the licencing of new securities trading companies?
According to operating securities trading companies, the state can increase the requirements for establishing securities trading companies and control the operating quality of securities trading companies.
However, despite any solution, the bankruptcy of securities trading companies should be considered objectively as the rules of the market economy, under which potential companies will develop while small ones will have to merge or go bankrupt. This rule has unfolded thusly in many economies and will in Vietnam as well and what the country can do to diminish its adverse impacts should not go against the rules of the market economy.
Source: VNE
Corporate income tax expected to decrease
Deputy Minister of Finance Truong Chi Trung said that the Finance Ministry was considering reducing the corporate income tax to further attract foreign investment.
The reduction may be performed this year and could drop to the level of some countries in the region, from 28% to 25%.
At a meeting on the draft Law on Personal Income Tax on June 26, Deputy Minister Truong Chi Trung said that many investors had complained that Vietnam’s corporate income tax was quite high compared to the common level in the world and ASEAN countries (around 20-25%).
If Vietnam maintains the current tax rate the country will have difficulty encouraging production and business as well as drawing foreign investment into the country.
“That’s why we are considering adjusting the tax rate to be suitable to the development situation of Vietnam,” Mr Trung said.
Source: VNE
The reduction may be performed this year and could drop to the level of some countries in the region, from 28% to 25%.
At a meeting on the draft Law on Personal Income Tax on June 26, Deputy Minister Truong Chi Trung said that many investors had complained that Vietnam’s corporate income tax was quite high compared to the common level in the world and ASEAN countries (around 20-25%).
If Vietnam maintains the current tax rate the country will have difficulty encouraging production and business as well as drawing foreign investment into the country.
“That’s why we are considering adjusting the tax rate to be suitable to the development situation of Vietnam,” Mr Trung said.
Source: VNE
IFC to aid Sacombank in underwriting home loans
The International Finance Corporation (IFC) will pump 500 billion VND (31 million USD) into the Saigon Thuong Tin Commercial Bank's (Sacombank) coffers to help it underwrite home loans.
IFC Country Director Sin Foong Wong inked the deal with Sacombank Director General Phan Bich Van in Ho Chi Minh City on June 27. The loans will be provided to people for mortgages, property development and repairs.
The World Bank's affiliate member is currently one of Sacombank's three foreign strategic partners and has recently increased its capital in the bank to 240 billion VND.
Sacombank President Dang Van Thanh said his bank would look to the experiences and financial strength of IFC and other strategic partners to attain higher growth.
Source: VNA
IFC Country Director Sin Foong Wong inked the deal with Sacombank Director General Phan Bich Van in Ho Chi Minh City on June 27. The loans will be provided to people for mortgages, property development and repairs.
The World Bank's affiliate member is currently one of Sacombank's three foreign strategic partners and has recently increased its capital in the bank to 240 billion VND.
Sacombank President Dang Van Thanh said his bank would look to the experiences and financial strength of IFC and other strategic partners to attain higher growth.
Source: VNA
Wednesday, June 27, 2007
VN-Index, HaSTC-Index dip
Both Ho Chi Minh City's bourse and its Ha Noi-based counterpart reported decreases by the end of the June 27 morning trading session.
By closing, the VN-Index at the HCM City Securities Trading Centre had dropped 22.74 points to finish at 1,032.96 points.
More than 4.7 million shares, worth over 586 billion VND changed hands. The market saw 23 stocks gain, 15 shares remain unchanged and 71 fall.
Corporation for Financing and Promoting Technology (FPT), Saigon Thuong Tin Commercial Bank (STB), Viet Nam Dairy Products (VNM) and Refrigeration Electrical Engineering (REE) were among stocks recording the highest trading volumes.
Saigon Hotel (SGH) topped the list of big movers, increasing by 7,000 VND to finish at 177,000 VND per share, followed by Tay Ninh Cable Car Tour (TCT), Thu Duc Housing Development Company (TDH) and Nam Viet (NAV).
Meanwhile, Song Da Urban and Industrial Zone Investment and Development (SJS) was the biggest loser of the day, dropping by 16,000 VND to 307,000 VND per unit, followed by FPT, Kinh Do (KDC) and North King Do Food (NKD).
At the Ha Noi Securities Trading Centre, the HaSTC- Index fell 2.26 points to finish at 293.14 points.
To day's trading volume hit a record low with 799,800 shares, worth more than 76.81 billion VND changing hands. Cho Lon Real Estate was hardest hit, dropping by 15,700 VND per unit.
Source: VNA
By closing, the VN-Index at the HCM City Securities Trading Centre had dropped 22.74 points to finish at 1,032.96 points.
More than 4.7 million shares, worth over 586 billion VND changed hands. The market saw 23 stocks gain, 15 shares remain unchanged and 71 fall.
Corporation for Financing and Promoting Technology (FPT), Saigon Thuong Tin Commercial Bank (STB), Viet Nam Dairy Products (VNM) and Refrigeration Electrical Engineering (REE) were among stocks recording the highest trading volumes.
Saigon Hotel (SGH) topped the list of big movers, increasing by 7,000 VND to finish at 177,000 VND per share, followed by Tay Ninh Cable Car Tour (TCT), Thu Duc Housing Development Company (TDH) and Nam Viet (NAV).
Meanwhile, Song Da Urban and Industrial Zone Investment and Development (SJS) was the biggest loser of the day, dropping by 16,000 VND to 307,000 VND per unit, followed by FPT, Kinh Do (KDC) and North King Do Food (NKD).
At the Ha Noi Securities Trading Centre, the HaSTC- Index fell 2.26 points to finish at 293.14 points.
To day's trading volume hit a record low with 799,800 shares, worth more than 76.81 billion VND changing hands. Cho Lon Real Estate was hardest hit, dropping by 15,700 VND per unit.
Source: VNA
First half attracts 5.2 billion USD in foreign investment
Foreign direct investment (FDI) into Viet Nam has increased by eight percent year on year, culminating at over 5.2 billion USD in the first half of 2007.
June saw a drastic surge in the number of licensed FDI projects: at at 203. These newly-licensed projects made up 35 percent of the first six months’ total, according to the Foreign Investment Department under the Ministry of Planning and Investment.
Oil-rich Ba Ria-Vung Tau province remains the leader in this term, wooing 16.6 percent of the national registered FDI. It is followed by the central province of Thua Thien-Hue, which took in 12.7 percent of the total, and the southern industrial province of Binh Duong, with 10.3 percent.
Among 36 foreign investors pumping money into Viet Nam, Singapore ranks first with investment of up to 890 million USD in 36 projects. Second is the Republic of Korea (RoK) with 166 projects capitalised at over 733 million USD.
The Foreign Investment Department has predicted that the rising trend will not stop there as at least 38 major projects with a combined investment of 35 billion USD are on the waiting list for Government approval. In total for 2007, FDI inflows into the country are expected to reach 20 billion USD, far beyond the original expectation of 12 billion USD.
One particular area of interest is in real estate development and the country's capital is drawing huge interest from awaiting foreign tycoons.
The Gamuda group from Malaysia, for example, is seeking a licence for a 1 billion USD trade-apartment complex, comprised of hotels, conference centres, luxury offices and apartments for lease. In addition, Japan’s Rivier Group has registered for an investment of over 500 million USD to build five-star hotels while the Pacific Land Limited from Great Britain is looking for a 1 billion USD project for construction of a biological hub in southern Ha Noi.
In the midland province of Vinh Phuc, the Compal Group from Taiwan has registered for a 500 million USD project to manufacture electronic appliances, and investors from the RoK are waiting for a licence to build a race-course for horses valued at 570 million USD.
Another company from Taiwan, the Foxconn Group, has expressed interest in building an information technology centre at an estimated cost of 5 billion USD, specialising in high-grade electronics appliances in a vast area spanning Bac Ninh and Bac Giang provinces, north of Ha Noi.
This surge in FDI has been attributed to continual reforms in the national investment and trade climate and upgrades of the legal systems in line with international commitments.
Since the Foreign Investment Law came into force in 1988, Viet Nam has attracted 7,490 FDI valid projects with a total charter investment of over 67.3 billion USD, of which almost 29 billion USD has been disbursed.
Source: VNA
June saw a drastic surge in the number of licensed FDI projects: at at 203. These newly-licensed projects made up 35 percent of the first six months’ total, according to the Foreign Investment Department under the Ministry of Planning and Investment.
Oil-rich Ba Ria-Vung Tau province remains the leader in this term, wooing 16.6 percent of the national registered FDI. It is followed by the central province of Thua Thien-Hue, which took in 12.7 percent of the total, and the southern industrial province of Binh Duong, with 10.3 percent.
Among 36 foreign investors pumping money into Viet Nam, Singapore ranks first with investment of up to 890 million USD in 36 projects. Second is the Republic of Korea (RoK) with 166 projects capitalised at over 733 million USD.
The Foreign Investment Department has predicted that the rising trend will not stop there as at least 38 major projects with a combined investment of 35 billion USD are on the waiting list for Government approval. In total for 2007, FDI inflows into the country are expected to reach 20 billion USD, far beyond the original expectation of 12 billion USD.
One particular area of interest is in real estate development and the country's capital is drawing huge interest from awaiting foreign tycoons.
The Gamuda group from Malaysia, for example, is seeking a licence for a 1 billion USD trade-apartment complex, comprised of hotels, conference centres, luxury offices and apartments for lease. In addition, Japan’s Rivier Group has registered for an investment of over 500 million USD to build five-star hotels while the Pacific Land Limited from Great Britain is looking for a 1 billion USD project for construction of a biological hub in southern Ha Noi.
In the midland province of Vinh Phuc, the Compal Group from Taiwan has registered for a 500 million USD project to manufacture electronic appliances, and investors from the RoK are waiting for a licence to build a race-course for horses valued at 570 million USD.
Another company from Taiwan, the Foxconn Group, has expressed interest in building an information technology centre at an estimated cost of 5 billion USD, specialising in high-grade electronics appliances in a vast area spanning Bac Ninh and Bac Giang provinces, north of Ha Noi.
This surge in FDI has been attributed to continual reforms in the national investment and trade climate and upgrades of the legal systems in line with international commitments.
Since the Foreign Investment Law came into force in 1988, Viet Nam has attracted 7,490 FDI valid projects with a total charter investment of over 67.3 billion USD, of which almost 29 billion USD has been disbursed.
Source: VNA
PVI raises $47 mln in share sale
Petrovietnam Insurance Corp. (PVI), Vietnam's third-largest insurer, said on Wednesday it raised nearly $47 million from an auction of 10 million shares.
Investors paid an average 75,499 dong ($4.7) for shares offered at a starting price of 50,000 dong at the auction on June 26, the company said in a statement issued by the Hanoi stock exchange.
Foreign investors bought more than 1.9 million shares in the auction.
The sale was part of PVI's plan to issue more than 35 million shares to boost its registered capital to $52.9 million before a domestic listing later this year.
PVI has sold 25,135,000 shares to existing shareholders.
The Hanoi-based company raised nearly $117 million by selling 23 percent of its shares in an initial public offering in January.
Last year, PVI had an 18.09 percent share of Vietnam's non-life insurance market, making it the third biggest after state-run Bao Viet, which had a 34.94 percent share, and Bao Minh with 21.29 percent, industry reports said.
PVI said its audited net profit jumped 51.7 percent last year from 2005 to 44 billion dong following a 65.6-percent surge in insurance premiums to 1.16 trillion dong ($72 million).
Since the start of this year, PVI has been expanding from its core insurance business, investing in areas such as crude oil production, banking, stock broking and cement production.
PVI and Petrovietnam have become founding members of a company building several hydro-power plants in Laos.
PVI said its revenues soared 165 percent in the first four months of 2007 from a year earlier to more than 750 billion dong ($46.6 million).
Source: Reuters
Investors paid an average 75,499 dong ($4.7) for shares offered at a starting price of 50,000 dong at the auction on June 26, the company said in a statement issued by the Hanoi stock exchange.
Foreign investors bought more than 1.9 million shares in the auction.
The sale was part of PVI's plan to issue more than 35 million shares to boost its registered capital to $52.9 million before a domestic listing later this year.
PVI has sold 25,135,000 shares to existing shareholders.
The Hanoi-based company raised nearly $117 million by selling 23 percent of its shares in an initial public offering in January.
Last year, PVI had an 18.09 percent share of Vietnam's non-life insurance market, making it the third biggest after state-run Bao Viet, which had a 34.94 percent share, and Bao Minh with 21.29 percent, industry reports said.
PVI said its audited net profit jumped 51.7 percent last year from 2005 to 44 billion dong following a 65.6-percent surge in insurance premiums to 1.16 trillion dong ($72 million).
Since the start of this year, PVI has been expanding from its core insurance business, investing in areas such as crude oil production, banking, stock broking and cement production.
PVI and Petrovietnam have become founding members of a company building several hydro-power plants in Laos.
PVI said its revenues soared 165 percent in the first four months of 2007 from a year earlier to more than 750 billion dong ($46.6 million).
Source: Reuters
PVD expects H1 revenues to double
Petrovietnam rig operator PV Drilling (PVD) said on Wednesday it expects revenues to more than double in the first half of 2007 from a year ago to 920 billion dong ($57 million).
"The rise in revenues is generated mainly by the rent of our new drilling rig," a company spokesman said.
The firm's first-half net profit was expected to reach 205 billion dong ($12.7 million), more than four times that of a year earlier, he said.
PV Drilling has set a target for whole year revenues of $142.8 million and net profit of $35 million this year.
The spokesman said the Ho Chi Minh City-based firm had signed a contract to rent its PV Drilling I rig to an exploration firm in Vietnam for the 2007-2009 period with a monthly rent of $215,000.
The firm said earlier this month it planned to invest about $200 million to purchase a third jackup drilling rig to meet soaring demand from oil explorers.
Last month, it awarded a $191 million contract to Singapore's Keppel Corp. to build its second rig for delivery in 2009.
In March, the firm took delivery of the PV Drilling I rig, also built by Keppel Corp, at a cost of $115 million.
PV Drilling officials have said the company would focus on Vietnamese waters for the next few years as exploration activity was expected to pick up in the area, with an estimated 55 to 60 wells to be drilled this year alone.
Source: Reuters
"The rise in revenues is generated mainly by the rent of our new drilling rig," a company spokesman said.
The firm's first-half net profit was expected to reach 205 billion dong ($12.7 million), more than four times that of a year earlier, he said.
PV Drilling has set a target for whole year revenues of $142.8 million and net profit of $35 million this year.
The spokesman said the Ho Chi Minh City-based firm had signed a contract to rent its PV Drilling I rig to an exploration firm in Vietnam for the 2007-2009 period with a monthly rent of $215,000.
The firm said earlier this month it planned to invest about $200 million to purchase a third jackup drilling rig to meet soaring demand from oil explorers.
Last month, it awarded a $191 million contract to Singapore's Keppel Corp. to build its second rig for delivery in 2009.
In March, the firm took delivery of the PV Drilling I rig, also built by Keppel Corp, at a cost of $115 million.
PV Drilling officials have said the company would focus on Vietnamese waters for the next few years as exploration activity was expected to pick up in the area, with an estimated 55 to 60 wells to be drilled this year alone.
Source: Reuters
VN-Index up, HaSTC-Index down slightly
Ho Chi Minh City's bourse continued its upward trend while its Ha Noi-based counterpart reported a slight drop by the end of the day's trading on June 26.
The VN-Index at the country's largest exchange in Ho Chi Minh City tacked on 11.31 points or 1.1 percent from the previous session to close at 1055.7 points. More than 5.6 million shares, worth a combined 615.1 billion VND, changed hands on the day, 47 stocks rallied for gains, 26 shares remained the same and 36 shares fell over the course of the session.
Blue chip share Sai Gon Thuong Tin Commercial Bank (STB) led the market in terms of trading volume with 693,090 shares changing hands on the day. Petroleum Drilling Service Firm (PVD) with 290,990 shares and Song Da Urban and Industrial Zone Investment and Development ( SJS ) with 283,830 shares rounded out the top three.
Although the State Securities Commission (SSC) has not yet determined whether Binh Dinh Mining Co (BMC) has been artificially inflating their stock price, 800 shares were offered during the session. As there was no demand for BMC, its price fell 27,000 VND to 514,000 VND per unit.
Financing and Promoting Technology Corporation (FPT) hit the ceiling price by 15,000 VND to 324,000 VND with all the 218,550 shares being snatched up. Pharmaceutical company (DHG), Confectioner Kinh Do Corp (KDC) and plastic tube producer BMP were also among the top five in terms of price gains.
The HaSTC-Index at the Ha Noi Securities Trading Centre continued to slide 0.52 points from its last session to finish at 295.4 points marking its sharpest decline since early this year.
Thirty-seven of 87 shares recorded small losses in prices. Noteworthy, after recording price gains for consecutive days, the newly listed Cho Lon Real Estate (CRL) fell 23,500 VND to close at 236,000 VND per share today.
On the day, almost 1 million shares, worth over 108.95 billion VND, changed hands at the Ha Noi bourse.
Source: VNA
The VN-Index at the country's largest exchange in Ho Chi Minh City tacked on 11.31 points or 1.1 percent from the previous session to close at 1055.7 points. More than 5.6 million shares, worth a combined 615.1 billion VND, changed hands on the day, 47 stocks rallied for gains, 26 shares remained the same and 36 shares fell over the course of the session.
Blue chip share Sai Gon Thuong Tin Commercial Bank (STB) led the market in terms of trading volume with 693,090 shares changing hands on the day. Petroleum Drilling Service Firm (PVD) with 290,990 shares and Song Da Urban and Industrial Zone Investment and Development ( SJS ) with 283,830 shares rounded out the top three.
Although the State Securities Commission (SSC) has not yet determined whether Binh Dinh Mining Co (BMC) has been artificially inflating their stock price, 800 shares were offered during the session. As there was no demand for BMC, its price fell 27,000 VND to 514,000 VND per unit.
Financing and Promoting Technology Corporation (FPT) hit the ceiling price by 15,000 VND to 324,000 VND with all the 218,550 shares being snatched up. Pharmaceutical company (DHG), Confectioner Kinh Do Corp (KDC) and plastic tube producer BMP were also among the top five in terms of price gains.
The HaSTC-Index at the Ha Noi Securities Trading Centre continued to slide 0.52 points from its last session to finish at 295.4 points marking its sharpest decline since early this year.
Thirty-seven of 87 shares recorded small losses in prices. Noteworthy, after recording price gains for consecutive days, the newly listed Cho Lon Real Estate (CRL) fell 23,500 VND to close at 236,000 VND per share today.
On the day, almost 1 million shares, worth over 108.95 billion VND, changed hands at the Ha Noi bourse.
Source: VNA
Tuesday, June 26, 2007
VinaPhone to be equitised after MobiFone
The General Director of the Vietnam Post and Telecommunications Group (VNPT) said that the equitisation of VinaPhone information mobile network is only performed after the equitisation of MobiFone is finalised.
The General Director said that the equitisation scheme of VinaPhone is being designed. VNPT is now focusing on the equitisation of MobiFone and when this task is complete, the group will apply lessons that it learns from MobiFone equitisation to apply for VinaPhone.
“We can’t perform equitisation of the two mobile phone networks at the same time when we don’t have any experience,” he said.
The equitisation of VinaPhone and MobiFone was permitted by the Government in early 2005. But until now, MobiFone is still seeking a suitable consultant and a strategic investor. MobiFone’s shares will be listed on the bourse in 2008 at the earliest time. Thus, till late 2008, VNPT can think of the equitisation of VinaPhone.
Hoang Trung Hai, VinaPhone Director said that the difficulty for the equitisation of VinaPhone is that this network is not independent in term of finance. Its business closely depends on the system of 64 post offices of 64 provinces and cities in Vietnam. To prepare for equitisation, VinaPhone will have to consider turnover, tasks, etc. for each province, which takes time and is very complicated.
According to Mr Hai, investors are enthusiastic for stocks of telecom companies. VinaPhone has received many investors who want to buy its stocks though the firm is not been equitised yet.
“However, we can’t tell before hand because we don’t have guidance from the leaders of VNPT,” VinaPhone Director said.
Source: VNE
The General Director said that the equitisation scheme of VinaPhone is being designed. VNPT is now focusing on the equitisation of MobiFone and when this task is complete, the group will apply lessons that it learns from MobiFone equitisation to apply for VinaPhone.
“We can’t perform equitisation of the two mobile phone networks at the same time when we don’t have any experience,” he said.
The equitisation of VinaPhone and MobiFone was permitted by the Government in early 2005. But until now, MobiFone is still seeking a suitable consultant and a strategic investor. MobiFone’s shares will be listed on the bourse in 2008 at the earliest time. Thus, till late 2008, VNPT can think of the equitisation of VinaPhone.
Hoang Trung Hai, VinaPhone Director said that the difficulty for the equitisation of VinaPhone is that this network is not independent in term of finance. Its business closely depends on the system of 64 post offices of 64 provinces and cities in Vietnam. To prepare for equitisation, VinaPhone will have to consider turnover, tasks, etc. for each province, which takes time and is very complicated.
According to Mr Hai, investors are enthusiastic for stocks of telecom companies. VinaPhone has received many investors who want to buy its stocks though the firm is not been equitised yet.
“However, we can’t tell before hand because we don’t have guidance from the leaders of VNPT,” VinaPhone Director said.
Source: VNE
Insurance companies seek permission to increase capital
A lot of insurance companies have asked for permission to increase capital to improve their financial capability, according to the Ministry of Finance.
The applications all were made to the Ministry of Finance in the first quarter of 2007. Insurers asking to increase capital included Bao Viet, Bao Minh, Vinare, Bao Long, Vien Dong, BIC, and newly licenced companies like Toan Cau, Bao Nong, Bao Tin.
Insurers are rushing to increase their capital in order to have the capital levels stipulated by Government Decree 45. The decree, dated March 27, 2007, says that non-life insurance companies must have at least VND300bil in legal capital (the previously applied level was VND70bil), while life insurance companies must have at least VND600bil in legal capital instead of VND140bil. Brokerage insurance companies must have the minimum legal capital of VND4bil.
The insurance companies which have been previously established and do not have the required capital level must raise their capital within three years after the date the decree went into effect.
However, according to Phung Dac Loc, Secretary General of the Vietnam Insurance Association, the strict requirements stipulated in the decree are not the main reasons insurers want to increase their capital. In fact, insurers want to become stronger to get ready for the fierce competition to come.
Among the companies, BIC (BIDV Insurance Company) has asked for the biggest capital increase. BIDV, the mother bank, has decided to inject VND300bil more in the insurance company to raise the chartered capital of the insurer to VND500bil in June 2007.
Pham Quang Tung, BIC Director, said that the required capital levels might be high for local companies, but they proved to be relatively low compared to those of companies in regional countries. Insurers need to increase their capital in order to become financially stronger.
Mr Tung said that with the stock market’s development, it was not a difficult task nowadays to increase capital.
Source: VNE
The applications all were made to the Ministry of Finance in the first quarter of 2007. Insurers asking to increase capital included Bao Viet, Bao Minh, Vinare, Bao Long, Vien Dong, BIC, and newly licenced companies like Toan Cau, Bao Nong, Bao Tin.
Insurers are rushing to increase their capital in order to have the capital levels stipulated by Government Decree 45. The decree, dated March 27, 2007, says that non-life insurance companies must have at least VND300bil in legal capital (the previously applied level was VND70bil), while life insurance companies must have at least VND600bil in legal capital instead of VND140bil. Brokerage insurance companies must have the minimum legal capital of VND4bil.
The insurance companies which have been previously established and do not have the required capital level must raise their capital within three years after the date the decree went into effect.
However, according to Phung Dac Loc, Secretary General of the Vietnam Insurance Association, the strict requirements stipulated in the decree are not the main reasons insurers want to increase their capital. In fact, insurers want to become stronger to get ready for the fierce competition to come.
Among the companies, BIC (BIDV Insurance Company) has asked for the biggest capital increase. BIDV, the mother bank, has decided to inject VND300bil more in the insurance company to raise the chartered capital of the insurer to VND500bil in June 2007.
Pham Quang Tung, BIC Director, said that the required capital levels might be high for local companies, but they proved to be relatively low compared to those of companies in regional countries. Insurers need to increase their capital in order to become financially stronger.
Mr Tung said that with the stock market’s development, it was not a difficult task nowadays to increase capital.
Source: VNE
Song Da 9 to raise 10mio US$
Vietnam construction firm Song Da 9 (SD9) said on Tuesday it would sell 4 million new shares by auction to raise about $10 million to purchase equipment and expand its business.
The company, which specalises in power plants and irrigation projects, said the auction would be held before September 18 and it would would issue 2.95 million shares to existing shareholders at 10,000 dong each ($0.62) next month.
The amount of money the firm sought to raise suggested it aimed to sell the shares at about 40,000 dong each ($2.5), traders said.
At 0230 GMT, shares in the company were traded on the Hanoi exchange at 72,000 dong ($4.5), down 0.55 percent from Monday.
Song Da 9 now has a price to earnings ratio of 21.20 and a return on equity of 30.89 percent.
Source: Reuters
The company, which specalises in power plants and irrigation projects, said the auction would be held before September 18 and it would would issue 2.95 million shares to existing shareholders at 10,000 dong each ($0.62) next month.
The amount of money the firm sought to raise suggested it aimed to sell the shares at about 40,000 dong each ($2.5), traders said.
At 0230 GMT, shares in the company were traded on the Hanoi exchange at 72,000 dong ($4.5), down 0.55 percent from Monday.
Song Da 9 now has a price to earnings ratio of 21.20 and a return on equity of 30.89 percent.
Source: Reuters
Vietnam to weaken dong
Vietnam will engineer a decline in the dong of as much as 1 percent this year to support exports, a Bloomberg news agency’s report Monday quoted Deputy Prime Minister Nguyen Sinh Hung as saying.
Intervention by State Bank of Vietnam, the country’s central bank, has led to a depreciation of about 1 percent in each of the past three years, even as foreign investment drove faster economic growth.
The currency has dropped 0.4 percent this year, while the Indian rupee gained 8.6 percent, the Philippine peso climbed 6.2 percent and the Thai baht rose 2.5 percent.
“We are making the decision to depreciate it a little bit to ensure our exports because there is a good inflow of dollars,” Hung said in an interview Sunday while attending the World Economic Forum in Singapore.
“Our concern is the appreciation of the Vietnam dong.”
HSBC Holdings Plc., Europe's biggest bank by market value, this month said the currency would appreciate as foreign investment inflows increase and policy makers try to stem inflation. A stronger dong would make imports cheaper and cool growth in exports of crude oil, textiles and furniture.
Source: Thanh Nien
Intervention by State Bank of Vietnam, the country’s central bank, has led to a depreciation of about 1 percent in each of the past three years, even as foreign investment drove faster economic growth.
The currency has dropped 0.4 percent this year, while the Indian rupee gained 8.6 percent, the Philippine peso climbed 6.2 percent and the Thai baht rose 2.5 percent.
“We are making the decision to depreciate it a little bit to ensure our exports because there is a good inflow of dollars,” Hung said in an interview Sunday while attending the World Economic Forum in Singapore.
“Our concern is the appreciation of the Vietnam dong.”
HSBC Holdings Plc., Europe's biggest bank by market value, this month said the currency would appreciate as foreign investment inflows increase and policy makers try to stem inflation. A stronger dong would make imports cheaper and cool growth in exports of crude oil, textiles and furniture.
Source: Thanh Nien
Bao Minh on the hunt for strategic partners
Bao Minh Insurance, Viet Nam's second largest insurer, has announced it has brought onboard consultants to aid it in attracting overseas strategic investors for its upcoming share issuance.
The Ho Chi Minh City-based insurer inked the consultancy deals with international investment bank NM Rothschild & Sons and Vietnamese-based Horizon Capital Advisers.
Bao Minh is planning to offer 12.57 million shares to strategic investors in preparation for capital expansions for its new subsidiaries in northern Lao Cai province and Central Highlands Kon Tum province.
Earlier, the company at its shareholders’ meeting also decided to establish the Bao Minh Securities Company and the Bao Minh Fund Management Company.
Source: VNA
The Ho Chi Minh City-based insurer inked the consultancy deals with international investment bank NM Rothschild & Sons and Vietnamese-based Horizon Capital Advisers.
Bao Minh is planning to offer 12.57 million shares to strategic investors in preparation for capital expansions for its new subsidiaries in northern Lao Cai province and Central Highlands Kon Tum province.
Earlier, the company at its shareholders’ meeting also decided to establish the Bao Minh Securities Company and the Bao Minh Fund Management Company.
Source: VNA
VinaCapital to finance golf course
A 36-hole golf course will be built in the central city of Da Nang’s Ngu Hanh Son District, announced VinaCapital Group chairman Horst Geicke.
VinaCapital signed an agreeement last week with the UK’s Greg Norman Co to design the course.
"We hope to build a high-quality golf course which does not affect the traditional culture and the village atmosphere here, and we chose Gref Norman," said Geicke. "They have developed about a hundred golf courses around the world."
The golf course would be part of a high-end resort complex named Hoa Hai which VinaCapital is financing at a cost of US$130 million on a total area of 260ha, Geicke said.
Construction would be carried out in two phases, he added. The first phase, to be commenced by the end of this year and be completed within 12 months, would include a five-star, 350-unit resort, and a 10ha seaside villa complex, along with an 18-hole golf course.
The subsequent second phase will include hotels, a cultural village, a convention centre, a 30ha residential area and the second 18-holes of the golf course.
"We hope to contribute to the development of tourism in Da Nang and in the central region," Geicke said. "We aim to make the region a high-grade destination for international visitors, with leading golf courses Asia-wide."
VinaCapital currently manages two funds listed on the London Stock Exchange worth $1.4 billion and a $50 million joint venture.
The group planned to pour an additional $200-300 million into financing for infrastructure projects, Geicke said.
Source: VNS
VinaCapital signed an agreeement last week with the UK’s Greg Norman Co to design the course.
"We hope to build a high-quality golf course which does not affect the traditional culture and the village atmosphere here, and we chose Gref Norman," said Geicke. "They have developed about a hundred golf courses around the world."
The golf course would be part of a high-end resort complex named Hoa Hai which VinaCapital is financing at a cost of US$130 million on a total area of 260ha, Geicke said.
Construction would be carried out in two phases, he added. The first phase, to be commenced by the end of this year and be completed within 12 months, would include a five-star, 350-unit resort, and a 10ha seaside villa complex, along with an 18-hole golf course.
The subsequent second phase will include hotels, a cultural village, a convention centre, a 30ha residential area and the second 18-holes of the golf course.
"We hope to contribute to the development of tourism in Da Nang and in the central region," Geicke said. "We aim to make the region a high-grade destination for international visitors, with leading golf courses Asia-wide."
VinaCapital currently manages two funds listed on the London Stock Exchange worth $1.4 billion and a $50 million joint venture.
The group planned to pour an additional $200-300 million into financing for infrastructure projects, Geicke said.
Source: VNS
Exports fetch 22.5 billion USD in six months
Viet Nam’s exports fetched close to 22.5 billion USD in the first half of this year, posting a year-on-year rise of 19.4 percent over 2006.
In June alone, the country brought in 4.1 billion USD from exports, slightly surpassing the expected monthly target of 4 billion USD, reported the General Statistics Office (GSO).
Wooden furniture again exceeded the 1 billion USD mark for June by bringing in 1.1 billion USD.
Other products to make the billion dollar club include crude oil, garments and textiles, footwear, seafood and coffee.
Exports of electronic appliances and computer components, and rice also showed positive growth signs as they recorded offshore numbers of 935 million USD and 730 million USD in turnover, respectively.
Rice has been tagged as breaking the 1 billion USD mark for the year as demand has been running high for Vietnamese strains of rice.
Source: VNA
In June alone, the country brought in 4.1 billion USD from exports, slightly surpassing the expected monthly target of 4 billion USD, reported the General Statistics Office (GSO).
Wooden furniture again exceeded the 1 billion USD mark for June by bringing in 1.1 billion USD.
Other products to make the billion dollar club include crude oil, garments and textiles, footwear, seafood and coffee.
Exports of electronic appliances and computer components, and rice also showed positive growth signs as they recorded offshore numbers of 935 million USD and 730 million USD in turnover, respectively.
Rice has been tagged as breaking the 1 billion USD mark for the year as demand has been running high for Vietnamese strains of rice.
Source: VNA
Vietnam estimates H1 trade deficit at $4.78 bln
Vietnam estimated on Monday its trade deficit in the first half of the year more than doubled to $4.78 billion from a year earlier, due largely to a surge in imports for the construction of state projects.
In June alone the deficit was estimated at $950 million, the General Statistics Office said.
In the first six months of 2006 the deficit stood at $1.88 billion.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first $2.5 billion refinery and new power plants, soared 46.5 percent in the January-June period from a year earlier to $4.4 billion.
The imports of steel and steel ingots in the first six months were also estimated to jump 60.9 percent from a year earlier to $3.3 billion on the back of robust demand from the construction sector.
The trade gap expected in the first half surpassed the Trade Ministry's full-year target of $4.66 billion.
Source: Reuters
In June alone the deficit was estimated at $950 million, the General Statistics Office said.
In the first six months of 2006 the deficit stood at $1.88 billion.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first $2.5 billion refinery and new power plants, soared 46.5 percent in the January-June period from a year earlier to $4.4 billion.
The imports of steel and steel ingots in the first six months were also estimated to jump 60.9 percent from a year earlier to $3.3 billion on the back of robust demand from the construction sector.
The trade gap expected in the first half surpassed the Trade Ministry's full-year target of $4.66 billion.
Source: Reuters
Vietnam H1 industrial output up 16.9% yr/yr
Vietnam estimated on Monday its industrial output in the first six months of this year would jump 16.9 percent to 275.71 trillion dong ($17 billion) compared with the same period of 2006.
Growth in the January-June period was driven by a 34.5 percent rise in motorcycle production and a 41 percent rise in industrial machinery output, data from the government statistics office showed.
Source: Reuters
Growth in the January-June period was driven by a 34.5 percent rise in motorcycle production and a 41 percent rise in industrial machinery output, data from the government statistics office showed.
Source: Reuters
Vietnam raises $62 mln in bond sales
Vietnam raised 1 trillion dong ($62 million) from two auctions of government bonds this month, 700 billion dong short of its target, the Hanoi stock exchange said on Monday.
The exchange said in one auction of 1 trillion dong on June 18, only half the issue, which carries a maturity of 15 years and was issued the Vietnam Development Bank, was sold.
Bids came in between 7.9 and 10 percent and the bonds were sold at an annual yield of 8 percent, the exchange said.
The statement said in another auction on June 25, 500 billion dong of 700 billion 5-year bonds offered by the State Treasury were sold at an annual coupon of 7.25 percent. Bids ranged from 7.15 percent to 8 percent.
On June 14, the Hanoi market sold 500 billion dong ($31 million) worth of Ho Chi Minh City's urban bonds. The yield on a five-year bond, worth 150 billion dong, was 7.8 percent while the 15-year bond carried yield of 8.25 percent.
The Finance Ministry aims to sell 22 trillion dong ($1.37 billion) worth of government bonds between March and the end of this year to invest in transport and irrigation projects.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It assigned a Ba3 rating for the country's dong debts.
Source: Reuters
The exchange said in one auction of 1 trillion dong on June 18, only half the issue, which carries a maturity of 15 years and was issued the Vietnam Development Bank, was sold.
Bids came in between 7.9 and 10 percent and the bonds were sold at an annual yield of 8 percent, the exchange said.
The statement said in another auction on June 25, 500 billion dong of 700 billion 5-year bonds offered by the State Treasury were sold at an annual coupon of 7.25 percent. Bids ranged from 7.15 percent to 8 percent.
On June 14, the Hanoi market sold 500 billion dong ($31 million) worth of Ho Chi Minh City's urban bonds. The yield on a five-year bond, worth 150 billion dong, was 7.8 percent while the 15-year bond carried yield of 8.25 percent.
The Finance Ministry aims to sell 22 trillion dong ($1.37 billion) worth of government bonds between March and the end of this year to invest in transport and irrigation projects.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It assigned a Ba3 rating for the country's dong debts.
Source: Reuters
Vietnam H1 exports seen up 19.4% yr/yr
Vietnam estimates its exports in the first half of the year will soar 19.4 percent from a year earlier to $22.5 billion due to strong coffee and clothing exports, state media reported on Monday.
The online newspaper Vietnamnet quoted a Trade Ministry report as saying high world prices were expected to help first-half coffee exports more than double to $1.2 billion from $582 million recorded in the same period of 2006.
The report did not provide figures for volume of coffee Vietnam, the world's largest exporter of robusta coffee, shipped during the first half of the year.
Exports of garments and textile products, the country's second biggest export item after crude oil, also jumped 23 percent from a year earlier to $3.4 billion in the first six months of the year, the Ministry estimated.
Crude oil exports were estimated at $3.75 billion, below last year's $4.18 billion, because of lower crude oil production at Bach Ho, the biggest oil field.
The report did not provide figures for imports during the first half of the year.
The Southeast Asian country aims for exports to grow 22 percent in the whole of 2007 to reach $47.54 billion.
Source: Reuters
The online newspaper Vietnamnet quoted a Trade Ministry report as saying high world prices were expected to help first-half coffee exports more than double to $1.2 billion from $582 million recorded in the same period of 2006.
The report did not provide figures for volume of coffee Vietnam, the world's largest exporter of robusta coffee, shipped during the first half of the year.
Exports of garments and textile products, the country's second biggest export item after crude oil, also jumped 23 percent from a year earlier to $3.4 billion in the first six months of the year, the Ministry estimated.
Crude oil exports were estimated at $3.75 billion, below last year's $4.18 billion, because of lower crude oil production at Bach Ho, the biggest oil field.
The report did not provide figures for imports during the first half of the year.
The Southeast Asian country aims for exports to grow 22 percent in the whole of 2007 to reach $47.54 billion.
Source: Reuters
Monday, June 25, 2007
June 18-22: stock market changes unpredictably
It was strange that domestic investors still sold stocks which led to oversupply though there was good news for the Vietnamese stock market in the week from June 18-22.
In the past few days, the foreign media and regional experts have made optimistic comments about the Vietnamese economy and the Vietnamese stock market in particular.
Japan’s Sankei newspaper on June 19 said that the Vietnamese stock market was the most interesting of emerging stock markets like those of Indonesia, South Africa, Turkey and Argentina.
CNN channel, meanwhile, several times a day broadcast a 30-second video clip titled Vietnam: a new horizon, which mentioned the achievements of Vietnam’s renovation period over the past 20 years in all fields.
Regional newspapers had the same comment that the Chinese stock market was burning and some other economies showed signs of depression. Investors are paying attention to Vietnam, an economy with a high and stable growth rate (over 8%).
Business missions and entrepreneurs of some countries expressed their wish to boost investment into Vietnam, particularly in the areas of infrastructure, electronics, garments, securities and services.
Vietnamese and international experts have said that the Vietnamese stock market has a lot of potential. The equitisation process in Vietnam is being quickened. The prices of many types of stocks are reasonable and they said that it was time for big foreign investors to think of entering this market.
Contrary to the good news about the stock market, the indexes of the two securities trading centres in Hanoi and HCM City reduced remarkably.
The VN-Index of the HCM City Securities Trading Centre dropped 14.5 points, marking the fourth consecutive week of decline. The HASTC-Index of the Hanoi Securities Trading Centre also saw a fall of 13.7 points.
With four trading sessions of reduction and only one of increase, the VN-Index dropped to 1,033.69 points, equivalent to an average reduction of 1.4% for all kind of stocks in the week.
The HASTC-Index was in the same situation with only one trading session early in the week witnessing an increase and the four others doing otherwise, with the final reduction of 4.37%. The HASTC-Index went under 300 points for the first time in five months.
The prices of 65 types of stocks on the HCM City Securities Trading Centre went down, 33 others rose and nine remained the same. At the Hanoi Securities Trading Centre, 12 types had their prices go up, four remained the same and 71 went down.
Notably, while foreign investors bought stocks (around 1.3-1.4 mil units/trading session), local investors tried to sell. Foreign investors bought 6.3 million units of shares and fund certificates, worth over VND905.4 billion (US$56.5 million), and sold nearly 4.6 million units, worth VND682.6 billion ($42.68 million).
Local investors, meanwhile, offered 55.54 million shares and fund certificates for sale and purchased nearly 47.2 million shares.
Source: VNE
In the past few days, the foreign media and regional experts have made optimistic comments about the Vietnamese economy and the Vietnamese stock market in particular.
Japan’s Sankei newspaper on June 19 said that the Vietnamese stock market was the most interesting of emerging stock markets like those of Indonesia, South Africa, Turkey and Argentina.
CNN channel, meanwhile, several times a day broadcast a 30-second video clip titled Vietnam: a new horizon, which mentioned the achievements of Vietnam’s renovation period over the past 20 years in all fields.
Regional newspapers had the same comment that the Chinese stock market was burning and some other economies showed signs of depression. Investors are paying attention to Vietnam, an economy with a high and stable growth rate (over 8%).
Business missions and entrepreneurs of some countries expressed their wish to boost investment into Vietnam, particularly in the areas of infrastructure, electronics, garments, securities and services.
Vietnamese and international experts have said that the Vietnamese stock market has a lot of potential. The equitisation process in Vietnam is being quickened. The prices of many types of stocks are reasonable and they said that it was time for big foreign investors to think of entering this market.
Contrary to the good news about the stock market, the indexes of the two securities trading centres in Hanoi and HCM City reduced remarkably.
The VN-Index of the HCM City Securities Trading Centre dropped 14.5 points, marking the fourth consecutive week of decline. The HASTC-Index of the Hanoi Securities Trading Centre also saw a fall of 13.7 points.
With four trading sessions of reduction and only one of increase, the VN-Index dropped to 1,033.69 points, equivalent to an average reduction of 1.4% for all kind of stocks in the week.
The HASTC-Index was in the same situation with only one trading session early in the week witnessing an increase and the four others doing otherwise, with the final reduction of 4.37%. The HASTC-Index went under 300 points for the first time in five months.
The prices of 65 types of stocks on the HCM City Securities Trading Centre went down, 33 others rose and nine remained the same. At the Hanoi Securities Trading Centre, 12 types had their prices go up, four remained the same and 71 went down.
Notably, while foreign investors bought stocks (around 1.3-1.4 mil units/trading session), local investors tried to sell. Foreign investors bought 6.3 million units of shares and fund certificates, worth over VND905.4 billion (US$56.5 million), and sold nearly 4.6 million units, worth VND682.6 billion ($42.68 million).
Local investors, meanwhile, offered 55.54 million shares and fund certificates for sale and purchased nearly 47.2 million shares.
Source: VNE
VN-Index up, HaSTC slips
The VN-Index at the Ho Chi Minh City Securities Trading Centre increased by 10.7 points to close at 1044.39 points by the end of the June 25 trading session.
The market saw more than 4,865,000 shares, worth 497.123 billion VND, change hands.
In contrast, HaSTC-Index in the Ha Noi bourse continued its downward trend by having 3.85 points shaved off its value to end the day at 295.92 points.
Trading volume at the bourse was minimal as only 957,500 shares worth 89 billion VND, were traded.
The market saw 47 shares fall, including blue chips, Asia Commercial Bank (ACB), Bao Viet Securities (BVS), Saigon Securities (SSI) and Bao Minh Insurance (BMI).
Source: VNA
The market saw more than 4,865,000 shares, worth 497.123 billion VND, change hands.
In contrast, HaSTC-Index in the Ha Noi bourse continued its downward trend by having 3.85 points shaved off its value to end the day at 295.92 points.
Trading volume at the bourse was minimal as only 957,500 shares worth 89 billion VND, were traded.
The market saw 47 shares fall, including blue chips, Asia Commercial Bank (ACB), Bao Viet Securities (BVS), Saigon Securities (SSI) and Bao Minh Insurance (BMI).
Source: VNA
Saigon Paper expects '07 profit up 115%
Vietnamese paper maker Saigon Paper Corp (SGC), which will launch its IPO next month, has forecast net profit this year should soar 115 percent from 2006 to $2.3 million due to strong demand and expanded capacity.
The company said in its prospectus seen on Monday 2007 revenues should jump 117 percent from last year to $28 million due to strong demand for tissue and napkins products and 50,000 tonnes of new capacity at two new plants in the south.
The Ho Chi Minh City-based company said it had set a starting price for its 3 million shares at an auction scheduled for July at 20,000 dong ($1.24), or double the stock's face value.
SGC, which has assets of $28 million, plans to invest about $1 million of the $3.7 million expected from the initial public offering in two new paper plants in Hung Yen province in the north and the central province of Quang Nam.
The firm, which makes tissue and toilet papers for domestic use and export to Africa, said it aimed to achieve a return-on-equity of 31.2 percent and pay a dividend of 15 percent this year.
Source: Reuters
The company said in its prospectus seen on Monday 2007 revenues should jump 117 percent from last year to $28 million due to strong demand for tissue and napkins products and 50,000 tonnes of new capacity at two new plants in the south.
The Ho Chi Minh City-based company said it had set a starting price for its 3 million shares at an auction scheduled for July at 20,000 dong ($1.24), or double the stock's face value.
SGC, which has assets of $28 million, plans to invest about $1 million of the $3.7 million expected from the initial public offering in two new paper plants in Hung Yen province in the north and the central province of Quang Nam.
The firm, which makes tissue and toilet papers for domestic use and export to Africa, said it aimed to achieve a return-on-equity of 31.2 percent and pay a dividend of 15 percent this year.
Source: Reuters
Vietnam forecasts June CPI up 7.8% yr/yr
Vietnam forecast on Monday that annual consumer price inflation in June would rise to 7.8% on higher fuel and food costs, up from 7.31% in May.
The rise in the consumer price index (CPI) is above a government target to keep annual inflation this year at less than 7%.
The General Statistics Office released preliminary inflation figures showing food prices this month would be 14.86% higher than last June, above a rise of 14.6% in May from a year earlier.
The government report also estimated consumer prices this month would edge up 0.85% from
May, following higher fuel prices, higher transport cost as well as construction cost.
Food prices account for 42.8% of the price basket Vietnam uses to calculate inflation. Vietnam's inflation data is not seasonally adjusted.
The Finance Ministry expects to control Vietnam's 2007 inflation at less than 7%, in line with a government goal of keeping the rate below the annual economic growth target of 8.5%.
But it has not revised its target since a fuel price rise early last month, which has a chain effect on production of items essential for industry and thus overall economic growth such as coal, cement, steel and electricity.
Consumer prices over the last six months have risen an estimated 5.2% since December, the statistics office said.
The World Bank has forecast that Vietnam's consumer prices this year would be 6.5% higher than 2006 while the International Monetary Fund estimated a year-end inflation rate of 7.1%.
Source: Reuters
The rise in the consumer price index (CPI) is above a government target to keep annual inflation this year at less than 7%.
The General Statistics Office released preliminary inflation figures showing food prices this month would be 14.86% higher than last June, above a rise of 14.6% in May from a year earlier.
The government report also estimated consumer prices this month would edge up 0.85% from
May, following higher fuel prices, higher transport cost as well as construction cost.
Food prices account for 42.8% of the price basket Vietnam uses to calculate inflation. Vietnam's inflation data is not seasonally adjusted.
The Finance Ministry expects to control Vietnam's 2007 inflation at less than 7%, in line with a government goal of keeping the rate below the annual economic growth target of 8.5%.
But it has not revised its target since a fuel price rise early last month, which has a chain effect on production of items essential for industry and thus overall economic growth such as coal, cement, steel and electricity.
Consumer prices over the last six months have risen an estimated 5.2% since December, the statistics office said.
The World Bank has forecast that Vietnam's consumer prices this year would be 6.5% higher than 2006 while the International Monetary Fund estimated a year-end inflation rate of 7.1%.
Source: Reuters
Petrovietnam Insurance to sell $31 mln of shares
Petrovietnam Insurance Corp. (PVI), Vietnam's third-largest insurer, plans to raise at least $31 million from an auction of 10 million new shares this week.
The insurer said in a statement seen on Monday it had set a starting price for bidding at 50,000 dong ($3.1) a share for the auction scheduled to begin on Tuesday.
The Hanoi Securities Trading Centre said more than 3,200 investors, including 75 institutions, had registered to bid for the shares. The company's stock is being traded in the unofficial market at around 120,000 dong ($7.4).
The share sale is part of the firm's plan to issue more than 35 million shares to boost finances before a domestic listing later this year, company officials have said.
PVI, which raised nearly $117 million by selling 23 percent of its shares in an initial public offering in January, has applied to list on the Hanoi exchange, Chairman Le Van Hung told state media last week.
Last year, PVI had an 18.09 percent share of Vietnam's non-life insurance market, making it the third biggest after state-run Bao Viet, which had a 34.94 percent share, and Bao Minh with 21.29 percent, industry reports said.
PVI said its audited net profit jumped 51.7 percent last year from 2005 to 44 billion dong following a 65.6-percent surge in insurance premiums to 1.16 trillion dong ($72 million).
Since the start of this year, PVI has been expanding from its core insurance business, investing in areas such as crude oil production, banking, stock broking and cement production.
PVI and Petrovietnam have become founding members of a company building several hydro-power plants in Laos.
PVI said its revenues soared 165 percent in the first four months of 2007 from a year earlier to more than 750 billion dong ($46.6 million).
Source: Reuters
The insurer said in a statement seen on Monday it had set a starting price for bidding at 50,000 dong ($3.1) a share for the auction scheduled to begin on Tuesday.
The Hanoi Securities Trading Centre said more than 3,200 investors, including 75 institutions, had registered to bid for the shares. The company's stock is being traded in the unofficial market at around 120,000 dong ($7.4).
The share sale is part of the firm's plan to issue more than 35 million shares to boost finances before a domestic listing later this year, company officials have said.
PVI, which raised nearly $117 million by selling 23 percent of its shares in an initial public offering in January, has applied to list on the Hanoi exchange, Chairman Le Van Hung told state media last week.
Last year, PVI had an 18.09 percent share of Vietnam's non-life insurance market, making it the third biggest after state-run Bao Viet, which had a 34.94 percent share, and Bao Minh with 21.29 percent, industry reports said.
PVI said its audited net profit jumped 51.7 percent last year from 2005 to 44 billion dong following a 65.6-percent surge in insurance premiums to 1.16 trillion dong ($72 million).
Since the start of this year, PVI has been expanding from its core insurance business, investing in areas such as crude oil production, banking, stock broking and cement production.
PVI and Petrovietnam have become founding members of a company building several hydro-power plants in Laos.
PVI said its revenues soared 165 percent in the first four months of 2007 from a year earlier to more than 750 billion dong ($46.6 million).
Source: Reuters
Vietnam's Economic Growth Rate Hits 4-Year High of 7.9%
Vietnam's GDP grew an estimated 7.9% in the first half of 2007, the highest mark since 2002, Government officials announced.
The numbers, though, are below a State target of 8.2 to 8.5% for the year.
The country will have to work hard to meet estimates, Minister of Planning and Investment Vo Hong Phuc said during a conference in the province of Thanh Hoa.
Phuc said over the past five months, droughts, bird flu, foot and mouth disease and an epidemic of brown hoppers have hampered the agricultural sector.
Imports also outstripped exports by 17%, he said. The main imports were equipment, machines and production materials.
Construction projects funded from the State budget, credits and government bonds were also behind schedule, he said.
He attributed the delay to price hikes of cement and steel.
In order to reach the 8.2 to 8.5% growth target, the economy will have to expand at 9% in the next six months, Phuc said.
The government will issue a series of new regulations in the hope of increasing production and exports, he said.
In addition, it is very important to promote the development of the industrial and service sectors to compensate for agricultural losses, he said.
Phuc asked local authorities to help speed up the disbursement of State funds.
He also said protecting domestic production and stabilising the inflation rate were priorities.
With the typhoon season on the horizon, Phuc asked authorities nation-wide to take precautions.
Source: VNA
The numbers, though, are below a State target of 8.2 to 8.5% for the year.
The country will have to work hard to meet estimates, Minister of Planning and Investment Vo Hong Phuc said during a conference in the province of Thanh Hoa.
Phuc said over the past five months, droughts, bird flu, foot and mouth disease and an epidemic of brown hoppers have hampered the agricultural sector.
Imports also outstripped exports by 17%, he said. The main imports were equipment, machines and production materials.
Construction projects funded from the State budget, credits and government bonds were also behind schedule, he said.
He attributed the delay to price hikes of cement and steel.
In order to reach the 8.2 to 8.5% growth target, the economy will have to expand at 9% in the next six months, Phuc said.
The government will issue a series of new regulations in the hope of increasing production and exports, he said.
In addition, it is very important to promote the development of the industrial and service sectors to compensate for agricultural losses, he said.
Phuc asked local authorities to help speed up the disbursement of State funds.
He also said protecting domestic production and stabilising the inflation rate were priorities.
With the typhoon season on the horizon, Phuc asked authorities nation-wide to take precautions.
Source: VNA
Hotel operator to raise $4 mln in IPO
Vietnamese hotel operator Huong Giang Tourism Co plans to raise around $4 million from an auction of 5.68 million shares, or nearly 25% of the company, next month.
The firm, which operates several major hotels in the central tourist city of Hue, said in a statement on Monday it had set a starting price for bidding at 10,700 dong ($0.66) a share for the auction on July 18.
The state will keep nearly 62% of the company and around 7.6% would be sold to its strategic parners.
The firm forecast its net profit next year to jump nearly 50% from 2007 to 25 billion dong ($1.6 million) on the back of expected higher foreign tourist arrivals in Hue.
Source: Reuters
The firm, which operates several major hotels in the central tourist city of Hue, said in a statement on Monday it had set a starting price for bidding at 10,700 dong ($0.66) a share for the auction on July 18.
The state will keep nearly 62% of the company and around 7.6% would be sold to its strategic parners.
The firm forecast its net profit next year to jump nearly 50% from 2007 to 25 billion dong ($1.6 million) on the back of expected higher foreign tourist arrivals in Hue.
Source: Reuters
Sacom lands deal to build resort in Vietnam central highlands
The Cables and Telecommunications Material Joint-Stock Company (Sacom) has replaced a Korean firm as contractor for a US$124-million resort complex including a golf course near Da Lat.
The Lam Dong province administration said the resort, 18 km from the central highlands resort town, would have a 36-hole golf course, 250 luxury villas, a five-star hotel, and a leisure area.
It has given Sacom one year to complete investment formalities after which another contractor would be chosen.
The Republic of Korea’s K’Gim company was the original partner in the project but the province scrapped the deal because K’Gim was slow to work on the formalities.
Sacom, based in Dong Nai province near Ho Chi Minh City, was the second firm to list on the country’s stock market when it was manufacturing electrical and telecom cables a few years ago.
Now it has diversified into real estate and telecom services.
Source: Thanh Nien
The Lam Dong province administration said the resort, 18 km from the central highlands resort town, would have a 36-hole golf course, 250 luxury villas, a five-star hotel, and a leisure area.
It has given Sacom one year to complete investment formalities after which another contractor would be chosen.
The Republic of Korea’s K’Gim company was the original partner in the project but the province scrapped the deal because K’Gim was slow to work on the formalities.
Sacom, based in Dong Nai province near Ho Chi Minh City, was the second firm to list on the country’s stock market when it was manufacturing electrical and telecom cables a few years ago.
Now it has diversified into real estate and telecom services.
Source: Thanh Nien
Vietnam builder Constrexim says plans IPO
Vietnamese state-owned builder Vietnam Construction Investment and Export-Import Corporation (Constrexim Holdings) plans to sell 15 to 20% of its capital in an IPO by year-end, its chairman said on Sunday. Constrexim, one of Vietnam's top 10 building groups, hopes to raise $5 million to $8 million and would have a market capitalisation of less than $50 million after listing, Constrexim chairman Do Manh Vu told Reuters on the sidelines of the World Economic Forum in Singapore.
Vu, 53, added that the company also wants to list in Singapore in a few years and that it is setting up a subsidiary in the city-state to prepare for the listing. He said that Constrexim -- whose activities include construction, real estate development and manufacturing of building materials -- has considerable "hidden assets" that he said could be worth 10 times more than indicated in the company's books.
"The state prohibits us from accounting for our real estate as company property, as all land belongs to the state," he said.
Do said that despite intense competition in Vietnam's construction sector, the firm's sales were up 15 to 20% compared to last year. The firm employs about 1,000 permanent staff and about 7,000 contract employees and has more than 30 subsidiaries.
He said that the Vietnamese government owns about 58% of the company and that the Asia Commercial Bank (ACB), one of two listed Vietnam banks, owns 6%. ACB is listed on the Hanoi stock exchange and is Vietnam's fifth-largest by assets.
"Constrexim is one of the most powerful corporations in the country, with a long history and a strong customer base," ACB Head of Strategic Planning Dam Van Tuan told Reuters.
Source: Reuters
Vu, 53, added that the company also wants to list in Singapore in a few years and that it is setting up a subsidiary in the city-state to prepare for the listing. He said that Constrexim -- whose activities include construction, real estate development and manufacturing of building materials -- has considerable "hidden assets" that he said could be worth 10 times more than indicated in the company's books.
"The state prohibits us from accounting for our real estate as company property, as all land belongs to the state," he said.
Do said that despite intense competition in Vietnam's construction sector, the firm's sales were up 15 to 20% compared to last year. The firm employs about 1,000 permanent staff and about 7,000 contract employees and has more than 30 subsidiaries.
He said that the Vietnamese government owns about 58% of the company and that the Asia Commercial Bank (ACB), one of two listed Vietnam banks, owns 6%. ACB is listed on the Hanoi stock exchange and is Vietnam's fifth-largest by assets.
"Constrexim is one of the most powerful corporations in the country, with a long history and a strong customer base," ACB Head of Strategic Planning Dam Van Tuan told Reuters.
Source: Reuters
Sunday, June 24, 2007
Urban drift causes big headache
Vietnam must set aside enough land for the settlement of more than six million people who will come to urban areas by 2010. That is a big challenge.
According to Vietnam’s land usage master plan to 2010, approved by the National Assembly last year, more than 110,000 hectares is expected to be diverted into new residential areas throughout Vietnam.
With more than six million people expected to flood urban areas, the country needs another 21,000ha to be developed.
At a conference named “Utilisation of land resources in Vietnam with urban and rural settlement” held recently in Hanoi, Institute for Residence Research deputy director Nguyen Hong Thuc said Vietnam might nearly exhaust all urban land resources by 2010, due to overly fast urban development growth.
“We will need another 21,000ha to serve our increasing population. This figure is not small at all and it is a big challenge for us,” Thuc said.
By 2020, the Vietnamese population will be more than 100 million, 70% of which will live in urban areas.
With the increase in population, the current average land per person ratio has dropped to only five square metres.
The increase in urban land will also put the squeeze on agricultural land, especially for rice production.
“That is why many farmers in Thai Binh province have returned agricultural land to authorities because the land was too small and separated,” said Le Thai Bat, Vietnamese Land Science Association’s associate professor.
Meanwhile, recent urban areas have been divided into many projects. Thuc said in the last three months only, 15 residential projects were started on Hanoi’s outskirts.
Many of those, she said, boasted more than $100 million in investment capital. Those projects’ investors have found the sites by themselves, not under local authority plans.
“This leads to a very serious problem that we cannot have a clear direction to develop our city, to create a new centre of the city, and we will waste our land as well,” Thuc said.
Meanwhile, Thuc said a large area in the city’s centre was still available for development, but had been ignored.
“I think that we should make detailed plans and exploit land resources in the city centre first, instead of expanding to outskirts and taking away agricultural land,” she added.
The Vietnam Construction Association’s Doctor Pham Sy Liem said the conversion of agricultural to urban land was a serious process.
Liem used a recently approved project to build a 180ha golf course in Hung Yen province as an example.
“Nearly 100% of Hung Yen’s population involves in agriculture, with modest a land area. So I think the province is not suitable for developing a golf course, but for a residential area,” Liem said.
Liem said local people, scientists and experts should have a heavy input before an investor can run with a project.
“I consider this investment follows a certain trend with limited consideration to many other impacts on the society,” he added.
In order to solve the shortage, architect Nguyen Truc Luyen, former chairman of the Vietnam Architecture Association, said the first solution often chosen was setting up high rise buildings. He said high rise buildings were a way to save land.
However, where they should be placed and how many stories should be built must be strictly controlled.
“We should take the setting up of high rise buildings more carefully and seriously, in order to avoid spreading a trend which cannot be controlled,” he added.
High rise buildings also need surrounding public facilities to support services to the buildings, Luyen said.
In 1998, architect Hoang Phuc Thang researched the planning ability of Vietnam’s authorities. He discovered that with backward planning capability, a detail plan for urban areas of the country could only be available in the next 500 years.
Thang’s above finding is understandable. By the end of 2005, there were only 20 million people living in urban areas. The figure is expected to rise to 50 mllion by 2020 and another 500,000ha will be needed.
According to the figures from the Vietnam Urban Association, in order to supply services for this 50 million population, the country would have to invest $8.9 billion by 2010 and $13 billion by 2020 in fresh water, drainage and waste treatment services. Hospitals, accommodation and schools will also be required.
“There must be accurate measures for urban development in Vietnam now or the country will be fallen into a tragedy of uncontrollable urbanisation,” said Thuc.
Source: VNE
According to Vietnam’s land usage master plan to 2010, approved by the National Assembly last year, more than 110,000 hectares is expected to be diverted into new residential areas throughout Vietnam.
With more than six million people expected to flood urban areas, the country needs another 21,000ha to be developed.
At a conference named “Utilisation of land resources in Vietnam with urban and rural settlement” held recently in Hanoi, Institute for Residence Research deputy director Nguyen Hong Thuc said Vietnam might nearly exhaust all urban land resources by 2010, due to overly fast urban development growth.
“We will need another 21,000ha to serve our increasing population. This figure is not small at all and it is a big challenge for us,” Thuc said.
By 2020, the Vietnamese population will be more than 100 million, 70% of which will live in urban areas.
With the increase in population, the current average land per person ratio has dropped to only five square metres.
The increase in urban land will also put the squeeze on agricultural land, especially for rice production.
“That is why many farmers in Thai Binh province have returned agricultural land to authorities because the land was too small and separated,” said Le Thai Bat, Vietnamese Land Science Association’s associate professor.
Meanwhile, recent urban areas have been divided into many projects. Thuc said in the last three months only, 15 residential projects were started on Hanoi’s outskirts.
Many of those, she said, boasted more than $100 million in investment capital. Those projects’ investors have found the sites by themselves, not under local authority plans.
“This leads to a very serious problem that we cannot have a clear direction to develop our city, to create a new centre of the city, and we will waste our land as well,” Thuc said.
Meanwhile, Thuc said a large area in the city’s centre was still available for development, but had been ignored.
“I think that we should make detailed plans and exploit land resources in the city centre first, instead of expanding to outskirts and taking away agricultural land,” she added.
The Vietnam Construction Association’s Doctor Pham Sy Liem said the conversion of agricultural to urban land was a serious process.
Liem used a recently approved project to build a 180ha golf course in Hung Yen province as an example.
“Nearly 100% of Hung Yen’s population involves in agriculture, with modest a land area. So I think the province is not suitable for developing a golf course, but for a residential area,” Liem said.
Liem said local people, scientists and experts should have a heavy input before an investor can run with a project.
“I consider this investment follows a certain trend with limited consideration to many other impacts on the society,” he added.
In order to solve the shortage, architect Nguyen Truc Luyen, former chairman of the Vietnam Architecture Association, said the first solution often chosen was setting up high rise buildings. He said high rise buildings were a way to save land.
However, where they should be placed and how many stories should be built must be strictly controlled.
“We should take the setting up of high rise buildings more carefully and seriously, in order to avoid spreading a trend which cannot be controlled,” he added.
High rise buildings also need surrounding public facilities to support services to the buildings, Luyen said.
In 1998, architect Hoang Phuc Thang researched the planning ability of Vietnam’s authorities. He discovered that with backward planning capability, a detail plan for urban areas of the country could only be available in the next 500 years.
Thang’s above finding is understandable. By the end of 2005, there were only 20 million people living in urban areas. The figure is expected to rise to 50 mllion by 2020 and another 500,000ha will be needed.
According to the figures from the Vietnam Urban Association, in order to supply services for this 50 million population, the country would have to invest $8.9 billion by 2010 and $13 billion by 2020 in fresh water, drainage and waste treatment services. Hospitals, accommodation and schools will also be required.
“There must be accurate measures for urban development in Vietnam now or the country will be fallen into a tragedy of uncontrollable urbanisation,” said Thuc.
Source: VNE
Disclosure rules to dissuade stock plots
The State Securities Commission ordered the nation's stock exchanges on June 21 to provide more detailed information related to unusual transactions, in a move targeted at avoiding market manipulation.
In the wake of the recent price volatility of several shares, the commission ordered the HCM City and Ha Noi Securities Trading Centres and the Securities Depository Centre to provide greater transaction data to the commission.
The commission noted that shares of the Binh Dinh Mining Co (coded BMC) had surged recently and unusual trading activity was under investigation. BMC shares remained unchanged on June 22 at 569,000 VND.
The commission also ordered the securities trading centres to provide investors with timely information on ceiling increases or floor decreases over the five consecutive sessions to avoid market manipulation.
Public disclosure would be required to include preliminary data analysis to help investors identify unusual transactions and avoid high-risk shares.
Source: VNA
In the wake of the recent price volatility of several shares, the commission ordered the HCM City and Ha Noi Securities Trading Centres and the Securities Depository Centre to provide greater transaction data to the commission.
The commission noted that shares of the Binh Dinh Mining Co (coded BMC) had surged recently and unusual trading activity was under investigation. BMC shares remained unchanged on June 22 at 569,000 VND.
The commission also ordered the securities trading centres to provide investors with timely information on ceiling increases or floor decreases over the five consecutive sessions to avoid market manipulation.
Public disclosure would be required to include preliminary data analysis to help investors identify unusual transactions and avoid high-risk shares.
Source: VNA
Saturday, June 23, 2007
Stock market in first half of 2007
The total capitalisation value of the listing share market has reached VND300tril, or $20bil, equivalent to 31% of GDP, according to the State Securities Commission (SSC), which has released figures about Vietnam’s stock market in the first six months of the year.
Meanwhile, the total capitalisation of the bond market has reached more than VND80tril, or 8% of GDP.
The figures reflect the impressive growth rate of the stock market, if noting that by the end of 2006, the total capitalisation value of the listing share market was just $14bil, or 22.7% of GDP.
Currently, there are 55 operational securities companies with the average chartered capital of VND90bil each. It is estimated that the number of securities companies will be 100 by the end of this year. There are 18 existing investment fund management companies and 61 institutions providing depository services.
Regarding the number of investors, more than 200,000 transactions accounts have been opened, including 4,400 by foreign investors, seven fold higher than that in 2005 and 1.5 fold higher than 2006. The statistics showed that 206 foreign institutions had registered to join the market, and that foreign portfolio investment had fetched some $5bil.
According to Kim Thanh, an expert from the Monetary Department from the State Bank of Vietnam, 40 enterprises, including the giant insurer Bao Viet, have organised share auctions so far this year, during which, 451mil shares have been offered for sale.
However, there has been only one company listing shares so far this year, the Cho Lon Real Estate Joint Stock Company. The two securities trading centres, Hanoi and HCM City, now have 194 share items, two fund certificates and 500 bond items being transacted.
There have been two stages of market performance so far this year. It was very bustling from the beginning of the year until March, and has been decreasing since then.
The VN Index reached a record on March 12 with 1,170.67 points, and fell to its deepest low on April 24 at 905.53 points.
The HASTC hit its highest peak on March 9 with 454.84 points, and then began declining after mid March. It is now hovering at around some 300 points.
Regarding share prices, the VND847,000/share level of BMC seen on May 21 was the highest price level, which replaced the record set on February 27 by FPT (VND665,000/share).
The Bao Viet share auction on May 31 holds the record for highest number of attendants (20,368 investors registered to participate in the auction), well exceeding the previous record of the PVI auction (8,000 investors).
It would be very interesting to know which investors have made the most and lost the most money in the last six months. However, the figures, regrettably, are not available.
Source: VNE
Meanwhile, the total capitalisation of the bond market has reached more than VND80tril, or 8% of GDP.
The figures reflect the impressive growth rate of the stock market, if noting that by the end of 2006, the total capitalisation value of the listing share market was just $14bil, or 22.7% of GDP.
Currently, there are 55 operational securities companies with the average chartered capital of VND90bil each. It is estimated that the number of securities companies will be 100 by the end of this year. There are 18 existing investment fund management companies and 61 institutions providing depository services.
Regarding the number of investors, more than 200,000 transactions accounts have been opened, including 4,400 by foreign investors, seven fold higher than that in 2005 and 1.5 fold higher than 2006. The statistics showed that 206 foreign institutions had registered to join the market, and that foreign portfolio investment had fetched some $5bil.
According to Kim Thanh, an expert from the Monetary Department from the State Bank of Vietnam, 40 enterprises, including the giant insurer Bao Viet, have organised share auctions so far this year, during which, 451mil shares have been offered for sale.
However, there has been only one company listing shares so far this year, the Cho Lon Real Estate Joint Stock Company. The two securities trading centres, Hanoi and HCM City, now have 194 share items, two fund certificates and 500 bond items being transacted.
There have been two stages of market performance so far this year. It was very bustling from the beginning of the year until March, and has been decreasing since then.
The VN Index reached a record on March 12 with 1,170.67 points, and fell to its deepest low on April 24 at 905.53 points.
The HASTC hit its highest peak on March 9 with 454.84 points, and then began declining after mid March. It is now hovering at around some 300 points.
Regarding share prices, the VND847,000/share level of BMC seen on May 21 was the highest price level, which replaced the record set on February 27 by FPT (VND665,000/share).
The Bao Viet share auction on May 31 holds the record for highest number of attendants (20,368 investors registered to participate in the auction), well exceeding the previous record of the PVI auction (8,000 investors).
It would be very interesting to know which investors have made the most and lost the most money in the last six months. However, the figures, regrettably, are not available.
Source: VNE
SBV: no concessions on loans for securities investments
Governor of the State Bank of Vietnam (SBV) Le Duc Thuy yesterday affirmed in an interview with the press that SBV would not change its mind on the issue relating to the limitation on securities investment loaning.
Responding to the questions about the revaluation of the dollar in recent days, Mr Thuy asserted that there would be no imbalance in foreign currency supply and demand, and that the VND/US$ exchange rate would fluctuate by 1% at maximum until the end of this year.
At the end of 2006, the VND/US$ exchange rate was low, reflecting the excess of supply over demand, which was rarely seen in previous years. This was because of higher exports (which brought more foreign currencies), and higher investment flow. This is why SBV has to buy foreign currencies: in order to prevent the local currency from further falling, said Mr Thuy.
SBV is now still buying foreign currencies, though the offered volume now is lower than that of the last five months (the central bank has bought $7bil in the last five months). More foreign currencies will continue inflowing in direct and indirect ways, or through overseas remittance. Therefore, Mr Thuy has affirmed that there would not be tightness in foreign currency supply and demand.
“Although the excess of foreign currencies will not be high the VND will still devaluate, but the local currency value decrease will still be within the control of the central bank with the expected fluctuation of 1% at maximum,” Mr Thuy said.
Do you think that SBV has imposed an “administrative order” when deciding that commercial banks’ outstanding loans given to securities investors must not exceed 3% of the banks’ total outstanding ones?
SBV decided to limit loaning for securities investments to follow the Prime Minister’s instructions on controlling the bank capital flow into the stock market.
In fact, the central bank has implemented a series of measures to limit the cash flow from banks into the stock market, but the measures showed little efficiency. Statistics showed that in the first four months of the year, the outstanding loans provided for securities investors amounted to 2.6% of total outstanding loans, and the figure saw just a little decrease by 0.1% in May 2007.
In principle, other central banks never allow commercial banks to get involved in funding securities trading. What will happen if investors, who borrow money from banks, cannot sell shares and get money back for debt payment? You may know that several hundred share items now cannot find customers on the OTC market.
The central bank checked information before making the decision. We found out that only 12 commercial banks had outstanding loans to securities investors at more than 3% of total outstanding loans. The%age is 3% for joint stock banks, while the figure is very low for state owned banks as the banks have big capital. Meanwhile, no foreign bank gets involved in this kind of loaning. As such, the ceiling of 3% should be seen as an ‘acceptable’ figure if considering the current loaning of banks.
How will the central bank deal with the banks which have the outstanding loans to securities investors higher than the allowed level?
We are planning to release a circular, guiding the implementation of the decision on limiting securities investment loaning. We will give them time, so that the banks which have the outstanding loans to securities investors higher than the allowed level can collect debts.
I have to remind you that the decision is applied only for the securities investment deals in the stock market. It will not apply to the programme on supporting staffs in equitised companies in buying stocks of their companies.
I can affirm that the central bank will not make concessions in tightening securities investment loaning.
According to SNV, the foreign currencies remitted to Vietnam in the first six months of 2007 saw an increase of 12% over the same period of last year. There were not big changes in interest rate policies of commercial banks. Vietnam’s foreign currency reserve in 2007 may increase, equivalent to the payment for 20 weeks of imports.
There have been more than 20 banks that have issued 6.2mil payment cards, four card alliances which own more than 3,800 ATMs. The payment of salary and other services are being carried out in HCM City, Hanoi, Hai Phong, Da Nang and some other localities.
Source: VNE
Responding to the questions about the revaluation of the dollar in recent days, Mr Thuy asserted that there would be no imbalance in foreign currency supply and demand, and that the VND/US$ exchange rate would fluctuate by 1% at maximum until the end of this year.
At the end of 2006, the VND/US$ exchange rate was low, reflecting the excess of supply over demand, which was rarely seen in previous years. This was because of higher exports (which brought more foreign currencies), and higher investment flow. This is why SBV has to buy foreign currencies: in order to prevent the local currency from further falling, said Mr Thuy.
SBV is now still buying foreign currencies, though the offered volume now is lower than that of the last five months (the central bank has bought $7bil in the last five months). More foreign currencies will continue inflowing in direct and indirect ways, or through overseas remittance. Therefore, Mr Thuy has affirmed that there would not be tightness in foreign currency supply and demand.
“Although the excess of foreign currencies will not be high the VND will still devaluate, but the local currency value decrease will still be within the control of the central bank with the expected fluctuation of 1% at maximum,” Mr Thuy said.
Do you think that SBV has imposed an “administrative order” when deciding that commercial banks’ outstanding loans given to securities investors must not exceed 3% of the banks’ total outstanding ones?
SBV decided to limit loaning for securities investments to follow the Prime Minister’s instructions on controlling the bank capital flow into the stock market.
In fact, the central bank has implemented a series of measures to limit the cash flow from banks into the stock market, but the measures showed little efficiency. Statistics showed that in the first four months of the year, the outstanding loans provided for securities investors amounted to 2.6% of total outstanding loans, and the figure saw just a little decrease by 0.1% in May 2007.
In principle, other central banks never allow commercial banks to get involved in funding securities trading. What will happen if investors, who borrow money from banks, cannot sell shares and get money back for debt payment? You may know that several hundred share items now cannot find customers on the OTC market.
The central bank checked information before making the decision. We found out that only 12 commercial banks had outstanding loans to securities investors at more than 3% of total outstanding loans. The%age is 3% for joint stock banks, while the figure is very low for state owned banks as the banks have big capital. Meanwhile, no foreign bank gets involved in this kind of loaning. As such, the ceiling of 3% should be seen as an ‘acceptable’ figure if considering the current loaning of banks.
How will the central bank deal with the banks which have the outstanding loans to securities investors higher than the allowed level?
We are planning to release a circular, guiding the implementation of the decision on limiting securities investment loaning. We will give them time, so that the banks which have the outstanding loans to securities investors higher than the allowed level can collect debts.
I have to remind you that the decision is applied only for the securities investment deals in the stock market. It will not apply to the programme on supporting staffs in equitised companies in buying stocks of their companies.
I can affirm that the central bank will not make concessions in tightening securities investment loaning.
According to SNV, the foreign currencies remitted to Vietnam in the first six months of 2007 saw an increase of 12% over the same period of last year. There were not big changes in interest rate policies of commercial banks. Vietnam’s foreign currency reserve in 2007 may increase, equivalent to the payment for 20 weeks of imports.
There have been more than 20 banks that have issued 6.2mil payment cards, four card alliances which own more than 3,800 ATMs. The payment of salary and other services are being carried out in HCM City, Hanoi, Hai Phong, Da Nang and some other localities.
Source: VNE
Small- and medium-size businesses upbeat about economy
Small- and medium-size Vietnamese enterprises (SMEs) are optimistic about the national economy and the opportunities to be brought about by good economic performance, a Hong Kong and Shanghai Banking Corporation HSBC survey has found.
The survey on SME’s beliefs was conducted by Acorn Marketing and Research Consultancy of 501 Vietnamese SMEs in the first quarter of 2007.
The aim of the survey was to find out the viewpoints and thinking of SMEs on the prospects of Vietnam’s national economy.
The survey was conducted at the same time as HSBC’s survey of Asia-Pacific businesses carried out by A.C. Nielson.
This is the biggest survey in Asia, involving the participation of 1,800 SMEs in nine countries and territories: Hong Kong, China, Taiwan, Singapore, India, the Republic of Korea, Malaysia, Indonesia and Australia.
The 501 Vietnamese companies were asked about their viewpoints on the national economy, investment and recruitment plans, as well as about trade prospects with China, the rest of Asia and the world.
Thomas Tobin, Chief Executive Officer of HSBC in Vietnam, said that most of the polled enterprises said they were very upbeat about the national economy and the international trade volume. They said they were ready to make further investment and recruit more staffs.
In general, Vietnamese SMEs said they were optimistic about economic performance for the next six months. 76% of them said that the economic growth rate would reach more than 8%. HCM City-based enterprises prove to be more optimistic about the national economy than enterprises in other localities.
In the international survey, Indian SMEs prove to be the most optimistic, followed by Singaporean, Chinese and Indonesian.
74% of Vietnamese SMEs revealed that they had investment plans for the next six months. No enterprise said it would shut down or cut production.
Indonesian enterprises are most optimistic about business development, followed by China, Australia and Singapore. The majority of Hong Kong businesses do not have investment plans, while 27% have investment plans and 11% plan to cut production this year.
With the optimism about the national economy, some 70% of Vietnamese SMEs said that they would recruit more staffs in 2007.
Chinese SMEs were the most optimistic in employment, followed by Indonesian, Indian and Singaporean. Most Hong Kong businesses (73%) do not have personnel adjustment plans for this year. However, 13% of the polled enterprises said that they planned to raise their workforces by less than 10%, and 11% of enterprises plan to raise their workforces by over 10%. Only a few enterprises said that they would cut staffs.
Vietnamese enterprises all expect a growth in trade volume with China, the rest of Asia and the world over the next six months.
Source: VNA
The survey on SME’s beliefs was conducted by Acorn Marketing and Research Consultancy of 501 Vietnamese SMEs in the first quarter of 2007.
The aim of the survey was to find out the viewpoints and thinking of SMEs on the prospects of Vietnam’s national economy.
The survey was conducted at the same time as HSBC’s survey of Asia-Pacific businesses carried out by A.C. Nielson.
This is the biggest survey in Asia, involving the participation of 1,800 SMEs in nine countries and territories: Hong Kong, China, Taiwan, Singapore, India, the Republic of Korea, Malaysia, Indonesia and Australia.
The 501 Vietnamese companies were asked about their viewpoints on the national economy, investment and recruitment plans, as well as about trade prospects with China, the rest of Asia and the world.
Thomas Tobin, Chief Executive Officer of HSBC in Vietnam, said that most of the polled enterprises said they were very upbeat about the national economy and the international trade volume. They said they were ready to make further investment and recruit more staffs.
In general, Vietnamese SMEs said they were optimistic about economic performance for the next six months. 76% of them said that the economic growth rate would reach more than 8%. HCM City-based enterprises prove to be more optimistic about the national economy than enterprises in other localities.
In the international survey, Indian SMEs prove to be the most optimistic, followed by Singaporean, Chinese and Indonesian.
74% of Vietnamese SMEs revealed that they had investment plans for the next six months. No enterprise said it would shut down or cut production.
Indonesian enterprises are most optimistic about business development, followed by China, Australia and Singapore. The majority of Hong Kong businesses do not have investment plans, while 27% have investment plans and 11% plan to cut production this year.
With the optimism about the national economy, some 70% of Vietnamese SMEs said that they would recruit more staffs in 2007.
Chinese SMEs were the most optimistic in employment, followed by Indonesian, Indian and Singaporean. Most Hong Kong businesses (73%) do not have personnel adjustment plans for this year. However, 13% of the polled enterprises said that they planned to raise their workforces by less than 10%, and 11% of enterprises plan to raise their workforces by over 10%. Only a few enterprises said that they would cut staffs.
Vietnamese enterprises all expect a growth in trade volume with China, the rest of Asia and the world over the next six months.
Source: VNA
Contract for exploration of offshore oil and gas inked
A product sharing contract (PSC) for the exploration and exploitation of oil and gas on Viet Nam’s northern continental shelf was signed in Ha Noi on June 22.
The agreement was reached between the Viet Nam National Oil and Gas Group (PetroVietnam) and the contractors - PetroVietnam Exploration and Production (PVEP) and Petronas Carigali Overseas Sdn.Bhd.
The two contractors will outlay 57.7 million USD on exploring oil and gas at Block 103-107. Fifty-five percent of the financing is to be contributed by PVEP, a subsidiary of PetroVietnam, and the remainder by Petronas Carigali Overseas, an arm of Malaysian oil giant Petronas.
Block 103-107 covers 11,962 sq.km, around 100 km off the coast at a depth of 25-50 m. Under a contract signed with PetroVietnam in 1988, the French firm Total made three drill-holes at the area to explore oil and gas but were unsuccessful in their efforts.
Recently, the PetroVietnam Investment and Development Company found gas and condensate at Hong Long and Hoang Long structures within the area and reserves have been estimated at 50 billion cu.m of gas and 45 million barrels of condensate.
Source: VNA
The agreement was reached between the Viet Nam National Oil and Gas Group (PetroVietnam) and the contractors - PetroVietnam Exploration and Production (PVEP) and Petronas Carigali Overseas Sdn.Bhd.
The two contractors will outlay 57.7 million USD on exploring oil and gas at Block 103-107. Fifty-five percent of the financing is to be contributed by PVEP, a subsidiary of PetroVietnam, and the remainder by Petronas Carigali Overseas, an arm of Malaysian oil giant Petronas.
Block 103-107 covers 11,962 sq.km, around 100 km off the coast at a depth of 25-50 m. Under a contract signed with PetroVietnam in 1988, the French firm Total made three drill-holes at the area to explore oil and gas but were unsuccessful in their efforts.
Recently, the PetroVietnam Investment and Development Company found gas and condensate at Hong Long and Hoang Long structures within the area and reserves have been estimated at 50 billion cu.m of gas and 45 million barrels of condensate.
Source: VNA
IPO: from Bao Viet to Vietcombank
Vietcombank’s Director General Vu Viet Ngoan asserted that the bank would still make IPO (initial public offering) in August as previously planned when he was asked if Vietcombank would delay its IPO after the Government issued a dispatch, requesting banks and corporations to reconsider the timing for issuing shares.
According to Mr Ngoan, the detailed plan on Vietcombank’s equitisation was submitted to the Government two weeks ago, and he hopes to get the approval prior to July 10. If so, Vietcombank will have one month at least to prepare for presenting itself before the public.
Mr Ngoan has declined to provide the exact figure about the value of the state owned capital in Vietcombank, but he implied that the ownership capital of the bank, estimated at VND11tril, including the value of the convertible bonds now listed at the HCM City Securities Trading Centre (HSTC), would remain unchanged.
Vietcombank will have the bank assessed in accordance with international practice, and the value will help define how much capital the state will hold and how much more will be raised. The principle element of Vietcombank’s equitisation is that it will keep intact the state contributed capital, while issuing more shares to raise funds.
The chartered capital of the bank is currently VND4,300bil (audited financial report 2006). Vietcombank will only register the new chartered capital level after all the shares are issued to the public, including to strategic shareholders.
How much will the chartered capital of Vietcombank be? It remains a secret, but it must not be lower than the current ownership capital of VND11tril.
Last year, Vietcombank gained the post-tax profit of nearly VND2,900bil ($181.25mil), and the bank’s proportion of post-tax profit to chartered capital (VND2,900bil/VND4,300bil) was one of the highest among state owned banks. However, the proportion will considerably decrease after the equitisation, once Vietcombank registers the new chartered capital.
“Our post-tax profit in 2007 is expected to reach VND3-3,200bil, or 10% higher than that of 2006,” said Mr Ngoan. The chartered capital is forecast to increase by 300%, while the profit is to increase by 10% only. However, the capital adequacy ratio will be improved once the bank has much higher chartered capital. Now Vietcombank has the total assets of VND180,000bil ($11.25bil).
Meanwhile, the IPO of Bao Viet held on May 31, 2005 seemed to be not as successful as expected. Many investors have decided to ‘give up the game’ by refusing to pay for the shares they earned the right to buy at the auction.
Nguyen Thi Phuc Lam, Director General of Bao Viet, said that the negotiations with foreign partners could not be conducted yet, as both sides were still waiting for the auction’s average final price (June 26 is the deadline for investors to make payment).
Source: VNE
According to Mr Ngoan, the detailed plan on Vietcombank’s equitisation was submitted to the Government two weeks ago, and he hopes to get the approval prior to July 10. If so, Vietcombank will have one month at least to prepare for presenting itself before the public.
Mr Ngoan has declined to provide the exact figure about the value of the state owned capital in Vietcombank, but he implied that the ownership capital of the bank, estimated at VND11tril, including the value of the convertible bonds now listed at the HCM City Securities Trading Centre (HSTC), would remain unchanged.
Vietcombank will have the bank assessed in accordance with international practice, and the value will help define how much capital the state will hold and how much more will be raised. The principle element of Vietcombank’s equitisation is that it will keep intact the state contributed capital, while issuing more shares to raise funds.
The chartered capital of the bank is currently VND4,300bil (audited financial report 2006). Vietcombank will only register the new chartered capital level after all the shares are issued to the public, including to strategic shareholders.
How much will the chartered capital of Vietcombank be? It remains a secret, but it must not be lower than the current ownership capital of VND11tril.
Last year, Vietcombank gained the post-tax profit of nearly VND2,900bil ($181.25mil), and the bank’s proportion of post-tax profit to chartered capital (VND2,900bil/VND4,300bil) was one of the highest among state owned banks. However, the proportion will considerably decrease after the equitisation, once Vietcombank registers the new chartered capital.
“Our post-tax profit in 2007 is expected to reach VND3-3,200bil, or 10% higher than that of 2006,” said Mr Ngoan. The chartered capital is forecast to increase by 300%, while the profit is to increase by 10% only. However, the capital adequacy ratio will be improved once the bank has much higher chartered capital. Now Vietcombank has the total assets of VND180,000bil ($11.25bil).
Meanwhile, the IPO of Bao Viet held on May 31, 2005 seemed to be not as successful as expected. Many investors have decided to ‘give up the game’ by refusing to pay for the shares they earned the right to buy at the auction.
Nguyen Thi Phuc Lam, Director General of Bao Viet, said that the negotiations with foreign partners could not be conducted yet, as both sides were still waiting for the auction’s average final price (June 26 is the deadline for investors to make payment).
Source: VNE
JSM Indochina cuts London IPO to $220 mln
Asia-focused property firm JSM Indochina Ltd. sharply cut its planned listing on London's junior market AIM to $220 million, citing tough market conditions.
JSM, set up to invest in Vietnamese and Cambodian real estate, said on Friday it plans to issue 220 million shares at $1 per share.
Earlier this month, the firm was looking to raise between $400 million and $600 million through an initial public offering (IPO) of up to 600 million shares.
"There are difficult IPO conditions at the moment in real estate... the market has been tough off the back of the Vector float that was postponed," said a spokeswoman for JSM. "That has harmed this one," she added.
A few weeks ago, British hotel owner Vector Hospitality pulled a potentially record-breaking $3.6 billion IPO blaming weak market sentiment and Spain's Realia (RLIA.MC: Quote, Profile , Research) was forced to slash its offering price.
However, Vector's failed float was because of a conflict of interest between the management of Vector and the company intending to sell it property assets after the float, Marylebone Warwick Balfour (MWB.L: Quote, Profile , Research), rather than underlying market conditions, Marylebone's biggest shareholder Mercury Real Estate Advisors said in an open letter this week.
JSM Chief Executive Craig Jones had shrugged off concerns of potential lukewarm demand for property stocks earlier this month. "We feel very comfortable with our 400 to 600 million (dollar) raise," he told Reuters then.
"Investors currently have a limited ability to gain exposure to real estate in Vietnam and Cambodia," JSM said on Friday, adding that it would offer investors access to real-estate opportunities in some of South East Asia's fastest-growing markets.
Sole bookrunner to the placing is the U.S. investment bank Lehman Brothers, which would subscribe to 13.5% of the issued shares, JSM said.
Trading in the shares is expected to commence on July 2.
Source: Reuters
JSM, set up to invest in Vietnamese and Cambodian real estate, said on Friday it plans to issue 220 million shares at $1 per share.
Earlier this month, the firm was looking to raise between $400 million and $600 million through an initial public offering (IPO) of up to 600 million shares.
"There are difficult IPO conditions at the moment in real estate... the market has been tough off the back of the Vector float that was postponed," said a spokeswoman for JSM. "That has harmed this one," she added.
A few weeks ago, British hotel owner Vector Hospitality pulled a potentially record-breaking $3.6 billion IPO blaming weak market sentiment and Spain's Realia (RLIA.MC: Quote, Profile , Research) was forced to slash its offering price.
However, Vector's failed float was because of a conflict of interest between the management of Vector and the company intending to sell it property assets after the float, Marylebone Warwick Balfour (MWB.L: Quote, Profile , Research), rather than underlying market conditions, Marylebone's biggest shareholder Mercury Real Estate Advisors said in an open letter this week.
JSM Chief Executive Craig Jones had shrugged off concerns of potential lukewarm demand for property stocks earlier this month. "We feel very comfortable with our 400 to 600 million (dollar) raise," he told Reuters then.
"Investors currently have a limited ability to gain exposure to real estate in Vietnam and Cambodia," JSM said on Friday, adding that it would offer investors access to real-estate opportunities in some of South East Asia's fastest-growing markets.
Sole bookrunner to the placing is the U.S. investment bank Lehman Brothers, which would subscribe to 13.5% of the issued shares, JSM said.
Trading in the shares is expected to commence on July 2.
Source: Reuters
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