Both the Ho Chi Minh City's bourse and its Ha Noi-based counterpart reported losses by the end of the July 31 morning trading session.
HCM City's VN-Index, saw a sharp drop of 17.49 points, or 1.89 percent, to close at 907.95 points.
The session witnessed 17 shares rally for gains, 13 decline and an overwhelming majority of 82 stocks remain unchanged.
Pha Lai Thermal Power Co. (PPC) Viet Nam Dairy (VNM), Financing and Promoting Technology (FPT), Saigon-Thuong Tin Commercial Bank (STB) and Song Da Urban and Industrial Zone Investment and Development (SJS) were among the shares that enjoyed the highest trade volumes.
Shares that recorded the biggest increases included Kinh Do Corp (KDC), North Kinh Do (NKD) and Hoa Binh Construction and Real Estate (HBC).
The non-stop downward trend was attributed to investors being hesitant to experiment with the new trading system. Over the first two days of using the automatic order matching system often the at-the-opening (ATO) and at-the-closing (ATC) orders were more matched.
The HaSTC-Index at the Ha Noi Securities Trading Centre saw a slight decrease of 1.63 points, finishing at 253.57 points.
The Ha Noi-based market closed the trading session after seeing 42 shares drop value, 24 recording no trades on the day, 14 rise and seven remain unchanged.
Source: VNA
Tuesday, July 31, 2007
Who protects minority shareholders?
One of the reasons behind the decline of Vietnam in the World Bank’s report on business environment is shortcomings in protecting minority shareholders.
Vinalink, the freight and forwarding company, decided to raise its chartered capital from VND36bil to VND90bil. In order to reach that end, Vinalink planned to sell 162,000 shares to Vinatrans, another freight and forwarding company, at VND100,000/share, equal to the face value. Meanwhile, the market value of Vinalink’s shares was 1.5mil/share.
The sale of shares at that price, which was much lower than the market price, faced strong opposition from Vinalink’s shareholders. However, the protest from the shareholders only could bring a small change: the 162,000 shares were sold at VND150,000/unit instead of VND100,000 as previously planned, but that was just equal to 1/10 of the market price.
The news that Saigon Service Joint Stock Company (SVC) sold shares at the preferential price of VND30,000/share to the company’s leaders when the market price of the share was VND118,000/unit also stirred up the public.
In this case, the buyers, SVC leaders, got big benefit, while small shareholders suffered losses. Though the minority shareholders protested the plan, the sale still went smoothly as it was approved by the majority shareholders.
In its plan to raise its chartered capital, Vipco, an oil and petrol trading company, allowed big shareholders to buy shares at VND15,000/unit, while smaller shareholders had to buy at VND40,000/unit.
In all the said cases, important principles and rights of shareholders were broken.
In fact, in many cases, members of the management boards and companies’ leaders can get preferences in buying shares and buy shares at preferential prices, which should be seen as a way to attract talents to the companies.
However, experts said that this must be done in accordance with the law and be done transparently. In Australia, the Australian Securities and Investments Commission – ASIC – is in charge of considering these cases. If preferences given to big shareholders face opposition from minority shareholders then ASIC has to come forward and settle the disputes.
In Vietnam, no similar case has been brought into open settlement, paving the way for groups of shareholders to seek unfair profit.
Vietnam fell four grades in the report on the business environment of 208 economies which has been released by the World Bank. The GNI (gross national income) per capita in Vietnam in 2006 was $690, ranking 169th in the world, falling four places from 2005 ($620 per capita).
Many factors have been cited to explain the fall, but the most important is that the 8.2% GDP growth rate was not high enough.
For example, Mauritania, the 168th in 2006, had the GDP growth rate of 11.7%, which helped make its GNI sharply increase from $580 in 2005 to $740 in 2006. Meanwhile, the Solomon Islands, which had the modest growth rate of 4.8%, saw GNI per capita increase from $620 in 2005 to $690 in 2006, thus falling five spots to the 170th position (in 2005, it ranked 165th like Vietnam).
Source: VNE
Vinalink, the freight and forwarding company, decided to raise its chartered capital from VND36bil to VND90bil. In order to reach that end, Vinalink planned to sell 162,000 shares to Vinatrans, another freight and forwarding company, at VND100,000/share, equal to the face value. Meanwhile, the market value of Vinalink’s shares was 1.5mil/share.
The sale of shares at that price, which was much lower than the market price, faced strong opposition from Vinalink’s shareholders. However, the protest from the shareholders only could bring a small change: the 162,000 shares were sold at VND150,000/unit instead of VND100,000 as previously planned, but that was just equal to 1/10 of the market price.
The news that Saigon Service Joint Stock Company (SVC) sold shares at the preferential price of VND30,000/share to the company’s leaders when the market price of the share was VND118,000/unit also stirred up the public.
In this case, the buyers, SVC leaders, got big benefit, while small shareholders suffered losses. Though the minority shareholders protested the plan, the sale still went smoothly as it was approved by the majority shareholders.
In its plan to raise its chartered capital, Vipco, an oil and petrol trading company, allowed big shareholders to buy shares at VND15,000/unit, while smaller shareholders had to buy at VND40,000/unit.
In all the said cases, important principles and rights of shareholders were broken.
In fact, in many cases, members of the management boards and companies’ leaders can get preferences in buying shares and buy shares at preferential prices, which should be seen as a way to attract talents to the companies.
However, experts said that this must be done in accordance with the law and be done transparently. In Australia, the Australian Securities and Investments Commission – ASIC – is in charge of considering these cases. If preferences given to big shareholders face opposition from minority shareholders then ASIC has to come forward and settle the disputes.
In Vietnam, no similar case has been brought into open settlement, paving the way for groups of shareholders to seek unfair profit.
Vietnam fell four grades in the report on the business environment of 208 economies which has been released by the World Bank. The GNI (gross national income) per capita in Vietnam in 2006 was $690, ranking 169th in the world, falling four places from 2005 ($620 per capita).
Many factors have been cited to explain the fall, but the most important is that the 8.2% GDP growth rate was not high enough.
For example, Mauritania, the 168th in 2006, had the GDP growth rate of 11.7%, which helped make its GNI sharply increase from $580 in 2005 to $740 in 2006. Meanwhile, the Solomon Islands, which had the modest growth rate of 4.8%, saw GNI per capita increase from $620 in 2005 to $690 in 2006, thus falling five spots to the 170th position (in 2005, it ranked 165th like Vietnam).
Source: VNE
Vinh Son - Song Hinh power firm to sell 12.5 mln new shares
Vinh Son-Song Hinh Hydro Power Plant Company (VSH), one of Vietnam's top 10 largest listed firms, said on Tuesday it has won permission to issue 12.5 million new shares to existing shareholders to boost capital.
The firm would issue the shares in a 10-for-1 scheme within 90 days from Monday, when it received the licence from the State Securities Commission, the stock market watchdog said in a statement.
"We are working to finalise the list of shareholders and the issue this time would be for them," a company spokesman said from the central province of Binh Dinh where the firm is located.
Shareholders agreed in May that the firm would issue 25 million new shares in two tranches this year to boost its registered capital and raise funds for new projects, a company report said without giving details of the projects.
The first issue envisaged the company selling 12.5 million shares to existing shareholders at 70 percent of the average share price during the 20 trading days prior to making the shareholder list.
In the second issue, not yet licensed by the State Securities Commission, Vinh Son-Song Hinh would sell 12.5 million shares to strategic investors or, failing that, it could sell the shares to existing shareholders, the report said.
Shares in Vinh Son-Song Hinh were down 4.63 percent at 51,500 dong ($3.2) at 0249 GMT on Tuesday. The firm was valued at $400 million.
Vinh Son-Song Hinh runs two hydro power plants, the 66-megawatt Vinh Son plant and the 70-megawatt Song Hinh plant, in Binh Dinh province, 645 km (400 miles) north of Ho Chi Minh City.
Last month, the government gave it approval to build a 90-megawatt hydro power plant in the area between Binh Dinh province and the central highland province of Gia Lai.
An increase in the number of private businesses and a rise in disposable incomes have spurred growth in electricity demand to around 15 percent annually in recent years, driving the communist government to plan 60 additional power plants by 2020.
Dominant utility Vietnam Electricity group, which owns 60 percent of the firm, is building 20 plants.
Vinh Son-Song Hinh's net profit in the first six months of this year nearly halved from 200 billion dong in the same period last year to 104.6 billion dong ($6.5 million) after dry weather early this year disrupted hydro-power generation.
Source: Reuters
The firm would issue the shares in a 10-for-1 scheme within 90 days from Monday, when it received the licence from the State Securities Commission, the stock market watchdog said in a statement.
"We are working to finalise the list of shareholders and the issue this time would be for them," a company spokesman said from the central province of Binh Dinh where the firm is located.
Shareholders agreed in May that the firm would issue 25 million new shares in two tranches this year to boost its registered capital and raise funds for new projects, a company report said without giving details of the projects.
The first issue envisaged the company selling 12.5 million shares to existing shareholders at 70 percent of the average share price during the 20 trading days prior to making the shareholder list.
In the second issue, not yet licensed by the State Securities Commission, Vinh Son-Song Hinh would sell 12.5 million shares to strategic investors or, failing that, it could sell the shares to existing shareholders, the report said.
Shares in Vinh Son-Song Hinh were down 4.63 percent at 51,500 dong ($3.2) at 0249 GMT on Tuesday. The firm was valued at $400 million.
Vinh Son-Song Hinh runs two hydro power plants, the 66-megawatt Vinh Son plant and the 70-megawatt Song Hinh plant, in Binh Dinh province, 645 km (400 miles) north of Ho Chi Minh City.
Last month, the government gave it approval to build a 90-megawatt hydro power plant in the area between Binh Dinh province and the central highland province of Gia Lai.
An increase in the number of private businesses and a rise in disposable incomes have spurred growth in electricity demand to around 15 percent annually in recent years, driving the communist government to plan 60 additional power plants by 2020.
Dominant utility Vietnam Electricity group, which owns 60 percent of the firm, is building 20 plants.
Vinh Son-Song Hinh's net profit in the first six months of this year nearly halved from 200 billion dong in the same period last year to 104.6 billion dong ($6.5 million) after dry weather early this year disrupted hydro-power generation.
Source: Reuters
Industrial production value up 17 percent
The industrial production value in July was estimated at 50.8 trillion VND, raising the total value in the first seven months of this year to over 325.9 trillion VND or 17 percent increase year on year, according to the Ministry of Industry.
The ministry said that the production of steel was 29.8 percent up over the same period last year; electric fans, 25.5 percent; air conditioners, 56.9 percent and automobiles, 67.2 percent.
In July, even though operation of the Nam Con Son gas pipeline was halted for maintenance and upgrade, the electric sector met the demands of production and the people's daily use.
The coal industry turned out 24.2 million tonnes of clean coal in the past seven months, a 14.9 percent year-on-year rise. To the figure, the Viet Nam Coal Industry and Mineral Group contributed 23.8 million tonnes.
Source: VNA
The ministry said that the production of steel was 29.8 percent up over the same period last year; electric fans, 25.5 percent; air conditioners, 56.9 percent and automobiles, 67.2 percent.
In July, even though operation of the Nam Con Son gas pipeline was halted for maintenance and upgrade, the electric sector met the demands of production and the people's daily use.
The coal industry turned out 24.2 million tonnes of clean coal in the past seven months, a 14.9 percent year-on-year rise. To the figure, the Viet Nam Coal Industry and Mineral Group contributed 23.8 million tonnes.
Source: VNA
SSC licenses two banks for securities services
Vietnam's State Securities Commission (SSC) said on Monday it has licensed JPMorgan Chase and Far East National Bank to offer securities depository services on its fast-expanding stock markets.
The Ho Chi Minh City branch of each of the banks was allowed to take the deposits as from last Friday, stock market watchdog SSC said in two separate statements.
The licensing took to six the foreign banks allowed to offer securities depository services in the southeast Asian country, after Citigroup, Deutsche Bank, HSBC and Standard Chartered Plc.
Another two state-run banks, Vietcombank and Vietindebank, have also been providing the service, SSC data showed.
The Ho Chi Minh Stock Exchange, Vietnam's main stock market with 109 listed companies, has the fastest rising index among Asian stock markets in the first quarter of 2007, after a surge of 144.5 percent last year.
On Monday the index lost 1.6 percent to close at 925.44 points. It was still a rise of 23 percent from the end of 2006. The market's capitalisation stood at $12.3 billion.
In the capital Hanoi a smaller over-the-counter market <.HASTCI> has 87 companies listed with a total capitalisation of $4.8 billion.
Foreign investors have raised their investment in Vietnamese securities to $5 billion as of early last month, from $3 billion to $4 billion in March, industry reports said.
The communist-run country caps foreign ownership in listed companies at 49 percent and 30 percent in listed banks.
Vietnam's central bank has forecast foreign indirect investment would rise to $5.5 billion by the end of this year.
Source: Reuters
The Ho Chi Minh City branch of each of the banks was allowed to take the deposits as from last Friday, stock market watchdog SSC said in two separate statements.
The licensing took to six the foreign banks allowed to offer securities depository services in the southeast Asian country, after Citigroup, Deutsche Bank, HSBC and Standard Chartered Plc.
Another two state-run banks, Vietcombank and Vietindebank, have also been providing the service, SSC data showed.
The Ho Chi Minh Stock Exchange, Vietnam's main stock market with 109 listed companies, has the fastest rising index among Asian stock markets in the first quarter of 2007, after a surge of 144.5 percent last year.
On Monday the index lost 1.6 percent to close at 925.44 points. It was still a rise of 23 percent from the end of 2006. The market's capitalisation stood at $12.3 billion.
In the capital Hanoi a smaller over-the-counter market <.HASTCI> has 87 companies listed with a total capitalisation of $4.8 billion.
Foreign investors have raised their investment in Vietnamese securities to $5 billion as of early last month, from $3 billion to $4 billion in March, industry reports said.
The communist-run country caps foreign ownership in listed companies at 49 percent and 30 percent in listed banks.
Vietnam's central bank has forecast foreign indirect investment would rise to $5.5 billion by the end of this year.
Source: Reuters
Monday, July 30, 2007
Indexes continue declining at both bourses
Both bourses in Ho Chi Minh City and Ha Noi closed the July 30 trading session with non-stop downward trends of indexes.
The VN-Index of the HCM City trading centre on the first day operating the automatic order matching system saw a sharp drop of 14.93 points, or 1.58 percent, to 925.44 points, the lowest ever so far this year.
The volume of traded shares at the session also decreased to closely 2.95 million shares valued at more than 260.81 billion VND.
Sixty-seven shares reported losses with the biggest being Chuong Duong Beverage (SCD), Ry Ninh Hydro-electricity II (RHC), Binh Dinh Minerals (BMC) and Kinh Do Food (KDC).
Only 26 shares rally to gains, worthy of note were SAFI Transportation (SFI), Viet Nam Dairy (VNM), Sai Gon Fuel (SFC), Hoa Binh Construction and Real Estate (HBC), and Financing and Promoting Technology (FPT).
Investors attributed the bourse’s sluggish performance to the debut of the new trading system as it made many investors be outsiders, and hoped that the market will rally soon.
The Ha Noi-based market closed the trading session after seeing 51 shares dropping, 18 having no transaction, five maintaining unchanged and 13 increasing slightly.
The HaSTC-Index thus was pulled down to 255.2 points, down by 3.64 points as compared with the last week-end session. This was the ninth consecutive session the bourse saw the slide-down.
Worrying about the non-stop downward trend, speculators tossed up shares for sale, bringing the total volume of traded shares to 1.17 million valued at 123 billion VND.
Source: VNA
The VN-Index of the HCM City trading centre on the first day operating the automatic order matching system saw a sharp drop of 14.93 points, or 1.58 percent, to 925.44 points, the lowest ever so far this year.
The volume of traded shares at the session also decreased to closely 2.95 million shares valued at more than 260.81 billion VND.
Sixty-seven shares reported losses with the biggest being Chuong Duong Beverage (SCD), Ry Ninh Hydro-electricity II (RHC), Binh Dinh Minerals (BMC) and Kinh Do Food (KDC).
Only 26 shares rally to gains, worthy of note were SAFI Transportation (SFI), Viet Nam Dairy (VNM), Sai Gon Fuel (SFC), Hoa Binh Construction and Real Estate (HBC), and Financing and Promoting Technology (FPT).
Investors attributed the bourse’s sluggish performance to the debut of the new trading system as it made many investors be outsiders, and hoped that the market will rally soon.
The Ha Noi-based market closed the trading session after seeing 51 shares dropping, 18 having no transaction, five maintaining unchanged and 13 increasing slightly.
The HaSTC-Index thus was pulled down to 255.2 points, down by 3.64 points as compared with the last week-end session. This was the ninth consecutive session the bourse saw the slide-down.
Worrying about the non-stop downward trend, speculators tossed up shares for sale, bringing the total volume of traded shares to 1.17 million valued at 123 billion VND.
Source: VNA
US portfolio investment heating up Vietnam’s stock market
The recent report by Merrill Lynch, which said that Vietnam did not deserve to be an investment address, has not had any impacts on the expectations of US investors in Vietnam’s stocks.
The report appeared at a time when the market was down and thought might ‘pour cold water’ on investors. But it has turned out to have had no considerable impact on US investors. The portfolio investment from the US keeps rising with more and more well-known investment funds coming to Vietnam.
Most recently, Heartland Funds announced a plan to cooperate with Lexington Langha, Vikoa Investment Consultant to set up an investment fund in Vietnam with capital directly sourced from US companies (not through third countries).
According to James Kim, a founder of Lexington Langha, the fund has the initial capital of $50-100mil, but it may be expanded if there are enough good investment opportunities.
Heartland Funds is a well-known fund in the US. It has been recognised as the leading fund in the first quarter of 2007, and Heartland Funds plans to take full advantage of its fame to make investment in the stock, real estate and capital markets in Vietnam.
Mr James said that many American investors wanted to join Vietnam’s market and they were awaiting the opportunities to inject money in.
In early July, IDG Venture, which has US-sourced capital, announced its investment in two more projects, the Goldsun Focus Media and Vega Software. It is expected that from now until the end of 2007, IDJ Venture will announce its investment in six to eight more projects.
Dragon Capital, the most long-standing fund management company in Vietnam, which is now managing $600mil worth of capital in Vietnam, has 30% of capital contribution sourced from US investors.
Indochina Land, which manages the real estate projects of the leading investment group Indochina Capital, last month signed a memorandum of understanding with Hoang Quan Group, the leading real estate group in Vietnam.
Indochina Land Holdings and Indochina Land Holdings 2 are both developing projects on apartments, offices, hotels and resorts for selling on the domestic market.
Several days ago, at a ceremony releasing the report reviewing the 5 years of the Vietnam-US Bilateral Trade Agreement (BTA), experts from the project on supporting the implementation of BTA, Star, said that US investors held from 1/3 to 1/2 of total foreign portfolio investment in Vietnam.
James Riedel, senior advisor to Star project, also said that US investors were interested in Vietnam’s market very much, and the opening of the service market in Vietnam had impacted their decisions.
Mr Riedel said that it was quite a normal thing that the market went up and down. The most important thing is that Vietnam needs to have a good system which can absorb the huge capital from foreigners, while avoiding crises.
Analysts said that Vietnam now had all the necessary conditions to attract US investors. However, American investors still want to learn about Vietnam from other US investors. Lexington Langha is an example. While following legal procedures to set up a fund in Vietnam, Mr James is now trying to make contact with several foreign funds in Vietnam like Vina Capital, Indochina Capital and Mekong Capital to discuss issues relating to investment in Vietnam.
Source: VNE
The report appeared at a time when the market was down and thought might ‘pour cold water’ on investors. But it has turned out to have had no considerable impact on US investors. The portfolio investment from the US keeps rising with more and more well-known investment funds coming to Vietnam.
Most recently, Heartland Funds announced a plan to cooperate with Lexington Langha, Vikoa Investment Consultant to set up an investment fund in Vietnam with capital directly sourced from US companies (not through third countries).
According to James Kim, a founder of Lexington Langha, the fund has the initial capital of $50-100mil, but it may be expanded if there are enough good investment opportunities.
Heartland Funds is a well-known fund in the US. It has been recognised as the leading fund in the first quarter of 2007, and Heartland Funds plans to take full advantage of its fame to make investment in the stock, real estate and capital markets in Vietnam.
Mr James said that many American investors wanted to join Vietnam’s market and they were awaiting the opportunities to inject money in.
In early July, IDG Venture, which has US-sourced capital, announced its investment in two more projects, the Goldsun Focus Media and Vega Software. It is expected that from now until the end of 2007, IDJ Venture will announce its investment in six to eight more projects.
Dragon Capital, the most long-standing fund management company in Vietnam, which is now managing $600mil worth of capital in Vietnam, has 30% of capital contribution sourced from US investors.
Indochina Land, which manages the real estate projects of the leading investment group Indochina Capital, last month signed a memorandum of understanding with Hoang Quan Group, the leading real estate group in Vietnam.
Indochina Land Holdings and Indochina Land Holdings 2 are both developing projects on apartments, offices, hotels and resorts for selling on the domestic market.
Several days ago, at a ceremony releasing the report reviewing the 5 years of the Vietnam-US Bilateral Trade Agreement (BTA), experts from the project on supporting the implementation of BTA, Star, said that US investors held from 1/3 to 1/2 of total foreign portfolio investment in Vietnam.
James Riedel, senior advisor to Star project, also said that US investors were interested in Vietnam’s market very much, and the opening of the service market in Vietnam had impacted their decisions.
Mr Riedel said that it was quite a normal thing that the market went up and down. The most important thing is that Vietnam needs to have a good system which can absorb the huge capital from foreigners, while avoiding crises.
Analysts said that Vietnam now had all the necessary conditions to attract US investors. However, American investors still want to learn about Vietnam from other US investors. Lexington Langha is an example. While following legal procedures to set up a fund in Vietnam, Mr James is now trying to make contact with several foreign funds in Vietnam like Vina Capital, Indochina Capital and Mekong Capital to discuss issues relating to investment in Vietnam.
Source: VNE
US$ deposit interest rates and loaning up
Since mid March 2007, many joint stock banks have raised interest rates on US$ deposits by 0.05-0.57% per annum. Outstanding loans in US$ have also grown more rapidly than VND loans with the growth rates of 19% and 13%, respectively.
The raising of US$ deposit interest rates was initiated by joint stock banks, especially banks in Hanoi like Military Bank, VIB and Techcombank. The move later was followed by HCM City-based banks like Phuong Nam and Nam A. Other banks, though they have not adjusted interest rates, have launched promotional programmes in order to attract capital in US$.
Why are Vietnamese banks still raising deposit interest rates while the US FED has decided to maintain the US$ interest rate at 5.25% (the rate is expected to remain unchanged until the year’s end) and there are no big fluctuations in the international market?
Analysts have said that local banks have to raise deposit interest rates because they lack capital in foreign currencies. In general, in Hanoi, the proportion of mobilised capital in use is not high, at 61.3%; however, the figure is high among joint stock banks, at 82%.
The liabilities in foreign currencies of eight joint stock banks in Hanoi are VND12.9tril, while the assets have reached VND13.7tril. Since the end of 2006, joint stock banks have been largely unsuccessful at raising mobilised capital. In Hanoi, the mobilised capital in foreign currencies has even decreased by 2%.
Joint stock banks have not been able to mobilise much capital in foreign currencies from the public because people prefer depositing in VND to get more interest. Meanwhile, companies which can supply big sums of foreign currencies only have relations with state owned banks. In order to raise more capital in foreign currencies, joint stock banks have no other choice than raising deposit interest rates.
The growth rate of loaning in US$ remains relatively high because of two reasons.
First, enterprises try to import more goods and it is the time for disbursement for big projects. However, many experts say that this is not the main reason behind the interest rate increases.
As for big projects, disbursement always goes in accordance with a scheduled roadmap, while it does not come in the second quarter only. Moreover, enterprises that have high demand for capital in foreign currencies contact state owned banks rather than joint stock banks.
Meanwhile, state owned banks all said that the demand for foreign currencies had not increased considerably in the last three months, and that they could still supply enough foreign currencies. In fact, state owned banks have not raised their US$ deposit interest rates.
As for the demand for foreign currencies to make payments for import deals, bankers have said that the demand always decreases to the deepest low in the second quarter and that the demand only increases at the end of the third quarter.
Bank officials have pointed out that loaning in US$ increases because enterprises prefer borrowing in foreign currencies. It is to enterprises’ advantages to borrow in foreign currencies in comparison with VND, and in the current context of the exchange rate.
The sharp increase of loaning in foreign currencies has raised doubts about loaning to the wrong subjects. Under current regulations, credit institutions can only provide loans in foreign currencies to clients which have turnovers in foreign currencies for paying debts, and clients which do not have turnovers in foreign currencies but have permission from banks to sell foreign currencies for paying debts and can show contracts on buying foreign currencies.
As for banks, they are ready to lend money, no matter in VND or foreign currencies, if they can make profit on the deals. The director of a bank even said that banks could get more profit when lending in foreign currencies as enterprises use derivative products of banks, from which banks can collect fees.
Though only joint stock banks have joined the move of raising deposit interest rates, state owned banks may get involved in the game. State owned banks are considering raising interest rates because they fear that joint stock banks will attract their traditional clients.
The escalating deposit interest rates will certainly lead to the increase of lending interest rates. This will make credit contracts signed in previous years difficult to be disbursed (medium- and long-term interest rates are never fixed, but always floating). Meanwhile, expenses for paying debts in the medium term will be higher for the credit contracts signed at this moment.
Experts have also warned that the increased interest rates would be a burden on small- and medium-size enterprises, a sector that plays a decisive role in export growth and national economic development.
Source: VNE
The raising of US$ deposit interest rates was initiated by joint stock banks, especially banks in Hanoi like Military Bank, VIB and Techcombank. The move later was followed by HCM City-based banks like Phuong Nam and Nam A. Other banks, though they have not adjusted interest rates, have launched promotional programmes in order to attract capital in US$.
Why are Vietnamese banks still raising deposit interest rates while the US FED has decided to maintain the US$ interest rate at 5.25% (the rate is expected to remain unchanged until the year’s end) and there are no big fluctuations in the international market?
Analysts have said that local banks have to raise deposit interest rates because they lack capital in foreign currencies. In general, in Hanoi, the proportion of mobilised capital in use is not high, at 61.3%; however, the figure is high among joint stock banks, at 82%.
The liabilities in foreign currencies of eight joint stock banks in Hanoi are VND12.9tril, while the assets have reached VND13.7tril. Since the end of 2006, joint stock banks have been largely unsuccessful at raising mobilised capital. In Hanoi, the mobilised capital in foreign currencies has even decreased by 2%.
Joint stock banks have not been able to mobilise much capital in foreign currencies from the public because people prefer depositing in VND to get more interest. Meanwhile, companies which can supply big sums of foreign currencies only have relations with state owned banks. In order to raise more capital in foreign currencies, joint stock banks have no other choice than raising deposit interest rates.
The growth rate of loaning in US$ remains relatively high because of two reasons.
First, enterprises try to import more goods and it is the time for disbursement for big projects. However, many experts say that this is not the main reason behind the interest rate increases.
As for big projects, disbursement always goes in accordance with a scheduled roadmap, while it does not come in the second quarter only. Moreover, enterprises that have high demand for capital in foreign currencies contact state owned banks rather than joint stock banks.
Meanwhile, state owned banks all said that the demand for foreign currencies had not increased considerably in the last three months, and that they could still supply enough foreign currencies. In fact, state owned banks have not raised their US$ deposit interest rates.
As for the demand for foreign currencies to make payments for import deals, bankers have said that the demand always decreases to the deepest low in the second quarter and that the demand only increases at the end of the third quarter.
Bank officials have pointed out that loaning in US$ increases because enterprises prefer borrowing in foreign currencies. It is to enterprises’ advantages to borrow in foreign currencies in comparison with VND, and in the current context of the exchange rate.
The sharp increase of loaning in foreign currencies has raised doubts about loaning to the wrong subjects. Under current regulations, credit institutions can only provide loans in foreign currencies to clients which have turnovers in foreign currencies for paying debts, and clients which do not have turnovers in foreign currencies but have permission from banks to sell foreign currencies for paying debts and can show contracts on buying foreign currencies.
As for banks, they are ready to lend money, no matter in VND or foreign currencies, if they can make profit on the deals. The director of a bank even said that banks could get more profit when lending in foreign currencies as enterprises use derivative products of banks, from which banks can collect fees.
Though only joint stock banks have joined the move of raising deposit interest rates, state owned banks may get involved in the game. State owned banks are considering raising interest rates because they fear that joint stock banks will attract their traditional clients.
The escalating deposit interest rates will certainly lead to the increase of lending interest rates. This will make credit contracts signed in previous years difficult to be disbursed (medium- and long-term interest rates are never fixed, but always floating). Meanwhile, expenses for paying debts in the medium term will be higher for the credit contracts signed at this moment.
Experts have also warned that the increased interest rates would be a burden on small- and medium-size enterprises, a sector that plays a decisive role in export growth and national economic development.
Source: VNE
Firms still bashful about bonds
Corporate bonds are still an unpopular method for raising capital, despite holding several advantages over Stocks and bank loans.
In 2006, the Government passed Decree 52/2006/ND-CP allowing private companies to issue debentures, yet few took advantage of this new source of capital. The majority of bonds in the market are from State enterprises.
Earlier this month, the HCM City Infrastructure Investment JSC (CII) succeeded in selling VND500bil (US$31.25mil) in debentures, one of the few private listings this year. The Viet Nam International Bank (VIBank) and International Securities Company (VISecurities) acted as underwriters.
CII bonds were bought by seven major institutional investors, including the Bank for Investment and Development of Vietnam, Military Bank, Bao Viet Fund Management and Hong Kong - based PCA Investment Funds.
Despite CII's success, companies still prefer traditional avenues for raising money.
Experts, though, argue if a company has been long established and has a solid performance record then there was no need to rely on bank loans and stocks, but could instead issue bonds.
"The cost of issuing corporate bonds is often lower than that of issuing shares, and companies can easily raise a huge amount of money at the same time," said Vo Hoai Chang, deputy research head at SME Securities.
"Besides, the success rates of bond issues are higher because when issuing bonds a company must have an institution to guarantee the bonds if they go unsold in the auction."
VIBank deputy director Nguyen Dinh Tung noted that bond rates currently are lower than bank loans.
CII seven-year bonds carry a 10.3% coupon rate, while if the company borrowed from a bank the interest would be 1-1.5% a year higher.
"However, the reason for bonds being unpopular lies in procedures to find a guarantor," said Chang.
"Normally, companies often raise a large amount of money through issuing bonds, often from VND100bil to VND500bil, so they have to find a guarantor who has the financial capacity to cover the amount," which is not easy in the current monetary tightening cycle.
Chang also said State enterprises are better equipped to offer bonds, because they tend to have long term development plans and the financial capacity to cover debts.
In contrast, private companies tend to look at the short or medium term and, therefore, do not have the same capital requirements.
In fact, only infrastructure and real estate developers, like CII, needed a large amount of capital quickly, said Chang.
CII will invest the money raised via the debentures into high-rise building projects in HCM City, the Tan An Hoi residential zone and the Tam Tan resettlement zone.
So for the time being, the bond market remains in its infancy, though analysts foresee strong growth.
"It is likely that in the next one or two years, the market will develop as companies begin to recognise the benefits of issuing bonds and investors start being lured by bonds," Chang said.
"Several securities companies have set up research and analysis departments focusing on bonds to help develop the market and raise investor awareness."
Tung added that as companies exhaust traditional avenues for mobilising capital then the bond market should accelerate.
Source: VNE
In 2006, the Government passed Decree 52/2006/ND-CP allowing private companies to issue debentures, yet few took advantage of this new source of capital. The majority of bonds in the market are from State enterprises.
Earlier this month, the HCM City Infrastructure Investment JSC (CII) succeeded in selling VND500bil (US$31.25mil) in debentures, one of the few private listings this year. The Viet Nam International Bank (VIBank) and International Securities Company (VISecurities) acted as underwriters.
CII bonds were bought by seven major institutional investors, including the Bank for Investment and Development of Vietnam, Military Bank, Bao Viet Fund Management and Hong Kong - based PCA Investment Funds.
Despite CII's success, companies still prefer traditional avenues for raising money.
Experts, though, argue if a company has been long established and has a solid performance record then there was no need to rely on bank loans and stocks, but could instead issue bonds.
"The cost of issuing corporate bonds is often lower than that of issuing shares, and companies can easily raise a huge amount of money at the same time," said Vo Hoai Chang, deputy research head at SME Securities.
"Besides, the success rates of bond issues are higher because when issuing bonds a company must have an institution to guarantee the bonds if they go unsold in the auction."
VIBank deputy director Nguyen Dinh Tung noted that bond rates currently are lower than bank loans.
CII seven-year bonds carry a 10.3% coupon rate, while if the company borrowed from a bank the interest would be 1-1.5% a year higher.
"However, the reason for bonds being unpopular lies in procedures to find a guarantor," said Chang.
"Normally, companies often raise a large amount of money through issuing bonds, often from VND100bil to VND500bil, so they have to find a guarantor who has the financial capacity to cover the amount," which is not easy in the current monetary tightening cycle.
Chang also said State enterprises are better equipped to offer bonds, because they tend to have long term development plans and the financial capacity to cover debts.
In contrast, private companies tend to look at the short or medium term and, therefore, do not have the same capital requirements.
In fact, only infrastructure and real estate developers, like CII, needed a large amount of capital quickly, said Chang.
CII will invest the money raised via the debentures into high-rise building projects in HCM City, the Tan An Hoi residential zone and the Tam Tan resettlement zone.
So for the time being, the bond market remains in its infancy, though analysts foresee strong growth.
"It is likely that in the next one or two years, the market will develop as companies begin to recognise the benefits of issuing bonds and investors start being lured by bonds," Chang said.
"Several securities companies have set up research and analysis departments focusing on bonds to help develop the market and raise investor awareness."
Tung added that as companies exhaust traditional avenues for mobilising capital then the bond market should accelerate.
Source: VNE
Vietnam bank to underwrite VND720 bln bond
The telecoms arm of dominant utility Vietnam Electricity (EVN) group has signed a contract for a domestic bank to underwrite a VND720 billion (US$44.6 million) corporate bond, local media reported Saturday. EVN Telecom's bond might raise more funds than the offer thanks to investor's interest, An Binh Bank's Chief Executive Luu Duc Khanh was quoted by the Liberation Saigon daily as saying, after EVN Telecom signed the contract with An Binh Bank on Friday.
"In such case, we are allowed to raise an extra 20 percent above the target," he said, but gave no details of the bond.
Hanoi-based EVN Telecom is one of three providers of CDMA technology-based mobile phone services in the communist-run Southeast Asian country. It also develops wireless landline phones and provides Internet access.
In April, EVN Telecom said the company and Singapore's VSNL International would build part of a $200-million pan-Asian submarine optic cable which would link Singapore, the Philippines, Japan, Hong Kong and Guam when operational in the first quarter of 2008.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It has a Ba3 rating on the country's dong debt.
Source: Thanh Nien
"In such case, we are allowed to raise an extra 20 percent above the target," he said, but gave no details of the bond.
Hanoi-based EVN Telecom is one of three providers of CDMA technology-based mobile phone services in the communist-run Southeast Asian country. It also develops wireless landline phones and provides Internet access.
In April, EVN Telecom said the company and Singapore's VSNL International would build part of a $200-million pan-Asian submarine optic cable which would link Singapore, the Philippines, Japan, Hong Kong and Guam when operational in the first quarter of 2008.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It has a Ba3 rating on the country's dong debt.
Source: Thanh Nien
WTO spurs greater foreign investment
A remarkable wave of foreign investment in Viet Nam after it acquired membership in the World Trade Organisation six months ago has created a challenge for enterprises and the economy, according to local economists.
The big question is how the country efficiency uses the surge in capital to create real growth, they said.
There has been a wave of direct and indirect foreign investment in Viet Nam. For the first seven months of this year, foreign investors have registered total capital of 7.5 billion USD, an increase of nearly 50 percent in comparison with 2006.
That figure will rise if administrative procedures are reformed, according to some experts.
In addition, all export commodities have risen around 28.6 percent and officials expect the export market to increase by 20 percent for the whole year.
Implementation of WTO’s commitments has opened up new opportunities for the economy by eliminating some barriers on quotas and export prices, according to government reports.
Furthermore, foreign capital and development have encouraged mobilisation of local investment with private savings and capital from local enterprises.
Since the start of this year, 8 trillion VND (500 million USD) has been mobilised via issuing corporate bonds according to the Finance Ministry. It is expected that this figure will double during the second half of this year and surpass last year’s figure of 15 trillion VND.
However, the sharp increase in inflation can be detrimental for economic growth.
“Many people thought that when we joined the WTO, prices would be reduced. But facts show that the prices of many commodities in Viet Nam are now approaching international prices, and are increasing,” said Nguyen Tien Thoa, head of the Finance Ministry’s Price Management Bureau.
With an open market and lower taxes, foreign goods will flood into the local market and create a wave of lower prices. However, as Viet Nam strengthens exports for certain key agricultural products, prices for such goods will increase, said Thoa.
“In the future, taxes will be cut, more industries and services will be opened to foreign enterprises. Therefore, prices and the quality of products will improve,” he added.
Viet Nam must greatly increase its per capita savings ratio and efficiently mobilise capital sources to secure real long-term economic development.
At present, Viet Nam converts local savings into investment at a rate of 17-20 percent of GDP, half the number in China.
Increases in foreign direct investment and higher efficiency in FDI usage will decide Viet Nam’s competitive edge in the near future.
Viet Nam should improve the quality of its human resources, reform its management systems and increase the proportion of savings, said Resident Representative of the International Monetary Fund, Il Houng Lee.
“Threat to development will be greater if the government only focuses on economic growth but forgets these three factors.” Lee said.
Pham Chi Lan, a senior economist, warned that enterprises should familiarise themselves with WTO regulations.
“Understanding these regulations will help enterprises survive and win in a fierce competitive international market,” she said.
Source: VNA
The big question is how the country efficiency uses the surge in capital to create real growth, they said.
There has been a wave of direct and indirect foreign investment in Viet Nam. For the first seven months of this year, foreign investors have registered total capital of 7.5 billion USD, an increase of nearly 50 percent in comparison with 2006.
That figure will rise if administrative procedures are reformed, according to some experts.
In addition, all export commodities have risen around 28.6 percent and officials expect the export market to increase by 20 percent for the whole year.
Implementation of WTO’s commitments has opened up new opportunities for the economy by eliminating some barriers on quotas and export prices, according to government reports.
Furthermore, foreign capital and development have encouraged mobilisation of local investment with private savings and capital from local enterprises.
Since the start of this year, 8 trillion VND (500 million USD) has been mobilised via issuing corporate bonds according to the Finance Ministry. It is expected that this figure will double during the second half of this year and surpass last year’s figure of 15 trillion VND.
However, the sharp increase in inflation can be detrimental for economic growth.
“Many people thought that when we joined the WTO, prices would be reduced. But facts show that the prices of many commodities in Viet Nam are now approaching international prices, and are increasing,” said Nguyen Tien Thoa, head of the Finance Ministry’s Price Management Bureau.
With an open market and lower taxes, foreign goods will flood into the local market and create a wave of lower prices. However, as Viet Nam strengthens exports for certain key agricultural products, prices for such goods will increase, said Thoa.
“In the future, taxes will be cut, more industries and services will be opened to foreign enterprises. Therefore, prices and the quality of products will improve,” he added.
Viet Nam must greatly increase its per capita savings ratio and efficiently mobilise capital sources to secure real long-term economic development.
At present, Viet Nam converts local savings into investment at a rate of 17-20 percent of GDP, half the number in China.
Increases in foreign direct investment and higher efficiency in FDI usage will decide Viet Nam’s competitive edge in the near future.
Viet Nam should improve the quality of its human resources, reform its management systems and increase the proportion of savings, said Resident Representative of the International Monetary Fund, Il Houng Lee.
“Threat to development will be greater if the government only focuses on economic growth but forgets these three factors.” Lee said.
Pham Chi Lan, a senior economist, warned that enterprises should familiarise themselves with WTO regulations.
“Understanding these regulations will help enterprises survive and win in a fierce competitive international market,” she said.
Source: VNA
Indochina Capital pours extra 1.1 million USD into Navigos
Indochina Capital poured an additional 1.1 million USD into the Navigos Group on Vietnamworks’ fifth birthday last week.
Navigos, a US-invested human resources services provider in Viet Nam and the investor of local well-known job website www.vietnamworks.com has received a total invested capital of 3.1 million USD from Indochina.
The vigorous growth of Navigos as well as the success of the above website would be the most important and attractive factors luring Indochina Capital, said the investor fund’s managing director, Tung Kim.
Navigos plans to list on the local bourse by launching an initial public offering (IPO) by 2010 at the latest. Navigos’s shares have fetched at the price of 2.5 USD per one from 0.01 USD three years ago.
Around 900,000 people have accessed to Vietnamworks website for job vacancies for five years and the number is expected to increase by four times this year, according to Navigos Group.
Navigos Group is a brand owned and operated by Management Consulting Group Ltd, a British Virgin Islands Co.
Source: VNA
Navigos, a US-invested human resources services provider in Viet Nam and the investor of local well-known job website www.vietnamworks.com has received a total invested capital of 3.1 million USD from Indochina.
The vigorous growth of Navigos as well as the success of the above website would be the most important and attractive factors luring Indochina Capital, said the investor fund’s managing director, Tung Kim.
Navigos plans to list on the local bourse by launching an initial public offering (IPO) by 2010 at the latest. Navigos’s shares have fetched at the price of 2.5 USD per one from 0.01 USD three years ago.
Around 900,000 people have accessed to Vietnamworks website for job vacancies for five years and the number is expected to increase by four times this year, according to Navigos Group.
Navigos Group is a brand owned and operated by Management Consulting Group Ltd, a British Virgin Islands Co.
Source: VNA
Financial investment: many opportunities, big profit
Aiming to become multi-area financial groups, commercial banks are promoting financial investment services besides their old business fields.
On July 25, the Saigon Thuong Tin Investment Joint Stock Company (SacomInvest) became operational in HCM City with chartered capital of VND300 billion (US$18.75 million). Its founding shareholders are Sacombank, Sacomreal, Toan Thinh Phat, Thanh Thanh Cong, in which Sacombank contributes 11% of capital.
SacomInvest operates in various fields, such as business management consulting, investment project management, real estate business, commercial brokerage, transport work construction, building infrastructure facilities for industrial zones, etc.
With the great financial potentials of its founding shareholders, SacomInvest focuses on infrastructure, energy, and real estate (high-class apartments, offices). The firm also plans to focus on business purchasing, buying the majority of shares of companies that have good foundations but operate ineffectively.
Luong Dinh Quang, Chairman of SacomInvest Board of Directors, said that SacomInvest had bought 40% of the stocks of the Kien Giang Tourism Company, 30% of the Dang Huynh Industrial Zone in the southern province of Long An and had become a strategic shareholder of the Bourbon Gia Lai Sugar Company and Nam Viet Investment Joint Stock Company.
According to Dang Van Thanh, Chairman of Sacombank Board of Directors, the real estate market is getting warmer. The need for housing, workshops, offices for lease is increasing. This is an opportunity for investment companies.
The Bank for Investment and Development of Vietnam (BIDV) has also set up a branch of the BIDV Financial Investment Joint Stock Company in HCM City to expand the company’s operations in the south.
It is easy to see that banks are establishing financial investment companies. Some banks like the Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Agriculture and Rural Development (Agribank), Sacombank have made joint ventures with some foreign financial institutions to set up securities investment funds.
BIDV has combined with six groups to set up the Industrial and Energy Management Fund Company, which has up to VND10 trillion (US$625 million) of capital. Meanwhile, Southern Bank has negotiated with Amcorp Bhd (Malaysia) to establish financial, insurance, securities trading, fund management companies in Vietnam.
There are many infrastructure investment projects witnessing the participation of banks. The HCM City-Trung Luong-My Thuan-Can Tho highway project has capital of BIDV, the Hanoi-Hai Phong highway, capital from Vietcombank.
According to Tran Phuong Binh, General Director of DongABank, through financial investment, banks can provide services for clients of its partners. For example, DongABank cooperates with water supply companies to gain the payment service for clients of water supply companies. The bank is also ready to loan to clients of water supply companies to install water meters, etc.
Financial investment is now a lucrative area of banks. Of the total VND880 billion ($55 million) of profit so far this year of Asia Commerce Bank (ACB), more than 30% comes from financial investment.
Ly Xuan Hai, General Director of ACB, said that ACB was trying to take advantage of 40% of its chartered capital to bring about big profit for the bank.
In financial investment, ACB divides its capital into two parts: one to buy shares of some companies to become their strategic shareholders and the other to invest in short-term securities. However, financial investment is highly risky so the bank is always very careful in making its portfolio and has to develop a professional risk management system.
Source: VNE
On July 25, the Saigon Thuong Tin Investment Joint Stock Company (SacomInvest) became operational in HCM City with chartered capital of VND300 billion (US$18.75 million). Its founding shareholders are Sacombank, Sacomreal, Toan Thinh Phat, Thanh Thanh Cong, in which Sacombank contributes 11% of capital.
SacomInvest operates in various fields, such as business management consulting, investment project management, real estate business, commercial brokerage, transport work construction, building infrastructure facilities for industrial zones, etc.
With the great financial potentials of its founding shareholders, SacomInvest focuses on infrastructure, energy, and real estate (high-class apartments, offices). The firm also plans to focus on business purchasing, buying the majority of shares of companies that have good foundations but operate ineffectively.
Luong Dinh Quang, Chairman of SacomInvest Board of Directors, said that SacomInvest had bought 40% of the stocks of the Kien Giang Tourism Company, 30% of the Dang Huynh Industrial Zone in the southern province of Long An and had become a strategic shareholder of the Bourbon Gia Lai Sugar Company and Nam Viet Investment Joint Stock Company.
According to Dang Van Thanh, Chairman of Sacombank Board of Directors, the real estate market is getting warmer. The need for housing, workshops, offices for lease is increasing. This is an opportunity for investment companies.
The Bank for Investment and Development of Vietnam (BIDV) has also set up a branch of the BIDV Financial Investment Joint Stock Company in HCM City to expand the company’s operations in the south.
It is easy to see that banks are establishing financial investment companies. Some banks like the Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Agriculture and Rural Development (Agribank), Sacombank have made joint ventures with some foreign financial institutions to set up securities investment funds.
BIDV has combined with six groups to set up the Industrial and Energy Management Fund Company, which has up to VND10 trillion (US$625 million) of capital. Meanwhile, Southern Bank has negotiated with Amcorp Bhd (Malaysia) to establish financial, insurance, securities trading, fund management companies in Vietnam.
There are many infrastructure investment projects witnessing the participation of banks. The HCM City-Trung Luong-My Thuan-Can Tho highway project has capital of BIDV, the Hanoi-Hai Phong highway, capital from Vietcombank.
According to Tran Phuong Binh, General Director of DongABank, through financial investment, banks can provide services for clients of its partners. For example, DongABank cooperates with water supply companies to gain the payment service for clients of water supply companies. The bank is also ready to loan to clients of water supply companies to install water meters, etc.
Financial investment is now a lucrative area of banks. Of the total VND880 billion ($55 million) of profit so far this year of Asia Commerce Bank (ACB), more than 30% comes from financial investment.
Ly Xuan Hai, General Director of ACB, said that ACB was trying to take advantage of 40% of its chartered capital to bring about big profit for the bank.
In financial investment, ACB divides its capital into two parts: one to buy shares of some companies to become their strategic shareholders and the other to invest in short-term securities. However, financial investment is highly risky so the bank is always very careful in making its portfolio and has to develop a professional risk management system.
Source: VNE
Friday, July 27, 2007
Stock exchanges dip again
Both the Ho Chi Minh City and Ha Noi bourses continued their downward trends on July 27, although the fall in Ha Noi was much less severe than its larger southern counterpart.
The VN-Index in HCM City dropped sharply by 15.77 points or 1.65 percent to sink to 940.30 points.
More than 5.2 million shares valued at 476.5 billion VND changed hands on the day with the session witnessing 64 shares falling, 24 remaining unchanged and 20 rallying for gains.
Hoa Binh Construction and Real Estate (HBC) suffered the biggest loss
with stocks tumbling by 30,000 VND, followed by Binh Dinh Minerals (BMC), North Kinh Do Food (NKD) and International Food (IFS).
The highest volume of traded shares were recorded by blue-chips, Financing and Promoting Technology (FPT), Sai Gon Commercial Bank (STB), Refrigeration Electronic Engineering (REE), which saw prices remain unchanged.
Reflecting the bourse’s sluggish performance were Ha Tien Transportation (HTV), Hau Giang Pharmaceutical (DHG), My Chau Printing and Packaging (MCP) and Binh Trieu Engineering and Construction (BTC), recording the indexes sharpest increases of between 1,000-2,100 VND for the session.
In Ha Noi, the HaSTC-Index dipped slightly by 0.62 points to finish at 258.84 points. Some 773,500 shares were sold out at a total transaction value of 75.85 billion VND.
Blue-chips Asian Commercial Bank (ACB), Bao Viet Securities (BVS), Sai Gon Securities (SSI) all dropped by between 1,000-3,000 VND per share.
Source: VNA
The VN-Index in HCM City dropped sharply by 15.77 points or 1.65 percent to sink to 940.30 points.
More than 5.2 million shares valued at 476.5 billion VND changed hands on the day with the session witnessing 64 shares falling, 24 remaining unchanged and 20 rallying for gains.
Hoa Binh Construction and Real Estate (HBC) suffered the biggest loss
with stocks tumbling by 30,000 VND, followed by Binh Dinh Minerals (BMC), North Kinh Do Food (NKD) and International Food (IFS).
The highest volume of traded shares were recorded by blue-chips, Financing and Promoting Technology (FPT), Sai Gon Commercial Bank (STB), Refrigeration Electronic Engineering (REE), which saw prices remain unchanged.
Reflecting the bourse’s sluggish performance were Ha Tien Transportation (HTV), Hau Giang Pharmaceutical (DHG), My Chau Printing and Packaging (MCP) and Binh Trieu Engineering and Construction (BTC), recording the indexes sharpest increases of between 1,000-2,100 VND for the session.
In Ha Noi, the HaSTC-Index dipped slightly by 0.62 points to finish at 258.84 points. Some 773,500 shares were sold out at a total transaction value of 75.85 billion VND.
Blue-chips Asian Commercial Bank (ACB), Bao Viet Securities (BVS), Sai Gon Securities (SSI) all dropped by between 1,000-3,000 VND per share.
Source: VNA
Banks report robust growth in deposits
Ho Chi Minh City-based banks have reported an average growth of 65.7 percent in deposits mobilised in the first seven months, recording over 377.5 trillion VND.
While deposits in VND posted a 80 percent year-on-year increase. Deposits in foreign currencies accounted for 27.2 percent of the total addition of bank deposits, and saw a year-on-year increase of 36.4 percent.
Economists attributed the recent surge to the “cooling down” period of the stock market as people have shifted to bank deposits for their iddle money.
Rising interest rates in hard currencies by a massive number of banks made another attribution to the rosy situation. The Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank) has sparked the trend with its annual interest rate up to 5 percent. The An Binh Bank took the lead in this term by raising the interest rate to 5.42 percent for saving deposits of 11 month term.
As a result, savings deposits and banking certificates have brought in almost 150 trillion VND, making up 39.7 percent of the municipal banking new deposits tally and representing an increase of 43.5 percent over a year ago.
On the other hand, banks have launched a number of new services such as payment cards and expanded their offices and branches down to every corner of the city to facilitate depositing or loaning transactions.
The entire banking system in the nation’s largest economic hub has managed to disburse over 291 trillion VND in loans up to early July, representing a year-on-year increase of 48.4 percent.
Source: VNA
While deposits in VND posted a 80 percent year-on-year increase. Deposits in foreign currencies accounted for 27.2 percent of the total addition of bank deposits, and saw a year-on-year increase of 36.4 percent.
Economists attributed the recent surge to the “cooling down” period of the stock market as people have shifted to bank deposits for their iddle money.
Rising interest rates in hard currencies by a massive number of banks made another attribution to the rosy situation. The Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank) has sparked the trend with its annual interest rate up to 5 percent. The An Binh Bank took the lead in this term by raising the interest rate to 5.42 percent for saving deposits of 11 month term.
As a result, savings deposits and banking certificates have brought in almost 150 trillion VND, making up 39.7 percent of the municipal banking new deposits tally and representing an increase of 43.5 percent over a year ago.
On the other hand, banks have launched a number of new services such as payment cards and expanded their offices and branches down to every corner of the city to facilitate depositing or loaning transactions.
The entire banking system in the nation’s largest economic hub has managed to disburse over 291 trillion VND in loans up to early July, representing a year-on-year increase of 48.4 percent.
Source: VNA
The strange moves of interest rates
Bank interest rates have been fluctuating wildly, and the strange moves seem to be making everything unpredictable.
At the end of December 2006 and in early January 2007, when VND was scarce, the overnight interest rate increased sharply, and then fell down, staying at 5% per annum.
At the end of June 2007, when the State Bank of Vietnam required higher compulsory reserve ratio, the overnight interest rate in the inter-bank market climbed to 7% per annum. However, the rate later fell dramatically to 3.5-4% per annum, even lower than the overnight rate applied for US$ loans at 5.25%, which has not been seen in the monetary market for a good many years.
A paradox exists: though banks’ usable capital is now profuse, they have still raised the interest rates on both VND and US$ deposits.
Though the stock market proves to be a good investment channel, commercial banks still can attract huge capital from the public. By June 30, 2007, banks in HCM City had mobilised VND377,500bil ($23,593mil) in capital, an increase of 32% over the end of 2006, while providing VND292,400bil ($18,275mil) in loans, an increase of 27.2%, according to the HCM City branch of the State Bank of Vietnam.
Banks have said that deposits made by both domestic and international institutions have been increasing sharply. Domestic and foreign investment funds have big sums of VND waiting for disbursement. A part of the money has been temporarily invested in Government and corporate bonds. Though the Government bond’s average interest rate has decreased compared to the beginning of the year, the rates remain relatively high, at 7.3-7.5% per annum.
Portfolio investment keeps flowing into Vietnam, though the VN Index has decreased in the last few months. Foreign investors expect to disburse their money for the IPOs of big corporations slated for the coming months.
Though usable capital is redundant, banks are not lowering the mobilisation rate, and are even raising deposit interest rates in order to attract more clients. Experts have said that traditional clients sometimes can get higher interest rates than the rates publicly declared by banks.
Experts say that interest rates have been pushed up as a result of stiff competition among banks. Several banks, which have shifted to operate as urban banks instead of rural banks, have to offer high interest rates to attract more clients.
The increased inflow of foreign capital into Vietnam has led to the temporary excess of foreign currencies. In the first five months of the year, the State Bank bought $7bil worth of foreign currencies, raising the foreign currency reserve to more than $20bil. In order to buy $7bil, the State Bank had to spend VND112tril, equal to 38% of total outstanding loans of all commercial banks in HCM City.
In order to control inflation, the State Bank has to withdraw cash from circulation through the open market and by auctioning valuable papers. In previous months, the central bank withdrew VND11,000-14,000bil ($687.5mil-875mil) a week, while the figure has risen to VND15,000-16,500bil ($937.5mil-1,031mil) a week after pessimistic predictions about the governments ability to keep the inflation rate below the GDP economic growth rate.
Experts have said that the sums of money the central bank withdraws every month will further increase if direct and indirect investment flows more strongly into Vietnam.
Source: VNE
At the end of December 2006 and in early January 2007, when VND was scarce, the overnight interest rate increased sharply, and then fell down, staying at 5% per annum.
At the end of June 2007, when the State Bank of Vietnam required higher compulsory reserve ratio, the overnight interest rate in the inter-bank market climbed to 7% per annum. However, the rate later fell dramatically to 3.5-4% per annum, even lower than the overnight rate applied for US$ loans at 5.25%, which has not been seen in the monetary market for a good many years.
A paradox exists: though banks’ usable capital is now profuse, they have still raised the interest rates on both VND and US$ deposits.
Though the stock market proves to be a good investment channel, commercial banks still can attract huge capital from the public. By June 30, 2007, banks in HCM City had mobilised VND377,500bil ($23,593mil) in capital, an increase of 32% over the end of 2006, while providing VND292,400bil ($18,275mil) in loans, an increase of 27.2%, according to the HCM City branch of the State Bank of Vietnam.
Banks have said that deposits made by both domestic and international institutions have been increasing sharply. Domestic and foreign investment funds have big sums of VND waiting for disbursement. A part of the money has been temporarily invested in Government and corporate bonds. Though the Government bond’s average interest rate has decreased compared to the beginning of the year, the rates remain relatively high, at 7.3-7.5% per annum.
Portfolio investment keeps flowing into Vietnam, though the VN Index has decreased in the last few months. Foreign investors expect to disburse their money for the IPOs of big corporations slated for the coming months.
Though usable capital is redundant, banks are not lowering the mobilisation rate, and are even raising deposit interest rates in order to attract more clients. Experts have said that traditional clients sometimes can get higher interest rates than the rates publicly declared by banks.
Experts say that interest rates have been pushed up as a result of stiff competition among banks. Several banks, which have shifted to operate as urban banks instead of rural banks, have to offer high interest rates to attract more clients.
The increased inflow of foreign capital into Vietnam has led to the temporary excess of foreign currencies. In the first five months of the year, the State Bank bought $7bil worth of foreign currencies, raising the foreign currency reserve to more than $20bil. In order to buy $7bil, the State Bank had to spend VND112tril, equal to 38% of total outstanding loans of all commercial banks in HCM City.
In order to control inflation, the State Bank has to withdraw cash from circulation through the open market and by auctioning valuable papers. In previous months, the central bank withdrew VND11,000-14,000bil ($687.5mil-875mil) a week, while the figure has risen to VND15,000-16,500bil ($937.5mil-1,031mil) a week after pessimistic predictions about the governments ability to keep the inflation rate below the GDP economic growth rate.
Experts have said that the sums of money the central bank withdraws every month will further increase if direct and indirect investment flows more strongly into Vietnam.
Source: VNE
Selling shares to strategic shareholders to be controlled
The Ministry of Finance plans to keep stricter control over the selling of shares to strategic shareholders as it is drafting a document amending several provisions in Circular No 18 on the buying and selling of shares, and the issuance of additional shares by public companies.
If companies sell shares at preferential prices to strategic partners, it is necessary to define who will be listed as ‘strategic shareholders’ after considering the criteria as follows: suppliers of materials for production; big partners who consume products of the companies; partners that have experience in the operation fields of the issuing companies; partners that can help the companies to expand markets and develop production and business; and partners that can give advice in corporate governance and set up strategies.
The management boards of the companies issuing securities must publish the lists of strategic shareholders and the volume of shares to be sold to them and make them public for the review of shareholders. The lists also must be submitted to the State Securities Commission (SSC).
Besides the sale of shares to strategic shareholders, the draft also sets regulations on issuing shares to companies’ labourers under specific programmes, under which the issuance programmes must be approved by shareholders.
The total shares issued under the specific programmes must not be higher than 5% of the total existing shares of the companies. The price of shares to be sold to labourers must not be lower than 40% of the market price at the time of issuance and the price at which shares were sold to existing shareholders.
If companies sell shares at preferential prices to strategic partners, it is necessary to define who will be listed as ‘strategic shareholders’ after considering the criteria as follows: suppliers of materials for production; big partners who consume products of the companies; partners that have experience in the operation fields of the issuing companies; partners that can help the companies to expand markets and develop production and business; and partners that can give advice in corporate governance and set up strategies.
The management boards of the companies issuing securities must publish the lists of strategic shareholders and the volume of shares to be sold to them and make them public for the review of shareholders. The lists also must be submitted to the State Securities Commission (SSC).
Besides the sale of shares to strategic shareholders, the draft also sets regulations on issuing shares to companies’ labourers under specific programmes, under which the issuance programmes must be approved by shareholders.
The total shares issued under the specific programmes must not be higher than 5% of the total existing shares of the companies. The price of shares to be sold to labourers must not be lower than 40% of the market price at the time of issuance and the price at which shares were sold to existing shareholders.
Minister of Finance answers how to curb inflation
In order to curb inflation, one of the measures the Government will apply is to pick up foreign currencies and reduce the VND in circulation, Minister of Finance Vu Van Ninh said on the morning of July 25 when answering questions from the press on the sideline of the National Assembly’s session.
Could you please tell us about the measures the Government will take in order to maintain the high economic growth rate, while ensuring the control of prices as the CPI in the first half of the year was higher than that in the previous year?
The Government will take more drastic measures in order to control prices. We will buy foreign currencies to increase the foreign currency reserve. We will issue Government bonds, push up investment. Meanwhile, the tools of the open market will be used to control prices and avoid shocks.
Strengthening society’s investment is one of the most important tasks. We have been mobilising sources from society at a high level through direct and indirect investment. The capital market has been developing well so the harmonisation of supply and demand on the market will bring efficiency in developing the economy and curbing inflation.
Regarding the harmonisation of supply and demand of goods, the Government will allow imports to meet domestic demand if necessary.
As for the monetary policy, the Government will pick up foreign currencies, while withdrawing VND from circulation
Do you think that prices have been escalating because Vietnam heavily relies on material imports?
The imports were really big in the first six months of the year, mostly the materials for domestic production. In the second half of the year, we should think of measures that allow for the balance of material supplies. Measures will be taken in harmonisation, including the tax policies, in order to prevent prices from increasing sharply. For example, if the world’s petrol price increases, we will have to lower the import tax to keep the petrol market in normal operation.
The excess of imports over exports remained high. Enterprises still cannot take full advantage of the opportunities to boost exports due to low competitiveness. How should the problems be tackled?
The Government has a programme on supporting enterprises to renovate equipment and technologies, which will help improve the quality of products. Moreover, the Government is choosing the products Vietnam has advantages in for export and pushing up the export of these products. We will balance exports and imports on that basis. It is forecast that exports will grow towards the year’s end.
Could you please talk about budget overspending?
The overspending remains within control. Though revenue was lower from oil exports, the Government has taken measures to offset the loss. Besides, the Government will use the provision fund more effectively, so as to ensure the budget collection even if the turnover from oil decreases.
What is your comment about the newly released report by Merrill Lynch, which said that Vietnam does not deserve to be a good investment place?
Corporations assess things differently based on different interests and from different perspectives. From the Government, we think that the most important thing now is to ensure the supply and demand balance on the market. The Government’s equitisation programme is running in order to bring more high-quality commodities to the market. The Ministry of Finance will have solutions to harmonise supply and demand, avoiding shocks to the market. It is also very necessary to control all the capital flow on the stock market.
Will the report have negative impacts on the investment decisions by foreign investors, as Merrill Lynch is a big financial group in the world?
I think there will be psychological impacts. However, there still needs to be further studies to make a sufficient assessment about possible impacts.
Some experts said that Merrill Lynch released the report in order to exert influence on Vietnam’s macroeconomic policies. Will the Government fulfill the commitments on expanding the market or keep stricter control over the market?
In principle, we have to create the most favourable conditions for the market to develop in a healthy and safe way. In the market economy, the Government should not deeply interfere in the market with administrative orders. The Government should apply measures that ensure macroeconomic balance while controlling capital flows, ensuring the legal benefit of investors, including small investors.
Do you think investors will worry about Instruction No 03 (on limiting loaning to securities investors – reporter) about the tax policies and the management over the capital transfer abroad?
We are trying step by step to perfect the legal framework. All markets in the world must be put under strict control so that they can develop in a healthy way. Regarding the measures, they must not cause shocks to the market. The measures are being taken, including ones on controlling speculation and controlling the information on the market
Investors are also worried that the income from securities investments will be taxed. What would you say to them?
It is the international practice to tax the earnings from securities investments. However, it is still necessary to think over when and how to tax.
What is your viewpoint about the State Bank of Vietnam’s decision that commercial banks’ outstanding loans for securities investments must not be higher than 3% of total outstanding loans?
In principle, it is necessary to control the flow in and out between banks and the stock market. If banks give big loans to fund securities investments, they would face risks. Regarding the proportion of 3%, I think this is a suitable figure
Source: VNE
Could you please tell us about the measures the Government will take in order to maintain the high economic growth rate, while ensuring the control of prices as the CPI in the first half of the year was higher than that in the previous year?
The Government will take more drastic measures in order to control prices. We will buy foreign currencies to increase the foreign currency reserve. We will issue Government bonds, push up investment. Meanwhile, the tools of the open market will be used to control prices and avoid shocks.
Strengthening society’s investment is one of the most important tasks. We have been mobilising sources from society at a high level through direct and indirect investment. The capital market has been developing well so the harmonisation of supply and demand on the market will bring efficiency in developing the economy and curbing inflation.
Regarding the harmonisation of supply and demand of goods, the Government will allow imports to meet domestic demand if necessary.
As for the monetary policy, the Government will pick up foreign currencies, while withdrawing VND from circulation
Do you think that prices have been escalating because Vietnam heavily relies on material imports?
The imports were really big in the first six months of the year, mostly the materials for domestic production. In the second half of the year, we should think of measures that allow for the balance of material supplies. Measures will be taken in harmonisation, including the tax policies, in order to prevent prices from increasing sharply. For example, if the world’s petrol price increases, we will have to lower the import tax to keep the petrol market in normal operation.
The excess of imports over exports remained high. Enterprises still cannot take full advantage of the opportunities to boost exports due to low competitiveness. How should the problems be tackled?
The Government has a programme on supporting enterprises to renovate equipment and technologies, which will help improve the quality of products. Moreover, the Government is choosing the products Vietnam has advantages in for export and pushing up the export of these products. We will balance exports and imports on that basis. It is forecast that exports will grow towards the year’s end.
Could you please talk about budget overspending?
The overspending remains within control. Though revenue was lower from oil exports, the Government has taken measures to offset the loss. Besides, the Government will use the provision fund more effectively, so as to ensure the budget collection even if the turnover from oil decreases.
What is your comment about the newly released report by Merrill Lynch, which said that Vietnam does not deserve to be a good investment place?
Corporations assess things differently based on different interests and from different perspectives. From the Government, we think that the most important thing now is to ensure the supply and demand balance on the market. The Government’s equitisation programme is running in order to bring more high-quality commodities to the market. The Ministry of Finance will have solutions to harmonise supply and demand, avoiding shocks to the market. It is also very necessary to control all the capital flow on the stock market.
Will the report have negative impacts on the investment decisions by foreign investors, as Merrill Lynch is a big financial group in the world?
I think there will be psychological impacts. However, there still needs to be further studies to make a sufficient assessment about possible impacts.
Some experts said that Merrill Lynch released the report in order to exert influence on Vietnam’s macroeconomic policies. Will the Government fulfill the commitments on expanding the market or keep stricter control over the market?
In principle, we have to create the most favourable conditions for the market to develop in a healthy and safe way. In the market economy, the Government should not deeply interfere in the market with administrative orders. The Government should apply measures that ensure macroeconomic balance while controlling capital flows, ensuring the legal benefit of investors, including small investors.
Do you think investors will worry about Instruction No 03 (on limiting loaning to securities investors – reporter) about the tax policies and the management over the capital transfer abroad?
We are trying step by step to perfect the legal framework. All markets in the world must be put under strict control so that they can develop in a healthy way. Regarding the measures, they must not cause shocks to the market. The measures are being taken, including ones on controlling speculation and controlling the information on the market
Investors are also worried that the income from securities investments will be taxed. What would you say to them?
It is the international practice to tax the earnings from securities investments. However, it is still necessary to think over when and how to tax.
What is your viewpoint about the State Bank of Vietnam’s decision that commercial banks’ outstanding loans for securities investments must not be higher than 3% of total outstanding loans?
In principle, it is necessary to control the flow in and out between banks and the stock market. If banks give big loans to fund securities investments, they would face risks. Regarding the proportion of 3%, I think this is a suitable figure
Source: VNE
New matching scheme: everything ready, worries exist
Securities companies and the HCM City Securities Trading Centre (HSTC) have announced they are ready for the real-time order matching scheme, but still have worries.
After three delays, the real-time order matching scheme will officially be applied as of July 30, 2007, and no further delays will occur.
According to HSTC, the rehearsal was very satisfactory, while 48 securities companies said they were ready for the application of the new scheme.
Le Hai Tra, Deputy Director HSTC, said that everything proved to be okay and the trading centre had got permission from the State Securities Commission (SSC) to apply the real-time order matching scheme.
However, the securities companies which have announced their readiness said that worries existed and they could not ensure that no troubles would occur.
The director of a securities company said that the biggest problem was that there would be a break between the order-matching turns, while transaction staffs had to immediately announce order matching results to investors so that they could consider placing other orders.
Previously, transaction staffs of securities companies had half an hour between order-matching turns (there were three order matching turns every trading session) to inform investors about the results. Meanwhile, with the new scheme, the staffs will have several minutes only to do that.
HSTC has helped securities companies to install software that allows investors to immediately see the results transmitted from HSTC. The software is believed will help provide information for investors; however, according to the director, troubles may still occur if the transmission of information has problems.
Additionally, though the operations at trading centres have been automated, many works still need to be done manually. Therefore, securities companies will have to have more staffs in charge of answering investors directly during transactions.
Nguyen Anh Tuan, Deputy Director General of Bien Viet Securities Company (VSSC), said that his biggest worry was difficulty in transmitting information to investors.
Most securities companies now provide information to investors through two channels: Internet and SMS messages.
Mr Tra from HSTC said that HSTC would reconsider the membership status of securities companies which could not apply the real-time order matching scheme well.
He also said that HSTC planned to set up strict requirements on securities companies which would certainly be higher than the currently applied requirements, especially regarding technical facilities.
Mr Tra said that when HSTC begins to operate as stock exchange, listing companies must have the chartered capital of at least VND80bil ($5mil); therefore, it would be reasonable to ask securities companies to upgrade their facilities and skills. However, Mr Tra said that the companies would be given more time to get adapted to the new requirements and circumstances.
Source: VNE
After three delays, the real-time order matching scheme will officially be applied as of July 30, 2007, and no further delays will occur.
According to HSTC, the rehearsal was very satisfactory, while 48 securities companies said they were ready for the application of the new scheme.
Le Hai Tra, Deputy Director HSTC, said that everything proved to be okay and the trading centre had got permission from the State Securities Commission (SSC) to apply the real-time order matching scheme.
However, the securities companies which have announced their readiness said that worries existed and they could not ensure that no troubles would occur.
The director of a securities company said that the biggest problem was that there would be a break between the order-matching turns, while transaction staffs had to immediately announce order matching results to investors so that they could consider placing other orders.
Previously, transaction staffs of securities companies had half an hour between order-matching turns (there were three order matching turns every trading session) to inform investors about the results. Meanwhile, with the new scheme, the staffs will have several minutes only to do that.
HSTC has helped securities companies to install software that allows investors to immediately see the results transmitted from HSTC. The software is believed will help provide information for investors; however, according to the director, troubles may still occur if the transmission of information has problems.
Additionally, though the operations at trading centres have been automated, many works still need to be done manually. Therefore, securities companies will have to have more staffs in charge of answering investors directly during transactions.
Nguyen Anh Tuan, Deputy Director General of Bien Viet Securities Company (VSSC), said that his biggest worry was difficulty in transmitting information to investors.
Most securities companies now provide information to investors through two channels: Internet and SMS messages.
Mr Tra from HSTC said that HSTC would reconsider the membership status of securities companies which could not apply the real-time order matching scheme well.
He also said that HSTC planned to set up strict requirements on securities companies which would certainly be higher than the currently applied requirements, especially regarding technical facilities.
Mr Tra said that when HSTC begins to operate as stock exchange, listing companies must have the chartered capital of at least VND80bil ($5mil); therefore, it would be reasonable to ask securities companies to upgrade their facilities and skills. However, Mr Tra said that the companies would be given more time to get adapted to the new requirements and circumstances.
Source: VNE
The biggest problems of the Vietnamese stock market
Vu Bang, Chairman of the State Securities Commission (SSC), when reviewing the 7 years of the stock market, said that the biggest success in the last seven years was that the market had been developing on the right track with no crises, serving as the important capital channel for the national economy.
What have been the shortcomings of the stock market in its seven years of development?
First, the investment structure of the market has been unbalanced: the institutional investment proportion has been low.
Second, supply and demand have been unbalanced. Sometimes demand is too big while supply is too low.
Third, material facilities have not been able to keep up with development.
Moreover, there have been problems in the policies on the stock market’s management.
What will SSC do to settle the supply and demand imbalance?
There will be two big sources of supply of commodities from now to the year’s end, share auctions and offerings by public companies. As the State Securities Commission has calculated, the volume of shares to be offered is big. It is a right policy to bring more good commodities to the market; however, it is still necessary to consider the conditions of the market.
The equitisation process should be pushed up; however, it is necessary to draw up suitable plans for the IPOs of big corporations. SSC has issued a document giving suggestions related to the timing of IPOs. SSC plans to submit to the Ministry of Finance a draft mechanism, which would allow companies to delay their share issuance plans, though they have been licenced.
I think it is necessary to keep close watch over demand on the market. For example, there should not be policies that tighten the flow of foreign portfolio investment into Vietnam at this moment.
Let’s talk about management and supervision capability. There have been many violations related to information exposure. What do we do to deal with the problem?
I have to admit that supervision and inspection capability is not good. It is partially because of the lack of staffs and the qualification of the staffs. Besides, penalties have proved to be not heavy enough to deter violators.
There are three things the committee needs to do to heighten supervision capability. 1. Setting up an independent supervision committee, which will supervise the operation of the market. 2. Focusing on training supervisors. The investigation requires qualified staffs. 3. Investing in a supervision system (which should be foreign-made).
Source: VNE
What have been the shortcomings of the stock market in its seven years of development?
First, the investment structure of the market has been unbalanced: the institutional investment proportion has been low.
Second, supply and demand have been unbalanced. Sometimes demand is too big while supply is too low.
Third, material facilities have not been able to keep up with development.
Moreover, there have been problems in the policies on the stock market’s management.
What will SSC do to settle the supply and demand imbalance?
There will be two big sources of supply of commodities from now to the year’s end, share auctions and offerings by public companies. As the State Securities Commission has calculated, the volume of shares to be offered is big. It is a right policy to bring more good commodities to the market; however, it is still necessary to consider the conditions of the market.
The equitisation process should be pushed up; however, it is necessary to draw up suitable plans for the IPOs of big corporations. SSC has issued a document giving suggestions related to the timing of IPOs. SSC plans to submit to the Ministry of Finance a draft mechanism, which would allow companies to delay their share issuance plans, though they have been licenced.
I think it is necessary to keep close watch over demand on the market. For example, there should not be policies that tighten the flow of foreign portfolio investment into Vietnam at this moment.
Let’s talk about management and supervision capability. There have been many violations related to information exposure. What do we do to deal with the problem?
I have to admit that supervision and inspection capability is not good. It is partially because of the lack of staffs and the qualification of the staffs. Besides, penalties have proved to be not heavy enough to deter violators.
There are three things the committee needs to do to heighten supervision capability. 1. Setting up an independent supervision committee, which will supervise the operation of the market. 2. Focusing on training supervisors. The investigation requires qualified staffs. 3. Investing in a supervision system (which should be foreign-made).
Source: VNE
Vietnam expects rise in Jan-July industrial output
Vietnam's January-to-July industrial output is expected to jump 17 percent from a year earlier to 325.94 trillion dong ($20 billion), the government said on Friday.
The industrial sector, making up a third of Vietnam's economy, lifted gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
Production of cars, machinery and air-conditioners during the first seven months would expand between 48.7 percent and 67.2 percent from a year ago, helping drive overall expansion, the General Statistics Office said in its monthly report.
The state sector grew 9.7 percent during the seven-month period, compared with 8.5 percent in the first half and above the 9.6 percent rate posted in the same period last year from a year earlier.
Meanwhile, enterprises outside state control and companies with foreign investment showed declines, with the non-state sector's growth easing slightly to 20.4 percent during the first seven months from 20.5 percent in the first half.
The foreign investment sector also slowed to 18.9 percent from 19.3 percent recorded in the first six months from a year earlier.
Industry accounts for 34.9 percent of gross domestic product, ranking only after the service sector which contributed 38.8 percent to Vietnam's GDP during the first six months, government figures showed.
The government aims for a GDP expansion of 9 percent in the second half of this year, saying it would help meet the annual growth target of 8.5 percent.
Source: Reuters
The industrial sector, making up a third of Vietnam's economy, lifted gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
Production of cars, machinery and air-conditioners during the first seven months would expand between 48.7 percent and 67.2 percent from a year ago, helping drive overall expansion, the General Statistics Office said in its monthly report.
The state sector grew 9.7 percent during the seven-month period, compared with 8.5 percent in the first half and above the 9.6 percent rate posted in the same period last year from a year earlier.
Meanwhile, enterprises outside state control and companies with foreign investment showed declines, with the non-state sector's growth easing slightly to 20.4 percent during the first seven months from 20.5 percent in the first half.
The foreign investment sector also slowed to 18.9 percent from 19.3 percent recorded in the first six months from a year earlier.
Industry accounts for 34.9 percent of gross domestic product, ranking only after the service sector which contributed 38.8 percent to Vietnam's GDP during the first six months, government figures showed.
The government aims for a GDP expansion of 9 percent in the second half of this year, saying it would help meet the annual growth target of 8.5 percent.
Source: Reuters
Blackouts expected as electrical capacity fizzles
Intermittent blackouts are likely to hit the country from now to mid-September because of the nation’s lower-than-usual electricity capacity, according to the National Electricity Dispatch Centre.
Allowing for maintenance work and anti-flooding measures affecting the country’s largest hydroelectric plant, Hoa Binh, Viet Nam’s electricity capacity will remain between 10,200 – 10,500MW, the centre said.
In another development, Ha Noi’s People’s Committee on Monday asked local agencies, offices and city lighting operators to make concerted efforts to save energy.
Suggestions include setting air conditioners in offices at not less than 25 degrees Celsius and turning them off 30 minutes before working hours are up or if there’s nobody in the office.
Also, when replacing lights or installing new ones, businesses and streetlight maintainers must use saving-energy light bulds.
Streetlights can only be turned on according to existing regulations.
The electricity sector will meet national demand by 2009 if all its projects run according to schedule, Deputy Minister of Industry Bui Xuan Khu has said.
Hundreds of electricity power plants are currently operating in Viet Nam, including 34 with capacity of more than 100 MW, but to achieve the 20 per cent growth rate approved by the Prime Minister the sector must pump out an additional 3,800 MW to the tune of US$4 billion in investment, Khu said.
To this end, the sector should equitise its plants and use the capital to invest in the sector, the deputy added.
"The price of electricity needs to be hiked so money can be channelled back into the plants," Khu said.
A plan to establish a public electricity fund to support poor households was also underway, the deputy said, adding the ministry would submit funds to the Government at the year end.
About 6 per cent of households in Viet Nam today live without electricity, mostly in remote and mountainous areas.
The Government plan to make electricity accessible nationwide by 2010.
Source: VNS
Allowing for maintenance work and anti-flooding measures affecting the country’s largest hydroelectric plant, Hoa Binh, Viet Nam’s electricity capacity will remain between 10,200 – 10,500MW, the centre said.
In another development, Ha Noi’s People’s Committee on Monday asked local agencies, offices and city lighting operators to make concerted efforts to save energy.
Suggestions include setting air conditioners in offices at not less than 25 degrees Celsius and turning them off 30 minutes before working hours are up or if there’s nobody in the office.
Also, when replacing lights or installing new ones, businesses and streetlight maintainers must use saving-energy light bulds.
Streetlights can only be turned on according to existing regulations.
The electricity sector will meet national demand by 2009 if all its projects run according to schedule, Deputy Minister of Industry Bui Xuan Khu has said.
Hundreds of electricity power plants are currently operating in Viet Nam, including 34 with capacity of more than 100 MW, but to achieve the 20 per cent growth rate approved by the Prime Minister the sector must pump out an additional 3,800 MW to the tune of US$4 billion in investment, Khu said.
To this end, the sector should equitise its plants and use the capital to invest in the sector, the deputy added.
"The price of electricity needs to be hiked so money can be channelled back into the plants," Khu said.
A plan to establish a public electricity fund to support poor households was also underway, the deputy said, adding the ministry would submit funds to the Government at the year end.
About 6 per cent of households in Viet Nam today live without electricity, mostly in remote and mountainous areas.
The Government plan to make electricity accessible nationwide by 2010.
Source: VNS
AB Bank to be PC1's one and only
An Binh Joint Stock Commercial Bank (AB Bank) will act as the primary provider of financial services for Power Company No1 (PC1) under an agreement signed yesterday in the capital.
"I do believe that this co-operation will bring more opportunities for both of us in terms of supporting investment capital, expanding operational networks, diversifying business sectors and exploiting each other’s advantages," said AB Bank general director Luu Duc Khanh.
The bank will provide PC1 a credit limit of VND300 billion (US$18.75 million). AB Bank will lend staff of PC1 money to buy shares in the power company and its subsidiaries. The bank will also provide home and car loans to workers.
In return, PC1 could open letter credit at AB Bank with an underwriting investment limit of $17 million.
The power company will help AB Bank to set up an operational network in all the provinces the firm covers. The bank expects to open more 12 offices nation-wide by the end this year.
"The economic alliance is in line with the new development trend of economic integration. I hope with this co-operation, we will together enhance our positions in the local market," said director of PC1 Nguyen Phuc Vinh.
Source: VNS
"I do believe that this co-operation will bring more opportunities for both of us in terms of supporting investment capital, expanding operational networks, diversifying business sectors and exploiting each other’s advantages," said AB Bank general director Luu Duc Khanh.
The bank will provide PC1 a credit limit of VND300 billion (US$18.75 million). AB Bank will lend staff of PC1 money to buy shares in the power company and its subsidiaries. The bank will also provide home and car loans to workers.
In return, PC1 could open letter credit at AB Bank with an underwriting investment limit of $17 million.
The power company will help AB Bank to set up an operational network in all the provinces the firm covers. The bank expects to open more 12 offices nation-wide by the end this year.
"The economic alliance is in line with the new development trend of economic integration. I hope with this co-operation, we will together enhance our positions in the local market," said director of PC1 Nguyen Phuc Vinh.
Source: VNS
HOSE - Ho Chi Minh City’s new stock market
The Ho Chi Minh City Securities Trading Center – Asia’s hottest stock exchange last year – is scheduled to transform itself into the HCMC Stock Exchange (HOSE) on August 8.
Following a decision approved by Vietnamese Prime Minister Nguyen Tan Dung in May, HOSE will organize transactions for eligible listed companies and have the power to issue listing licenses.
The limited liability state company will have a chartered capital of VND1 trillion (US$63 million) and will perform many of the duties currently carried out by the State Securities Commission (SSC).
Companies expecting to trade shares on the stock market will have to submit applications to the HOSE instead of the SSC.
HOSE will be Vietnam’s most advanced stock market platform yet and will list only big corporations. The company will go public by 2010.
A clear and detailed agenda will be mapped out to create a modern stock market capable of linking with other regional markets.
The HCMC market is home to 109 listed stocks, including two funds and more than 40 brokerage firms.
Stock market capitalization is forecast to hit US$30-40 billion by 2010, accounting for between 30 and 40 percent of the country’s gross domestic product (GDP), according to SSC.
Source: Thanh Nien
Following a decision approved by Vietnamese Prime Minister Nguyen Tan Dung in May, HOSE will organize transactions for eligible listed companies and have the power to issue listing licenses.
The limited liability state company will have a chartered capital of VND1 trillion (US$63 million) and will perform many of the duties currently carried out by the State Securities Commission (SSC).
Companies expecting to trade shares on the stock market will have to submit applications to the HOSE instead of the SSC.
HOSE will be Vietnam’s most advanced stock market platform yet and will list only big corporations. The company will go public by 2010.
A clear and detailed agenda will be mapped out to create a modern stock market capable of linking with other regional markets.
The HCMC market is home to 109 listed stocks, including two funds and more than 40 brokerage firms.
Stock market capitalization is forecast to hit US$30-40 billion by 2010, accounting for between 30 and 40 percent of the country’s gross domestic product (GDP), according to SSC.
Source: Thanh Nien
Vinaplast set to equitise
The Ministry of Industry’s Department for Enterprise Renovation has approved a plan to equitise State-owned Viet Nam Plastic Company.
Under the plan, the company will be renamed the Viet Nam Plastic Joint Stock Corporation (Vinaplast) and have a total chartered capital of 198 billion VND (12.3 million USD), of which 45 percent will be owned by the State.
The initial share price is set to be 10,500 VND.
After equitisation, Vinaplast plans to invest in numerous projects, including a 218 billion VND (13.6 million USD) BOPP film factory and a 35 billion VND (2.18 million USD) plastic plank mill.
The corporation will build a 75 billion VND (4.68 million USD) factory to produce plastic films covered with aluminum and a waste treatment plant with a projected investment capital of 202 billion VND (12.6 million USD).
Source: Thanh Nien
Under the plan, the company will be renamed the Viet Nam Plastic Joint Stock Corporation (Vinaplast) and have a total chartered capital of 198 billion VND (12.3 million USD), of which 45 percent will be owned by the State.
The initial share price is set to be 10,500 VND.
After equitisation, Vinaplast plans to invest in numerous projects, including a 218 billion VND (13.6 million USD) BOPP film factory and a 35 billion VND (2.18 million USD) plastic plank mill.
The corporation will build a 75 billion VND (4.68 million USD) factory to produce plastic films covered with aluminum and a waste treatment plant with a projected investment capital of 202 billion VND (12.6 million USD).
Source: Thanh Nien
New non-life insurance company makes debut
The Global Insurance Company (GIC), which offers non-life insurance, reinsurance and finance investment services, made its debut in Ha Noi on July 26.
The company’s shareholders include Electricity of Viet Nam (EVN), Dong A Bank (EAB), Viet Nam National Reinsurance Cooperation (Vinare), Song Da Urban and Industrial Zone Investment and Development JSC (Sudico) and Viet Nam Air Service Corporation.
To date the company has reached a revenue of nearly 150 billion VND, providing more than 50 insurance products to its clients nationwide.
Speaking at the ceremony, chairman of the board of directors, Ho Nam Thang, said the company’s charter capital is planned to reach 1,000 trillion VND (62.7 million USD) by 2010.
If it’s successful in achieving its target revenue of 300 billion VND (18.7 million USD) this year, GIC would be one of the top five leading insurance companies in the country’s non-life insurance sector.
During the launch ceremony, Electricity of Viet Nam signed a comprehensive cooperative agreement with GIC.
Under the agreement, the two sides will promote joint-venture activities and make capital contributions in order to expand and develop other multilateral businesses activities.
GIC also inked several contracts with partners such as Bao Viet group, Vietnam Air Service Corporation, Power Transmission Company 3 and others.
Source: VNA
The company’s shareholders include Electricity of Viet Nam (EVN), Dong A Bank (EAB), Viet Nam National Reinsurance Cooperation (Vinare), Song Da Urban and Industrial Zone Investment and Development JSC (Sudico) and Viet Nam Air Service Corporation.
To date the company has reached a revenue of nearly 150 billion VND, providing more than 50 insurance products to its clients nationwide.
Speaking at the ceremony, chairman of the board of directors, Ho Nam Thang, said the company’s charter capital is planned to reach 1,000 trillion VND (62.7 million USD) by 2010.
If it’s successful in achieving its target revenue of 300 billion VND (18.7 million USD) this year, GIC would be one of the top five leading insurance companies in the country’s non-life insurance sector.
During the launch ceremony, Electricity of Viet Nam signed a comprehensive cooperative agreement with GIC.
Under the agreement, the two sides will promote joint-venture activities and make capital contributions in order to expand and develop other multilateral businesses activities.
GIC also inked several contracts with partners such as Bao Viet group, Vietnam Air Service Corporation, Power Transmission Company 3 and others.
Source: VNA
Government prioritises stabilision of inflation
The Government has announced it will take drastic measures to keep inflation below national economic growth and consider this to be its key task in the remaining months of this year.
Deputy Prime Minister Nguyen Sinh Hung has made the statement on the sidelines of the first meeting of the on-going 12th National Assembly in Ha Noi.
Deputy PM Hung said to rein in consumer price hikes, a balance must be struck between demand and supply of commodities items.
The deputy PM stressed the need for ensuring a sufficient supply of locally-made indispensable commodities and importing reserves in case they are in short supply in order to avoid hoarding of goods.
Finance Minister Vu Van Ninh said in the fist six months of this year, the consumer price index surged 5.2 percent in comparison with a 4 percent hike over the same period last year.
The Government will move to ensure balanced budget and money and commodity flows to stabilise the increase of the index as set out by the National Assembly, the Minister said.
He went on to say that for products, which are affected by world prices, such as oil, the Government will curb their prices hike by measures that include tax adjustments.
Source: VNA
Deputy Prime Minister Nguyen Sinh Hung has made the statement on the sidelines of the first meeting of the on-going 12th National Assembly in Ha Noi.
Deputy PM Hung said to rein in consumer price hikes, a balance must be struck between demand and supply of commodities items.
The deputy PM stressed the need for ensuring a sufficient supply of locally-made indispensable commodities and importing reserves in case they are in short supply in order to avoid hoarding of goods.
Finance Minister Vu Van Ninh said in the fist six months of this year, the consumer price index surged 5.2 percent in comparison with a 4 percent hike over the same period last year.
The Government will move to ensure balanced budget and money and commodity flows to stabilise the increase of the index as set out by the National Assembly, the Minister said.
He went on to say that for products, which are affected by world prices, such as oil, the Government will curb their prices hike by measures that include tax adjustments.
Source: VNA
Trading boards lit in red as indexes continue to dip
Securities trading boards were lit in red yesterday as prices of many stocks decreased, resulting in the continued slides of both indexes.
In Ho Chi Minh City, after losing 9.87 points (1%) on July 25, the VN-Index today suffered a sharp loss of 1.69%, dropping 16.43 points to close at 956.13.
Total volume and value also decreased sharply to low records, only 3.7 million shares traded in the call-matching method for over VND 362 billion. Up to 94 stocks decreased while only 7 others were up and 10 stayed still.
Top five losers were blue-chips DHG, BMC, TCT, NKD and SJS. DHG of Hau Giang Pharmaceuticals lost 4.9% (VND 20,000) to VND 388,000 a share while BMC dropped to the floor price of VND 342,000 a piece, losing VND 18,000 a share. TCT, NKD and SJS lost VND 13,000, VND 10,000 and VND 8,000 a piece respectively.
TTP shares of Tan Tien Plastic Packaging Joint Stock Company top the list of seven gainers today, increasing VND 2,000 (1.94%) to VND 105,000 a share. TTP also ranked fifth in traded volume with 172,340 shares traded. Yesterday, the share also rose 4.04% to VND 103,000 a piece. TTP’s good business results released recently explained for the large traded volume and price hike of this code.
FPT shares today continue to lose VND 5,000 to close at VND 250,000 a share. However, the stock topped in terms of trading volume with 393,930 shared traded, followed by STB of Sacombank with 332,060 shares traded at VND 58,000, down VND 1,000 compared to the previous trading session.
In Hanoi, the HaSTC-Index continued to drop 1.43%, down 3.78 points to 259.46.
Prices of 57 of the total 87 listed stocks lost, only 13 stocks gained, 13 saw no transactions and 4 remained stationery. Investors traded 834,500 shares worth over VND 83.6 billion.
Foreign investors sharply reduced their securities purchase in the northern bourse in this session. They bought 77,700 shares worth VND 10.6 billion and sold 35,000 others worth VND 4.8 billion. Yesterday, they bought 271,000 shares of 22 symbols worth nearly VND 20 billion and sold 40,000 shares of 7 codes worth nearly VND 8 billion.
Source: Nhan Dan
In Ho Chi Minh City, after losing 9.87 points (1%) on July 25, the VN-Index today suffered a sharp loss of 1.69%, dropping 16.43 points to close at 956.13.
Total volume and value also decreased sharply to low records, only 3.7 million shares traded in the call-matching method for over VND 362 billion. Up to 94 stocks decreased while only 7 others were up and 10 stayed still.
Top five losers were blue-chips DHG, BMC, TCT, NKD and SJS. DHG of Hau Giang Pharmaceuticals lost 4.9% (VND 20,000) to VND 388,000 a share while BMC dropped to the floor price of VND 342,000 a piece, losing VND 18,000 a share. TCT, NKD and SJS lost VND 13,000, VND 10,000 and VND 8,000 a piece respectively.
TTP shares of Tan Tien Plastic Packaging Joint Stock Company top the list of seven gainers today, increasing VND 2,000 (1.94%) to VND 105,000 a share. TTP also ranked fifth in traded volume with 172,340 shares traded. Yesterday, the share also rose 4.04% to VND 103,000 a piece. TTP’s good business results released recently explained for the large traded volume and price hike of this code.
FPT shares today continue to lose VND 5,000 to close at VND 250,000 a share. However, the stock topped in terms of trading volume with 393,930 shared traded, followed by STB of Sacombank with 332,060 shares traded at VND 58,000, down VND 1,000 compared to the previous trading session.
In Hanoi, the HaSTC-Index continued to drop 1.43%, down 3.78 points to 259.46.
Prices of 57 of the total 87 listed stocks lost, only 13 stocks gained, 13 saw no transactions and 4 remained stationery. Investors traded 834,500 shares worth over VND 83.6 billion.
Foreign investors sharply reduced their securities purchase in the northern bourse in this session. They bought 77,700 shares worth VND 10.6 billion and sold 35,000 others worth VND 4.8 billion. Yesterday, they bought 271,000 shares of 22 symbols worth nearly VND 20 billion and sold 40,000 shares of 7 codes worth nearly VND 8 billion.
Source: Nhan Dan
ACB bonds to raise $402.7 million
Vietnam's central bank has allowed partly private Asia Commercial Bank (ACB) to raise 6.5 trillion dong ($402.7 million) through long-term bond issues this year on domestic markets.
The Ho Chi Minh City-based bank would sell the bonds by the end of 2007 and use the proceeds in line with a plan approved by the State Bank of Vietnam, a statement on the central bank's website said on Thursday.
ACB, Vietnam's fifth-largest lender by assets, had 58.4 trillion dong in assets at the end of June, a rise of 30.9 percent from the end of 2006.
The bank has not published details of its debt issues.
Source: VNA
The Ho Chi Minh City-based bank would sell the bonds by the end of 2007 and use the proceeds in line with a plan approved by the State Bank of Vietnam, a statement on the central bank's website said on Thursday.
ACB, Vietnam's fifth-largest lender by assets, had 58.4 trillion dong in assets at the end of June, a rise of 30.9 percent from the end of 2006.
The bank has not published details of its debt issues.
Source: VNA
Sacombank to expand into China
The Ho Chi Minh City-based Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) has got the nod from the country's State Bank Governor to open its first overseas representative office in Nanning city in China's Guangxi province.
The new Sacombank office will be charged with conducting market research on Guangxi and China's economic, financial and banking markets as it looks to boost cooperation with credit organisations in the world's fastest growing economy.
Sacombank expects to reach agreements with Chinese banks on cross-border payment contracts using bills of exchange, credit letters and other payment documents as well as to provide banking products and services to customers alongside the bordering provinces.
Sacombank is considered as one of the most efficient commercial banks in Viet Nam, recording rapid growth rates and being singled out as the “Best Bank –Viet Nam 2007” by Euromoney. The award was handed out on ratings such as the bank’s sustainable development, business results, risk control, information technology applications and management quality.
Source: VNA
The new Sacombank office will be charged with conducting market research on Guangxi and China's economic, financial and banking markets as it looks to boost cooperation with credit organisations in the world's fastest growing economy.
Sacombank expects to reach agreements with Chinese banks on cross-border payment contracts using bills of exchange, credit letters and other payment documents as well as to provide banking products and services to customers alongside the bordering provinces.
Sacombank is considered as one of the most efficient commercial banks in Viet Nam, recording rapid growth rates and being singled out as the “Best Bank –Viet Nam 2007” by Euromoney. The award was handed out on ratings such as the bank’s sustainable development, business results, risk control, information technology applications and management quality.
Source: VNA
GDP growth rate 8.5%, inflation rate below 8% – acceptable
Deputy Prime Minister Nguyen Sinh Hung in a recent talk with the press said that 8.5% GDP growth and inflation of less than 8% would be acceptable.
Mr Hung said that the most important tasks the Government had to fulfill were to curb inflation and ensure a high economic growth rate.
Mr Hung said that the two works proved to be difficult to fulfill at the same time. In principle, the measures to ensure a high GDP growth rate lead to a high inflation rate. Therefore, the Government will have to find solutions that can harmonise the two tasks.
According to Nguyen Ngoc Bao, Head of the Monetary Policy Department under the State Bank of Vietnam, the bank had taken a lot of measures to control the monetary increase in the first six months of the year. The bank has required the higher ratio of compulsory reserve in order to withdraw cash from circulation, apply open market tools in order to keep the credit at a suitable level. These have helped ensure high economic growth and curb inflation.
Mr Bao said that the National Assembly had said the inflation rate must be lower than the GDP growth rate.
Mr Bao has stressed that the central bank will try to withdraw money from circulation, but keep the interest rates and exchange rates stable. Moreover, the central bank will ask commercial banks to expand loans at a suitable level in order to ensure sufficient capital supply for production and business.
When asked if the central bank feared uncontrollable inflation when it decided to tighten the monetary policy, Mr Bao affirmed that inflation remained within control. However, the central bank, in a cautious step, needs to take action to control the situation and cope with possible unexpected changes.
The statement by the central bank about withdrawing cash from circulation can be understood that the volume of cash in circulation is overly high. Mr Bao said that foreign currency supply proved to be profuse thanks to high direct and indirect investment. Therefore, the central bank has to spend a big sum of money to buy foreign currencies.
“The volume of cash in circulation needs to be kept at a suitable level and in harmonisation with the total value of goods, after considering the situation and inflation rate,” Mr Bao said.
Mr Bao has also revealed that the growth rate of mobilised capital is now higher than the rate of loaning, which has led to the excess of usable capital.
Source: VNE
Mr Hung said that the most important tasks the Government had to fulfill were to curb inflation and ensure a high economic growth rate.
Mr Hung said that the two works proved to be difficult to fulfill at the same time. In principle, the measures to ensure a high GDP growth rate lead to a high inflation rate. Therefore, the Government will have to find solutions that can harmonise the two tasks.
According to Nguyen Ngoc Bao, Head of the Monetary Policy Department under the State Bank of Vietnam, the bank had taken a lot of measures to control the monetary increase in the first six months of the year. The bank has required the higher ratio of compulsory reserve in order to withdraw cash from circulation, apply open market tools in order to keep the credit at a suitable level. These have helped ensure high economic growth and curb inflation.
Mr Bao said that the National Assembly had said the inflation rate must be lower than the GDP growth rate.
Mr Bao has stressed that the central bank will try to withdraw money from circulation, but keep the interest rates and exchange rates stable. Moreover, the central bank will ask commercial banks to expand loans at a suitable level in order to ensure sufficient capital supply for production and business.
When asked if the central bank feared uncontrollable inflation when it decided to tighten the monetary policy, Mr Bao affirmed that inflation remained within control. However, the central bank, in a cautious step, needs to take action to control the situation and cope with possible unexpected changes.
The statement by the central bank about withdrawing cash from circulation can be understood that the volume of cash in circulation is overly high. Mr Bao said that foreign currency supply proved to be profuse thanks to high direct and indirect investment. Therefore, the central bank has to spend a big sum of money to buy foreign currencies.
“The volume of cash in circulation needs to be kept at a suitable level and in harmonisation with the total value of goods, after considering the situation and inflation rate,” Mr Bao said.
Mr Bao has also revealed that the growth rate of mobilised capital is now higher than the rate of loaning, which has led to the excess of usable capital.
Source: VNE
Exports bring in 26.8 billion USD in seven months
Viet Nam’s export revenue soared to almost 26.8 billion USD in the first seven months of this year, posting a year-on-year rise of 19.6 percent, with 4.25 billion USD coming from July alone.
Staples such as aquatic, crude oil, coffee, textile and garment, footwear and wooden products all exceeded the 1 billion USD mark.
Other items also recorded high growth rates such as coal with 23.6 percent, electronic appliances and computer components with 24.6 percent, and vegetables and fruits with 23 percent.
The import turnover in July was 5.05 billion USD, pushing up the total value in the seven months to 32.2 billion, a year-on-year increase of 29.8 percent.
According to the Trade Ministry, the period saw a massive amount of import of materials and equipment for production while consumer goods were imported at a more modest rate.
The country’s trade deficit of 5.45 billion USD over the period surpassed expected targets and represented 20.3 percent of total export turnover.
Source: VNA
Staples such as aquatic, crude oil, coffee, textile and garment, footwear and wooden products all exceeded the 1 billion USD mark.
Other items also recorded high growth rates such as coal with 23.6 percent, electronic appliances and computer components with 24.6 percent, and vegetables and fruits with 23 percent.
The import turnover in July was 5.05 billion USD, pushing up the total value in the seven months to 32.2 billion, a year-on-year increase of 29.8 percent.
According to the Trade Ministry, the period saw a massive amount of import of materials and equipment for production while consumer goods were imported at a more modest rate.
The country’s trade deficit of 5.45 billion USD over the period surpassed expected targets and represented 20.3 percent of total export turnover.
Source: VNA
Thursday, July 26, 2007
At 7-year mark, stock market on right track
The stock market has been developing on the right track, especially in the last few years, when the market has witnessed great advances in development.
According to the State Securities Commission (SSC), by the end of June 2007, 243,809 transaction accounts had been opened, up by 2.3 times compared to December 2006 (106.393), including 242,624 accounts of individual investors and 1,185 accounts of institutional investors.
With open regulations released recently foreign investors have more opportunities to join the market. Now foreign investors can hold up to 49% of total listed shares. Foreign securities trading institutions are allowed to make capital contributions and buy shares of up to 49% of chartered capital to form joint ventures. Foreign investors can hold up to 30% of local banks’ shares.
To date, foreign investors have opened 5,568 transaction accounts (5,353 individual accounts and 215 institutional accounts). Some 260 foreign investment funds are injecting money in Vietnam’s stocks with the total estimated value of investment portfolio reaching $5bil. The accounts opened by Japanese investors account for 70% of total foreign investors’ accounts.
The proportion of shares held by foreign investors in big local companies, such as ACB, STB, BT6, or AGF, has nearly hit the ceiling. Officials from the Market Development Division under SSC said that if Vietnam could offer high-quality commodities it could attract a huge quantity of capital from the outside, which will help stimulate the national economy.
The most important tasks for SSC in the time to come are to stimulate demand, build and make public the roadmap on market opening to foreign investors. The regulation on foreign ownership in conditional investment fields must come in line with the regulations stipulated in the Investment Law and in international treaties of which Vietnam is a member.
On August 8, 2007, in HCM City, there will be the ceremony announcing the Prime Minister’s decision on shifting the HCM City Securities Trading Centre (HSTC) into the HCM City Stock Exchange (HOSE).
According to Decision No 599 dated May 11, 2007, HOSE is a state-owned legal entity, operating under the mode of a one-member limited company, and is covered by the Securities Law, Enterprise Law, the regulations for the stock exchange and other related laws.
HOSE has the total chartered capital of VND1tril ($62.5mil), sourced from the initially allocated capital by the state to HSTC now transferred to HOSE, the additional capital to be provided by the state during the operation, the additional capital from post-tax profit, and other legal sources.
Source: VNE
According to the State Securities Commission (SSC), by the end of June 2007, 243,809 transaction accounts had been opened, up by 2.3 times compared to December 2006 (106.393), including 242,624 accounts of individual investors and 1,185 accounts of institutional investors.
With open regulations released recently foreign investors have more opportunities to join the market. Now foreign investors can hold up to 49% of total listed shares. Foreign securities trading institutions are allowed to make capital contributions and buy shares of up to 49% of chartered capital to form joint ventures. Foreign investors can hold up to 30% of local banks’ shares.
To date, foreign investors have opened 5,568 transaction accounts (5,353 individual accounts and 215 institutional accounts). Some 260 foreign investment funds are injecting money in Vietnam’s stocks with the total estimated value of investment portfolio reaching $5bil. The accounts opened by Japanese investors account for 70% of total foreign investors’ accounts.
The proportion of shares held by foreign investors in big local companies, such as ACB, STB, BT6, or AGF, has nearly hit the ceiling. Officials from the Market Development Division under SSC said that if Vietnam could offer high-quality commodities it could attract a huge quantity of capital from the outside, which will help stimulate the national economy.
The most important tasks for SSC in the time to come are to stimulate demand, build and make public the roadmap on market opening to foreign investors. The regulation on foreign ownership in conditional investment fields must come in line with the regulations stipulated in the Investment Law and in international treaties of which Vietnam is a member.
On August 8, 2007, in HCM City, there will be the ceremony announcing the Prime Minister’s decision on shifting the HCM City Securities Trading Centre (HSTC) into the HCM City Stock Exchange (HOSE).
According to Decision No 599 dated May 11, 2007, HOSE is a state-owned legal entity, operating under the mode of a one-member limited company, and is covered by the Securities Law, Enterprise Law, the regulations for the stock exchange and other related laws.
HOSE has the total chartered capital of VND1tril ($62.5mil), sourced from the initially allocated capital by the state to HSTC now transferred to HOSE, the additional capital to be provided by the state during the operation, the additional capital from post-tax profit, and other legal sources.
Source: VNE
Viet Nam’s economic development acclaimed
Economic growth in Viet Nam is set to rank among the top rates in the region in the next few years, Germany ’s Deutsche Bank and Frankfurt Times have said.
According to German economic analysts, the steady flow of foreign investment into the country has contributed to its success, with the prospect of accelerating Viet Nam up the ladder to join China and India by 2020.
Another plus factor is Viet Nam ’s entry into the World Trade Organisation, helping accelerate the nation’s on-going reform process and opening the country up to the outside world, the economists said.
According to the Pricewaterhouse Coopers group, Viet Nam is regarded as the most attractive investment destination among 20 countries selected by the group.
Meanwhile, Chile ’s Estrategia online has run an article praising Viet Nam ’s great socio-economic achievements during its renewal process.
The paper said that Viet Nam ’s economic development as well as its increasing role in the international arena have been admired worldwide as the country has faced many hurdles following the war.
A bevy of world economic powers such as the US , Japan , Germany and the Republic of Korea have shifted their investment to Viet Nam . Foreign investment in Viet Nam was valued at close to 10 billion USD in 2006 and is expected to reach up to 12 billion USD in 2006.
However, obstacles remain as Viet Nam still struggles with poor infrastructure and financial systems.
Source: VNA
According to German economic analysts, the steady flow of foreign investment into the country has contributed to its success, with the prospect of accelerating Viet Nam up the ladder to join China and India by 2020.
Another plus factor is Viet Nam ’s entry into the World Trade Organisation, helping accelerate the nation’s on-going reform process and opening the country up to the outside world, the economists said.
According to the Pricewaterhouse Coopers group, Viet Nam is regarded as the most attractive investment destination among 20 countries selected by the group.
Meanwhile, Chile ’s Estrategia online has run an article praising Viet Nam ’s great socio-economic achievements during its renewal process.
The paper said that Viet Nam ’s economic development as well as its increasing role in the international arena have been admired worldwide as the country has faced many hurdles following the war.
A bevy of world economic powers such as the US , Japan , Germany and the Republic of Korea have shifted their investment to Viet Nam . Foreign investment in Viet Nam was valued at close to 10 billion USD in 2006 and is expected to reach up to 12 billion USD in 2006.
However, obstacles remain as Viet Nam still struggles with poor infrastructure and financial systems.
Source: VNA
Nine companies to list on Ha Noi bourse
Nine companies have sent financial documents and applications to the Ha Noi Securities Trading Centre (HaSTC) to list on the bourse.
PV Gas North was among three companies on July 25 that submitted documents to authorities, and is the biggest with 135 billion VND in charter capital.
The other two are Lam Dong Food Company worth 12 billion VND and Ngo Quyen Seafood Export Company worth 10 billion VND.
Cho Lon Real Estate Co was the first company to list on the bourse this year, incrasing the number of stocks on the exchange to 87.
Source: VNA
PV Gas North was among three companies on July 25 that submitted documents to authorities, and is the biggest with 135 billion VND in charter capital.
The other two are Lam Dong Food Company worth 12 billion VND and Ngo Quyen Seafood Export Company worth 10 billion VND.
Cho Lon Real Estate Co was the first company to list on the bourse this year, incrasing the number of stocks on the exchange to 87.
Source: VNA
Foreign investors focus on buying
The Ho Chi Minh City and Ha Noi bourses on July 25 reported substantial boost in foreign buyers.
At the Ho Chi Minh City Securities Trading Centre, foreign investors bought more than 1.9 million units worth 247.8 billion VND, a 75 percent increase compared to the previous session.
Foreign buyers focused on 62 shares, mostly blue chips like the Corporation for Financing and Promoting (FPT), Vinamilk (VNM), Tan Tien Plastics Packaging (TTP), Vinh Son-Song Hinh (VSH), and Pha Lai Thermal Power Company (PPC).
Of the purchase, which accounted for 48.13 percent of the bourse's transactions, FPT was the most popular, followed by VNM.
Foreign buyers also sought shares in Song Da Urban and Industrial Zone Investment and Development (SJS), PetroVietnam Drilling &Well Services (PVD), and Tuong An Oil Company (TAC) at the bourse.
At the same time, selling by foreign investors fell with 630,730 units of 43 shares sold for more than 65 billion VND, making up 12.76 percent of the total transactions conducted on the bourse.
At the Ha Noi Securities Trading Centre, foreign investors bought 271,000 units of 22 shares worth around 20 billion VND while selling only 40,000 units of six shares for 7.8 billion VND.
By the end of the July 25 trading session, both the Ho Chi Minh City and Ha Noi bourses suffered losses.
The VN-Index at the Ho Chi Minh City Securities Trading Centre dropped again after bouncing back at the previous session, losing 9.87 points to finish at 972.56 points.
Nearly 4.8 million shares, worth more than 514 billion VND, were traded during the day. The session witnessed up to 76 shares decline while only 14 shares recorded gains and 21 remain unchanged.
At the Ha Noi Securities Trading Centre, the HaSTC-Index dropped 1.64 points to finish at 263.4 points. However, the traded volume increased rapidly over the previous session, amounting to 840,000 shares, worth more than 79.5 billion VND.
Source: VNA
At the Ho Chi Minh City Securities Trading Centre, foreign investors bought more than 1.9 million units worth 247.8 billion VND, a 75 percent increase compared to the previous session.
Foreign buyers focused on 62 shares, mostly blue chips like the Corporation for Financing and Promoting (FPT), Vinamilk (VNM), Tan Tien Plastics Packaging (TTP), Vinh Son-Song Hinh (VSH), and Pha Lai Thermal Power Company (PPC).
Of the purchase, which accounted for 48.13 percent of the bourse's transactions, FPT was the most popular, followed by VNM.
Foreign buyers also sought shares in Song Da Urban and Industrial Zone Investment and Development (SJS), PetroVietnam Drilling &Well Services (PVD), and Tuong An Oil Company (TAC) at the bourse.
At the same time, selling by foreign investors fell with 630,730 units of 43 shares sold for more than 65 billion VND, making up 12.76 percent of the total transactions conducted on the bourse.
At the Ha Noi Securities Trading Centre, foreign investors bought 271,000 units of 22 shares worth around 20 billion VND while selling only 40,000 units of six shares for 7.8 billion VND.
By the end of the July 25 trading session, both the Ho Chi Minh City and Ha Noi bourses suffered losses.
The VN-Index at the Ho Chi Minh City Securities Trading Centre dropped again after bouncing back at the previous session, losing 9.87 points to finish at 972.56 points.
Nearly 4.8 million shares, worth more than 514 billion VND, were traded during the day. The session witnessed up to 76 shares decline while only 14 shares recorded gains and 21 remain unchanged.
At the Ha Noi Securities Trading Centre, the HaSTC-Index dropped 1.64 points to finish at 263.4 points. However, the traded volume increased rapidly over the previous session, amounting to 840,000 shares, worth more than 79.5 billion VND.
Source: VNA
Military Bank profit at 318 billion VND
The Military Bank has reported a mid-year profit of 318 billion VND (19.9 million USD), while total assets grew 61 percent to 19 trillion VND (1.2 billion USD).
Earnings were helped along by a number of cooperation agreements with large companies including Lilama, Ha Noi Housing Investment and Development and Royal Securities.
The bank hopes to operate 65 branches by the end of the year, up from the current 48 transaction points.
Source: VNA
Earnings were helped along by a number of cooperation agreements with large companies including Lilama, Ha Noi Housing Investment and Development and Royal Securities.
The bank hopes to operate 65 branches by the end of the year, up from the current 48 transaction points.
Source: VNA
Vinare sets share auction on Aug 24
Vietnam's top re-insurer, National Re-Insurance Corporation (Vinare), said on Thursday it would sell 12.58 million new shares at an auction on Aug. 24 to raise at least $46.8 million.
The auction held on the over-the-counter Hanoi stock market <.HASTCI> is part of Vinare's plan to issue 40.7 million new shares this year, to more than double its registered capital to 750 billion dong from the current 343 billion dong and to expand its businesses.
A statement from the Hanoi-based company said bidding for the 12.58 million shares would start at 60,000 dong ($3.7).
Vinare chairman Trinh Quang Tuyen said in May the firm needed to invest 1.6 trillion dong ($100 million) in several projects, including the formation of new banks together with top insurer Bao Viet and Vietnam's leading IT firm FPT.
Vinare also plans to spend 200 billion dong to increase its stake in five domestic insurance firms and a joint venture late this year or early 2008, and another 200 billion dong on the formation of non-life insurance firms in 2007 and 2008.
Of the 40.7 million new shares, 27.95 million will go to the public, existing shareholders and employees. Another 12.75 million shares would be sold to Vietnamese and foreign strategic investors.
Shares in Vinare lost 1.2 percent to close at 82,000 dong ($5) on Thursday, valuing the firm at $172 million.
Vietnam's insurance sector has grown rapidly in recent years as the country's economy has boomed. Growth is expected to top 8 percent for the third year running this year.
Vinare, which used to provide the sole access to international re-insurance for Vietnamese insurers, still maintains a leading role in the sector.
Source: Reuters
The auction held on the over-the-counter Hanoi stock market <.HASTCI> is part of Vinare's plan to issue 40.7 million new shares this year, to more than double its registered capital to 750 billion dong from the current 343 billion dong and to expand its businesses.
A statement from the Hanoi-based company said bidding for the 12.58 million shares would start at 60,000 dong ($3.7).
Vinare chairman Trinh Quang Tuyen said in May the firm needed to invest 1.6 trillion dong ($100 million) in several projects, including the formation of new banks together with top insurer Bao Viet and Vietnam's leading IT firm FPT.
Vinare also plans to spend 200 billion dong to increase its stake in five domestic insurance firms and a joint venture late this year or early 2008, and another 200 billion dong on the formation of non-life insurance firms in 2007 and 2008.
Of the 40.7 million new shares, 27.95 million will go to the public, existing shareholders and employees. Another 12.75 million shares would be sold to Vietnamese and foreign strategic investors.
Shares in Vinare lost 1.2 percent to close at 82,000 dong ($5) on Thursday, valuing the firm at $172 million.
Vietnam's insurance sector has grown rapidly in recent years as the country's economy has boomed. Growth is expected to top 8 percent for the third year running this year.
Vinare, which used to provide the sole access to international re-insurance for Vietnamese insurers, still maintains a leading role in the sector.
Source: Reuters
Vietnam says Jan-July trade deficit jumps on year
Vietnam estimated on Thursday its trade deficit in the first seven months of the year more than doubled to $5.45 billion from a year earlier, due largely to a surge in imports for construction of state projects.
In July alone the deficit was estimated at $800 million from a revised gap of $790 million last month, the General Statistics Office said in its monthly report.
In trade deficit for the first seven months of 2006 was $2.44 billion.
Exports in the first seven months rose 19.6 percent from a year earlier to $26.79 billion while imports during the period jumped nearly 30 percent to $32.24 billion, the office said.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first refinery and new power plants, soared 42.2 percent in the January-July period from a year earlier to $5.04 billion.
Oil product imports in the first seven months rose 11.9 percent from a year earlier to $4.06 billion, while crude exports fell 11.3 percent to $4.4 billion, the report showed.
The Trade Ministry forecast earlier this month the 2007 trade gap could jump to a record $8 billion this year.
Apart from infrastructure projects, the ministry attributed the widening trade deficit to increases in imports of cars and household appliances due to lower import tariffs as Vietnam implemented its World Trade Organisation commitments.
Vietnam, which joined the global trade body in January, aims to boost annual economic growth to 9 percent in the second half of 2007 from 7.87 percent in the first half to achieve full-year growth of 8.5 percent.
Earlier this week, Deputy Trade Minister Nguyen Thanh Bien raised the 2007 export forecast to $48.1 billion, up 20.8 percent from last year from a previous forecast of $47.54 billion.
Source: Reuters
In July alone the deficit was estimated at $800 million from a revised gap of $790 million last month, the General Statistics Office said in its monthly report.
In trade deficit for the first seven months of 2006 was $2.44 billion.
Exports in the first seven months rose 19.6 percent from a year earlier to $26.79 billion while imports during the period jumped nearly 30 percent to $32.24 billion, the office said.
The trade report showed imports of machinery, mainly for big government projects including Vietnam's first refinery and new power plants, soared 42.2 percent in the January-July period from a year earlier to $5.04 billion.
Oil product imports in the first seven months rose 11.9 percent from a year earlier to $4.06 billion, while crude exports fell 11.3 percent to $4.4 billion, the report showed.
The Trade Ministry forecast earlier this month the 2007 trade gap could jump to a record $8 billion this year.
Apart from infrastructure projects, the ministry attributed the widening trade deficit to increases in imports of cars and household appliances due to lower import tariffs as Vietnam implemented its World Trade Organisation commitments.
Vietnam, which joined the global trade body in January, aims to boost annual economic growth to 9 percent in the second half of 2007 from 7.87 percent in the first half to achieve full-year growth of 8.5 percent.
Earlier this week, Deputy Trade Minister Nguyen Thanh Bien raised the 2007 export forecast to $48.1 billion, up 20.8 percent from last year from a previous forecast of $47.54 billion.
Source: Reuters
Vietnam fears falling exports will push target beyond reach
A slowdown in exports of some key items means the year’s export target of US$48 billion could be missed, a routine trade ministry meeting Tuesday heard. Pham The Dung, head of the Ministry of Trade’s Export-Import Department, said as a result the export sector faced a heavy burden in the second half.
As the country’s number one export turnover earner, crude oil plunged by 5 percent to $3.8 billion.
Oil industry insiders attributed the slip to declining global prices and lower than expected output by certain overseas operations.
Rice exports fell by 5 percent to $732 million. Huynh Minh Hue, deputy general secretary of the Vietnam Food Association, said a shortfall in cargo services and a 40 percent hike in transport costs had pushed exports down.
As a result, shipments to some key markets like Russia, Cuba, and South Africa had plunged by 75 percent, 67 percent, and 58 percent respectively.
Footwear exports fetched $1.9 billion, a year-on-year rise of 11 percent against a targeted rise of 21 percent.
This was mainly due to anti-dumping duties slapped by the EU which buys 80 percent of Vietnamese footwear exports.
Exporters failed to address the problem by finding alternate markets.
However, despite the problems, the country‘s exports jumped by 20 percent in the first half to $22.5 billion.
Deputy Minister of Trade Nguyen Tinh Bien warned that nothing less than a massive effort would do to reach the export target.
The coffee, apparel, and seafood industries were on track to achieve their targets, especially apparel, which could reach its $7.3 - 7.5 billion goal.
A push was required to ensure fisheries, another important export item, achieved its export target.
The government had agreed to provide VND50 billion to set up facilities to test fisheries products to ensure they were free of banned chemical substances.
Van Thanh Huy, chairman of the Vietnam Coffee Association, said coffee exports had already achieved 92 percent of the whole year’s target with revenues of $1.5 billion so far.
But he was worried that the low coffee quality could hurt the goal.
A Ho Chi Minh City-based coffee trader admitted that Vietnamese coffee had 1 percent impurities compared to 0.5 percent elsewhere.
Exports are expected to maintain robust growth, helped by Vietnam's membership in the WTO. The country’s ambitious export goal is to reach a whopping $100 billion in export value by 2010, according to the Ministry of Trade.
The nation’s four giant exporting markets now are the EU, the US, Japan and China.
Trade officials said exports to the US were forecast to rise 35 percent from last year to nearly $11 billion in total this year while revenues from goods sold to Europe would jump 22 percent to $8.3 billion by the year’s end.
Source: Reuters
As the country’s number one export turnover earner, crude oil plunged by 5 percent to $3.8 billion.
Oil industry insiders attributed the slip to declining global prices and lower than expected output by certain overseas operations.
Rice exports fell by 5 percent to $732 million. Huynh Minh Hue, deputy general secretary of the Vietnam Food Association, said a shortfall in cargo services and a 40 percent hike in transport costs had pushed exports down.
As a result, shipments to some key markets like Russia, Cuba, and South Africa had plunged by 75 percent, 67 percent, and 58 percent respectively.
Footwear exports fetched $1.9 billion, a year-on-year rise of 11 percent against a targeted rise of 21 percent.
This was mainly due to anti-dumping duties slapped by the EU which buys 80 percent of Vietnamese footwear exports.
Exporters failed to address the problem by finding alternate markets.
However, despite the problems, the country‘s exports jumped by 20 percent in the first half to $22.5 billion.
Deputy Minister of Trade Nguyen Tinh Bien warned that nothing less than a massive effort would do to reach the export target.
The coffee, apparel, and seafood industries were on track to achieve their targets, especially apparel, which could reach its $7.3 - 7.5 billion goal.
A push was required to ensure fisheries, another important export item, achieved its export target.
The government had agreed to provide VND50 billion to set up facilities to test fisheries products to ensure they were free of banned chemical substances.
Van Thanh Huy, chairman of the Vietnam Coffee Association, said coffee exports had already achieved 92 percent of the whole year’s target with revenues of $1.5 billion so far.
But he was worried that the low coffee quality could hurt the goal.
A Ho Chi Minh City-based coffee trader admitted that Vietnamese coffee had 1 percent impurities compared to 0.5 percent elsewhere.
Exports are expected to maintain robust growth, helped by Vietnam's membership in the WTO. The country’s ambitious export goal is to reach a whopping $100 billion in export value by 2010, according to the Ministry of Trade.
The nation’s four giant exporting markets now are the EU, the US, Japan and China.
Trade officials said exports to the US were forecast to rise 35 percent from last year to nearly $11 billion in total this year while revenues from goods sold to Europe would jump 22 percent to $8.3 billion by the year’s end.
Source: Reuters
FPT gets fund management licence
Vietnamese information technology services firm FPT has received a licence to run a fund management subsidiary as part of its plans to diversify into financial services.
The State Securities Commission issued the licence on July 25 for Hanoi-based FPT Fund Management Co. to operate with a registered capital of $6.8 million, the commission said in a statement seen on Thursday.
The company's business areas include managing securities funds and investing directly in securities, it said.
After a July 13 licence to offer stockbroking service, fund management allows FPT, Vietnam's second-largest listed firm valued at $1.44 billion, to operate outside its core businesses of software production, mobile phone sales and Internet services.
Eager to get a slice of Vietnam's quickly expanding financial services market, FPT has teamed up with state-run MobiFone and the State Capital Investment Corp. (SCIC) in seeking central bank permission to form a bank.
But brokers said investors may stay away from FPT shares for a while to see how the company deals with its new business areas.
Shares in FPT fell 4.49 percent to close at 255,000 dong ($15.8) on Wednesday as the VN Index ended 1 percent down at 972.56 points. The index is still 29.3 percent higher than at the end of last year.
Source: Reuters
The State Securities Commission issued the licence on July 25 for Hanoi-based FPT Fund Management Co. to operate with a registered capital of $6.8 million, the commission said in a statement seen on Thursday.
The company's business areas include managing securities funds and investing directly in securities, it said.
After a July 13 licence to offer stockbroking service, fund management allows FPT, Vietnam's second-largest listed firm valued at $1.44 billion, to operate outside its core businesses of software production, mobile phone sales and Internet services.
Eager to get a slice of Vietnam's quickly expanding financial services market, FPT has teamed up with state-run MobiFone and the State Capital Investment Corp. (SCIC) in seeking central bank permission to form a bank.
But brokers said investors may stay away from FPT shares for a while to see how the company deals with its new business areas.
Shares in FPT fell 4.49 percent to close at 255,000 dong ($15.8) on Wednesday as the VN Index ended 1 percent down at 972.56 points. The index is still 29.3 percent higher than at the end of last year.
Source: Reuters
Wednesday, July 25, 2007
VN-Index and HaSTC-Index drop
Both the Ho Chi Minh City's bourse and its Ha Noi-based counterpart reported losses by the end of the July 25 morning trading session.
The VN-Index at the Ho Chi Minh City Securities Trading Centre dropped again after bouncing back at the previous session, losing 9.87 points to finish at 972.56 points.
Nearly 4.8 million shares, worth more than 514 billion VND, were traded during the day.
The session witnessed up to 76 shares decline while only 14 shares recorded gains and 21 remain unchanged.
Binh Dinh Minerals Joint Stock Company (BMC) was the biggest loser of the day, having 18,000 VND wiped off its listed price. It was followed by blue chips like Seafood Joint Stock Company No. 4 (TS4), Tay Ninh Cable Tour Company (TCT) and the Corporation for Financing and Promoting Technology (FPT).
Meanwhile, Hau Giang Pharmaceurtical (DHG), North Kinhdo Food (NKD) and Tan Tien Plastic Packaging (TTP) were among shares that recorded the biggest increase.
DHG led the market in terms of traded volume for the day with nearly 43,000 shares changing hands, followed by FPT and Tuong An Oil Joint Stock Company (TAC).
At the Ha Noi Securities Trading Centre, the HaSTC-Index dropped 1.64 points to finish at 263.4 points. However, the traded volume increased rapidly over the previous session, amounting to 840,000 shares, worth more than 79.5 billion VND.
Song Da Simco (SDA) and Song Da 7 (SD7) were the biggest losers among 48 shares to suffer decline during the day while Song Da Joint Stock Company 9.09 (S99) topped the 21 shares that recorded gains by tacking 30,300 VND onto its listed price.
Source: VNA
The VN-Index at the Ho Chi Minh City Securities Trading Centre dropped again after bouncing back at the previous session, losing 9.87 points to finish at 972.56 points.
Nearly 4.8 million shares, worth more than 514 billion VND, were traded during the day.
The session witnessed up to 76 shares decline while only 14 shares recorded gains and 21 remain unchanged.
Binh Dinh Minerals Joint Stock Company (BMC) was the biggest loser of the day, having 18,000 VND wiped off its listed price. It was followed by blue chips like Seafood Joint Stock Company No. 4 (TS4), Tay Ninh Cable Tour Company (TCT) and the Corporation for Financing and Promoting Technology (FPT).
Meanwhile, Hau Giang Pharmaceurtical (DHG), North Kinhdo Food (NKD) and Tan Tien Plastic Packaging (TTP) were among shares that recorded the biggest increase.
DHG led the market in terms of traded volume for the day with nearly 43,000 shares changing hands, followed by FPT and Tuong An Oil Joint Stock Company (TAC).
At the Ha Noi Securities Trading Centre, the HaSTC-Index dropped 1.64 points to finish at 263.4 points. However, the traded volume increased rapidly over the previous session, amounting to 840,000 shares, worth more than 79.5 billion VND.
Song Da Simco (SDA) and Song Da 7 (SD7) were the biggest losers among 48 shares to suffer decline during the day while Song Da Joint Stock Company 9.09 (S99) topped the 21 shares that recorded gains by tacking 30,300 VND onto its listed price.
Source: VNA
Vietindebank bags $20.3 mln in 1st half net profit
Vietnam's second largest bank by assets, state-run Bank for Investment and Development or Vietindebank, said on Wednesday its net profit reached 326.89 billion dong ($20.3 million) in the first half of this year.
Vietindebank and four other state-run banks have been ordered to partially privatise this year and in 2008, a move seen as a test of market-opening commitments Vietnam made before joining the World Trade Organisation in January.
The unlisted Hanoi-based bank gave no comparison for the corresponding period last year but it said its after-tax earnings in 2006 totalled 1.08 trillion dong.
In a statement via the Ho Chi Minh Stock Exchange Vietindebank said its assets at the end of June rose 25 percent from the end of 2006 to 201.59 trillion dong, nearing the target for the whole of this year.
Vietindebank has projected its assets at the end of 2007 to jump 26 percent from 2006 to 211.3 trillion dong, with loans expected to rise 20 percent to 122.7 trillion dong.
Using Vietnamese accounting standards, Vietindebank's return on earnings is forecast to rise to 10.42 percent by the end of the year, from 6.38 percent in April, the bank has said.
Earlier this month Vietindebank said it planned to list its shares in Vietnam in the first quarter of next year while an overseas flotation at undisclosed time would follow.
Vietindebank has hired U.S. investment bank Morgan Stanley as an adviser on a domestic IPO scheduled in the last quarter of 2007.
Source: Reuters
Vietindebank and four other state-run banks have been ordered to partially privatise this year and in 2008, a move seen as a test of market-opening commitments Vietnam made before joining the World Trade Organisation in January.
The unlisted Hanoi-based bank gave no comparison for the corresponding period last year but it said its after-tax earnings in 2006 totalled 1.08 trillion dong.
In a statement via the Ho Chi Minh Stock Exchange Vietindebank said its assets at the end of June rose 25 percent from the end of 2006 to 201.59 trillion dong, nearing the target for the whole of this year.
Vietindebank has projected its assets at the end of 2007 to jump 26 percent from 2006 to 211.3 trillion dong, with loans expected to rise 20 percent to 122.7 trillion dong.
Using Vietnamese accounting standards, Vietindebank's return on earnings is forecast to rise to 10.42 percent by the end of the year, from 6.38 percent in April, the bank has said.
Earlier this month Vietindebank said it planned to list its shares in Vietnam in the first quarter of next year while an overseas flotation at undisclosed time would follow.
Vietindebank has hired U.S. investment bank Morgan Stanley as an adviser on a domestic IPO scheduled in the last quarter of 2007.
Source: Reuters
ACB bank H1 profit exceeds all of 2006
Asia Commercial Bank (ACB), Vietnam's fifth-largest lender by assets, said on Wednesday its gross profit in the first half alone jumped nearly 30 percent from the whole of last year to 880 billion dong ($54.5 million).
The bank, which posted a gross profit of 682.4 billion dong in 2006, did not provide comparative figures for its net earnings and revenues in the same period last year.
The bank told the Hanoi stock exchange that its assets at the end of June also rose about 30 percent from the end of last year to 58.4 trillion dong ($3.6 billion).
ACB said in a statement posted on its Web site (www.acb.com.vn) that good results in the January-June period came partly from new lines of business including gold trading and new mortgage products that attracted more home buyers.
The Ho Chi Minh City-based bank, whose shares are listed on the Hanoi over-the-counter stock market, said January to June revenues totalled 2.62 trillion dong ($162 million).
ACB has said it aimed to grow at about 45 to 50 percent in the 2006-2010 period to have total assets of about $12 billion by 2010.
Demand for loans and other banking services is booming as Vietnam's economy rapidly expands. Gross domestic product (GDP) in the first half grew by an estimated 7.87 percent from a year earlier, led by the industrial and construction sectors.
Foreign investors hold a combined 30 percent in ACB. Standard Chartered Plc. owns 8.56 percent of ACB, the biggest stake of ACB's four foreign shareholders.
Shares in ACB fell 1.08 percent on Wednesday to close at 119,200 dong ($7.4) each.
Source: Reuters
The bank, which posted a gross profit of 682.4 billion dong in 2006, did not provide comparative figures for its net earnings and revenues in the same period last year.
The bank told the Hanoi stock exchange that its assets at the end of June also rose about 30 percent from the end of last year to 58.4 trillion dong ($3.6 billion).
ACB said in a statement posted on its Web site (www.acb.com.vn) that good results in the January-June period came partly from new lines of business including gold trading and new mortgage products that attracted more home buyers.
The Ho Chi Minh City-based bank, whose shares are listed on the Hanoi over-the-counter stock market, said January to June revenues totalled 2.62 trillion dong ($162 million).
ACB has said it aimed to grow at about 45 to 50 percent in the 2006-2010 period to have total assets of about $12 billion by 2010.
Demand for loans and other banking services is booming as Vietnam's economy rapidly expands. Gross domestic product (GDP) in the first half grew by an estimated 7.87 percent from a year earlier, led by the industrial and construction sectors.
Foreign investors hold a combined 30 percent in ACB. Standard Chartered Plc. owns 8.56 percent of ACB, the biggest stake of ACB's four foreign shareholders.
Shares in ACB fell 1.08 percent on Wednesday to close at 119,200 dong ($7.4) each.
Source: Reuters
SSI to move listing from Hanoi to HCMC
Vietnam's largest brokerage, Saigon Securities Inc. (SSI), said on Wednesday it would seek permission to shift its share listing to the Ho Chi Minh Stock Exchange from the Hanoi market.
Executive Director Nguyen Hong Nam said in a statement the Ho Chi Minh City-based SSI would submit an application by August 5 and list all its 80 million shares on the main exchange after a licence is in place.
He did not give a reason for the move, but companies find the Ho Chi Minh exchange more attractive due to its greater liquidity partly due to the listing of major stocks such as Vinamilk, FPT and Sacombank on the exchange.
On Wednesday, the total value of shares traded in the Ho Chi Minh City market hit $31.5 million, compared with just $4.9 million in the Hanoi market.
Analysts said many companies launched their initial listings last year on the Hanoi market -- where listing rules are less stringent -- to test market sentiment about their stocks, and also to take advantage of corporate tax relief for listed firms which expired on Dec. 31, 2006.
The Hanoi market now trades in 87 stocks, including SSI, with a total capitalisation of $5 billion, while the Ho Chi Minh market has 109 listed firms with a capitalisation of nearly $13 billion.
SSI, which underwrites share and debt issues and advises state-run companies on privatisation, is one of more than 50 companies offering such services in Hanoi and Ho Chi Minh City.
The State Securities Commission said about two dozen more brokerages were seeking operating licences in Vietnam's capital.
The Australia and New Zealand Banking Group Ltd. has a 10 percent stake in SSI while Japan's Daiwa Securities Group Incorporation has a 1.25 percent stake.
SSI said it posted a record net profit of 668.5 billion dong ($41 million) in the first six months of this year, more than four times its annual earnings last year.
Shares in the brokerage gained 0.32 percent to close at 156,500 dong ($9.7) on Wednesday on the over-the-counter Hanoi market.
Source: Reuters
Executive Director Nguyen Hong Nam said in a statement the Ho Chi Minh City-based SSI would submit an application by August 5 and list all its 80 million shares on the main exchange after a licence is in place.
He did not give a reason for the move, but companies find the Ho Chi Minh exchange more attractive due to its greater liquidity partly due to the listing of major stocks such as Vinamilk, FPT and Sacombank on the exchange.
On Wednesday, the total value of shares traded in the Ho Chi Minh City market hit $31.5 million, compared with just $4.9 million in the Hanoi market.
Analysts said many companies launched their initial listings last year on the Hanoi market -- where listing rules are less stringent -- to test market sentiment about their stocks, and also to take advantage of corporate tax relief for listed firms which expired on Dec. 31, 2006.
The Hanoi market now trades in 87 stocks, including SSI, with a total capitalisation of $5 billion, while the Ho Chi Minh market has 109 listed firms with a capitalisation of nearly $13 billion.
SSI, which underwrites share and debt issues and advises state-run companies on privatisation, is one of more than 50 companies offering such services in Hanoi and Ho Chi Minh City.
The State Securities Commission said about two dozen more brokerages were seeking operating licences in Vietnam's capital.
The Australia and New Zealand Banking Group Ltd. has a 10 percent stake in SSI while Japan's Daiwa Securities Group Incorporation has a 1.25 percent stake.
SSI said it posted a record net profit of 668.5 billion dong ($41 million) in the first six months of this year, more than four times its annual earnings last year.
Shares in the brokerage gained 0.32 percent to close at 156,500 dong ($9.7) on Wednesday on the over-the-counter Hanoi market.
Source: Reuters
Eximbank joins global trade finance programme
he Viet Nam Export Import Commercial Joint Stock Bank (Vietnam Eximbank), on July 25, signed an agreement with the International Finance Corporation (IFC) to join the IFC’s Global Trade Finance Programme (GTFP) as an issuing bank.
Joining the programme, Vietnam Eximbank will have better access to banks in the world to expand its operational markets and improve its competitiveness and service quality, particularly in the area of financing import-export.
The programme has so far admitted 105 member banks in 65 countries as confirming banks and 75 banks in 50 countries as issuing banks.
Source: VNA
Joining the programme, Vietnam Eximbank will have better access to banks in the world to expand its operational markets and improve its competitiveness and service quality, particularly in the area of financing import-export.
The programme has so far admitted 105 member banks in 65 countries as confirming banks and 75 banks in 50 countries as issuing banks.
Source: VNA
VND/US$ exchange rate stable until year-end
Big international institutions all share the same view that the VND/US$ exchange rate will keep stable in the last part of the year as in the previous three years.
The strong flow of foreign capital into Vietnam over the last time has put pressure on the local currency, forcing the VND to revaluate. However, the fact that the State Bank of Vietnam is trying to buy more foreign currencies has helped stabilise the exchange rate.
According to Citibank, in 2004-2006, the VND lost 0.8-0.9% in value every year. However, the local currency unexpectedly revaluated in the first two months of 2007. The revaluation of the local currency halted in subsequent months; however, the local currency has revaluated again in the last three months, by 0.6% against the greenback.
The current exchange rate is VND16,138/US$1, which is lower than the rate seen in January 2007 (VND16,142/US$1), but higher than the VND16,060/US$1 level in mid February 2007.
The fact that the central bank bought dollars in large quantity in the last time has helped reduce the supply of foreign currencies on the market. This is considered the main reason that the greenback has recovered. The central bank has confirmed that it will continue buying foreign currencies in order to raise the foreign currency reserve and ensure the devaluation of the VND of 1% in 2007 as previously targeted.
Therefore, the reports by Citibank, HSBC, Standard Chartered all said that the VND would slightly devaluate in the short term. However, as the surplus in international payment balance remains high thanks to the big capital inflow (foreign direct investment FDI), overseas remittance and portfolio investment, this will maintain the pressure on the local currency.
Experts have voiced their concern about the increased supply of money on the market as the central bank is trying to buy more foreign currencies. In fact, in order to buy a big volume of foreign currencies, the central bank will have to put a big volume of VND into circulation, thus making it more difficult to realise the goal of curbing inflation.
In fact, international financial institutions, including the World Bank (WB) and International Monetary Fund (IMF), warned about the impact of the foreign capital flow on the monetary policy management earlier this year. WB even said that the investment flow would challenge the monetary policy.
It seems that the central bank has to do two works that may conflict with each other: putting more money into circulation to buy foreign currencies for reserve, while tightening the monetary policy to curb inflation. Therefore, every solution should be considered thoroughly to ensure reaching both purposes.
Most recently, the central bank has decided to raise the compulsory reserve ratio to 10% for bank deposits, a move aiming to tighten the monetary policy and withdraw money from circulation. However, the effects of the decision will only be clear in some months.
Source: VNE
The strong flow of foreign capital into Vietnam over the last time has put pressure on the local currency, forcing the VND to revaluate. However, the fact that the State Bank of Vietnam is trying to buy more foreign currencies has helped stabilise the exchange rate.
According to Citibank, in 2004-2006, the VND lost 0.8-0.9% in value every year. However, the local currency unexpectedly revaluated in the first two months of 2007. The revaluation of the local currency halted in subsequent months; however, the local currency has revaluated again in the last three months, by 0.6% against the greenback.
The current exchange rate is VND16,138/US$1, which is lower than the rate seen in January 2007 (VND16,142/US$1), but higher than the VND16,060/US$1 level in mid February 2007.
The fact that the central bank bought dollars in large quantity in the last time has helped reduce the supply of foreign currencies on the market. This is considered the main reason that the greenback has recovered. The central bank has confirmed that it will continue buying foreign currencies in order to raise the foreign currency reserve and ensure the devaluation of the VND of 1% in 2007 as previously targeted.
Therefore, the reports by Citibank, HSBC, Standard Chartered all said that the VND would slightly devaluate in the short term. However, as the surplus in international payment balance remains high thanks to the big capital inflow (foreign direct investment FDI), overseas remittance and portfolio investment, this will maintain the pressure on the local currency.
Experts have voiced their concern about the increased supply of money on the market as the central bank is trying to buy more foreign currencies. In fact, in order to buy a big volume of foreign currencies, the central bank will have to put a big volume of VND into circulation, thus making it more difficult to realise the goal of curbing inflation.
In fact, international financial institutions, including the World Bank (WB) and International Monetary Fund (IMF), warned about the impact of the foreign capital flow on the monetary policy management earlier this year. WB even said that the investment flow would challenge the monetary policy.
It seems that the central bank has to do two works that may conflict with each other: putting more money into circulation to buy foreign currencies for reserve, while tightening the monetary policy to curb inflation. Therefore, every solution should be considered thoroughly to ensure reaching both purposes.
Most recently, the central bank has decided to raise the compulsory reserve ratio to 10% for bank deposits, a move aiming to tighten the monetary policy and withdraw money from circulation. However, the effects of the decision will only be clear in some months.
Source: VNE
Subscribe to:
Posts (Atom)
