The last trading session of the week saw improvement made by the two price indices on the Northern and Southern bourses.
HCM bourse:
HCM was reported to see a stunning high trade against yesterday’s poor performance, which was partly attributed to the system’s technical breakdown. The market price indicator saw its second consecutive rise. Vn-index closed at 908.37 points, up a slight 4.43 points, or 0.49% against the session earlier. The bourse saw a consolidated 7.8 million shares changing hands, worth a combined VND 673 billion. As such, the market’s total trade volume rose by rougly 60%, far exceeding the average of August. There were reportedly around 67 advancers, 23 decliners and 23 stills.
Though the number of rising stocks outstripped that of decliners and stills combined, HCM’s price index did not witness a strong rebound, which was partly attributed to the price decreases sufferred by those stocks of big listings and high capitalization as KDC, BMP, VNM, PVD. The stocks’ falls ranged from VND 1,000 to VND 4,000. Others such as NKD, TAC, ITA,SJS, DHG, REE, SAM was entitled to slight increases ranging from VND 1,000 to VND 3,000.
In terms of trade volume, the top advancers list this morning saw the presences of PPC and SAM. The former saw roughly 700,000 shares changing hands, while the latter saw 260,000 shares successfully matched. As usual, STB led the market in terms of liquidity with as many as 926,000 units traded. Sharp volumes were also seen with the fund VF1 and VNM.
Hanoi bourse:
Closing the session this morning, HaSTC index enjoyed a slight rise of 1.27 points, or 0.51% to reach 252.55 points. The market saw a consolidated 857,600 shares matched with volume totalling VND 86.12 billion. There were 43 rising stocks, 22 falling ones and 24 stills.
Included in the top advancers list this morning were the triple of Song Da Constrcution Group with decreasing band being expanded. VMC led the top advancers list with an increase of VND 5,200 and 1,000 units successfullymatched.
In the reverse direction, S99 suffered slight loss, leading the top losers list with a VND 2,800 fall. Next in the list were VNR, MEC, NTP and VTS, falling from VND 1,000 to VND 2,200 each. NTP saw the stunning high rise in the last couple of sessions. The stock lost VND 1,500.
In terms of trade volume, no significant changes witnessed with the top active list by volume. Included in the list were stocks of high frequency as SSI, NTP, ACB, MPC. New comer was SD9, which rose by VND 2,800 and saw roughly 38,000 units changing hands. Foreign investors continued to reduce trade. Such group brought in a total of 77,700 shares while sold out 200 units of SSI and SJE.
Source: InfoTV
Friday, August 31, 2007
Power Company joins hand with securities firm
Power Company No. 1 and Ha Thanh Securities signed a comprehensive strategic cooperation agreement on Aug. 30.
Under the agreement, the power company will contribute capital to Ha Thanh Securities, while Ha Thanh is expected to pour capital in power transmission, real estate and finance services projects invested by Power company No. 1.
Ha Thanh will become a partner in providing outline consultation for equitisation, share issuance, shareholder management and other services as the power company carries out its equitisation.
The power company will work with Ha Thanh to open transaction units and stock order agents at the power company’s several locations.
The General Director of Electricity of Viet Nam (EVN), Pham Le Thanh, said that the agreement aimed to fully utilise the two companies’ potential.
Cooperation enhancement between Ha Thanh Securities and Power Company No. 1 is regarded as the first step in the development of EVN’s multi-sectoral economic growth.
Source: VNA
Under the agreement, the power company will contribute capital to Ha Thanh Securities, while Ha Thanh is expected to pour capital in power transmission, real estate and finance services projects invested by Power company No. 1.
Ha Thanh will become a partner in providing outline consultation for equitisation, share issuance, shareholder management and other services as the power company carries out its equitisation.
The power company will work with Ha Thanh to open transaction units and stock order agents at the power company’s several locations.
The General Director of Electricity of Viet Nam (EVN), Pham Le Thanh, said that the agreement aimed to fully utilise the two companies’ potential.
Cooperation enhancement between Ha Thanh Securities and Power Company No. 1 is regarded as the first step in the development of EVN’s multi-sectoral economic growth.
Source: VNA
Supply side shocks, liquidity drive inflation
Headline inflation picked up in August from 6.6 per cent at the end-2006 to 8.6 per cent year-on-year. This represents an inflation of 7.4 per cent in the first eight months of the year, somewhat below the real GDP growth of 7.8 per cent during the first half of the year.
Rising inflation was initially induced by a rapid increase in food prices, for example in staple crops, and then later in other goods, especially pork.
Non-food prices inched up only marginally during the same period from 5 per cent to 5.2 per cent year-on-year. While broadly stable, non-food price inflation is by no means low.
Categories with rapid price increases include housing and construction materials, and other goods and services, mainly personal consumption items. Except for transportation and education, most other prices are hovering between 5 and 8 per cent.
Adjusting for seasonal variations, the recent price acceleration can be seen clearly as a supply side shock. Non-food prices have been broadly stable at below 6 per cent since the third quarter of 2006, while food prices started to increase sharply from the early part of this year.
Food price inflation in Viet Nam reflects a region-wide development with China and Indonesia, in particular, experiencing a similar upswing. However, because of lower non-food inflation in these countries, Viet Nam’s headline inflation is one of the highest in the region.
Underlying factors
There are several underlying factors that could explain the recent pick up in inflation.
First, shortages of food arising from weather related calamities, compounded by foot-and-mouth and, most recently, blue-ear disease, have driven food prices higher, such as rice and pork, along with several vegetables and cooking oil.
Second, international commodity prices rose sharply in 2007, peaking in mid-year, and filtered through to the local market. For example, from the second quarter of 2006 to mid-2007, international cereal prices rose by 21 per cent, vegetable oil by 5 per cent, meat by 9 per cent, and metals by as much as 80 per cent.
Third, aggregate demand has remained strong during the first half of 2007, not only driving non-food inflation but also merchandise imports. The increase in imports helped to release some of the pressures from domestic demand. However, higher international prices also implied a sharp increase in the unit value of imports.
Fourth, the higher inflation in Viet Nam could partly be a relative price adjustment process, although a lack of quantitative evidence makes it difficult to affirm.
Policy and responses
The regular seasonal slowdown of economic activity in the first half of 2007 was less visible as strong domestic demand and exports helped sustain a high rate of GDP growth.
Non-oil exports recorded an overall growth of 28 per cent during the first eight months in US dollar terms, while strong domestic demand in response to large capital inflows and rising household incomes through the asset boom led to a pick up in consumer demand. Furthermore, investment remained robust in part due to increasing foreign direct investment (FDI) and construction.
Domestic sales data shows an increase of 23 per cent during the first eight months of the year, and construction sector rising by 10.5 per cent in the second quarter.
Moreover, non-oil import merchandise grew by 34 per cent during the same period, reflecting not only imports of capital and intermediate goods but also final consumer products such as cars and electronics.
As such, relatively low agricultural production compared with previous years was more than compensated by the strong growth in manufacturing, construction, and services.
Macroeconomic policies were broadly accommodative of these developments. The liquidity injection arising from foreign exchange market intervention was only partly sterilised, facilitating rapid private sector credit growth. Furthermore, credit expansion had a more direct impact on consumption than indirectly through the real balance effect by fuelling an asset boom and also through direct consumer loans.
Adding to this liquidity injection are private capital inflows, which in the case of dollarised economies, can add directly to domestic liquidity.
There was no added fiscal stimulus in the first half of the year as spending was contained.
However, the non-oil fiscal balance still remains well above 10 per cent of GDP. In other words, this amount represents a net fiscal injection of money into the economy that is not raised from local sources.
Short-term outlook
Inflation outlook is subject to various conditions. On the supply side, food inflation could pick up in the fourth quarter, repeating last year’s pattern, but is subject to weather conditions. Also, pork supply has not yet been brought under control, and will be an important factor in determining food inflation in the second half.
Overall inflation, however, will be influenced by macroeconomic policies. Policies implemented to date argue for some optimism.
Various measures introduced by the Government - for example State Bank of Viet Nam (SBV) Decision 03/2007 and Directive 03, and raising commercial banks’ required reserves by 100 per cent in June - helped absorb liquidity.
The longer maturity and larger quantity of SBV bills issued in recent months also helped to tighten the interbank market condition.
Assuming that the SBV will continue to do so in an environment where inflows have moderated due to the recent global financial turmoil related to the US sub-prime mortgage market, the rate of acceleration of monetary aggregates could be contained in the second half of the year.
Nevertheless, the recent cooling on the stock market by itself cannot assure containment of the asset boom as there is still ample liquidity that will search for other assets such as property.
On the fiscal policy side, the deferment of minimum wage increases by the Government and the containment of capital spending in the second half of the year will ensure that no added fiscal stimulus is provided to the economy.
Finally, the current moderation of inflows provides an opportunity for the Government to supplement the positive effect of the temporary reduction of tariff rates by intervening less rigorously in the foreign exchange market.
Higher inflation is a concern as it affects the poor more than the rich, especially if inflation is induced by an asset boom. Moreover, what matters is not whether inflation has exceeded GDP growth, but whether uncertainties created by high inflation is starting to have an adverse impact on economic growth itself.
Source: VNS
Rising inflation was initially induced by a rapid increase in food prices, for example in staple crops, and then later in other goods, especially pork.
Non-food prices inched up only marginally during the same period from 5 per cent to 5.2 per cent year-on-year. While broadly stable, non-food price inflation is by no means low.
Categories with rapid price increases include housing and construction materials, and other goods and services, mainly personal consumption items. Except for transportation and education, most other prices are hovering between 5 and 8 per cent.
Adjusting for seasonal variations, the recent price acceleration can be seen clearly as a supply side shock. Non-food prices have been broadly stable at below 6 per cent since the third quarter of 2006, while food prices started to increase sharply from the early part of this year.
Food price inflation in Viet Nam reflects a region-wide development with China and Indonesia, in particular, experiencing a similar upswing. However, because of lower non-food inflation in these countries, Viet Nam’s headline inflation is one of the highest in the region.
Underlying factors
There are several underlying factors that could explain the recent pick up in inflation.
First, shortages of food arising from weather related calamities, compounded by foot-and-mouth and, most recently, blue-ear disease, have driven food prices higher, such as rice and pork, along with several vegetables and cooking oil.
Second, international commodity prices rose sharply in 2007, peaking in mid-year, and filtered through to the local market. For example, from the second quarter of 2006 to mid-2007, international cereal prices rose by 21 per cent, vegetable oil by 5 per cent, meat by 9 per cent, and metals by as much as 80 per cent.
Third, aggregate demand has remained strong during the first half of 2007, not only driving non-food inflation but also merchandise imports. The increase in imports helped to release some of the pressures from domestic demand. However, higher international prices also implied a sharp increase in the unit value of imports.
Fourth, the higher inflation in Viet Nam could partly be a relative price adjustment process, although a lack of quantitative evidence makes it difficult to affirm.
Policy and responses
The regular seasonal slowdown of economic activity in the first half of 2007 was less visible as strong domestic demand and exports helped sustain a high rate of GDP growth.
Non-oil exports recorded an overall growth of 28 per cent during the first eight months in US dollar terms, while strong domestic demand in response to large capital inflows and rising household incomes through the asset boom led to a pick up in consumer demand. Furthermore, investment remained robust in part due to increasing foreign direct investment (FDI) and construction.
Domestic sales data shows an increase of 23 per cent during the first eight months of the year, and construction sector rising by 10.5 per cent in the second quarter.
Moreover, non-oil import merchandise grew by 34 per cent during the same period, reflecting not only imports of capital and intermediate goods but also final consumer products such as cars and electronics.
As such, relatively low agricultural production compared with previous years was more than compensated by the strong growth in manufacturing, construction, and services.
Macroeconomic policies were broadly accommodative of these developments. The liquidity injection arising from foreign exchange market intervention was only partly sterilised, facilitating rapid private sector credit growth. Furthermore, credit expansion had a more direct impact on consumption than indirectly through the real balance effect by fuelling an asset boom and also through direct consumer loans.
Adding to this liquidity injection are private capital inflows, which in the case of dollarised economies, can add directly to domestic liquidity.
There was no added fiscal stimulus in the first half of the year as spending was contained.
However, the non-oil fiscal balance still remains well above 10 per cent of GDP. In other words, this amount represents a net fiscal injection of money into the economy that is not raised from local sources.
Short-term outlook
Inflation outlook is subject to various conditions. On the supply side, food inflation could pick up in the fourth quarter, repeating last year’s pattern, but is subject to weather conditions. Also, pork supply has not yet been brought under control, and will be an important factor in determining food inflation in the second half.
Overall inflation, however, will be influenced by macroeconomic policies. Policies implemented to date argue for some optimism.
Various measures introduced by the Government - for example State Bank of Viet Nam (SBV) Decision 03/2007 and Directive 03, and raising commercial banks’ required reserves by 100 per cent in June - helped absorb liquidity.
The longer maturity and larger quantity of SBV bills issued in recent months also helped to tighten the interbank market condition.
Assuming that the SBV will continue to do so in an environment where inflows have moderated due to the recent global financial turmoil related to the US sub-prime mortgage market, the rate of acceleration of monetary aggregates could be contained in the second half of the year.
Nevertheless, the recent cooling on the stock market by itself cannot assure containment of the asset boom as there is still ample liquidity that will search for other assets such as property.
On the fiscal policy side, the deferment of minimum wage increases by the Government and the containment of capital spending in the second half of the year will ensure that no added fiscal stimulus is provided to the economy.
Finally, the current moderation of inflows provides an opportunity for the Government to supplement the positive effect of the temporary reduction of tariff rates by intervening less rigorously in the foreign exchange market.
Higher inflation is a concern as it affects the poor more than the rich, especially if inflation is induced by an asset boom. Moreover, what matters is not whether inflation has exceeded GDP growth, but whether uncertainties created by high inflation is starting to have an adverse impact on economic growth itself.
Source: VNS
Bosses try to ease investors’ jitters
The heads of four leading Vietnamese companies met with shareholders yesterday to allay fears amid tumbling share prices.
Investors fired more than 30 questions at bosses of the Refrigeration Electrical Engineering Corporation (REE), the Cables and Telecom Materials Company (SAM), the Gemadept Corporation (GMD) and the Kinh Do Corporation (KDC).
Top of investor concerns was falling prices - despite seemingly sound business performances and potential investment plans.
Sacom General Director Do Van Trac said three factors were chiefly to blame for declining stock values - the State’s macro-economic policies (such as the State Bank of Viet Nam’s decree 03), business results and investor confidence.
He said the most noticeable feature of the Vietnamese stock market was the imitative behaviour of investors.
"Vietnamese investors often follow each others’ decisions, which has a negative influence on share prices," said Trac.
"Investors cannot blame their losses on market factors, they must look to themselves. They should be patient and believe in their companies’ future, rather than just off-loading shares when they find prices go down, which makes the situation worse."
Trac added that he hoped the shareholder meeting would convince investors either to sell their shares or hold onto them.
GMD General Director Do Van Minh said prices had been inflated beyond their real value and that it was only normal to expect them to find their own level.
He said that GMD’s true share price lay between VND160,000 and VND180,000. Next year, if GMD profit’s grow by 30 per cent, as anticipated, investors could expect stock values to rise accordingly.
Investors also raised the issue of foreign ownership, which currently stands at 49 per cent of REE and GMD.
Investors asked if the companies intended to issue more shares to attract greater foreign investment to hike prices.
Minh said: "If the company issues more shares, we will try not to sell directly to foreign strategic shareholders in order to force them to buy on the stock exchange. This can make prices higher."
Trac said foreign investors now owned 40.3 per cent of SAM’s shares. He said if they wished to buy a larger stake in the company they would have to do it through the stock exchange. However, he doubted strategic shareholders would sell.
The chairwoman of REE Management Board, Nguyen Thi Mai Thanh, said her company would only issue more shares as part of its business plan.
On this issue investors expressed concerns about investment in real estate.
Thanh affirmed that REE’s main investments were in property and finance. She said profits from real estate investments this year would be VND100 billion (US$6.2 million), accounting for one-third of the company’s total targeted profit.
Source: VNS
Investors fired more than 30 questions at bosses of the Refrigeration Electrical Engineering Corporation (REE), the Cables and Telecom Materials Company (SAM), the Gemadept Corporation (GMD) and the Kinh Do Corporation (KDC).
Top of investor concerns was falling prices - despite seemingly sound business performances and potential investment plans.
Sacom General Director Do Van Trac said three factors were chiefly to blame for declining stock values - the State’s macro-economic policies (such as the State Bank of Viet Nam’s decree 03), business results and investor confidence.
He said the most noticeable feature of the Vietnamese stock market was the imitative behaviour of investors.
"Vietnamese investors often follow each others’ decisions, which has a negative influence on share prices," said Trac.
"Investors cannot blame their losses on market factors, they must look to themselves. They should be patient and believe in their companies’ future, rather than just off-loading shares when they find prices go down, which makes the situation worse."
Trac added that he hoped the shareholder meeting would convince investors either to sell their shares or hold onto them.
GMD General Director Do Van Minh said prices had been inflated beyond their real value and that it was only normal to expect them to find their own level.
He said that GMD’s true share price lay between VND160,000 and VND180,000. Next year, if GMD profit’s grow by 30 per cent, as anticipated, investors could expect stock values to rise accordingly.
Investors also raised the issue of foreign ownership, which currently stands at 49 per cent of REE and GMD.
Investors asked if the companies intended to issue more shares to attract greater foreign investment to hike prices.
Minh said: "If the company issues more shares, we will try not to sell directly to foreign strategic shareholders in order to force them to buy on the stock exchange. This can make prices higher."
Trac said foreign investors now owned 40.3 per cent of SAM’s shares. He said if they wished to buy a larger stake in the company they would have to do it through the stock exchange. However, he doubted strategic shareholders would sell.
The chairwoman of REE Management Board, Nguyen Thi Mai Thanh, said her company would only issue more shares as part of its business plan.
On this issue investors expressed concerns about investment in real estate.
Thanh affirmed that REE’s main investments were in property and finance. She said profits from real estate investments this year would be VND100 billion (US$6.2 million), accounting for one-third of the company’s total targeted profit.
Source: VNS
It’s time to buy shares
The Hong Kong and Shanghai Banking Corporation (HSBC) has released a new report in a series of reports about Vietnam’s national economy and financial market.
In the report, HSBC’s experts advise investors to buy Vietnamese stocks at this moment.
At the end of January 2007, HSBC gave the forecast that the VN Index would stand at the 900 point level by the end of this year, and the forecast was repeated in its latest report. After declining by 25% after hitting its peak in March, the VN Index has come back to the forecast level, making share items on the bourse become attractive – once again.
Vietnam’s national economy maintains high growth rates, 8.1% in the second quarter of 2007, while the foreign direct investment (FDI) keeps flowing into Vietnam in big quantities ($6.7bil to date, much higher than last year’s level of $2.8bil). Vietnam’s export growth rate is at 19%.
Meanwhile, the growth rate of the profit of listing companies proves to be very satisfactory. The net profit of the 12 companies which own the 12 blue chips saw the impressive growth rate of 83% in the first half of the year. Some of them saw profit double or triple that of the same period last year.
However, the report reminded investors that the high profit of the listing companies came from financial investment deals. Vinamilk (the Vietnam Dairy Products Company), for example, would have gained the net profit of 23% instead of 36% if it had not made financial investments.
As many companies have issued additional shares, the EPS proves to be much lower than the net profit growth rate. Anyway, the EPS in the first half of the year still grew by 35% over the same period of last year.
Investment fund management companies in Vietnam share the same view that EPS growth rate will be between 22% and 25% this year, and 15-20% in 2008. Meanwhile, the EPS growth rate of Indian companies is expected to be 9% this year and 20% next year. The figures are 15% and 19% for Chinese companies, respectively, and 19% and 11% for Malaysian companies. Therefore, investors may see that the EPS growth rate for Vietnamese companies is relatively attractive.
The prices of the stocks on Vietnam’s bourse are believed to have returned to the actual values. In March, when the market was very hot, the P/E was 37, and now it has fallen to 31. If considering that the EPS growth rate is 25% this year and 15% the next year, the P/E of 2008 would be 20.
Though share prices prove to be not so cheap, HSBC still believes that the current price levels are close to the actual values. According to HSBC, the VN Index is likely to reach the 1,100 point level by the end of 2008.
Until now, Vietnam has not born impacts of the world’s stock market crisis. The majority of foreign currencies on Vietnam’s market come from domestic funds, which do not have plans to sell.
In fact, only a small part of the total capital of foreign investment funds has been injected in the market. Funds are still holding onto capital, waiting for the share issuances in the last six months of the year. HSBV thinks that some $3bil more remains undisbursed. Once the VN Index is around the 900 point level, which foreign investors think is close to the actual value, the capital will be pumped into the market.
This explains the recovery of Vietnam’s stock market in the context of the world’s gloomy market. While Asian markets have witnessed sharp falls of 18% between July 24 and August 17, Vietnam’s saw the slight decrease of 9.6%, the lowest decrease among Asian markets.
Nevertheless, HSBC has warned that Vietnam’s stock market will be influenced if the world’s market continues fluctuating.
HSBC does not share the same viewpoint as Vietnamese officials that massive IPOs, slated for the remaining months of the year, will cause indigestion in the market due to oversupply. HSBC thinks that demand will increase when there is supply, saying that the IPOs may serve as a catalyst for the recovery of the market.
Source: VNE
In the report, HSBC’s experts advise investors to buy Vietnamese stocks at this moment.
At the end of January 2007, HSBC gave the forecast that the VN Index would stand at the 900 point level by the end of this year, and the forecast was repeated in its latest report. After declining by 25% after hitting its peak in March, the VN Index has come back to the forecast level, making share items on the bourse become attractive – once again.
Vietnam’s national economy maintains high growth rates, 8.1% in the second quarter of 2007, while the foreign direct investment (FDI) keeps flowing into Vietnam in big quantities ($6.7bil to date, much higher than last year’s level of $2.8bil). Vietnam’s export growth rate is at 19%.
Meanwhile, the growth rate of the profit of listing companies proves to be very satisfactory. The net profit of the 12 companies which own the 12 blue chips saw the impressive growth rate of 83% in the first half of the year. Some of them saw profit double or triple that of the same period last year.
However, the report reminded investors that the high profit of the listing companies came from financial investment deals. Vinamilk (the Vietnam Dairy Products Company), for example, would have gained the net profit of 23% instead of 36% if it had not made financial investments.
As many companies have issued additional shares, the EPS proves to be much lower than the net profit growth rate. Anyway, the EPS in the first half of the year still grew by 35% over the same period of last year.
Investment fund management companies in Vietnam share the same view that EPS growth rate will be between 22% and 25% this year, and 15-20% in 2008. Meanwhile, the EPS growth rate of Indian companies is expected to be 9% this year and 20% next year. The figures are 15% and 19% for Chinese companies, respectively, and 19% and 11% for Malaysian companies. Therefore, investors may see that the EPS growth rate for Vietnamese companies is relatively attractive.
The prices of the stocks on Vietnam’s bourse are believed to have returned to the actual values. In March, when the market was very hot, the P/E was 37, and now it has fallen to 31. If considering that the EPS growth rate is 25% this year and 15% the next year, the P/E of 2008 would be 20.
Though share prices prove to be not so cheap, HSBC still believes that the current price levels are close to the actual values. According to HSBC, the VN Index is likely to reach the 1,100 point level by the end of 2008.
Until now, Vietnam has not born impacts of the world’s stock market crisis. The majority of foreign currencies on Vietnam’s market come from domestic funds, which do not have plans to sell.
In fact, only a small part of the total capital of foreign investment funds has been injected in the market. Funds are still holding onto capital, waiting for the share issuances in the last six months of the year. HSBV thinks that some $3bil more remains undisbursed. Once the VN Index is around the 900 point level, which foreign investors think is close to the actual value, the capital will be pumped into the market.
This explains the recovery of Vietnam’s stock market in the context of the world’s gloomy market. While Asian markets have witnessed sharp falls of 18% between July 24 and August 17, Vietnam’s saw the slight decrease of 9.6%, the lowest decrease among Asian markets.
Nevertheless, HSBC has warned that Vietnam’s stock market will be influenced if the world’s market continues fluctuating.
HSBC does not share the same viewpoint as Vietnamese officials that massive IPOs, slated for the remaining months of the year, will cause indigestion in the market due to oversupply. HSBC thinks that demand will increase when there is supply, saying that the IPOs may serve as a catalyst for the recovery of the market.
Source: VNE
What can big corporations’ cooperation deals bring?
Analysts have been talking about the trend of “brand name trading”. This is when big corporations signs agreements on strategic partnership and cooperation.
A lot of cooperation agreements have been signed recently, between the Vietnam Post and Telecommunications Group (VNPT) and three corporations, Vincom (real estate developer), BIDV (bank) and Vinaconex (construction); between BIDV and the Vietnam Development Bank (VDB); between the Vietnam Coal and Mineral Industries Group (Vinacoal) and a transport works design company.
It has become a trend that big corporations cooperate with each other, which can help them share risks in doing business while allowing them to seek more profit.
VNPT, for example, is mainly a telecommunications service provider. However, with the cooperation with Vinaconex and Vincom, it is attempting to enter a new business field: construction and real estate. The enterprises that cooperate with VNPT will also benefit from having VNPT as a special partner in terms of access to its services.
The news about cooperation between corporations has brought about a lot of effects. One year ago, when the stock market was hot, news about cooperation deals helped a lot in making corporations’ shares more valuable. The shares of the companies involved in cooperation agreements skyrocketed right after mass media reported on the deals.
That explains why questions have been raised about the reasons for the partnerships.
VNPT now can establish a bank, while FPT, a software and informatics company, now can jump into other business fields, including finance and securities. Meanwhile, other enterprises have not made any moves after their hand shakings.
Vincom’s representatives stressed that the company did not intend to take advantage of VNPT to polish its image. VNPT and Vincom now have common, specific goals in capital investment, technology infrastructure for high-grade apartment areas.
According to VNPT’s representative, it will not happen that VNPT will be the sole service provider for Vincom. VNPT will have to compete with other rivals, though it has advantages as the strategic partner of Vincom.
Anyway, experts have warned that enterprises should think carefully before making cooperation deals. If the benefit the two sides can get does not satisfy enterprises, they will cheapen their brand names.
Source: VNE
A lot of cooperation agreements have been signed recently, between the Vietnam Post and Telecommunications Group (VNPT) and three corporations, Vincom (real estate developer), BIDV (bank) and Vinaconex (construction); between BIDV and the Vietnam Development Bank (VDB); between the Vietnam Coal and Mineral Industries Group (Vinacoal) and a transport works design company.
It has become a trend that big corporations cooperate with each other, which can help them share risks in doing business while allowing them to seek more profit.
VNPT, for example, is mainly a telecommunications service provider. However, with the cooperation with Vinaconex and Vincom, it is attempting to enter a new business field: construction and real estate. The enterprises that cooperate with VNPT will also benefit from having VNPT as a special partner in terms of access to its services.
The news about cooperation between corporations has brought about a lot of effects. One year ago, when the stock market was hot, news about cooperation deals helped a lot in making corporations’ shares more valuable. The shares of the companies involved in cooperation agreements skyrocketed right after mass media reported on the deals.
That explains why questions have been raised about the reasons for the partnerships.
VNPT now can establish a bank, while FPT, a software and informatics company, now can jump into other business fields, including finance and securities. Meanwhile, other enterprises have not made any moves after their hand shakings.
Vincom’s representatives stressed that the company did not intend to take advantage of VNPT to polish its image. VNPT and Vincom now have common, specific goals in capital investment, technology infrastructure for high-grade apartment areas.
According to VNPT’s representative, it will not happen that VNPT will be the sole service provider for Vincom. VNPT will have to compete with other rivals, though it has advantages as the strategic partner of Vincom.
Anyway, experts have warned that enterprises should think carefully before making cooperation deals. If the benefit the two sides can get does not satisfy enterprises, they will cheapen their brand names.
Source: VNE
What’s the fate of 6 blue chips on HOSE?
Having the total capitalisation volume of VND120tril ($7.5bil), six share items, SJS, STB, FPT, VNM, PPC, and PVD, now account for one-third of the total listing market capitalisation.
Domestic and foreign investors always refer to the prices of the six blue chips when making investment decisions, considering these the barometer of the stock market.
Several days ago, foreign investors were given an unexpected gift: as the securities depository centre made a mistake in defining the foreign ownership ratio in Sacombank, foreign investors could freely purchase many more Sacombank shares. Though the depository centre announced its mistake, foreign investors decided not to sell Sacombank shares in order to reduce the foreign ownership ratio to 30% as required. The event shows the big attractiveness of Sacombank shares (STB).
In the last trading sessions, STB has led the market in transaction volume. However, as the market remains quiet, STB’s price did not increase, selling at VND53,000/share on August 28.
According to Bui Ngoc Tuoc, a securities expert, though STB has high liquidity and low P/E index, it has several shortcomings that may worry investors.
First, STB have been listed in the largest quantity on the market with listed 442mil, many of which have been additionally issued, and at the moments when the demand was lower than supply.
Second, STB has witnessed a lot of changes in staff, while members of management board and their relatives have continuously sold STB recently.
Third, investors still want to keep the ‘wait-and-see’ attitude as they want to know how Sacombank will perform when many foreign banks enter the market and more local banks are set up.
Mr Tuoc said that if the shortcomings could be fixed, STB would still deserve to be listed among investors’ portfolios.
Once the hottest share item on the bourse, SJS has surrendered its first position to another item though it remains influential. When Song Da Corporation (the parent group of SJS) sold 6mil SJS shares, big doubts were left among investors.
Vu Chi Tung, an investor on SSI trading floor, said that this was one of the factors that had prompted him and other investors not to keep SJS any more. “Song Da would not have sold SJS in large quantities if SJS had been actually promising,” he said.
The director of a securities company said that SJS would have difficulty retaining its previous position as the real estate boom was over. Meanwhile, several other real estate firms, which also have big competitiveness, are also going to make IPOs or list on the bourse.
The director said that the actual value of SJS would be somewhere between VND200-250,000/share. If the real estate market does not witness a new price fever, and the company does not have business plans which promise fat profit, SJS will not be able to return to the over VND300,000/share level.
Recently, Vinamilk (VNM) has revealed its intention of listing on a foreign bourse. Together with STB, VNM is a big name among the six blue chips most wanted by investors. If the government approves the raising of foreign ownership ratio, and VNM lists on foreign bourses, VNM price will skyrocket. However, there is always a big gap between expectations and reality.
FPT prices slid dramatically recently from their highest peak. Three reasons have been cited to explain the sharp price decreases 1. bad rumours about FPT, which were not addressed timely 2. TPG registered to sell a large quantity of FPT 3. Two members of FPT registered to sell a large volume of FPT also at that time. Whether FPT prices can recover in the time to come will depend on many factors, while FPT’s management board has committed not to sell shares until the year’s end.
PPC, though having the lowest P/E index among the group of six (less than 17), has the lowest price level, at VND52,500/share.
The paradox has been explained by Electricity Engineer Tran Vinh Nghi: outdated equipment and low management skills both make PPC’s value low.
Meanwhile, PVD has overly high P/E (over 74), while the new projects of the company have not shown efficiency; therefore, investors dare not inject mooney in PVD. Moreover, if wanting to make investment in oil and gas companies, investors will have more choices in the near future, when more oil and gas enterprises are equitised.
Domestic and foreign investors always refer to the prices of the six blue chips when making investment decisions, considering these the barometer of the stock market.
Several days ago, foreign investors were given an unexpected gift: as the securities depository centre made a mistake in defining the foreign ownership ratio in Sacombank, foreign investors could freely purchase many more Sacombank shares. Though the depository centre announced its mistake, foreign investors decided not to sell Sacombank shares in order to reduce the foreign ownership ratio to 30% as required. The event shows the big attractiveness of Sacombank shares (STB).
In the last trading sessions, STB has led the market in transaction volume. However, as the market remains quiet, STB’s price did not increase, selling at VND53,000/share on August 28.
According to Bui Ngoc Tuoc, a securities expert, though STB has high liquidity and low P/E index, it has several shortcomings that may worry investors.
First, STB have been listed in the largest quantity on the market with listed 442mil, many of which have been additionally issued, and at the moments when the demand was lower than supply.
Second, STB has witnessed a lot of changes in staff, while members of management board and their relatives have continuously sold STB recently.
Third, investors still want to keep the ‘wait-and-see’ attitude as they want to know how Sacombank will perform when many foreign banks enter the market and more local banks are set up.
Mr Tuoc said that if the shortcomings could be fixed, STB would still deserve to be listed among investors’ portfolios.
Once the hottest share item on the bourse, SJS has surrendered its first position to another item though it remains influential. When Song Da Corporation (the parent group of SJS) sold 6mil SJS shares, big doubts were left among investors.
Vu Chi Tung, an investor on SSI trading floor, said that this was one of the factors that had prompted him and other investors not to keep SJS any more. “Song Da would not have sold SJS in large quantities if SJS had been actually promising,” he said.
The director of a securities company said that SJS would have difficulty retaining its previous position as the real estate boom was over. Meanwhile, several other real estate firms, which also have big competitiveness, are also going to make IPOs or list on the bourse.
The director said that the actual value of SJS would be somewhere between VND200-250,000/share. If the real estate market does not witness a new price fever, and the company does not have business plans which promise fat profit, SJS will not be able to return to the over VND300,000/share level.
Recently, Vinamilk (VNM) has revealed its intention of listing on a foreign bourse. Together with STB, VNM is a big name among the six blue chips most wanted by investors. If the government approves the raising of foreign ownership ratio, and VNM lists on foreign bourses, VNM price will skyrocket. However, there is always a big gap between expectations and reality.
FPT prices slid dramatically recently from their highest peak. Three reasons have been cited to explain the sharp price decreases 1. bad rumours about FPT, which were not addressed timely 2. TPG registered to sell a large quantity of FPT 3. Two members of FPT registered to sell a large volume of FPT also at that time. Whether FPT prices can recover in the time to come will depend on many factors, while FPT’s management board has committed not to sell shares until the year’s end.
PPC, though having the lowest P/E index among the group of six (less than 17), has the lowest price level, at VND52,500/share.
The paradox has been explained by Electricity Engineer Tran Vinh Nghi: outdated equipment and low management skills both make PPC’s value low.
Meanwhile, PVD has overly high P/E (over 74), while the new projects of the company have not shown efficiency; therefore, investors dare not inject mooney in PVD. Moreover, if wanting to make investment in oil and gas companies, investors will have more choices in the near future, when more oil and gas enterprises are equitised.
Thursday, August 30, 2007
VN-Index surpasses 900 point benchmark
Modest rises were witnessed in the two bourses this morning. In HCM bourse, VN-Index closed another session surviving the 900 level. The index closed at 903.94 points, up a slight 2.77 points against the session earlier. The market saw roughly 4.83 million shares changing hands, worth a combined VND 426.51 billion. The thing worth noting in the session this morning was HOSE’s electronic board suddenly going black for nearly one hour, which resulted in the reduced trading volume and orders placed by investors.
The number of rising stocks was reportedly around 54, while that of falling and still closed at 28 and 32, respectively. Some bluechips saw initial rebounds. BMC and TCT continued to draw much investors’ attention by their sharp rises and falls. The two stocks were back at the top of the top advancers list, increasing VND 25,000 and VND 17,000 each by the end of the session. Other sharp risers included KDC, HAS and BBC. Others closed at their reference prices, namely NKD, REE, RIC, SAM, STB, TDH, VNM, VSH, etc.
In the reverse direction, decliners saw moderate falls. The two most severely hit by price falls on the bourse, ABT and IMP each suffereed VND 4,000. The remaining decliners saw modest falls. 20 out of 28 decliners restricted their falls to VND 1,000 only.
In terms of trade volume, TNC put an end to its string of rising sessions since its bourse debut one week ago. The stock’s volume was reduced sharply to one third that of yesterday, prompting STB to regain its posisition as the most-heavily traded stock. Next active stocks were FPT, VSH and VNM.
Closing the session this morning, HaSTC closed at 251.28 points, up a very slight 0.8 points, or 0.31% against the session earlier. The market saw rougly 747,600 units changing hands, worth a combined VND 68.22 billion. There were 39 rising stocks, 30 falling stocks and 20 stills.
Things barely changed over the course of the last couple of trading sessions. Stocks saw moderate ups and downs, except for S99, the stock of sharp increments. NTP was reportedly the stock on highest rise, gaining an additional VND 4,500 to its reference price. Next in the list were SD9, BVS, SD3 and PLC. Of the remaining 34 falling stocks, 24 saw decreases less than VND 1,000 and 10 others in VND 1-2,000 each.
In the reverse direction, the bourse’s new comer, SSS, ebbed VND 3,000 with volume amounting to 1,700 units. Next in the top losers list were STC, MCO, HTP and PSC with decreases ranging from VND 15,000-2,500 each.
In terms of trading volume, 5 stocks of heaviest trade were NTP, ACB, SSI, SD9 and PVI. SSI saw a severe decline in volume, which fell short of 100,000 units. NTP and ACB, on the contrary, saw trade exceeding that level. Foreign investors bought in 119,300 shares of different stocks while sold out 100 SSI shares only.
Source: Infotv
The number of rising stocks was reportedly around 54, while that of falling and still closed at 28 and 32, respectively. Some bluechips saw initial rebounds. BMC and TCT continued to draw much investors’ attention by their sharp rises and falls. The two stocks were back at the top of the top advancers list, increasing VND 25,000 and VND 17,000 each by the end of the session. Other sharp risers included KDC, HAS and BBC. Others closed at their reference prices, namely NKD, REE, RIC, SAM, STB, TDH, VNM, VSH, etc.
In the reverse direction, decliners saw moderate falls. The two most severely hit by price falls on the bourse, ABT and IMP each suffereed VND 4,000. The remaining decliners saw modest falls. 20 out of 28 decliners restricted their falls to VND 1,000 only.
In terms of trade volume, TNC put an end to its string of rising sessions since its bourse debut one week ago. The stock’s volume was reduced sharply to one third that of yesterday, prompting STB to regain its posisition as the most-heavily traded stock. Next active stocks were FPT, VSH and VNM.
Closing the session this morning, HaSTC closed at 251.28 points, up a very slight 0.8 points, or 0.31% against the session earlier. The market saw rougly 747,600 units changing hands, worth a combined VND 68.22 billion. There were 39 rising stocks, 30 falling stocks and 20 stills.
Things barely changed over the course of the last couple of trading sessions. Stocks saw moderate ups and downs, except for S99, the stock of sharp increments. NTP was reportedly the stock on highest rise, gaining an additional VND 4,500 to its reference price. Next in the list were SD9, BVS, SD3 and PLC. Of the remaining 34 falling stocks, 24 saw decreases less than VND 1,000 and 10 others in VND 1-2,000 each.
In the reverse direction, the bourse’s new comer, SSS, ebbed VND 3,000 with volume amounting to 1,700 units. Next in the top losers list were STC, MCO, HTP and PSC with decreases ranging from VND 15,000-2,500 each.
In terms of trading volume, 5 stocks of heaviest trade were NTP, ACB, SSI, SD9 and PVI. SSI saw a severe decline in volume, which fell short of 100,000 units. NTP and ACB, on the contrary, saw trade exceeding that level. Foreign investors bought in 119,300 shares of different stocks while sold out 100 SSI shares only.
Source: Infotv
Kinh Do sees one third '07 profit rise
Vietnam's Kinh Do Food Corporation (KDC) expects its net profit to rise by one third this year and to complete the takeovers of two subsidiaries, including North Kinh Do Food Co (NKD), an executive said on Thursday.
Le Phung Hao, Deputy General Director of the Ho Chi Minh City-based firm, said this year's net profit would rise 37.8 percent from 2006 to 332 billion dong ($20.5 million) and to 572 billion dong ($35.4 million) next year.
"We will complete the acquisitions within this year after a share issue for which we are seeking licence from the State Securities Commission," Hao told Reuters on the sidelines of a conference in Hanoi.
In April, Kinh Do said it would issue 11 million shares to raise funds for three property projects and lift its registered capital by 30.6 percent to 470 billion dong ($29 million).
"We need more than 1,200 billion dong for our property projects," Hao said.
The projects include an office building in downtown Ho Chi Minh City, a shopping mall and office complex and an apartment building.
"Foreign investors are arriving in Vietnam, people's living standards are also getting higher, so the pressure on housing in Ho Chi Minh City is huge," Hao said.
Kinh Do was also running a venture with a Vietnamese military company to build a complex of office, trade promotion facilities and apartments in Ho Chi Minh City, he said.
Kinh Do's future business would include food processing, retail property and financial investment with food processing still contributing 70-80 percent of revenues, Hao said.
After the share issue, Kinh Do will take over the North Kinh Do Food Company, based in the northern province of Hung Yen.
It would be the first acquisition between two firms listed on the country's fledgling stock market, which has risen about 20 percent so far this year after a 144 percent surge last year.
North Kinh Do, which has a market value of $144 million, makes cakes, snacks and processes foods for domestic markets and export to the United States and Taiwan. Its shares last traded flat at 230,000 dong ($14.2) each.
Kinh Do makes food, confectionaries and fruit juice. It is also a general trading firm, dealing with a wide range of goods from textiles and electric appliances to stationery, fruit and vegetables.
Shares in Kinh Do ended up 2.04 percent at 250,000 dong ($15.5) on Thursday, valuing the company at $557 million.
It would also take over Kido Company, another subsidiary in the 10-member Kinh Do group, Hao said.
Source: Reuters
Le Phung Hao, Deputy General Director of the Ho Chi Minh City-based firm, said this year's net profit would rise 37.8 percent from 2006 to 332 billion dong ($20.5 million) and to 572 billion dong ($35.4 million) next year.
"We will complete the acquisitions within this year after a share issue for which we are seeking licence from the State Securities Commission," Hao told Reuters on the sidelines of a conference in Hanoi.
In April, Kinh Do said it would issue 11 million shares to raise funds for three property projects and lift its registered capital by 30.6 percent to 470 billion dong ($29 million).
"We need more than 1,200 billion dong for our property projects," Hao said.
The projects include an office building in downtown Ho Chi Minh City, a shopping mall and office complex and an apartment building.
"Foreign investors are arriving in Vietnam, people's living standards are also getting higher, so the pressure on housing in Ho Chi Minh City is huge," Hao said.
Kinh Do was also running a venture with a Vietnamese military company to build a complex of office, trade promotion facilities and apartments in Ho Chi Minh City, he said.
Kinh Do's future business would include food processing, retail property and financial investment with food processing still contributing 70-80 percent of revenues, Hao said.
After the share issue, Kinh Do will take over the North Kinh Do Food Company, based in the northern province of Hung Yen.
It would be the first acquisition between two firms listed on the country's fledgling stock market, which has risen about 20 percent so far this year after a 144 percent surge last year.
North Kinh Do, which has a market value of $144 million, makes cakes, snacks and processes foods for domestic markets and export to the United States and Taiwan. Its shares last traded flat at 230,000 dong ($14.2) each.
Kinh Do makes food, confectionaries and fruit juice. It is also a general trading firm, dealing with a wide range of goods from textiles and electric appliances to stationery, fruit and vegetables.
Shares in Kinh Do ended up 2.04 percent at 250,000 dong ($15.5) on Thursday, valuing the company at $557 million.
It would also take over Kido Company, another subsidiary in the 10-member Kinh Do group, Hao said.
Source: Reuters
Sacom to invest $24.7 mln in new bank
Vietnam telecommunications cable maker Sacom (SAM) plans to invest 400 billion dong ($24.7 million) in a 20-percent stake in a start-up bank, its chief executive said on Thursday.
Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.
"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.
Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.
"The bank operation would rely on these investors with their working capital," Trac said.
When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.
Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.
More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.
Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.
But in recent years it has been seeking to branch out into real estate and telecoms services.
Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.
He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.
VNPT has a stake of about 31 percent in Sacom.
Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.
Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.
Source: Reuters
Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.
"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.
Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.
"The bank operation would rely on these investors with their working capital," Trac said.
When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.
Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.
More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.
Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.
But in recent years it has been seeking to branch out into real estate and telecoms services.
Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.
He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.
VNPT has a stake of about 31 percent in Sacom.
Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.
Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.
Source: Reuters
REE makes foray into banking, brokerage
Vietnamese engineering firm Refrigeration Electrical Engineering Co. (REE) plans to invest in two start-up banks in Vietnam as it diversifies into financial services, its chief executive said on Thursday.
Communist Vietnam's banking sector is experiencing growth of more than 20 percent in loans and deposits, fuelled by a fast-growing economy where 85 million people hold just 5 million bank accounts.
"These are new banks which are applying for licences," REE CEO Nguyen Thi Mai Thanh told Reuters on the sidelines of a conference in Hanoi without identifying the lenders.
She said one bank would have a registered capital of 1 trillion dong ($62 million) and another, registered capital of 1.2 trillion dong. The licences have not yet been issued.
Thanh said Ho Chi Minh City-based REE has invested 834 billion dong ($52 million) in shares of Vietnamese banks such as Sacombank (STB), bonds, as well as shares of listed and unlisted firms so far.
Online newspaper VnExpress on Thursday quoted Thanh as saying REE would invest $10 million in the two banks and would also establish its own securities subsidiary.
Shares in REE closed flat at 131,000 dong ($8.1) on Thursday, valuing the firm at $664 million.
Thanh said in the long run, REE expects its core engineering business to generate one third of its profits, property to bring one third and financial investments another third.
REE's net profit is expected to rise 51 percent to 245 billion dong ($15 million) this year as revenues would more than double to 1 trillion dong ($62 million), she said at the conference.
REE, one of Vietnam's first two listed firms when the Ho Chi Minh Stock Exchange opened in July 2000, has targeted an overall growth of at least 20 percent a year until 2010 when its net profit would grow to 800 billion dong, Thanh added.
REE's current core business is in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE also operates a software park in Ho Chi Minh City.
Thanh said REE has been building to add 40,000 square metres of office space, residential areas and industrial zones to bring its total space for lease at the year end to 110,000 square metres and that should generate $15 million in revenues by 2009.
"Until 2010 we would expand our space for lease to 200,000 square metres," she said.
REE's pre-tax profit jumped 55.6 percent in the first seven months of 2007 from a year earlier to nearly $15 million on strong construction demand, the company said
Source: Reuters
Communist Vietnam's banking sector is experiencing growth of more than 20 percent in loans and deposits, fuelled by a fast-growing economy where 85 million people hold just 5 million bank accounts.
"These are new banks which are applying for licences," REE CEO Nguyen Thi Mai Thanh told Reuters on the sidelines of a conference in Hanoi without identifying the lenders.
She said one bank would have a registered capital of 1 trillion dong ($62 million) and another, registered capital of 1.2 trillion dong. The licences have not yet been issued.
Thanh said Ho Chi Minh City-based REE has invested 834 billion dong ($52 million) in shares of Vietnamese banks such as Sacombank (STB), bonds, as well as shares of listed and unlisted firms so far.
Online newspaper VnExpress on Thursday quoted Thanh as saying REE would invest $10 million in the two banks and would also establish its own securities subsidiary.
Shares in REE closed flat at 131,000 dong ($8.1) on Thursday, valuing the firm at $664 million.
Thanh said in the long run, REE expects its core engineering business to generate one third of its profits, property to bring one third and financial investments another third.
REE's net profit is expected to rise 51 percent to 245 billion dong ($15 million) this year as revenues would more than double to 1 trillion dong ($62 million), she said at the conference.
REE, one of Vietnam's first two listed firms when the Ho Chi Minh Stock Exchange opened in July 2000, has targeted an overall growth of at least 20 percent a year until 2010 when its net profit would grow to 800 billion dong, Thanh added.
REE's current core business is in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE also operates a software park in Ho Chi Minh City.
Thanh said REE has been building to add 40,000 square metres of office space, residential areas and industrial zones to bring its total space for lease at the year end to 110,000 square metres and that should generate $15 million in revenues by 2009.
"Until 2010 we would expand our space for lease to 200,000 square metres," she said.
REE's pre-tax profit jumped 55.6 percent in the first seven months of 2007 from a year earlier to nearly $15 million on strong construction demand, the company said
Source: Reuters
Vietnam's Gemadept to build $410 mln container port
Vietnam's top forwarder Gemadept Corporation will start building a $410 million deep-water container port in early 2008 to handle more transhipments, its chief executive said on Thursday.
"So far transhipments are carried out in Singapore, Taiwan or Hong Kong but when we put the port into operation, ships from the United States could come directly to Cai Mep port for transhipments to regional countries," Gemadept CEO Do Van Minh told reporters.
The government has identified Cai Mep container port as one of five ports to be built in the southern province of Ba Ria-Vung Tau by 2010 to serve the region which handles 70 percent of containers in the country.
The five ports will be used when the government relocates Saigon Port and related facilities from Ho Chi Minh City over the next few years.
"We will strive to start construction in early 2008 and complete it in 2010," Minh said at a conference in Hanoi.
He did not say how much Gemadept would invest in the port which is designed to have a depth of 16 metres.
Minh said Gemadept has been building two more ports in the central region, the $36-million Dung Quat port and the $230-million Nhon Hoi port, each to get a 55 percent of investment from Gemadept.
Shares in Gemadept traded up 0.8 percent to 126,000 dong ($7.8) on Thursday, valueing the company at $336 million.
The Ho Chi Minh City-based company operates ports, provides logistics services including container transport and acts as an agent for several dozen foreign shipping lines.
Its two warehouses of 40,000 square metres are Vietnam's largest facility for stocking coffee.
Minh said Gemadept has also been diversifying its business into property and financial investment.
Source: Reuters
"So far transhipments are carried out in Singapore, Taiwan or Hong Kong but when we put the port into operation, ships from the United States could come directly to Cai Mep port for transhipments to regional countries," Gemadept CEO Do Van Minh told reporters.
The government has identified Cai Mep container port as one of five ports to be built in the southern province of Ba Ria-Vung Tau by 2010 to serve the region which handles 70 percent of containers in the country.
The five ports will be used when the government relocates Saigon Port and related facilities from Ho Chi Minh City over the next few years.
"We will strive to start construction in early 2008 and complete it in 2010," Minh said at a conference in Hanoi.
He did not say how much Gemadept would invest in the port which is designed to have a depth of 16 metres.
Minh said Gemadept has been building two more ports in the central region, the $36-million Dung Quat port and the $230-million Nhon Hoi port, each to get a 55 percent of investment from Gemadept.
Shares in Gemadept traded up 0.8 percent to 126,000 dong ($7.8) on Thursday, valueing the company at $336 million.
The Ho Chi Minh City-based company operates ports, provides logistics services including container transport and acts as an agent for several dozen foreign shipping lines.
Its two warehouses of 40,000 square metres are Vietnam's largest facility for stocking coffee.
Minh said Gemadept has also been diversifying its business into property and financial investment.
Source: Reuters
Shinpetrol to start small refinery in Sept
LPG trader Shinpetrol (VSP) will start operating a small oil refinery with an initial capacity of 2,000 barrels per day in southern Vietnam next month, state media reported on Thursday.
The refinery in the Mekong Delta city of Can Tho was expected to have an internal rate of return of 23.46 percent, the Dau Tu Chung Khoan (Stock Investment) magazine quoted Chief Executive Nguyen Duy Hung as saying.
The plant, which has a small terminal for 1,000-DWT vessels, will produce oil products including fuel oil, diesel, LPG and gasoline, Hung said.
He also said the firm planned to upgrade the terminal to receive bigger tankers of about 10,000 DWT.
Shinpetrol, a subsidiary of Vietnam's largest state-owned shipbuilder Vinashin, has set a target to achieve revenue of 752 billion dong ($47 million) this year.
Vietnam is Southeast Asia's third-largest crude oil producer but still relies on oil product imports as it lacks major oil refineries.
Its first large-scale oil refinery, Dung Quat, will have a capacity of 130,000 barrels per day when it begins operations by February 2009.
Source: Reuters
The refinery in the Mekong Delta city of Can Tho was expected to have an internal rate of return of 23.46 percent, the Dau Tu Chung Khoan (Stock Investment) magazine quoted Chief Executive Nguyen Duy Hung as saying.
The plant, which has a small terminal for 1,000-DWT vessels, will produce oil products including fuel oil, diesel, LPG and gasoline, Hung said.
He also said the firm planned to upgrade the terminal to receive bigger tankers of about 10,000 DWT.
Shinpetrol, a subsidiary of Vietnam's largest state-owned shipbuilder Vinashin, has set a target to achieve revenue of 752 billion dong ($47 million) this year.
Vietnam is Southeast Asia's third-largest crude oil producer but still relies on oil product imports as it lacks major oil refineries.
Its first large-scale oil refinery, Dung Quat, will have a capacity of 130,000 barrels per day when it begins operations by February 2009.
Source: Reuters
Govt gives green light on Vietcombank equitisation
The plan on equitising Vietcombank was approved in principle by the government yesterday, Vietcombank’s leader confirmed this morning, saying that the official decision would be made next week.
The government has agreed to the proposals of international consultants and auditors relating to the bank’s appraisal in accordance with international standards. This means that Vietcombank’s appraisal process will be quick and in good order, while passing over some steps.
After the equitisation, the bank will be allowed to apply the corporate governance method in accordance with the best possible international standards, provided that these do not come contrary to Vietnam’s regulations. The decision by the government has helped remove investors’ worries that the equitised Vietcombank would be a ‘new decanter with old wine inside’ (i.e. Vietcombank will operate under the previously applied mechanism after the equitisation).
According to an official from Vietcombank, the government has been paying special attention to the selection of strategic partners. Under the previous plan, Vietcombank would set the timetable for making IPO first, and then define the selling prices of shares applied to strategic investors. But now the government has set higher requirements on choosing strategic investors and leaves the IPO timetable open. Vietcombank may choose strategic investors before making IPO.
The official stressed that the selling prices applied to strategic foreign investors would be independent from the IPO prices. Vietcombank will submit prices for strategic foreign investors for the government’s approval.
“Prices will not be the most important factor Vietcombank will rely on to seek foreign strategic investors. Vietcombank will highly rate the technical support, investment cooperation, and especially, the duration to hold shares after the listing,” the official said.
The government proves to be very ‘open’ when saying that if foreign investors make good commitments, the government will give preferences back to Vietcombank.
In special cases, foreign investors can hold more than the currently applied ceiling foreign ownership ratio of 15%, the official said.
Vietcombank has wrapped up the two rounds of negotiations with the short-listed bidders. It is expected that the partners will send the final offers one week after the government approves the equitisation plan. If so, Vietcombank will submit its ideas to the government on September 20, and will officially announce the foreign strategic partners in early October.
Source: VNE
The government has agreed to the proposals of international consultants and auditors relating to the bank’s appraisal in accordance with international standards. This means that Vietcombank’s appraisal process will be quick and in good order, while passing over some steps.
After the equitisation, the bank will be allowed to apply the corporate governance method in accordance with the best possible international standards, provided that these do not come contrary to Vietnam’s regulations. The decision by the government has helped remove investors’ worries that the equitised Vietcombank would be a ‘new decanter with old wine inside’ (i.e. Vietcombank will operate under the previously applied mechanism after the equitisation).
According to an official from Vietcombank, the government has been paying special attention to the selection of strategic partners. Under the previous plan, Vietcombank would set the timetable for making IPO first, and then define the selling prices of shares applied to strategic investors. But now the government has set higher requirements on choosing strategic investors and leaves the IPO timetable open. Vietcombank may choose strategic investors before making IPO.
The official stressed that the selling prices applied to strategic foreign investors would be independent from the IPO prices. Vietcombank will submit prices for strategic foreign investors for the government’s approval.
“Prices will not be the most important factor Vietcombank will rely on to seek foreign strategic investors. Vietcombank will highly rate the technical support, investment cooperation, and especially, the duration to hold shares after the listing,” the official said.
The government proves to be very ‘open’ when saying that if foreign investors make good commitments, the government will give preferences back to Vietcombank.
In special cases, foreign investors can hold more than the currently applied ceiling foreign ownership ratio of 15%, the official said.
Vietcombank has wrapped up the two rounds of negotiations with the short-listed bidders. It is expected that the partners will send the final offers one week after the government approves the equitisation plan. If so, Vietcombank will submit its ideas to the government on September 20, and will officially announce the foreign strategic partners in early October.
Source: VNE
VND devaluates 0.8%: Citibank
Citibank experts say in a newly released report that the local currency has lost 0.8% in value since July 2007, and that the VND is at risk of further devaluating in the time to come.
Citibank on August 29 released a report about Asia’s economy, which mentions the key problems of Vietnam at this moment: inflation, monetary policy and external risks.
The report says that there are no signs of inflation decreasing due to the price increases of food and construction materials. The government has decided to lower import taxes on several kinds of products, but it will still take time to confirm the impacts of the decision on retail prices.
Citibank says it’s a possibility that the inflation rate will be lower than the GDP growth rate, which is estimated to reach 8% in 2007. However, this will happen only if crude oil can be stabilised and Vietnam continues tightening its monetary policy, and controlling the prices of key products.
Regarding the value of the local currency, Citibank says that the local currency has devaluated by 0.8% since the end of July. The demand of enterprises and importers for dollars has increased. The wider gap in the purchasing and selling prices between the VND and the greenback also shows less demand for VND compared to the greenback.
Regarding external risks, Citibank says that the trade gap doubled between January and July 2007 due to the sharp increases of imports.
Despite the big difficulties caused by the high inflation rate and the external risks, Citibank’s experts give the optimistic conclusion that Vietnam’s national economy will be firm enough to deal with the difficulties. Industrial value in July increased by 18.7% over the same period last year, while retail turnover increased by 23.1%, and foreign direct investment by 49.8%.
The increased demand on the domestic market will make up for the trade gap. Moreover, one of the factors that lead the experts to give the optimistic conclusion is the successful reelection of Prime Minister Nguyen Tan Dung. The new cabinet which comprises young and intellectual members is expected to actively impact the national economy.
Citibank’s experts also discuss some risks for Vietnam, including a food shortage and further price increases due to animal epidemics, as well as the further devaluation of the local currency.
Source: VNE
Citibank on August 29 released a report about Asia’s economy, which mentions the key problems of Vietnam at this moment: inflation, monetary policy and external risks.
The report says that there are no signs of inflation decreasing due to the price increases of food and construction materials. The government has decided to lower import taxes on several kinds of products, but it will still take time to confirm the impacts of the decision on retail prices.
Citibank says it’s a possibility that the inflation rate will be lower than the GDP growth rate, which is estimated to reach 8% in 2007. However, this will happen only if crude oil can be stabilised and Vietnam continues tightening its monetary policy, and controlling the prices of key products.
Regarding the value of the local currency, Citibank says that the local currency has devaluated by 0.8% since the end of July. The demand of enterprises and importers for dollars has increased. The wider gap in the purchasing and selling prices between the VND and the greenback also shows less demand for VND compared to the greenback.
Regarding external risks, Citibank says that the trade gap doubled between January and July 2007 due to the sharp increases of imports.
Despite the big difficulties caused by the high inflation rate and the external risks, Citibank’s experts give the optimistic conclusion that Vietnam’s national economy will be firm enough to deal with the difficulties. Industrial value in July increased by 18.7% over the same period last year, while retail turnover increased by 23.1%, and foreign direct investment by 49.8%.
The increased demand on the domestic market will make up for the trade gap. Moreover, one of the factors that lead the experts to give the optimistic conclusion is the successful reelection of Prime Minister Nguyen Tan Dung. The new cabinet which comprises young and intellectual members is expected to actively impact the national economy.
Citibank’s experts also discuss some risks for Vietnam, including a food shortage and further price increases due to animal epidemics, as well as the further devaluation of the local currency.
Source: VNE
PM’s decision brings millions of clients to banks
The instruction by the Prime Minister on paying salaries to state officials through bank accounts proves to be good news for banks as banks will have several million more clients.
State employees at ministries, government agencies, and central People’s Committees will receive their salaries through bank accounts under a newly-implemented instruction passed by the Prime Minister.
In fact, salary payments for retired officials through the bank have been implemented on a trial basis in HCM City since June 2006.
Cao Van Sang, Deputy Director of the HCM City Social Insurance, said that there were 90,000 pension and social allowance beneficiaries in HCM City, who receive VND100bil a month. Therefore, the payment through banks would benefit both the beneficiaries and the city’s social insurance.
Tran Phuong Binh, Director General of East Asia Bank (EAB), acknowledged that the Prime Minister’s instruction was good news for banks.
EAB has been providing payment services to retired state officials in HCM City since April 2007, and now the bank has begun providing the services in Tien Giang province.
In fact, EAB and 20 other banks have been providing payment services to several million labourers of many enterprises in HCM City.
According to the State Bank of Vietnam, to date, 20 banks have issued payment cards with 6.2mil issued cards, four car alliances, which own 3,800 auto teller machines (ATMs) nationwide. If banks and alliances can cooperate with each other well, the salary payments through banks will not be a technical problem for banks.
Commercial banks have applauded the Prime Minister’s decision, which aims to fight against corruption and fulfill the plan on non-cash payment in the 2006-2010 period approved in late 2006. The credit operation director of a bank said that banks would have several million more clients. Banks can collect fees not only from transactions, but also from a lot of other services that the clients will use.
“If clients can be served well, they will think of making deposits, borrowing money and use other services of the banks,” he said.
In fact, many banks have been trying to provide additional services to clients who receive salaries through bank accounts. EAB, for example, allows the overdraft of up to five-month salaries. The bank also exempts them from paying card issuance fees, fees for paying salaries and annual fees for the first two years. Meanwhile, ACB offers them loans worth up to VND100mil with no mortgaged assets.
A lot of other banks, including An Binh, Techcombank, Military Bank and Habubank, also offer preferences for their clients who collect their salaries at the banks. Owning ATM cards, the salary receivers can enjoy interest on the account balance, can borrow sums of money equal to one-month pay with the soft interest rate of 0.05%/day with no mortgaged assets. Moreover, clients can exchange foreign currencies, pay water, electricity, telephone, and cable TV bills as well.
However, the current technical facilities of commercial banks have not satisfied clients. Except from Vietcombank, which has a wide ATM network, clients of other banks find it hard to withdraw money when necessary if they are far from downtown. Meanwhile, as four card alliances now exist, clients of one bank are not able to use the ATMs of all other banks, thus causing inconvenience to clients.
Source: VNE
State employees at ministries, government agencies, and central People’s Committees will receive their salaries through bank accounts under a newly-implemented instruction passed by the Prime Minister.
In fact, salary payments for retired officials through the bank have been implemented on a trial basis in HCM City since June 2006.
Cao Van Sang, Deputy Director of the HCM City Social Insurance, said that there were 90,000 pension and social allowance beneficiaries in HCM City, who receive VND100bil a month. Therefore, the payment through banks would benefit both the beneficiaries and the city’s social insurance.
Tran Phuong Binh, Director General of East Asia Bank (EAB), acknowledged that the Prime Minister’s instruction was good news for banks.
EAB has been providing payment services to retired state officials in HCM City since April 2007, and now the bank has begun providing the services in Tien Giang province.
In fact, EAB and 20 other banks have been providing payment services to several million labourers of many enterprises in HCM City.
According to the State Bank of Vietnam, to date, 20 banks have issued payment cards with 6.2mil issued cards, four car alliances, which own 3,800 auto teller machines (ATMs) nationwide. If banks and alliances can cooperate with each other well, the salary payments through banks will not be a technical problem for banks.
Commercial banks have applauded the Prime Minister’s decision, which aims to fight against corruption and fulfill the plan on non-cash payment in the 2006-2010 period approved in late 2006. The credit operation director of a bank said that banks would have several million more clients. Banks can collect fees not only from transactions, but also from a lot of other services that the clients will use.
“If clients can be served well, they will think of making deposits, borrowing money and use other services of the banks,” he said.
In fact, many banks have been trying to provide additional services to clients who receive salaries through bank accounts. EAB, for example, allows the overdraft of up to five-month salaries. The bank also exempts them from paying card issuance fees, fees for paying salaries and annual fees for the first two years. Meanwhile, ACB offers them loans worth up to VND100mil with no mortgaged assets.
A lot of other banks, including An Binh, Techcombank, Military Bank and Habubank, also offer preferences for their clients who collect their salaries at the banks. Owning ATM cards, the salary receivers can enjoy interest on the account balance, can borrow sums of money equal to one-month pay with the soft interest rate of 0.05%/day with no mortgaged assets. Moreover, clients can exchange foreign currencies, pay water, electricity, telephone, and cable TV bills as well.
However, the current technical facilities of commercial banks have not satisfied clients. Except from Vietcombank, which has a wide ATM network, clients of other banks find it hard to withdraw money when necessary if they are far from downtown. Meanwhile, as four card alliances now exist, clients of one bank are not able to use the ATMs of all other banks, thus causing inconvenience to clients.
Source: VNE
Rule to tighten cap on insurance company shareholding
A draft Ministry of Finance regulation would limit individuals and organisations to holding no more than 10% and 20%, respectively, of insurance company's total equity.
The policy would apply to both domestic and foreign investors, said the ministry.
The limits would help ensure that insurance companies are not dominated by a few major shareholders and would help maintain sustainable development over the long term for newly created insurance companies, said Phung Dac Loc, general secretary of the Viet Nam Insurance Association.
The director of Ernst & Young Viet Nam's business consulting sector, Allanda McConnell, disagreed, saying that the ownership limits would make investment in domestic insurance companies less attractive to foreign investors.
Local players' capacity in terms of technology, management and business strategy is still limited,. McConnell said. The presence of strategic investors with higher stakes in these local companies was a positive solution to these shortcomings.
A 49-per-cent limit, similar to the rate stipulated for foreign individuals and organisations investing in companies listed on the stock market, would be suitable, she suggested.
Currently, there are only some 40 insurers operating on the market. Many foreign insurers are eyeing the market, and many domestic banks were also developing financial group models to expand their businesses into the insurance arena.
The issuance of stricter regulations on the insurance industry has limited the number of new insurance companies, however, with Agribank Insurance Joint Stock Co, established earlier this month, the only new player on the market.
Earlier this year, the Ministry of Finance issued Decree No 46 stipulating that non-life insurance companies have legal capital of at least VND300bil (US$18.75mil), up from the previous VND70bil. Life insurers were required to have capital of VND600bil ($37.5mil), up from VND140bil.
Source: VNE
The policy would apply to both domestic and foreign investors, said the ministry.
The limits would help ensure that insurance companies are not dominated by a few major shareholders and would help maintain sustainable development over the long term for newly created insurance companies, said Phung Dac Loc, general secretary of the Viet Nam Insurance Association.
The director of Ernst & Young Viet Nam's business consulting sector, Allanda McConnell, disagreed, saying that the ownership limits would make investment in domestic insurance companies less attractive to foreign investors.
Local players' capacity in terms of technology, management and business strategy is still limited,. McConnell said. The presence of strategic investors with higher stakes in these local companies was a positive solution to these shortcomings.
A 49-per-cent limit, similar to the rate stipulated for foreign individuals and organisations investing in companies listed on the stock market, would be suitable, she suggested.
Currently, there are only some 40 insurers operating on the market. Many foreign insurers are eyeing the market, and many domestic banks were also developing financial group models to expand their businesses into the insurance arena.
The issuance of stricter regulations on the insurance industry has limited the number of new insurance companies, however, with Agribank Insurance Joint Stock Co, established earlier this month, the only new player on the market.
Earlier this year, the Ministry of Finance issued Decree No 46 stipulating that non-life insurance companies have legal capital of at least VND300bil (US$18.75mil), up from the previous VND70bil. Life insurers were required to have capital of VND600bil ($37.5mil), up from VND140bil.
Source: VNE
FPT opens cell-phone and laptop shops
FPT Retail Co., a subsidiary of the big information technology firm FPT, launched on Tuesday four shops retailing cell phones and laptops in HCMC and Hanoi, marking its first business activity since establishment early this year.
Le Quang Vu, managing director of FPT Retail, said at the opening ceremony that "the new retail shop chain marks FPT Retail's debut in Vietnam mobile retail market and offers more choices for customers."
He said that after opening the four retail shops in Hanoi and HCMC, the company would continue to open more stores in Can Tho, Hai Phong, Thanh Hoa, Vinh and Da Nang in the coming months as part of a more ambitious expansion plan.
"FPT Retail plans to increase our chain to 100 shops nationwide in the next two years and expects to obtain US$400mil of annual revenue," he added.
Under the FPT Retail shop standard, all the FPT retail shops with the trademark [IN] should cover no less than 300 square meters and has the uniform design model in blue color.
The center mainly distributes products of popular mobile phone and notebook manufacturers such as Nokia, Samsung, Motorola, Lenovo, HP, Toshiba and NEC.
On the occasion of the opening, the company also launched its promotion campaign to offer many gifts worth over VND2bil for clients.
Industry insiders said that with the debut of FPT Retail, Vietnam's mobile and notebook distributing market would see fiercer competition.
The Mobile World Joint Stock Company also launched on Tuesday its new promotion campaign to celebrate its third establishment, offering lucky clients mobile phones manufactured by Nokia, Samsung, and Sony Ericson.
The Mobile World is now the leading company in Vietnam's cell phone segment, holding a market share of over 20% in HCMC. After receiving Mekong Enterprise Fund II investment of US$4.5mil, the company plans to open about 20 more retail shops nationwide.
With the Mobile World's business expansion, the military-run telco Viettel also said that the company has plans to participate in the local mobile phone distribution market.
The company has taken over 15 retail shops of Netra Trading and Investment International Co. Ltd., who lost its foothold in Vietnam in June due to poor business return.
The market survey company GfK Asia Pte. Ltd. (Vietnam) estimated the market growth rate this year for mobile phones at between 40% and 60%.
Source: VNE
Le Quang Vu, managing director of FPT Retail, said at the opening ceremony that "the new retail shop chain marks FPT Retail's debut in Vietnam mobile retail market and offers more choices for customers."
He said that after opening the four retail shops in Hanoi and HCMC, the company would continue to open more stores in Can Tho, Hai Phong, Thanh Hoa, Vinh and Da Nang in the coming months as part of a more ambitious expansion plan.
"FPT Retail plans to increase our chain to 100 shops nationwide in the next two years and expects to obtain US$400mil of annual revenue," he added.
Under the FPT Retail shop standard, all the FPT retail shops with the trademark [IN] should cover no less than 300 square meters and has the uniform design model in blue color.
The center mainly distributes products of popular mobile phone and notebook manufacturers such as Nokia, Samsung, Motorola, Lenovo, HP, Toshiba and NEC.
On the occasion of the opening, the company also launched its promotion campaign to offer many gifts worth over VND2bil for clients.
Industry insiders said that with the debut of FPT Retail, Vietnam's mobile and notebook distributing market would see fiercer competition.
The Mobile World Joint Stock Company also launched on Tuesday its new promotion campaign to celebrate its third establishment, offering lucky clients mobile phones manufactured by Nokia, Samsung, and Sony Ericson.
The Mobile World is now the leading company in Vietnam's cell phone segment, holding a market share of over 20% in HCMC. After receiving Mekong Enterprise Fund II investment of US$4.5mil, the company plans to open about 20 more retail shops nationwide.
With the Mobile World's business expansion, the military-run telco Viettel also said that the company has plans to participate in the local mobile phone distribution market.
The company has taken over 15 retail shops of Netra Trading and Investment International Co. Ltd., who lost its foothold in Vietnam in June due to poor business return.
The market survey company GfK Asia Pte. Ltd. (Vietnam) estimated the market growth rate this year for mobile phones at between 40% and 60%.
Source: VNE
Ensuring IP rights, due diligence in an M&A deal
The nation is witnessing an increasing trend towards mergers and acquisitions among both Vietnamese and foreign companies. One of the most important factors in ensuring the success of an M&A deal is for the acquiring company to conduct proper "due diligence," lawyer-speak for the process whereby the potential buyer evaluates the target company and its assets.
While lawyers have long focused due diligence efforts on tangible assets, including land, buildings, and equipment, little attention has been paid to intangible assets, such as intellectual property, which can in some instances be as or more valuable to the company’s operations and profitability.
Due diligence should extend to a wide range of intangible assets related to intellectual property, including business information, employee know-how, licence agreements, marketing and distribution agreements, domain names and even intellectual property which is not legally protectable, e.g., business ideas. Like customer "good will", these types of intangible assets can be important elements of a target enterprise’s value, although evaluation of their worth is not an easy task.
Intellectual property itself is a term that has traditionally referred to copyrights, patents, trademarks and trade secrets. In Viet Nam, the new Intellectual Property Law states that "intellectual property rights are the rights of organisations and individuals to their intellectual property, including copyrights and copyright-related rights, industrial property rights and rights to plant varieties" (Article 4.1). The concept of industrial property is further understood as including industrial designs, utility solutions, layout-designs of semi-conductor integrated circuits, trademarks, trade names, geographical indications, trade secrets, and rights to repression of unfair competition under the IP Law.
Most industrial property objects are only protectable under the IP Law if they are registered with the National Office of Intellectual Property. Well-known trademarks established on the basis of use, however, may be protected independent from registration procedures. However, a claim for protection of a well-known mark is complex, as it is normally made during cancellation or infringement proceedings. Therefore, the protection afforded by registration is more effective in most ordinary cases.
Unlike industrial property objects such as industrial designs and trademarks, objects which are protected by copyright do not need to be registered to afford protection. In this respect, Vietnamese law is consistent with international definitions of copyright which provide that copyright adheres in an original work of authorship published or fixed in a particular medium. Registration of the copyrighted work serves purposes of providing notice and evidence of the copyright.
When conducting due diligence into these types of intangibles, a lawyer must ask two fundamental questions: (1) what are the key rights and intangible assets needed to operate the business successfully? and (2) how can the business be assured the benefits of those rights and assets following the acquisition?
The lawyer then must confirm licences and ownership records, evaluate contracts and licensing agreements, and check for existing litigation and infringement notices.
Issues uncovered in the course of due diligence may significantly alter the terms of an acquisition. For example, if the prospective buyer discovers the target company’s trademark is in use by another firm and rights cannot be secured to the target company, this could lead to significant costs involving re-branding and re-working marketing and promotional materials. Such information, revealed in the course of due diligence, could dramatically affect the target company’s value in the eyes of the prospective investor.
IP rights owned by another division within the target group would also need to be assigned or licensed to the target if the acquiring investor wants to secure these rights. Lawyers conducting due diligence must also ensure target company employees have signed confidentiality agreements and agreed in writing to assign inventions to their employer. This prevents critical copyrights, patents, and trade secrets from leaving the company with departing employees. For instance, a company might sell off a software division, only for the buyer to learn that it owns the copyright in original software but not in any modifications after the developer became an independent contractor.
In addition to ensuring control of IP rights before and during a merger or acquisition, lawyers must also consider what happens after the sale. Following any acquisition, patents will usually need to be re-assigned, licence agreements may need amendment, and notices about the transfer of rights may need to be issued.
Depending on the type of intellectual property, the lawyer must determine whether a particular form of intangible asset is transferable as a matter of contract or under the IP Law. For instance, most industrial property objects such as trademarks, patents, and industrial designs may be transferable, but the moral rights in a copyrighted work cannot be transferred, except under certain circumstances, pursuant to the IP Law.
In short, investigating IP issues in the course of due diligence is of paramount importance during an acquisition. Though often time-consuming and resource-intensive, solid IP due diligence will lessen risk, make valuation more accurate, and give an investor a better understanding of the target company’s business.
Source: VNS
While lawyers have long focused due diligence efforts on tangible assets, including land, buildings, and equipment, little attention has been paid to intangible assets, such as intellectual property, which can in some instances be as or more valuable to the company’s operations and profitability.
Due diligence should extend to a wide range of intangible assets related to intellectual property, including business information, employee know-how, licence agreements, marketing and distribution agreements, domain names and even intellectual property which is not legally protectable, e.g., business ideas. Like customer "good will", these types of intangible assets can be important elements of a target enterprise’s value, although evaluation of their worth is not an easy task.
Intellectual property itself is a term that has traditionally referred to copyrights, patents, trademarks and trade secrets. In Viet Nam, the new Intellectual Property Law states that "intellectual property rights are the rights of organisations and individuals to their intellectual property, including copyrights and copyright-related rights, industrial property rights and rights to plant varieties" (Article 4.1). The concept of industrial property is further understood as including industrial designs, utility solutions, layout-designs of semi-conductor integrated circuits, trademarks, trade names, geographical indications, trade secrets, and rights to repression of unfair competition under the IP Law.
Most industrial property objects are only protectable under the IP Law if they are registered with the National Office of Intellectual Property. Well-known trademarks established on the basis of use, however, may be protected independent from registration procedures. However, a claim for protection of a well-known mark is complex, as it is normally made during cancellation or infringement proceedings. Therefore, the protection afforded by registration is more effective in most ordinary cases.
Unlike industrial property objects such as industrial designs and trademarks, objects which are protected by copyright do not need to be registered to afford protection. In this respect, Vietnamese law is consistent with international definitions of copyright which provide that copyright adheres in an original work of authorship published or fixed in a particular medium. Registration of the copyrighted work serves purposes of providing notice and evidence of the copyright.
When conducting due diligence into these types of intangibles, a lawyer must ask two fundamental questions: (1) what are the key rights and intangible assets needed to operate the business successfully? and (2) how can the business be assured the benefits of those rights and assets following the acquisition?
The lawyer then must confirm licences and ownership records, evaluate contracts and licensing agreements, and check for existing litigation and infringement notices.
Issues uncovered in the course of due diligence may significantly alter the terms of an acquisition. For example, if the prospective buyer discovers the target company’s trademark is in use by another firm and rights cannot be secured to the target company, this could lead to significant costs involving re-branding and re-working marketing and promotional materials. Such information, revealed in the course of due diligence, could dramatically affect the target company’s value in the eyes of the prospective investor.
IP rights owned by another division within the target group would also need to be assigned or licensed to the target if the acquiring investor wants to secure these rights. Lawyers conducting due diligence must also ensure target company employees have signed confidentiality agreements and agreed in writing to assign inventions to their employer. This prevents critical copyrights, patents, and trade secrets from leaving the company with departing employees. For instance, a company might sell off a software division, only for the buyer to learn that it owns the copyright in original software but not in any modifications after the developer became an independent contractor.
In addition to ensuring control of IP rights before and during a merger or acquisition, lawyers must also consider what happens after the sale. Following any acquisition, patents will usually need to be re-assigned, licence agreements may need amendment, and notices about the transfer of rights may need to be issued.
Depending on the type of intellectual property, the lawyer must determine whether a particular form of intangible asset is transferable as a matter of contract or under the IP Law. For instance, most industrial property objects such as trademarks, patents, and industrial designs may be transferable, but the moral rights in a copyrighted work cannot be transferred, except under certain circumstances, pursuant to the IP Law.
In short, investigating IP issues in the course of due diligence is of paramount importance during an acquisition. Though often time-consuming and resource-intensive, solid IP due diligence will lessen risk, make valuation more accurate, and give an investor a better understanding of the target company’s business.
Source: VNS
Sabeco IPO progresses cautiously
Leading beverage maker Sabeco will continue with its equitisation, but may move slower than expected as it attempts to list shares during the current period of uncertainty on the stock exchange.
The company’s IPO is still slated for some time in the fourth quarter, and is still receiving a great deal of attention from investors.
Nguyen Quang Minh, the company’s general director, says equitisation progress depends heavily on market demand for shares, which has been poor of late.
Post and Telecommunications Investment and Construction JSC (PTIC), for example, only sold 297,400 of the 2 million shares up for grabs in an auction yesterday. Lacklustre demand has been a problem for a slue of other large-cap companies, including Bao Viet.
Sabeco, maker of Sai Gon Beer, plans to sell a 20 per cent stake in the company during its IPO, with no shares allocated to foreign strategic partners.
"Sabeco will still attract investors, even with the market in such a poor state," says a Kim Long Securities analyst. "It’s one of those companies that investors have been eagerly anticipating, given its solid earnings results over the past few years."
People, though, should not expect to make money off Sabeco shares quickly, given current market uncertainties, and should instead look to the company’s long term prospects, according to Kim Long Securities.
The stock price may not surge on its first day on the bourse, but shares should sell out during the book building phase of the IPO, according to VinaCapital and Bien Viet Securities.
Seasonally strong earnings among food manufacturers in the final months of the year will ensure demand for the shares, analysts say.
Sabeco plans to use the capital raised during the IPO for capacity expansion projects, which will likely help the company’s bottom line in the long term.
In addition, the local beer market is expanding aggressively, catching foreign investor interests, with annual consumption at around 18 litres a person.
"We are also considering several co-operation projects with foreign partners, which will help us advertise products abroad," says Minh, who predicts 2007 revenue will be around VND8 trillion.
"With promising expansion plans, positive earnings result and control over a significant portion of the local market, buying into Sabeco is a good move, especially with the market in such a gloomy state," the Kim Long Securities analyst said.
Source: VNS
The company’s IPO is still slated for some time in the fourth quarter, and is still receiving a great deal of attention from investors.
Nguyen Quang Minh, the company’s general director, says equitisation progress depends heavily on market demand for shares, which has been poor of late.
Post and Telecommunications Investment and Construction JSC (PTIC), for example, only sold 297,400 of the 2 million shares up for grabs in an auction yesterday. Lacklustre demand has been a problem for a slue of other large-cap companies, including Bao Viet.
Sabeco, maker of Sai Gon Beer, plans to sell a 20 per cent stake in the company during its IPO, with no shares allocated to foreign strategic partners.
"Sabeco will still attract investors, even with the market in such a poor state," says a Kim Long Securities analyst. "It’s one of those companies that investors have been eagerly anticipating, given its solid earnings results over the past few years."
People, though, should not expect to make money off Sabeco shares quickly, given current market uncertainties, and should instead look to the company’s long term prospects, according to Kim Long Securities.
The stock price may not surge on its first day on the bourse, but shares should sell out during the book building phase of the IPO, according to VinaCapital and Bien Viet Securities.
Seasonally strong earnings among food manufacturers in the final months of the year will ensure demand for the shares, analysts say.
Sabeco plans to use the capital raised during the IPO for capacity expansion projects, which will likely help the company’s bottom line in the long term.
In addition, the local beer market is expanding aggressively, catching foreign investor interests, with annual consumption at around 18 litres a person.
"We are also considering several co-operation projects with foreign partners, which will help us advertise products abroad," says Minh, who predicts 2007 revenue will be around VND8 trillion.
"With promising expansion plans, positive earnings result and control over a significant portion of the local market, buying into Sabeco is a good move, especially with the market in such a gloomy state," the Kim Long Securities analyst said.
Source: VNS
Wednesday, August 29, 2007
VN-Index drops below 900 points
Ho Chi Minh City’s VN-Index dropped 7.91 points or 0.87 percent to slump below the 900 point barrier by the end of trading on August 29.
Finishing up on 894.67 points, the exchange had little reason to cheer as only 23 stocks rallied for games at the session. 3.8 million shares worth 351.5 billion VND were traded during the morning run.
The Capital City’s HaSTC-Index fared a little better as it dipped slightly by 0.38 percent to 250.48 points.
However, the trade volume remained low as 640,000 shares worth over 54.9 billion VND exchanged hands on the day.
Source: VNA
Finishing up on 894.67 points, the exchange had little reason to cheer as only 23 stocks rallied for games at the session. 3.8 million shares worth 351.5 billion VND were traded during the morning run.
The Capital City’s HaSTC-Index fared a little better as it dipped slightly by 0.38 percent to 250.48 points.
However, the trade volume remained low as 640,000 shares worth over 54.9 billion VND exchanged hands on the day.
Source: VNA
Indochina Capital buys stake in BIM Seafood
The Ha Long Investment and Development Company (BIM Group) on Aug. 28 announced the establishment of the BIM seafood joint stock company (BIM Seafood), the first shrimp processing association model in Viet Nam that will see 20 percent stake go to Indochina Capital.
The signing of a strategic cooperation pact between BIM Seafood and Indochia Capital Vietnam Holdings (ICVH), will allow ICVH to play the role of strategic investor and provide business and financial aid to BIM Seafood.
According to Peter R. Ryder, General Director of Indochina Capital, BIM Seafood is well placed to become a leading seafood processing company in both the domestic and international markets.
BIM, established in 1994, is involved in infrastructure and real estate development, seafood, salt production and tourism. BIM Seafood will be a top to bottom model from breeder shrimp production to, shrimp farms, to processing factories and the company's distribution network.
Source: VNA
The signing of a strategic cooperation pact between BIM Seafood and Indochia Capital Vietnam Holdings (ICVH), will allow ICVH to play the role of strategic investor and provide business and financial aid to BIM Seafood.
According to Peter R. Ryder, General Director of Indochina Capital, BIM Seafood is well placed to become a leading seafood processing company in both the domestic and international markets.
BIM, established in 1994, is involved in infrastructure and real estate development, seafood, salt production and tourism. BIM Seafood will be a top to bottom model from breeder shrimp production to, shrimp farms, to processing factories and the company's distribution network.
Source: VNA
Real estate market heating up as securities fever cools
As the stock market keeps falling down and bank deposits cannot bring high profit, investors are turning to inject money in real estate projects, making the market warmer.
No price fever is occurring on the real estate market; prices are just moving up gradually as the demand is expected to increase as more Viet Kieu will return home to settle down when they can enjoy visa waivers, and foreigners are allowed to buy houses for accommodation.
House prices began escalating in March 2007. Mr Tan, the broker at the Van Quan Property Office in Ha Dong town, said that the prices of the villas in advantageous positions had seen two-fold increases, from VND3bil to VND6bil on average.
The prices of Vimeco’s apartments near Big C Supermart in Trung Hoa-Nhan Chinh new urban area have increased by VND500mil from the original prices. The owners of Vinaconex’s 34-storey apartments, who bought the apartments two years ago, are now leasing the apartments at $500-1,000.
Lam Van Chuc, Director of the HCM City-based Phuc Duc Real Estate Brokerage Company, said that buyers were queuing to buy luxury apartments on ‘beautiful land plots’ like An Phu-An Khanh, Huy Hoang and 21st Century.
The prices of houses and land in districts 2 and 9 in HCM City changed continuously last week. The land plots on Song Hanh Road, Hanoi highway and An Phu-An Khanh residential quarter, which were offered at VND30-32mil/sq m, have jumped to VND35mil/sq m. Meanwhile, the prices of Huy Hoang apartments, which were thought to have the lowest levels, have also soared to over VND20mil/sq m from the previous levels of VND17-19mil/sq m.
Meanwhile, more than 400 buyers had to join the lucky draw to find out the ones eligible to buy 37 apartments of PN-Techcons project on Hoa Su Road in Phu Nhuan district. Those, who won the right to purchase the apartments, now can resell the apartments, gaining the profit of VND1-2mil/sq m.
Investment in real estate market can bring stable profit, while the stock market proves to be quite ‘fragile’. That explains why many investors have returned to the real estate market, while securities investments do not bring fat profit any more.
Though the supply has improved, it cannot meet the increased demand for accommodation. Lang-Hoa Lac road in Hanoi is nearly occupied with residential quarters. Neighbouring areas of Hanoi and HCM City are also full of residential quarters. Especially, investors accept buying projects that remain on paper. Investors with long-term vision are now seeking land plots in Vinh Phuc, Ha Tay and Bac Ninh – 25 km from the centre of Hanoi.
The demand for accommodation is forecast to increase in the near future thanks to open policies. Nguyen Manh Ha, Head of the Housing Management Department under the Ministry of Construction, said that the ministry had submitted to the government a plan on allowing foreigners living and working in Vietnam to buy houses for accommodation. It is estimated that some 21,000 foreigners will be eligible to buy houses in Vietnam once the government gives the nod on the plan.
Source: VNE
No price fever is occurring on the real estate market; prices are just moving up gradually as the demand is expected to increase as more Viet Kieu will return home to settle down when they can enjoy visa waivers, and foreigners are allowed to buy houses for accommodation.
House prices began escalating in March 2007. Mr Tan, the broker at the Van Quan Property Office in Ha Dong town, said that the prices of the villas in advantageous positions had seen two-fold increases, from VND3bil to VND6bil on average.
The prices of Vimeco’s apartments near Big C Supermart in Trung Hoa-Nhan Chinh new urban area have increased by VND500mil from the original prices. The owners of Vinaconex’s 34-storey apartments, who bought the apartments two years ago, are now leasing the apartments at $500-1,000.
Lam Van Chuc, Director of the HCM City-based Phuc Duc Real Estate Brokerage Company, said that buyers were queuing to buy luxury apartments on ‘beautiful land plots’ like An Phu-An Khanh, Huy Hoang and 21st Century.
The prices of houses and land in districts 2 and 9 in HCM City changed continuously last week. The land plots on Song Hanh Road, Hanoi highway and An Phu-An Khanh residential quarter, which were offered at VND30-32mil/sq m, have jumped to VND35mil/sq m. Meanwhile, the prices of Huy Hoang apartments, which were thought to have the lowest levels, have also soared to over VND20mil/sq m from the previous levels of VND17-19mil/sq m.
Meanwhile, more than 400 buyers had to join the lucky draw to find out the ones eligible to buy 37 apartments of PN-Techcons project on Hoa Su Road in Phu Nhuan district. Those, who won the right to purchase the apartments, now can resell the apartments, gaining the profit of VND1-2mil/sq m.
Investment in real estate market can bring stable profit, while the stock market proves to be quite ‘fragile’. That explains why many investors have returned to the real estate market, while securities investments do not bring fat profit any more.
Though the supply has improved, it cannot meet the increased demand for accommodation. Lang-Hoa Lac road in Hanoi is nearly occupied with residential quarters. Neighbouring areas of Hanoi and HCM City are also full of residential quarters. Especially, investors accept buying projects that remain on paper. Investors with long-term vision are now seeking land plots in Vinh Phuc, Ha Tay and Bac Ninh – 25 km from the centre of Hanoi.
The demand for accommodation is forecast to increase in the near future thanks to open policies. Nguyen Manh Ha, Head of the Housing Management Department under the Ministry of Construction, said that the ministry had submitted to the government a plan on allowing foreigners living and working in Vietnam to buy houses for accommodation. It is estimated that some 21,000 foreigners will be eligible to buy houses in Vietnam once the government gives the nod on the plan.
Source: VNE
Banks continue funding securities investments
While many joint stock banks have announced ceasing loaning to securities investors, other banks are trying to push up this operation, which proves to bring high profit.
SeABank Hanoi, for example, on August 20 announced that it would cooperate with SeABank Securities Company, belonging to the bank, to provide loans to securities investors with the mortgages being the securities themselves.
The bank will lend VND50mil at minimum for every deal and for six months. However, the bank requires high interest rates on the loans. For example, the interest rate for a six-month term loan is 1.1% per month. In case investors want to extend the loans, they would have to pay 1.32% per month. The borrowers will have to pay 1.65% a month for overdue debts. Moreover, they have to pay VND200,000 per deal for the so-called ‘credit management fee’.
The mortgage assets for the loans will be the securities items to be selected by SeABS, which are being listed on HCM City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HASTC). The market value of the mortgaged securities items will be the average closing price of the latest trading sessions. Borrowers are allowed to sell mortgaged securities, and right after the sale, they have to pay debts to the bank.
The Bank for Agriculture and Rural Development (Agribank) HCM City Branch has also signed contracts with Agribank Securities Company and Au Viet Securities Company to provide loans to stock investors. With Agribank, clients are allowed to borrow sums of money equivalent to 50% of shares’ value, and for 12 months at maximum.
It is said that Vietcombank and other state-owned banks, which have a percentage of loans for securities investments below the ceiling level of 3% of total outstanding loans, are trying to attract clients – securities investors – though they announced before that they would not pay much attention to this operation.
Loaning for securities investments proves to be a profitable business, and it is understandable why no joint stock bank refuses funding stock investment deals. These loans have been accounting for 10-40% of total outstanding loans of commercial banks.
The central bank has tried to limit the loaning for securities investments by issuing Instruction No 3, requesting banks to lower their outstanding loans for stock investments to less than 3% of banks’ total outstanding loans. The deadline for the implementation of the decision is December 31, 2007.
Source: VNE
SeABank Hanoi, for example, on August 20 announced that it would cooperate with SeABank Securities Company, belonging to the bank, to provide loans to securities investors with the mortgages being the securities themselves.
The bank will lend VND50mil at minimum for every deal and for six months. However, the bank requires high interest rates on the loans. For example, the interest rate for a six-month term loan is 1.1% per month. In case investors want to extend the loans, they would have to pay 1.32% per month. The borrowers will have to pay 1.65% a month for overdue debts. Moreover, they have to pay VND200,000 per deal for the so-called ‘credit management fee’.
The mortgage assets for the loans will be the securities items to be selected by SeABS, which are being listed on HCM City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HASTC). The market value of the mortgaged securities items will be the average closing price of the latest trading sessions. Borrowers are allowed to sell mortgaged securities, and right after the sale, they have to pay debts to the bank.
The Bank for Agriculture and Rural Development (Agribank) HCM City Branch has also signed contracts with Agribank Securities Company and Au Viet Securities Company to provide loans to stock investors. With Agribank, clients are allowed to borrow sums of money equivalent to 50% of shares’ value, and for 12 months at maximum.
It is said that Vietcombank and other state-owned banks, which have a percentage of loans for securities investments below the ceiling level of 3% of total outstanding loans, are trying to attract clients – securities investors – though they announced before that they would not pay much attention to this operation.
Loaning for securities investments proves to be a profitable business, and it is understandable why no joint stock bank refuses funding stock investment deals. These loans have been accounting for 10-40% of total outstanding loans of commercial banks.
The central bank has tried to limit the loaning for securities investments by issuing Instruction No 3, requesting banks to lower their outstanding loans for stock investments to less than 3% of banks’ total outstanding loans. The deadline for the implementation of the decision is December 31, 2007.
Source: VNE
SSC to have information about ATIP shares checked
The State Securities Commission (SSC) has promised to have the information about ATIP (ATI Petroleum) shares clarified after the government on August 8, 2007 requested that the Ministry of Finance and SSC provide faithful information about ATIP to investors.
According to SSC, ATIP is a foreign enterprise, established and now operating in Nevada state in the US. On July 4, 2001, ATIP got an investment licence from the Ministry of Planning and Investment for a joint venture project with PetroVietnam under the mode of PSC (production sharing contract) on exploring, developing and producing oil and gas at block No 102 and 106 on Vietnam’s continental shelf. Later, ATIP sold a part of the joint venture to Malaysia’s Petronas, and now ATIP holds 10% of total shares in the joint venture.
On January 26, 2007, Chairman of ATIP signed Decision No 01/QD on internal share issuance to 93 staffs. After buying ATIP shares, the staffs sold the shares to outside investors, and the shares have been available on the market.
SSC has checked information about the shareholders and found out that as of March 12, 2007, the number of investors who held ATIP shares was 251.
Recently, mass media have reported that ATIP shares are being listed on NYSE – Euronext, and that ATIP promised to give 10,000 ATIP shares as bonus to the national soccer squad.
The Securities Law, Enterprise Law and current guiding documents do not mention the fact that 100% foreign owned companies, established and operating in other countries, can offer shares for sale in Vietnam. However, in fact, ATIP shares have been transferred to 250 investors in Vietnam.
In order to protect the benefit of Vietnamese investors and avoid possible risks, SSC has two times asked ATIP to expose information about capital and financial situation, business performance and operation regulations of ATIP, as well as the transactions on NYSE – Euronext.
However, ATIP had not provided necessary information by August 10, 2007, except Dispatch No 10 to SSC dated August 10, 2007, saying that the company was preparing necessary documents. As the chairman of ATIP was away on business and would return in mid August, the company promised to gather all necessary documents and give explanations to the questions put by SSC at that time.
On August 17, 2007, ATIP sent a document to SSC, providing some details about the interested issues relating to the listing of ATIP on NYSE – Euronext. SSC thinks that it still needs to check the information before making it public; therefore, it plans to have a working session with ATIP to discuss related issues
Prior to that, SSC took an inspection tour of ATIP. The company organised workshops introducing its operation activities.
Source: VNE
According to SSC, ATIP is a foreign enterprise, established and now operating in Nevada state in the US. On July 4, 2001, ATIP got an investment licence from the Ministry of Planning and Investment for a joint venture project with PetroVietnam under the mode of PSC (production sharing contract) on exploring, developing and producing oil and gas at block No 102 and 106 on Vietnam’s continental shelf. Later, ATIP sold a part of the joint venture to Malaysia’s Petronas, and now ATIP holds 10% of total shares in the joint venture.
On January 26, 2007, Chairman of ATIP signed Decision No 01/QD on internal share issuance to 93 staffs. After buying ATIP shares, the staffs sold the shares to outside investors, and the shares have been available on the market.
SSC has checked information about the shareholders and found out that as of March 12, 2007, the number of investors who held ATIP shares was 251.
Recently, mass media have reported that ATIP shares are being listed on NYSE – Euronext, and that ATIP promised to give 10,000 ATIP shares as bonus to the national soccer squad.
The Securities Law, Enterprise Law and current guiding documents do not mention the fact that 100% foreign owned companies, established and operating in other countries, can offer shares for sale in Vietnam. However, in fact, ATIP shares have been transferred to 250 investors in Vietnam.
In order to protect the benefit of Vietnamese investors and avoid possible risks, SSC has two times asked ATIP to expose information about capital and financial situation, business performance and operation regulations of ATIP, as well as the transactions on NYSE – Euronext.
However, ATIP had not provided necessary information by August 10, 2007, except Dispatch No 10 to SSC dated August 10, 2007, saying that the company was preparing necessary documents. As the chairman of ATIP was away on business and would return in mid August, the company promised to gather all necessary documents and give explanations to the questions put by SSC at that time.
On August 17, 2007, ATIP sent a document to SSC, providing some details about the interested issues relating to the listing of ATIP on NYSE – Euronext. SSC thinks that it still needs to check the information before making it public; therefore, it plans to have a working session with ATIP to discuss related issues
Prior to that, SSC took an inspection tour of ATIP. The company organised workshops introducing its operation activities.
Source: VNE
New banks to be born
The number of applications for establishing new banks now on the table of the Governor of the State Bank of Vietnam has reached 20. The well-informed circle says that the central bank will give answers on the applications in October.
Big general corporations are all making capital contributions to set up banks, despite the worries about unmarketable shares, which have prompted Vietcombank, MHB and Incombank to delay their IPO plans. Investors think that banking, together with securities and real estate are the most profitable business fields nowadays
All big general corporations, from oil and gas, electricity to textiles and garments have been named as the founding shareholders of new banks. The biggest names among the shareholders are Bao Viet (insurers), Vietnam National Post and Telecommunications (VNPT), PetroVietnam (oil and gas), Vinatex (textile and garment), Song Da Corporation (construction), VSC (steel), Habeco (brewery).
Corporations are also seeking ways to become the strategic shareholders of existing banks. More than 10 general corporations have become strategic partners of the Export-Import Bank (Eximbank).
Vinatex, for example, has together with BIDV (bank), Vincom (real estate developer) and Vinashin (shipbuilder), applied to set up the Industrial Development Bank (IDB). At the same time, Vinatex has made capital contributions to Nam Viet Bank, Maritime Bank, ACB and Eximbank.
Euro Window, a well-known name in the field of interior decoration, is also seeking permission to establish Euro Window bank. Meanwhile, Euro Window has got a licence from the State Securities Commission to set up a securities company.
The central bank’s committee for appraising investment projects and licencing banks was set up at the end of July. The committee will consider the applications based on the set requirements.
It is expected that the bank to receive the first licence this year will be Dong Duong Tin Phat. Its application for setting up a bank was submitted to the central bank six months ago and has gotten approval in principle.
The candidate which lodged its application first was Lien Viet bank.
Experts said that a new bank would be set up by the end of this year at the latest. Meanwhile, officials from the State Bank of Vietnam are keeping quiet about this, leaving the financial market to make wild guesses about the newcomers who will join the market in some days.
No new bank has been set up in the last 10 years. Meanwhile, arguments have been raised on whether to establish more banks and how many banks would be enough for Vietnam.
There are only 34 operational joint stock banks in Vietnam, and according to experts the figure is too small if compared to the number of banks in Singapore or Taiwan. Meanwhile, others say that one should not compare Vietnam with Singapore, the regional financial centre in Southeast Asia.
In fact, bank share prices have been decreasing dramatically: blue chips prices have decreased by 30-50% in the last four months. “The fact that a series of banks are awaiting to be established worries me. I wonder if they know how to run a bank,” an investor said. The investor does not understand why people are rushing to set up banks when bank shares are not attractive in the eyes of investors any more.
However, some other experts have said that the bank share price decrease is just a temporary problem, while setting up banks is a long-term plan. Bank share prices should not serve as the basis for investors to decide whether to set up banks.
The director of an investment fund said that capital was not the worrying problem; the headache now was the labour force. “While existing banks cannot find qualified managers, where will new banks find managers?” he asked.
Source: VNE
Big general corporations are all making capital contributions to set up banks, despite the worries about unmarketable shares, which have prompted Vietcombank, MHB and Incombank to delay their IPO plans. Investors think that banking, together with securities and real estate are the most profitable business fields nowadays
All big general corporations, from oil and gas, electricity to textiles and garments have been named as the founding shareholders of new banks. The biggest names among the shareholders are Bao Viet (insurers), Vietnam National Post and Telecommunications (VNPT), PetroVietnam (oil and gas), Vinatex (textile and garment), Song Da Corporation (construction), VSC (steel), Habeco (brewery).
Corporations are also seeking ways to become the strategic shareholders of existing banks. More than 10 general corporations have become strategic partners of the Export-Import Bank (Eximbank).
Vinatex, for example, has together with BIDV (bank), Vincom (real estate developer) and Vinashin (shipbuilder), applied to set up the Industrial Development Bank (IDB). At the same time, Vinatex has made capital contributions to Nam Viet Bank, Maritime Bank, ACB and Eximbank.
Euro Window, a well-known name in the field of interior decoration, is also seeking permission to establish Euro Window bank. Meanwhile, Euro Window has got a licence from the State Securities Commission to set up a securities company.
The central bank’s committee for appraising investment projects and licencing banks was set up at the end of July. The committee will consider the applications based on the set requirements.
It is expected that the bank to receive the first licence this year will be Dong Duong Tin Phat. Its application for setting up a bank was submitted to the central bank six months ago and has gotten approval in principle.
The candidate which lodged its application first was Lien Viet bank.
Experts said that a new bank would be set up by the end of this year at the latest. Meanwhile, officials from the State Bank of Vietnam are keeping quiet about this, leaving the financial market to make wild guesses about the newcomers who will join the market in some days.
No new bank has been set up in the last 10 years. Meanwhile, arguments have been raised on whether to establish more banks and how many banks would be enough for Vietnam.
There are only 34 operational joint stock banks in Vietnam, and according to experts the figure is too small if compared to the number of banks in Singapore or Taiwan. Meanwhile, others say that one should not compare Vietnam with Singapore, the regional financial centre in Southeast Asia.
In fact, bank share prices have been decreasing dramatically: blue chips prices have decreased by 30-50% in the last four months. “The fact that a series of banks are awaiting to be established worries me. I wonder if they know how to run a bank,” an investor said. The investor does not understand why people are rushing to set up banks when bank shares are not attractive in the eyes of investors any more.
However, some other experts have said that the bank share price decrease is just a temporary problem, while setting up banks is a long-term plan. Bank share prices should not serve as the basis for investors to decide whether to set up banks.
The director of an investment fund said that capital was not the worrying problem; the headache now was the labour force. “While existing banks cannot find qualified managers, where will new banks find managers?” he asked.
Source: VNE
Hanoi bourse welcomes 89th company
Two and a half million shares of the Song Da No 6.06 Joint Stock Company were officially listed on the Hanoi Securities Trading Centre under the symbol SSS on August 28, bringing the total companies listed on the centre to 89.
On its first trading session, 10,200 SSS shares were traded at an average price of VND 50.700 a share.
The company is the 20th member of the Song Da Corporation listed on the northern bourse.
Song Da 6 Construction Company’s affiliate in Thua Thien- Hue, the precursor of Song Da No 6.06 JSC, was established in 1999. In 2002, the affiliate was shifted to Song Da 6.06 Enterprise under the Song Da 6 Company. Since January 2004, it has officially operated as a joint stock company with a registered capital of VND 5 billion.
After three years of operation, the company achieves an annual average growth of 30% with the charter capital increasing five fold to VND 25 billion in 2007, affirming its prestige in the central Thua Thien-Hue province as well as the central region and the Central Highlands.
Song Da 6 JSC currently holds 50% stake in Song Da No 6.06 JSC; 28.74% others belong to outside shareholders and the remaining are owned by the company’s employees.
The company specialises in providing assembling products and industrial production products such as concrete and concrete execution, exploiting limestone for cement companies, cement trading, etc.
Last year, the company’s total revenue stood at over VND 79 billion with an after tax profit of VND 4.7 billion and a 20% dividend. This year, Song Da No 6.06 JSC targets a total revenue of VND 116 billion with a net profit of nearly VND 8 billion and 19% dividend.
Source: VNE
On its first trading session, 10,200 SSS shares were traded at an average price of VND 50.700 a share.
The company is the 20th member of the Song Da Corporation listed on the northern bourse.
Song Da 6 Construction Company’s affiliate in Thua Thien- Hue, the precursor of Song Da No 6.06 JSC, was established in 1999. In 2002, the affiliate was shifted to Song Da 6.06 Enterprise under the Song Da 6 Company. Since January 2004, it has officially operated as a joint stock company with a registered capital of VND 5 billion.
After three years of operation, the company achieves an annual average growth of 30% with the charter capital increasing five fold to VND 25 billion in 2007, affirming its prestige in the central Thua Thien-Hue province as well as the central region and the Central Highlands.
Song Da 6 JSC currently holds 50% stake in Song Da No 6.06 JSC; 28.74% others belong to outside shareholders and the remaining are owned by the company’s employees.
The company specialises in providing assembling products and industrial production products such as concrete and concrete execution, exploiting limestone for cement companies, cement trading, etc.
Last year, the company’s total revenue stood at over VND 79 billion with an after tax profit of VND 4.7 billion and a 20% dividend. This year, Song Da No 6.06 JSC targets a total revenue of VND 116 billion with a net profit of nearly VND 8 billion and 19% dividend.
Source: VNE
Textile exports reach 5.1 billion US$ after 8 months
The garment and textiles industry posted a massive 5.1 billion USD in exports revenues for the first eight months of the year, representing a year-on-year surge of 30 percent.
The US remains to be Viet Nam’s largest market by importing almost 3 billion USD of products or a 20 percent increase over the same period last year. The figure represented a 60 percent share of Viet Nam’s gross garment exports.
The post-WTO surge of Viet Nam’s textiles and garments exportation to the US at 25 percent in the first half, however, is just slightly higher than the quota-imposition period prior to the country’s WTO membership which stood at 21 percent, said Le Quoc An, Chairman of the Viet Nam Textiles and Garments Association (VTGA).
“The recent level of exports by the textile and garment industry has not shown any signs of “unexpected highs” for the US side to use as a pretext for sueing Viet Nam on dumping charges,” he said.
The VTGA chief unveiled a plan in association with the Ministry of Industry and Trade to further lobby US authorities, especially the Department of Commerce, to lift more barriers that are blocking Viet Nam’s textile and garment exports.
An urged domestic enterprises to strictly control their exports to the world’s largest market by focusing on high priced contracts while turning away small and low value deals.
“This should allow the textile and garment industry to maintain its high export growth rates in the rest of the year,” emphasised the garment expert.
He also urged firms to expand into other markets such as the European Union and Japan.
Source: VNA
The US remains to be Viet Nam’s largest market by importing almost 3 billion USD of products or a 20 percent increase over the same period last year. The figure represented a 60 percent share of Viet Nam’s gross garment exports.
The post-WTO surge of Viet Nam’s textiles and garments exportation to the US at 25 percent in the first half, however, is just slightly higher than the quota-imposition period prior to the country’s WTO membership which stood at 21 percent, said Le Quoc An, Chairman of the Viet Nam Textiles and Garments Association (VTGA).
“The recent level of exports by the textile and garment industry has not shown any signs of “unexpected highs” for the US side to use as a pretext for sueing Viet Nam on dumping charges,” he said.
The VTGA chief unveiled a plan in association with the Ministry of Industry and Trade to further lobby US authorities, especially the Department of Commerce, to lift more barriers that are blocking Viet Nam’s textile and garment exports.
An urged domestic enterprises to strictly control their exports to the world’s largest market by focusing on high priced contracts while turning away small and low value deals.
“This should allow the textile and garment industry to maintain its high export growth rates in the rest of the year,” emphasised the garment expert.
He also urged firms to expand into other markets such as the European Union and Japan.
Source: VNA
Tuesday, August 28, 2007
VN-Index dips slightly after gains
The VN-Index at the Ho Chi Minh City Stock Exchange reported a miniscale decline by the end of the August 28 trading session by closing at 902.58 points, a dip of 6.49 points.
The market saw 4.9 million shares worth over 518.3 billion VND changing hands on the day.
Both Imexpharm Pharmaceutical JSC (IMP) and Domesco Medical Import & Export JSC (DMC) topped the list of 35 gainers by tacking 7,000 VND onto their listed prices of 160,000 VND and 152,000 VND, respectively.
Meanwhile, Binh Dinh Minerals (BMC) and Tay Ninh Cable Car Tour (TCT), which experienced consecutive increases in previous sessions, dropped sharply. BMC lost 27,000 VND to finish at 517,000 VND while TCT had 19,000 VND slashed off its unit-price.
Saigon Thuong Tin Commercial Joint Stock Bank again led the market in terms of trading volume with 445,800 shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre saw a very modest increase after finishing today's session at 250.69 points, an increase of 0.39 points.
As many as 555,000 shares worth 54.3 billion VND were traded, with Sai Gon Securities again on top of traded volume with 109,400 shares being bought and sold.
Source: VNA
The market saw 4.9 million shares worth over 518.3 billion VND changing hands on the day.
Both Imexpharm Pharmaceutical JSC (IMP) and Domesco Medical Import & Export JSC (DMC) topped the list of 35 gainers by tacking 7,000 VND onto their listed prices of 160,000 VND and 152,000 VND, respectively.
Meanwhile, Binh Dinh Minerals (BMC) and Tay Ninh Cable Car Tour (TCT), which experienced consecutive increases in previous sessions, dropped sharply. BMC lost 27,000 VND to finish at 517,000 VND while TCT had 19,000 VND slashed off its unit-price.
Saigon Thuong Tin Commercial Joint Stock Bank again led the market in terms of trading volume with 445,800 shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre saw a very modest increase after finishing today's session at 250.69 points, an increase of 0.39 points.
As many as 555,000 shares worth 54.3 billion VND were traded, with Sai Gon Securities again on top of traded volume with 109,400 shares being bought and sold.
Source: VNA
Jan-Aug industrial output to rise 17 pct y/y
Vietnam's January-to-August industrial output is expected to rise 17.1 percent from a year earlier to 377.07 trillion dong ($23.3 billion), but crude oil production has slowed, the government said on Tuesday.
The industrial sector, making up a third of Vietnam's economy, helped lift gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
But crude oil production during the first eight months is expected to fall 8 percent from the same period last year to 10.38 million tonnes, or 313,100 barrels per day, the government's General Statistics Office said in a monthly report.
Crude's decline "does not only affect greatly the export growth and state budget income but also has an impact on the industrial sector's contribution to the eight-month gross domestic product growth", it said, without giving details.
Crude exports, Vietnam's top foreign exchange earner, in January-to-August fell 11.8 percent from a year earlier to $5.1 billion, the statistics office said.
However, production of cars, machinery and air-conditioners in the eight-month period extended the strong growth since the start of the year, rising by between 60 percent and 70.2 percent from a year earlier.
The state sector was estimated to grow 10.2 percent during the first eight months, up from 9.7 percent in the January-to-July period.
Production by enterprises outside state control was also expected to expand slightly faster in the January-to-August period, growing 20.5 percent from a year earlier, up 0.1 percentage point compared with January-to-July.
Growth in the foreign investment sector slowed to 18.6 percent, from 18.9 percent during the first seven months.
Industry accounts for 34.9 percent of gross domestic product, ranking after the service sector which contributed 38.8 percent to Vietnam's GDP during the first half, the government said.
Vietnam aims for GDP growth of 9 percent in the second half of this year, which will help it meet its annual growth target of 8.5 percent.
Source: Reuters
The industrial sector, making up a third of Vietnam's economy, helped lift gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
But crude oil production during the first eight months is expected to fall 8 percent from the same period last year to 10.38 million tonnes, or 313,100 barrels per day, the government's General Statistics Office said in a monthly report.
Crude's decline "does not only affect greatly the export growth and state budget income but also has an impact on the industrial sector's contribution to the eight-month gross domestic product growth", it said, without giving details.
Crude exports, Vietnam's top foreign exchange earner, in January-to-August fell 11.8 percent from a year earlier to $5.1 billion, the statistics office said.
However, production of cars, machinery and air-conditioners in the eight-month period extended the strong growth since the start of the year, rising by between 60 percent and 70.2 percent from a year earlier.
The state sector was estimated to grow 10.2 percent during the first eight months, up from 9.7 percent in the January-to-July period.
Production by enterprises outside state control was also expected to expand slightly faster in the January-to-August period, growing 20.5 percent from a year earlier, up 0.1 percentage point compared with January-to-July.
Growth in the foreign investment sector slowed to 18.6 percent, from 18.9 percent during the first seven months.
Industry accounts for 34.9 percent of gross domestic product, ranking after the service sector which contributed 38.8 percent to Vietnam's GDP during the first half, the government said.
Vietnam aims for GDP growth of 9 percent in the second half of this year, which will help it meet its annual growth target of 8.5 percent.
Source: Reuters
Price increases stopped by drastic measures
he prices of food, poultry meat, seafood and dairy products have been stabilised, while the prices of steel, import cars and electric products have been decreasing in some areas.
Regarding food prices, though rice exporters are trying to collect rice to fulfill signed export contracts, the rice price has still decreased by VND50-100/kg thanks to the superfluous supply, now selling at VND4,600-5,200/kg.
However, as the Ministry of Industry and Trade has forecast, as the northern region has entered the rainy and storm season, while floods threaten the south, the food price is expected to increase slightly in some areas.
Meanwhile, foodstuff prices are tending to slightly decrease thanks to superfluous supply. The price of pork, for example, saw a slight decrease in August after increasing sharply in July, now selling at VND19-23,000/kg in the north, and VND19-25,000/kg in the south.
The prices of beef, poultry meat, and seafood, seeing increases of VND2-4,000/kg in early August, have slightly decreased. Beef is selling at VND75-90,000/kg. Chicken bred in industrial farms is selling at VND35,000/kg, while chicken bred at households is selling at VND58-60,000/kg. In the Mekong River Delta, tra fish price reduced by VND500-600/kg, now selling at VND13,400/kg on average.
At the end of July and in early August, imported dairy products saw sharp price increases of VND20-96,000/unit. The decision to cut taxes on dairy products has helped prevent further increases, but has not helped reduce selling prices.
Nguyen Tien Thoa, Head of the Price Control Department under the Ministry of Finance, said that the 3-week inspection tours of steel mills, gas and dairy producers, the products that saw biggest price increases over the last time, was nearly finished, and the results would be announced in some days.
Regarding construction material prices, the Ministry of Industry and Trade (MIT) said that the prices would be stable until the end of the year thanks to big stocks.
Some 3mil tonnes of cement were consumed in August despite the rainy season, raising the total consumption level of cement to 23.3mil tonnes. The price is hovering between VND760-800,000/tonne in the north, and VND878-900,000 in the south. The volume of cement in stock is 2.21mil tonnes, which, together with local production, will ensure adequate supply for the market, and no price fever is expected to occur.
As for construction steel, Vietnamese steel producers now tend to purchase ingot steel from Malaysia and Thailand due to the limited supply from China. The steel price is VND9,550-9,900/kg now, down by VND300/kg over the previous month.
Also according to MIT, after the decision to reduce petrol price by VND500/litre, petrol distributors still can make profit of 9.6% of CIF price, while they are incurring heavy losses with diesel (VND1,488/litre) and kerosene (VND1,376/litre).
MIT has predicted the CPI growth rate of 0.2-0.3% for September, saying that the high purchasing power on the National Day holiday, the opening of the new academic year and Mid-Autumn festival will be the factors that can push up prices.
Also in an effort to curb the price increases, the central bank has announced it will continuously use the open market operations to withdraw cash from circulation. Since mid August 2007, the central bank has offered to sell bonds on all working days. Besides the 1-month, 2-month, 3-month, 6-month, 9-month and 12-month term, the central bank has offered 4-month and 5-month term bonds as well.
Source: VNE
Regarding food prices, though rice exporters are trying to collect rice to fulfill signed export contracts, the rice price has still decreased by VND50-100/kg thanks to the superfluous supply, now selling at VND4,600-5,200/kg.
However, as the Ministry of Industry and Trade has forecast, as the northern region has entered the rainy and storm season, while floods threaten the south, the food price is expected to increase slightly in some areas.
Meanwhile, foodstuff prices are tending to slightly decrease thanks to superfluous supply. The price of pork, for example, saw a slight decrease in August after increasing sharply in July, now selling at VND19-23,000/kg in the north, and VND19-25,000/kg in the south.
The prices of beef, poultry meat, and seafood, seeing increases of VND2-4,000/kg in early August, have slightly decreased. Beef is selling at VND75-90,000/kg. Chicken bred in industrial farms is selling at VND35,000/kg, while chicken bred at households is selling at VND58-60,000/kg. In the Mekong River Delta, tra fish price reduced by VND500-600/kg, now selling at VND13,400/kg on average.
At the end of July and in early August, imported dairy products saw sharp price increases of VND20-96,000/unit. The decision to cut taxes on dairy products has helped prevent further increases, but has not helped reduce selling prices.
Nguyen Tien Thoa, Head of the Price Control Department under the Ministry of Finance, said that the 3-week inspection tours of steel mills, gas and dairy producers, the products that saw biggest price increases over the last time, was nearly finished, and the results would be announced in some days.
Regarding construction material prices, the Ministry of Industry and Trade (MIT) said that the prices would be stable until the end of the year thanks to big stocks.
Some 3mil tonnes of cement were consumed in August despite the rainy season, raising the total consumption level of cement to 23.3mil tonnes. The price is hovering between VND760-800,000/tonne in the north, and VND878-900,000 in the south. The volume of cement in stock is 2.21mil tonnes, which, together with local production, will ensure adequate supply for the market, and no price fever is expected to occur.
As for construction steel, Vietnamese steel producers now tend to purchase ingot steel from Malaysia and Thailand due to the limited supply from China. The steel price is VND9,550-9,900/kg now, down by VND300/kg over the previous month.
Also according to MIT, after the decision to reduce petrol price by VND500/litre, petrol distributors still can make profit of 9.6% of CIF price, while they are incurring heavy losses with diesel (VND1,488/litre) and kerosene (VND1,376/litre).
MIT has predicted the CPI growth rate of 0.2-0.3% for September, saying that the high purchasing power on the National Day holiday, the opening of the new academic year and Mid-Autumn festival will be the factors that can push up prices.
Also in an effort to curb the price increases, the central bank has announced it will continuously use the open market operations to withdraw cash from circulation. Since mid August 2007, the central bank has offered to sell bonds on all working days. Besides the 1-month, 2-month, 3-month, 6-month, 9-month and 12-month term, the central bank has offered 4-month and 5-month term bonds as well.
Source: VNE
Price increases – reverse effects of WTO admission
he price increases in the last eight months, according to economist Pham Chi Lan, have been explained as reverse effects of Vietnam’s admission to the WTO due to shortcomings in the management of the national economy.
The consumer price index (CPI) has increased by 6.78% through August, and 8.57% over the same period last year. The most worrying thing is that rural areas have exceeded urban areas in terms of CPI growth rate: in August, the CPI increase in rural areas was higher than that in urban areas, 0.6% vs. 0.5%. The continued price increases have negatively impacted peoples’ lives.
The price increases seem to come contrary to peoples’ expectations that prices would decrease as a result of WTO membership.
However, as Economist Pham Chi Lan, a former member of the Prime Minister’s Research Team, has pointed out, the price increases were expected. This is called one of the ‘prompt reverse effects’ occurring right after Vietnam has joined the WTO and signals the process of more deep integration into the world’s economy.
Mrs Lan said that WTO membership had brought both active and inactive effects. The active ones include the increasing investment flow into Vietnam, while the inactive ones include the price increases.
According to Mrs Lan, since becoming an official member of the WTO, the vulnerability of the national economy has become clearer. The links connecting Vietnam and the world’s market have become closer, i.e. the world’s market fluctuations have more direct impacts on Vietnam. Vietnam, for example, has been influenced by the oil price increases. It proves to be quite different from 1997, when the financial and monetary crisis occurred. At that time, the outside happenings did not have negative impacts on Vietnam.
As Vietnam has opened its market, the national economy has shown some shortcomings. As Vietnam’s management skills are not good, it finds it hard to control the market and prices.
Moreover, Vietnam still lacks necessary factors to run a market in which prices are defined purely by the supply and demand basis. Let’s take petrol price as an example. Enterprises did not lower the selling prices of petrol even when the world’s prices went down and the government asked them to lower prices. Mrs Lan said that in this case, it was because Vietnam did not have necessary market forces which could create healthy competition. Vietnam has 11 petrol distributors, including nine state owned, and Petrolimex alone holds up to 60% of the market share.
Mrs Lan said that in the short term, Vietnam would have to bear reverse effects of WTO membership, and the undesired effects would gradually disappear when Vietnam improved its management capability.
Source: VNE
The consumer price index (CPI) has increased by 6.78% through August, and 8.57% over the same period last year. The most worrying thing is that rural areas have exceeded urban areas in terms of CPI growth rate: in August, the CPI increase in rural areas was higher than that in urban areas, 0.6% vs. 0.5%. The continued price increases have negatively impacted peoples’ lives.
The price increases seem to come contrary to peoples’ expectations that prices would decrease as a result of WTO membership.
However, as Economist Pham Chi Lan, a former member of the Prime Minister’s Research Team, has pointed out, the price increases were expected. This is called one of the ‘prompt reverse effects’ occurring right after Vietnam has joined the WTO and signals the process of more deep integration into the world’s economy.
Mrs Lan said that WTO membership had brought both active and inactive effects. The active ones include the increasing investment flow into Vietnam, while the inactive ones include the price increases.
According to Mrs Lan, since becoming an official member of the WTO, the vulnerability of the national economy has become clearer. The links connecting Vietnam and the world’s market have become closer, i.e. the world’s market fluctuations have more direct impacts on Vietnam. Vietnam, for example, has been influenced by the oil price increases. It proves to be quite different from 1997, when the financial and monetary crisis occurred. At that time, the outside happenings did not have negative impacts on Vietnam.
As Vietnam has opened its market, the national economy has shown some shortcomings. As Vietnam’s management skills are not good, it finds it hard to control the market and prices.
Moreover, Vietnam still lacks necessary factors to run a market in which prices are defined purely by the supply and demand basis. Let’s take petrol price as an example. Enterprises did not lower the selling prices of petrol even when the world’s prices went down and the government asked them to lower prices. Mrs Lan said that in this case, it was because Vietnam did not have necessary market forces which could create healthy competition. Vietnam has 11 petrol distributors, including nine state owned, and Petrolimex alone holds up to 60% of the market share.
Mrs Lan said that in the short term, Vietnam would have to bear reverse effects of WTO membership, and the undesired effects would gradually disappear when Vietnam improved its management capability.
Source: VNE
Vietcombank fails to keep IPO timetable
The Vietnam Bank for Foreign Trade (Vietcombank) cannot make IPO prior to August 30 as previously planned as the government has not given the green light on the IPO plan.
Vietcombank announced in February 2007, right after it signed a contract with Credit Suisse on equitisation consultancy, that it would make IPO at the end of July or August at the latest, and have its shares listed on the bourse prior to the end of October.
However, Vietcombank Deputy Director General Nguyen Thu Ha on August 24 announced that Vietcombank would not be able to make IPO in August as it had not received any instructions from the government yet.
Last year and earlier this year, the government many times urged banks to speed up the equitisation process. However, it has not been hurrying banks since June, when the stock market began falling down. Analysts have also warned about the oversupply of commodities on the stock market causing losses to the state.
Owing to these warnings, banks themselves have been hesitating to put commodities on sale while the market is quiet with few transactions. The Bank for Investment and Development of Vietnam (BIDV), which volunteered to be equitised, has asked the government to reconsider the timing of the IPOs of big state owned enterprises. As previously planned, BIDV will complete its equitisation plan to be submitted to the government before the IPO is made at the end of the fourth quarter of the year.
The Vietnam Industrial and Commercial Bank (ICB), which also volunteered for equitisation, now is considering the re-timing of its IPO. ICB Director General Pham Huy Hung said that the bank "would do what the government instructed".
It is clear that Vietcombank cannot make IPO right in August, but Mrs Ha said that the bank would run the IPO as previously planned if the government approved, despite the gloomy market.
“The market now is not as favourable as previously, but we do not plan to delay IPO and the equitisation plan because of this. No one can know for sure how the market will perform later,” said Mrs Ha.
Vietcombank has every reason to be optimistic about its IPO plan. Several tens of international financial groups have expressed their desire to become Vietcombank’s strategic partners, when Vietnam’s first state owned bank becomes equitised. The five names which have been short listed for government consideration are all big names in the world.
Le Dao Nguyen, Deputy Director General of BIDV, said that bank shares were still being hunted by investors, especially shares of profitable and prestigious banks.
“We do not intend to make IPOs at any cost. Price will be an important factor to consider when offering shares, and enterprises all want to sell shares at the moment when prices reach peaks. However, it would be even worse if the auction prices are high, but the prices later decrease and no investor wants to buy them,” said Mr Nguyen.
Mr Nguyen said that BIDV was still hectically preparing for the equitisation and IPO.
In a report released on August 1 on Vietnam’s financial situation, the Hong Kong and Shanghai Banking Corporation HSBC said there was no need to worry about the IPOs of big banks. The sale of good commodities will help stimulate the market demand and attract new foreign investors.
Source: VNE
Vietcombank announced in February 2007, right after it signed a contract with Credit Suisse on equitisation consultancy, that it would make IPO at the end of July or August at the latest, and have its shares listed on the bourse prior to the end of October.
However, Vietcombank Deputy Director General Nguyen Thu Ha on August 24 announced that Vietcombank would not be able to make IPO in August as it had not received any instructions from the government yet.
Last year and earlier this year, the government many times urged banks to speed up the equitisation process. However, it has not been hurrying banks since June, when the stock market began falling down. Analysts have also warned about the oversupply of commodities on the stock market causing losses to the state.
Owing to these warnings, banks themselves have been hesitating to put commodities on sale while the market is quiet with few transactions. The Bank for Investment and Development of Vietnam (BIDV), which volunteered to be equitised, has asked the government to reconsider the timing of the IPOs of big state owned enterprises. As previously planned, BIDV will complete its equitisation plan to be submitted to the government before the IPO is made at the end of the fourth quarter of the year.
The Vietnam Industrial and Commercial Bank (ICB), which also volunteered for equitisation, now is considering the re-timing of its IPO. ICB Director General Pham Huy Hung said that the bank "would do what the government instructed".
It is clear that Vietcombank cannot make IPO right in August, but Mrs Ha said that the bank would run the IPO as previously planned if the government approved, despite the gloomy market.
“The market now is not as favourable as previously, but we do not plan to delay IPO and the equitisation plan because of this. No one can know for sure how the market will perform later,” said Mrs Ha.
Vietcombank has every reason to be optimistic about its IPO plan. Several tens of international financial groups have expressed their desire to become Vietcombank’s strategic partners, when Vietnam’s first state owned bank becomes equitised. The five names which have been short listed for government consideration are all big names in the world.
Le Dao Nguyen, Deputy Director General of BIDV, said that bank shares were still being hunted by investors, especially shares of profitable and prestigious banks.
“We do not intend to make IPOs at any cost. Price will be an important factor to consider when offering shares, and enterprises all want to sell shares at the moment when prices reach peaks. However, it would be even worse if the auction prices are high, but the prices later decrease and no investor wants to buy them,” said Mr Nguyen.
Mr Nguyen said that BIDV was still hectically preparing for the equitisation and IPO.
In a report released on August 1 on Vietnam’s financial situation, the Hong Kong and Shanghai Banking Corporation HSBC said there was no need to worry about the IPOs of big banks. The sale of good commodities will help stimulate the market demand and attract new foreign investors.
Source: VNE
Monday, August 27, 2007
Indexes see slight increases
Both of the country's bourses in Ho Chi Minh City and Ha Noi experienced slight increases after the conclusion of the August 27 trading session.
The VN-Index at the HCM City Stock Exchange rose 3.59 points to finish at 909.07 points.
Today's session had 6.2 million shares worth nearly 543 billion VND change hands.
Binh Dinh Mining (BMC) continued topping the list of 51 shares that recorded gains by adding 25,000 VND onto its listed price to end at 544,000 VND. It was followed by the Sea & Air Freight Int'l (SFI) with a 9,000 VND spike and Tay Ninh Cable Car Tour's (TCT), 6,000 VND increase.
The Saigon Thuong Tin Commercial Joint Stock Bank still led the market in terms of transaction volume with nearly 1.3 million shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by mere 0.15 points to finish at 250.3 points, but decreased in terms of transaction volume and value with 800,000 shares worth a total 80 billion VND changing hands.
Source: VNA
The VN-Index at the HCM City Stock Exchange rose 3.59 points to finish at 909.07 points.
Today's session had 6.2 million shares worth nearly 543 billion VND change hands.
Binh Dinh Mining (BMC) continued topping the list of 51 shares that recorded gains by adding 25,000 VND onto its listed price to end at 544,000 VND. It was followed by the Sea & Air Freight Int'l (SFI) with a 9,000 VND spike and Tay Ninh Cable Car Tour's (TCT), 6,000 VND increase.
The Saigon Thuong Tin Commercial Joint Stock Bank still led the market in terms of transaction volume with nearly 1.3 million shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by mere 0.15 points to finish at 250.3 points, but decreased in terms of transaction volume and value with 800,000 shares worth a total 80 billion VND changing hands.
Source: VNA
San Miguel looks to expand brewing in Vietnam
San Miguel Corp of the Philippines said Friday it wants to expand brewing operations in Viet Nam and possibly into neighboring Cambodia.
Local press reports said San Miguel, Southeast Asia's largest publicly-listed food, beverage and packaging group, would spend up to eight million dollars to build up the capacity of its Viet Nam plant.
"The company confirms that it intends to expand its presence in Viet Nam and that it is studying the feasibility of putting up a brewery in Cambodia," San Miguel said in a brief statement to the Philippine Stock Exchange.
It did not give any financial details in its disclosure.
In the press reports, San Miguel beer division assistant vice president Benjamin Aton was quoted as saying that a brewery in Cambodia might cost 16 million dollars.
The company plans to spin off its domestic beer business under San Miguel Brewery Inc. for an initial public offering possibly before the year ends.
San Miguel, which is 20 percent owned by Kirin Holdings of Japan, also plans to venture into other businesses such as power generation and transmission, water and other utilities, mining and infrastructure.
Source: VNE
Local press reports said San Miguel, Southeast Asia's largest publicly-listed food, beverage and packaging group, would spend up to eight million dollars to build up the capacity of its Viet Nam plant.
"The company confirms that it intends to expand its presence in Viet Nam and that it is studying the feasibility of putting up a brewery in Cambodia," San Miguel said in a brief statement to the Philippine Stock Exchange.
It did not give any financial details in its disclosure.
In the press reports, San Miguel beer division assistant vice president Benjamin Aton was quoted as saying that a brewery in Cambodia might cost 16 million dollars.
The company plans to spin off its domestic beer business under San Miguel Brewery Inc. for an initial public offering possibly before the year ends.
San Miguel, which is 20 percent owned by Kirin Holdings of Japan, also plans to venture into other businesses such as power generation and transmission, water and other utilities, mining and infrastructure.
Source: VNE
Friday, August 24, 2007
VN-Index records sharp increase
The VN-Index at the Ho Chi Minh City Stock Exchange climbed 17.86 points after the conclusion of the August 24 trading session to finish at 905.48.
As many as 7.563 million shares worth 660.955 billion VND changed hands with Binh Dinh mining (BMC) topping the list of 88 shares recording gains by adding 24,000 VND onto its listed price. BMC was followed by Tay Ninh Cable Tour with an 18,000 VND spike and North Kinh Do Food's 9,000 VND rise.
The Saigon Thuong Tin Commercial Joint Stock Bank led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw a slight increase as it rose 2.78 points to finish at 250.15 points.
Among 918,000 shares traded at a total cost of 81.8 billion VND. Saigon Securities Inc. topped the market in terms of transaction value with 158,000 shares being brought or sold.
Source: VNA
As many as 7.563 million shares worth 660.955 billion VND changed hands with Binh Dinh mining (BMC) topping the list of 88 shares recording gains by adding 24,000 VND onto its listed price. BMC was followed by Tay Ninh Cable Tour with an 18,000 VND spike and North Kinh Do Food's 9,000 VND rise.
The Saigon Thuong Tin Commercial Joint Stock Bank led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw a slight increase as it rose 2.78 points to finish at 250.15 points.
Among 918,000 shares traded at a total cost of 81.8 billion VND. Saigon Securities Inc. topped the market in terms of transaction value with 158,000 shares being brought or sold.
Source: VNA
VNPT signs strategic pact with Vincom
Viet Nam Post and Telecommunications Group (VNPT) and Vincom Joint Stock Company on Aug. 23 signed an agreement making them strategic partners.
The agreement involves closer cooperation between the two companies, so that they will become strategic shareholders and customers of each other’s respective enterprises.
While VNPT will become the main supplier of telecom equipment for Vincom’s real estate projects, Vincom will be awarded VNPT infrastructure development contracts.
“This is a very notable partnership as it will combine the strengths and resources of two of the country’s leading companies,” said VNPT’s vice general director Nguyen Ba Thuoc.
Thuoc stressed that the collaboration between the two large corporations would boost Viet Nam’s economy and the technology sector, in particular, during integration into the World Trade Organisation.
He also said that the collaboration would promote the competitive edge of the two firms on the international market.
Last year, VNPT, the country’s largest telecom service provider, posted a revenue of 38.3 trillion VND (2.4 billion USD), up 14.9 percent compared to 2005 and 3.4 percent higher than the company’s initial forecast.
Real estate developer Vincom ISC generated revenue of 548.4 billion VND (34 million USD) last year, four times higher than the previous year’s figure. Its after-tax profit increased five fold, reaching 343.7 billion VND (21.4 million USD). Vincom, wholly owned by Vietnamese investors, also brings Ha Noi Vincom Tower to the table, among many other properties.
Source: VNA
The agreement involves closer cooperation between the two companies, so that they will become strategic shareholders and customers of each other’s respective enterprises.
While VNPT will become the main supplier of telecom equipment for Vincom’s real estate projects, Vincom will be awarded VNPT infrastructure development contracts.
“This is a very notable partnership as it will combine the strengths and resources of two of the country’s leading companies,” said VNPT’s vice general director Nguyen Ba Thuoc.
Thuoc stressed that the collaboration between the two large corporations would boost Viet Nam’s economy and the technology sector, in particular, during integration into the World Trade Organisation.
He also said that the collaboration would promote the competitive edge of the two firms on the international market.
Last year, VNPT, the country’s largest telecom service provider, posted a revenue of 38.3 trillion VND (2.4 billion USD), up 14.9 percent compared to 2005 and 3.4 percent higher than the company’s initial forecast.
Real estate developer Vincom ISC generated revenue of 548.4 billion VND (34 million USD) last year, four times higher than the previous year’s figure. Its after-tax profit increased five fold, reaching 343.7 billion VND (21.4 million USD). Vincom, wholly owned by Vietnamese investors, also brings Ha Noi Vincom Tower to the table, among many other properties.
Source: VNA
Thursday, August 23, 2007
VN-Index slides, HaSTC-Index bounces back
The Ho Chi Minh City Stock Exchange (HOSE) reported losses again while its Ha Noi-based counterpart bounced back by the end of the August 23 trading session.
The VN-Index at the HOSE dropped 4.45 points or 0.5 percent to finish at 887.62 points. Close to 6 million shares, worth more than 439 billion VND, changed hands during the day.
The session witnessed 52 shares decline, 22 remain unchanged and 40 others rally for gains.
Shares that suffered the biggest losses included blue-chips Tan Tao Industrial Park Corporation (ITA), PetroVietnam Drilling and Well Services (PVD) and the Corporation for Financing and Promoting Technology (FPT).
Meanwhile, Binh Dinh Minerals (BMC) continued to top the list of movers by tacking 23,000 VND onto its listed price to finish at 495,000 VND per unit. It was followed by Tay Ninh Cable Tour Company (TCT) and the Saigon Hotel Corporation (SGH).
Saigon Thuong Tin Commercial Bank (STB), Vinh Son - Song Hinh Hydropower (VSH) and FPT were among the shares that led the market in terms of transaction volume.
The HaSTC-Index at the Ha Noi Securities Trading Centre meanwhile rose 0.9 point to finish at 247.37 points. More than 972,000 shares, worth over 90 billion VND, were traded.
Asia Commercial Bank (ACB) and Saigon Securities Inc. (SSI) continued to lead the market in terms of transaction volume with 152,000 shares changing hands.
The Over-The-Counter (OTC) market has also become less attractive to investors. The market saw many shares decline, including Vietcombank shares, which dropped by 50 percent to finish at 140,000 VND per unit.
The HOSE will close on September 3 for National Day and will resume operations on September 4, according to the bourse's General Director Tran Dac Sinh.
Source: VNA
The VN-Index at the HOSE dropped 4.45 points or 0.5 percent to finish at 887.62 points. Close to 6 million shares, worth more than 439 billion VND, changed hands during the day.
The session witnessed 52 shares decline, 22 remain unchanged and 40 others rally for gains.
Shares that suffered the biggest losses included blue-chips Tan Tao Industrial Park Corporation (ITA), PetroVietnam Drilling and Well Services (PVD) and the Corporation for Financing and Promoting Technology (FPT).
Meanwhile, Binh Dinh Minerals (BMC) continued to top the list of movers by tacking 23,000 VND onto its listed price to finish at 495,000 VND per unit. It was followed by Tay Ninh Cable Tour Company (TCT) and the Saigon Hotel Corporation (SGH).
Saigon Thuong Tin Commercial Bank (STB), Vinh Son - Song Hinh Hydropower (VSH) and FPT were among the shares that led the market in terms of transaction volume.
The HaSTC-Index at the Ha Noi Securities Trading Centre meanwhile rose 0.9 point to finish at 247.37 points. More than 972,000 shares, worth over 90 billion VND, were traded.
Asia Commercial Bank (ACB) and Saigon Securities Inc. (SSI) continued to lead the market in terms of transaction volume with 152,000 shares changing hands.
The Over-The-Counter (OTC) market has also become less attractive to investors. The market saw many shares decline, including Vietcombank shares, which dropped by 50 percent to finish at 140,000 VND per unit.
The HOSE will close on September 3 for National Day and will resume operations on September 4, according to the bourse's General Director Tran Dac Sinh.
Source: VNA
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