The first finance leasing company was established in Vietnam 11 years ago, and only 11 finance leasing companies have been set up in the last 11 years.
In the US, finance leasing every year provides 25-30% of the total credit funding enterprises’ purchasing and selling of equipment. The turnover from finance leasing activities is $17bil a year in the Republic of Korea, and the figure is $3bil in Thailand. The total turnover in the world that finance leasing can bring is estimated at $500bil with the growth rate of 7% per annum on average.
Meanwhile, finance leasing remains unused by Vietnamese companies. That explains why only 11 finance leasing companies have been set up in the last 11 years, since the first company of this kind was born.
A recent survey showed that the average capital of a finance leasing company is VND150bil ($9.37mil), very small if compared to the chartered capital of commercial banks, at over VND1tril ($62.5mil). A lot of companies among the said 11 companies have been operating ineffectively. It is because Vietnamese companies do not access loans through finance leasing.
In fact, not many Vietnamese companies know much about finance leasing due to bad advertising. A recent survey conducted of 1,000 enterprises showed that 70% of them knew very little about finance leasing. Meanwhile, nearly 20% of the polled enterprises said they knew nothing about finance leasing. Some of them even thought that it was a kind of funding of purchasing by installments. In general, enterprises cannot see any benefit in using finance leasing services.
In fact, the finance leasing fee remains high, thus not attracting enterprises. In general, clients would have to pay high to get assets through leasing services, while the cost would be lower if they borrow money from banks to buy the assets. The finance leasing interests rates prove to be higher than the bank loans’ interest rates as lessees have to pay additional expenses on installation, operation and insurance.
Another reason that explains why finance leasing is not favoured in Vietnam is the lack of legal documents regulating the finance leasing market. Experts have pointed out that the current regulations which say that domestic companies must have VND50bil ($3.12mil) and foreign companies must have $5mil to be allowed to operate in Vietnam prove to be unsuitable.
Despite the difficulties, experts still assert that Vietnam should pay appropriate attention to develop the finance leasing market. They said that the finance leasing would be a good solution for small enterprises or newly born ones which lack capital but need heavy investment in their workshops and technologies. In Vietnam, small- and medium-size enterprises account for 95% of total enterprises. 50% of enterprises are dissolved or need restructuring after six years of operation.
Source: VNE
Showing posts with label Financial Services. Show all posts
Showing posts with label Financial Services. Show all posts
Thursday, September 06, 2007
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
Thursday, August 30, 2007
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
Wednesday, August 15, 2007
Domestic-made market surveys booming
A lot of market surveys conducted by domestic financial institutions have been released in the last one month.
Investors now have a lot of choices when they want reliable reports and market surveys to refer to before making investment decisions. Besides the reports released by foreign HSBC or Merrill Lynch, they can also seek information and advice in domestic-made reports by SSI, VDSC or BVSC.
SSI’s report hit the market first, called “Vietnam’s stock market: the story about development”. After that, a lot of other reports conducted by other securities firms appeared on the market with different styles and diversified analyses.
In its report, Rong Viet (Viet Dragon VDSC) provides figures showing the overall picture of the economy: GDP growth rate 7.87% in first half of 2007, FDI $5.2bil, up by 8% over the same period of the last year, committed ODA $4.4bil, and export turnover $22.4bil.
The report mentions challenges Vietnam’s economy is facing such as high inflation, low disbursement of ODA, export growth slowdown. In the report, investors can also find general analyses about the financial situations of enterprises, both listed and unlisted, which are classified by business fields.
Bao Viet Securities (BVSC) on August 8 released a report with the prediction that the VN Index will hover at the 1,000 point level at the year’s end. The report also gives reasons for the fall of the market in the second quarter of the year 1. the market did not have strong impetuses, the P/E index was high 2. the ‘room’ for foreign investors had run out in many local companies 3. the central bank issued the decision to limit loans for securities investments.
Moreover, the report also identifies another reason, which is that 90% of companies listing on HOSE issued more shares in order to raise funds to inject in real estate projects, while real estate is not their main business field.
BVSC gives an optimistic view about the business operations of several big companies and big business fields. “The VN Index is believed to be on the upturn, and possibly will return to around the 1,000 point level; by that time, the P/E will be 26-27,” the report reads.
Meanwhile, Thang Long Securities Company writes in its report that the market’s performance will be very satisfactory in the future, but will not boom.
CBV’s (Bien Viet Securities Company) report provides a review of the market in the first seven months of the year based on CBV set of indexes: CBV Index (based on the 50 listing companies which have the biggest transaction volumes and market values) reached 133.04 points in the time period, and the market capitalisation volume had reached VND315,272bil ($19,704mil) by the end of July. The profitability level of the companies in these fields, according to CBV’s method of calculation, is very satisfactory, and even though the market fell down in July, the companies still maintained profitability.
CBV advises investors to make investment in MidCap group (companies with medium scale) instead of LargeCap (big-size companies) or SmallCap. The suggested investment addresses are companies in the fields of oil and gas, consumer goods and health care.
Big companies have good positions in the market, good trademarks, but now they are absorbed in expanding their businesses into other fields, which is not necessarily to their advantage. “This is a bad thing, which may lead to the price decrease of big groups and corporations,” the report concludes.
History shows that big groups and corporations can dominate smaller ones only when they focus on their main business fields.
Analysts have said that securities firms were trying to release market reports in the last time in order to polish their names, thus attracting more clients. In general, the reports bring more advice to investors, helping them make timely and suitable decisions.
Source: VNE
Investors now have a lot of choices when they want reliable reports and market surveys to refer to before making investment decisions. Besides the reports released by foreign HSBC or Merrill Lynch, they can also seek information and advice in domestic-made reports by SSI, VDSC or BVSC.
SSI’s report hit the market first, called “Vietnam’s stock market: the story about development”. After that, a lot of other reports conducted by other securities firms appeared on the market with different styles and diversified analyses.
In its report, Rong Viet (Viet Dragon VDSC) provides figures showing the overall picture of the economy: GDP growth rate 7.87% in first half of 2007, FDI $5.2bil, up by 8% over the same period of the last year, committed ODA $4.4bil, and export turnover $22.4bil.
The report mentions challenges Vietnam’s economy is facing such as high inflation, low disbursement of ODA, export growth slowdown. In the report, investors can also find general analyses about the financial situations of enterprises, both listed and unlisted, which are classified by business fields.
Bao Viet Securities (BVSC) on August 8 released a report with the prediction that the VN Index will hover at the 1,000 point level at the year’s end. The report also gives reasons for the fall of the market in the second quarter of the year 1. the market did not have strong impetuses, the P/E index was high 2. the ‘room’ for foreign investors had run out in many local companies 3. the central bank issued the decision to limit loans for securities investments.
Moreover, the report also identifies another reason, which is that 90% of companies listing on HOSE issued more shares in order to raise funds to inject in real estate projects, while real estate is not their main business field.
BVSC gives an optimistic view about the business operations of several big companies and big business fields. “The VN Index is believed to be on the upturn, and possibly will return to around the 1,000 point level; by that time, the P/E will be 26-27,” the report reads.
Meanwhile, Thang Long Securities Company writes in its report that the market’s performance will be very satisfactory in the future, but will not boom.
CBV’s (Bien Viet Securities Company) report provides a review of the market in the first seven months of the year based on CBV set of indexes: CBV Index (based on the 50 listing companies which have the biggest transaction volumes and market values) reached 133.04 points in the time period, and the market capitalisation volume had reached VND315,272bil ($19,704mil) by the end of July. The profitability level of the companies in these fields, according to CBV’s method of calculation, is very satisfactory, and even though the market fell down in July, the companies still maintained profitability.
CBV advises investors to make investment in MidCap group (companies with medium scale) instead of LargeCap (big-size companies) or SmallCap. The suggested investment addresses are companies in the fields of oil and gas, consumer goods and health care.
Big companies have good positions in the market, good trademarks, but now they are absorbed in expanding their businesses into other fields, which is not necessarily to their advantage. “This is a bad thing, which may lead to the price decrease of big groups and corporations,” the report concludes.
History shows that big groups and corporations can dominate smaller ones only when they focus on their main business fields.
Analysts have said that securities firms were trying to release market reports in the last time in order to polish their names, thus attracting more clients. In general, the reports bring more advice to investors, helping them make timely and suitable decisions.
Source: VNE
Thursday, August 02, 2007
First online integrated stock exchange floor opens
Viet Nam’s first online integrated stock exchange floor, Easy Online Trader, officially opened in Ho Chi Minh City on August 1.
The exchange floor is part of the Empower Securities Corporation (EPS)’s strategy to boost online securities trading of high confidentiality which is based on high-tech applications.
“We poured a heavy investment into the technology to provide quick, convenient, accurate and safe services for investors,” said EPS Chief Executive Offer Nguyen Huu Nam. “In the first phase, we will provide online trading training for investors.”
The same day, EPS officially launched a trading floor and representative office in Ho Chi Minh City.
The corporation reached agreements to issue 1 trillion VND worth of bonds for the Viet Nam National Textile and Garment Group (Vinatex), provide consultancy on equitisation to the Hoang Quan Real Estate Company and on initial public offerings for Vinatex’s affiliates.
It also inked business cooperation contracts with the Bank for Foreign Trade of Viet Nam (Vietcombank), the Bank for Investment and Development of Viet Nam and the Dong A Bank.
Source: VNA
The exchange floor is part of the Empower Securities Corporation (EPS)’s strategy to boost online securities trading of high confidentiality which is based on high-tech applications.
“We poured a heavy investment into the technology to provide quick, convenient, accurate and safe services for investors,” said EPS Chief Executive Offer Nguyen Huu Nam. “In the first phase, we will provide online trading training for investors.”
The same day, EPS officially launched a trading floor and representative office in Ho Chi Minh City.
The corporation reached agreements to issue 1 trillion VND worth of bonds for the Viet Nam National Textile and Garment Group (Vinatex), provide consultancy on equitisation to the Hoang Quan Real Estate Company and on initial public offerings for Vinatex’s affiliates.
It also inked business cooperation contracts with the Bank for Foreign Trade of Viet Nam (Vietcombank), the Bank for Investment and Development of Viet Nam and the Dong A Bank.
Source: VNA
Tuesday, July 31, 2007
SSC licenses two banks for securities services
Vietnam's State Securities Commission (SSC) said on Monday it has licensed JPMorgan Chase and Far East National Bank to offer securities depository services on its fast-expanding stock markets.
The Ho Chi Minh City branch of each of the banks was allowed to take the deposits as from last Friday, stock market watchdog SSC said in two separate statements.
The licensing took to six the foreign banks allowed to offer securities depository services in the southeast Asian country, after Citigroup, Deutsche Bank, HSBC and Standard Chartered Plc.
Another two state-run banks, Vietcombank and Vietindebank, have also been providing the service, SSC data showed.
The Ho Chi Minh Stock Exchange, Vietnam's main stock market with 109 listed companies, has the fastest rising index among Asian stock markets in the first quarter of 2007, after a surge of 144.5 percent last year.
On Monday the index lost 1.6 percent to close at 925.44 points. It was still a rise of 23 percent from the end of 2006. The market's capitalisation stood at $12.3 billion.
In the capital Hanoi a smaller over-the-counter market <.HASTCI> has 87 companies listed with a total capitalisation of $4.8 billion.
Foreign investors have raised their investment in Vietnamese securities to $5 billion as of early last month, from $3 billion to $4 billion in March, industry reports said.
The communist-run country caps foreign ownership in listed companies at 49 percent and 30 percent in listed banks.
Vietnam's central bank has forecast foreign indirect investment would rise to $5.5 billion by the end of this year.
Source: Reuters
The Ho Chi Minh City branch of each of the banks was allowed to take the deposits as from last Friday, stock market watchdog SSC said in two separate statements.
The licensing took to six the foreign banks allowed to offer securities depository services in the southeast Asian country, after Citigroup, Deutsche Bank, HSBC and Standard Chartered Plc.
Another two state-run banks, Vietcombank and Vietindebank, have also been providing the service, SSC data showed.
The Ho Chi Minh Stock Exchange, Vietnam's main stock market with 109 listed companies, has the fastest rising index among Asian stock markets in the first quarter of 2007, after a surge of 144.5 percent last year.
On Monday the index lost 1.6 percent to close at 925.44 points. It was still a rise of 23 percent from the end of 2006. The market's capitalisation stood at $12.3 billion.
In the capital Hanoi a smaller over-the-counter market <.HASTCI> has 87 companies listed with a total capitalisation of $4.8 billion.
Foreign investors have raised their investment in Vietnamese securities to $5 billion as of early last month, from $3 billion to $4 billion in March, industry reports said.
The communist-run country caps foreign ownership in listed companies at 49 percent and 30 percent in listed banks.
Vietnam's central bank has forecast foreign indirect investment would rise to $5.5 billion by the end of this year.
Source: Reuters
Monday, July 30, 2007
Financial investment: many opportunities, big profit
Aiming to become multi-area financial groups, commercial banks are promoting financial investment services besides their old business fields.
On July 25, the Saigon Thuong Tin Investment Joint Stock Company (SacomInvest) became operational in HCM City with chartered capital of VND300 billion (US$18.75 million). Its founding shareholders are Sacombank, Sacomreal, Toan Thinh Phat, Thanh Thanh Cong, in which Sacombank contributes 11% of capital.
SacomInvest operates in various fields, such as business management consulting, investment project management, real estate business, commercial brokerage, transport work construction, building infrastructure facilities for industrial zones, etc.
With the great financial potentials of its founding shareholders, SacomInvest focuses on infrastructure, energy, and real estate (high-class apartments, offices). The firm also plans to focus on business purchasing, buying the majority of shares of companies that have good foundations but operate ineffectively.
Luong Dinh Quang, Chairman of SacomInvest Board of Directors, said that SacomInvest had bought 40% of the stocks of the Kien Giang Tourism Company, 30% of the Dang Huynh Industrial Zone in the southern province of Long An and had become a strategic shareholder of the Bourbon Gia Lai Sugar Company and Nam Viet Investment Joint Stock Company.
According to Dang Van Thanh, Chairman of Sacombank Board of Directors, the real estate market is getting warmer. The need for housing, workshops, offices for lease is increasing. This is an opportunity for investment companies.
The Bank for Investment and Development of Vietnam (BIDV) has also set up a branch of the BIDV Financial Investment Joint Stock Company in HCM City to expand the company’s operations in the south.
It is easy to see that banks are establishing financial investment companies. Some banks like the Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Agriculture and Rural Development (Agribank), Sacombank have made joint ventures with some foreign financial institutions to set up securities investment funds.
BIDV has combined with six groups to set up the Industrial and Energy Management Fund Company, which has up to VND10 trillion (US$625 million) of capital. Meanwhile, Southern Bank has negotiated with Amcorp Bhd (Malaysia) to establish financial, insurance, securities trading, fund management companies in Vietnam.
There are many infrastructure investment projects witnessing the participation of banks. The HCM City-Trung Luong-My Thuan-Can Tho highway project has capital of BIDV, the Hanoi-Hai Phong highway, capital from Vietcombank.
According to Tran Phuong Binh, General Director of DongABank, through financial investment, banks can provide services for clients of its partners. For example, DongABank cooperates with water supply companies to gain the payment service for clients of water supply companies. The bank is also ready to loan to clients of water supply companies to install water meters, etc.
Financial investment is now a lucrative area of banks. Of the total VND880 billion ($55 million) of profit so far this year of Asia Commerce Bank (ACB), more than 30% comes from financial investment.
Ly Xuan Hai, General Director of ACB, said that ACB was trying to take advantage of 40% of its chartered capital to bring about big profit for the bank.
In financial investment, ACB divides its capital into two parts: one to buy shares of some companies to become their strategic shareholders and the other to invest in short-term securities. However, financial investment is highly risky so the bank is always very careful in making its portfolio and has to develop a professional risk management system.
Source: VNE
On July 25, the Saigon Thuong Tin Investment Joint Stock Company (SacomInvest) became operational in HCM City with chartered capital of VND300 billion (US$18.75 million). Its founding shareholders are Sacombank, Sacomreal, Toan Thinh Phat, Thanh Thanh Cong, in which Sacombank contributes 11% of capital.
SacomInvest operates in various fields, such as business management consulting, investment project management, real estate business, commercial brokerage, transport work construction, building infrastructure facilities for industrial zones, etc.
With the great financial potentials of its founding shareholders, SacomInvest focuses on infrastructure, energy, and real estate (high-class apartments, offices). The firm also plans to focus on business purchasing, buying the majority of shares of companies that have good foundations but operate ineffectively.
Luong Dinh Quang, Chairman of SacomInvest Board of Directors, said that SacomInvest had bought 40% of the stocks of the Kien Giang Tourism Company, 30% of the Dang Huynh Industrial Zone in the southern province of Long An and had become a strategic shareholder of the Bourbon Gia Lai Sugar Company and Nam Viet Investment Joint Stock Company.
According to Dang Van Thanh, Chairman of Sacombank Board of Directors, the real estate market is getting warmer. The need for housing, workshops, offices for lease is increasing. This is an opportunity for investment companies.
The Bank for Investment and Development of Vietnam (BIDV) has also set up a branch of the BIDV Financial Investment Joint Stock Company in HCM City to expand the company’s operations in the south.
It is easy to see that banks are establishing financial investment companies. Some banks like the Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Agriculture and Rural Development (Agribank), Sacombank have made joint ventures with some foreign financial institutions to set up securities investment funds.
BIDV has combined with six groups to set up the Industrial and Energy Management Fund Company, which has up to VND10 trillion (US$625 million) of capital. Meanwhile, Southern Bank has negotiated with Amcorp Bhd (Malaysia) to establish financial, insurance, securities trading, fund management companies in Vietnam.
There are many infrastructure investment projects witnessing the participation of banks. The HCM City-Trung Luong-My Thuan-Can Tho highway project has capital of BIDV, the Hanoi-Hai Phong highway, capital from Vietcombank.
According to Tran Phuong Binh, General Director of DongABank, through financial investment, banks can provide services for clients of its partners. For example, DongABank cooperates with water supply companies to gain the payment service for clients of water supply companies. The bank is also ready to loan to clients of water supply companies to install water meters, etc.
Financial investment is now a lucrative area of banks. Of the total VND880 billion ($55 million) of profit so far this year of Asia Commerce Bank (ACB), more than 30% comes from financial investment.
Ly Xuan Hai, General Director of ACB, said that ACB was trying to take advantage of 40% of its chartered capital to bring about big profit for the bank.
In financial investment, ACB divides its capital into two parts: one to buy shares of some companies to become their strategic shareholders and the other to invest in short-term securities. However, financial investment is highly risky so the bank is always very careful in making its portfolio and has to develop a professional risk management system.
Source: VNE
Thursday, July 26, 2007
FPT gets fund management licence
Vietnamese information technology services firm FPT has received a licence to run a fund management subsidiary as part of its plans to diversify into financial services.
The State Securities Commission issued the licence on July 25 for Hanoi-based FPT Fund Management Co. to operate with a registered capital of $6.8 million, the commission said in a statement seen on Thursday.
The company's business areas include managing securities funds and investing directly in securities, it said.
After a July 13 licence to offer stockbroking service, fund management allows FPT, Vietnam's second-largest listed firm valued at $1.44 billion, to operate outside its core businesses of software production, mobile phone sales and Internet services.
Eager to get a slice of Vietnam's quickly expanding financial services market, FPT has teamed up with state-run MobiFone and the State Capital Investment Corp. (SCIC) in seeking central bank permission to form a bank.
But brokers said investors may stay away from FPT shares for a while to see how the company deals with its new business areas.
Shares in FPT fell 4.49 percent to close at 255,000 dong ($15.8) on Wednesday as the VN Index ended 1 percent down at 972.56 points. The index is still 29.3 percent higher than at the end of last year.
Source: Reuters
The State Securities Commission issued the licence on July 25 for Hanoi-based FPT Fund Management Co. to operate with a registered capital of $6.8 million, the commission said in a statement seen on Thursday.
The company's business areas include managing securities funds and investing directly in securities, it said.
After a July 13 licence to offer stockbroking service, fund management allows FPT, Vietnam's second-largest listed firm valued at $1.44 billion, to operate outside its core businesses of software production, mobile phone sales and Internet services.
Eager to get a slice of Vietnam's quickly expanding financial services market, FPT has teamed up with state-run MobiFone and the State Capital Investment Corp. (SCIC) in seeking central bank permission to form a bank.
But brokers said investors may stay away from FPT shares for a while to see how the company deals with its new business areas.
Shares in FPT fell 4.49 percent to close at 255,000 dong ($15.8) on Wednesday as the VN Index ended 1 percent down at 972.56 points. The index is still 29.3 percent higher than at the end of last year.
Source: Reuters
Monday, July 23, 2007
SSI H1 net profit at record $41 mln
Vietnam's top brokerage, Saigon Securities Inc. (SSI), posted a record net profit of 668.5 billion dong ($41 million) in the first half, more than four fold its annual earnings last year, a state-run newspaper reported.
The company's net profit for the whole of 2006 was just 148.8 billion dong, its prospectus showed.
However, the Lao Dong (Labour) daily quoted the Ho Chi Minh City-based firm as saying net profit in the second quarter was half the earnings in the first quarter at 203.88 billion dong ($12.6 million). The report gave no reasons for the fall in second-quarter earnings.
SSI's main lines of businesses include underwriting share and debt issues as well as advising state-owned companies on privatisation. It is among about 50 companies offering such services in Hanoi and Ho Chi Minh City.
Earlier this month, Australia and New Zealand Banking Group Ltd. and Japan's Daiwa Securities Group Incorporation paid $88 million and $10.9 million respectively for a 10 percent and 1.25 percent stakes in SSI, valuing the firm at about $880 milllion.
Shares in SSI were traded down 0.32 percent at 156,400 dong ($9.7) each at 0225 GMT on the over-the-counter Hanoi exchange on Monday.
Source: Reuters
The company's net profit for the whole of 2006 was just 148.8 billion dong, its prospectus showed.
However, the Lao Dong (Labour) daily quoted the Ho Chi Minh City-based firm as saying net profit in the second quarter was half the earnings in the first quarter at 203.88 billion dong ($12.6 million). The report gave no reasons for the fall in second-quarter earnings.
SSI's main lines of businesses include underwriting share and debt issues as well as advising state-owned companies on privatisation. It is among about 50 companies offering such services in Hanoi and Ho Chi Minh City.
Earlier this month, Australia and New Zealand Banking Group Ltd. and Japan's Daiwa Securities Group Incorporation paid $88 million and $10.9 million respectively for a 10 percent and 1.25 percent stakes in SSI, valuing the firm at about $880 milllion.
Shares in SSI were traded down 0.32 percent at 156,400 dong ($9.7) each at 0225 GMT on the over-the-counter Hanoi exchange on Monday.
Source: Reuters
Friday, July 20, 2007
Listing companies atop CIC’s credit rating
The Credit Information Centre (CIC) has announced the results of the one-year implementation of the firm credit rating work, which showed that listing companies are the best ones.
In CIC’s rating, AAA is the highest rating, BB is given to good enterprises, while CCC is the worst.
Per request of the State Securities Commission (SSC), in 2006, CIC carried out the analysis of and ranked 72 companies listing on the bourse based on figures from 2004 and 2005. Most listing companies (93%) had good credit ratings, from BBB to AAA, while only five companies got CCC to BB.
However, according to CIC, there is no institution which can provide regular information about share issuance companies, including ones issuing OTC shares.
Service, energy and farm produce processing sectors prove to have the highest percentage of good enterprises among the eight polled sectors. The construction sector had the lowest percentage of good enterprises, at 20.5%, while the figure is 31% for other sectors. The processing sector had the highest percentage of optimal (AAA) enterprises (4.43%).
The capability of construction companies under the Ministries of Construction and Transport to make a profit proves to be very low (84% of general corporations have post tax profit of less than 3% of total turnover). 60% of corporations have an asset use ratio of less than 1 (one dong of asset can bring one dong of turnover).
Enterprises belonging to the two ministries have been found as being bogged down in debt. Statistics released by banks also showed that a big proportion of non-performing loans (NPL) belong to transport work construction and installation companies.
In the near future, CIC will give credit ratings to 20 big companies in the seafood sector, 20 big companies in the rubber industry and other enterprises in key industries of the national economy.
Source: VNE
In CIC’s rating, AAA is the highest rating, BB is given to good enterprises, while CCC is the worst.
Per request of the State Securities Commission (SSC), in 2006, CIC carried out the analysis of and ranked 72 companies listing on the bourse based on figures from 2004 and 2005. Most listing companies (93%) had good credit ratings, from BBB to AAA, while only five companies got CCC to BB.
However, according to CIC, there is no institution which can provide regular information about share issuance companies, including ones issuing OTC shares.
Service, energy and farm produce processing sectors prove to have the highest percentage of good enterprises among the eight polled sectors. The construction sector had the lowest percentage of good enterprises, at 20.5%, while the figure is 31% for other sectors. The processing sector had the highest percentage of optimal (AAA) enterprises (4.43%).
The capability of construction companies under the Ministries of Construction and Transport to make a profit proves to be very low (84% of general corporations have post tax profit of less than 3% of total turnover). 60% of corporations have an asset use ratio of less than 1 (one dong of asset can bring one dong of turnover).
Enterprises belonging to the two ministries have been found as being bogged down in debt. Statistics released by banks also showed that a big proportion of non-performing loans (NPL) belong to transport work construction and installation companies.
In the near future, CIC will give credit ratings to 20 big companies in the seafood sector, 20 big companies in the rubber industry and other enterprises in key industries of the national economy.
Source: VNE
Depository centre launches website
The Securities Depository Centre has launched a website at www.vsd.vn to supply information about trading codes to foreign investors as well as professional operations of its members.
Since it began operating last year, the centre has accepted deposit of 1.89 billion shares worth 18.9 trillion VND (1.2 billion USD). The centre has granted trading codes to 4,000 foreign individuals and 270 foreign institutional investors.
Since it began operating last year, the centre has accepted deposit of 1.89 billion shares worth 18.9 trillion VND (1.2 billion USD). The centre has granted trading codes to 4,000 foreign individuals and 270 foreign institutional investors.
Wednesday, July 18, 2007
Vietnam tech giant gets stockbroking license
Vietnam's top information technology services firm FPT Corp. has received the regulator’s nod to set up a securities brokerage as part of its drive to diversify into financial services. The State Securities Commission issued a license last week for the establishment of FPT Securities with a chartered capital of VND200 billion (US$12 million).
The brokerage will open in mid-August, offering stock brokerage, underwriting, and financial and investment consulting and stock depository.
The Ho Chi Minh City-listed FTP has been seeking to diversify away from its core businesses of software production, mobile phone distribution, and Internet services in an effort to get a slice of Vietnam's rapidly-growing financial services market.
The tech group has already won the license to FPT Fund Management Co, which is expected to be launched in the near future and it is also seeking central bank permission to open a commercial bank.
It is set to list on foreign stock exchanges next year with a particular interest in Singapore market to tap international capital sources.
Texas Pacific Group, a private-equity fund, and Intel Capital, a unit of chipmaker Intel hold a 10 percent stake worth $36.5 million in FPT.
Shares in FPT stayed unchanged at VND290,000 Tuesday, valuing the Hanoi-based company at VND135 billion.
Source: Thanh Nien
The brokerage will open in mid-August, offering stock brokerage, underwriting, and financial and investment consulting and stock depository.
The Ho Chi Minh City-listed FTP has been seeking to diversify away from its core businesses of software production, mobile phone distribution, and Internet services in an effort to get a slice of Vietnam's rapidly-growing financial services market.
The tech group has already won the license to FPT Fund Management Co, which is expected to be launched in the near future and it is also seeking central bank permission to open a commercial bank.
It is set to list on foreign stock exchanges next year with a particular interest in Singapore market to tap international capital sources.
Texas Pacific Group, a private-equity fund, and Intel Capital, a unit of chipmaker Intel hold a 10 percent stake worth $36.5 million in FPT.
Shares in FPT stayed unchanged at VND290,000 Tuesday, valuing the Hanoi-based company at VND135 billion.
Source: Thanh Nien
Thursday, July 12, 2007
Daiwa pays $11 mln for Vietnam SSI stake
Saigon Securities Inc. (SSI) said on Thursday it had sold one million shares to Japan's Daiwa Securities Group Incorporation for about $10.9 million.
The Ho Chi Minh City-based brokerage said in a statement published by the Hanoi Securities Trading Center it sold the shares, which represent a stake of about 1.25 percent, for 175,100 dong ($10.9) each, a 9.4 percent premium.
This week, Australia and New Zealand Bank Group Ltd. bought 8 million shares in SSI for 170,000 dong each, along with 555,600 convertible SSI bonds at 100,000 dong each.
Foreign banks have been moving increasingly into Vietnam as a wave of privatisations and share sales drive market activity.
The Vietnam Index was the top performing stock index in Asia in 2006 and is up almost 40 percent so far this year.
SSI reported in May its first quarter net profit jumped four times from a year earlier to $28.8 million on revenues of $35.5 million as the brokerage and IPO underwriting businesses thrived.
Source: Reuters
The Ho Chi Minh City-based brokerage said in a statement published by the Hanoi Securities Trading Center it sold the shares, which represent a stake of about 1.25 percent, for 175,100 dong ($10.9) each, a 9.4 percent premium.
This week, Australia and New Zealand Bank Group Ltd. bought 8 million shares in SSI for 170,000 dong each, along with 555,600 convertible SSI bonds at 100,000 dong each.
Foreign banks have been moving increasingly into Vietnam as a wave of privatisations and share sales drive market activity.
The Vietnam Index was the top performing stock index in Asia in 2006 and is up almost 40 percent so far this year.
SSI reported in May its first quarter net profit jumped four times from a year earlier to $28.8 million on revenues of $35.5 million as the brokerage and IPO underwriting businesses thrived.
Source: Reuters
Monday, July 09, 2007
Foreign banks preparing new attack?
In the last 10 years, foreign banks have not threatened domestic banks in the monetary market. However, experts say they are preparing a new attack in an attempt to dominate the domestic market.
While domestic banks have been growing rapidly in terms of network and chartered capital, foreign banks in Vietnam have not made any recent advances.
According to the Department for Banks and Non-bank Credit Institutions under the State Bank of Vietnam, in 1997-2006, the chartered capital of credit institutions increased by 4.96 times on average, while the figure was only 2.35 for foreign banks.
The market share of foreign banks has narrowed: down from 16.6% to 9.7% in terms of total assets, from 15.9% to 9.7% in terms of mobilised capital, and from 19.8% to 8.9% in terms of outstanding loans.
Due to many reasons, including ones relating to legal framework, the level of economic development, income and Vietnamese people’s habits, products and services provided by foreign banks in Vietnam remain limited.
Most foreign banks have been focusing on several services, like lending (wholesale lending), commercial support (opening accounts in VND and foreign currencies, money remittance, letter of credit L/C, frame agreement on commercial support), funding export-import projects, or funding projects. The main clients of foreign banks are foreign-invested production and processing enterprises, and big Vietnamese companies which have good business results.
It has been very difficult for foreign banks to expand their targeted clients. While foreign banks only establish credit relations with companies with healthy financial capability, transparent information, many Vietnamese companies cannot meet the requirements. That explains why foreign banks just access domestic enterprises through contracts on syndicated loans with domestic banks.
Up to now, the income for foreign banks has come mainly from lending activities and capital trading on the inter-bank market.
Statistics show that the borrowing and lending sums of foreign banks to other credit institutions in Hanoi account for 44.5% of the total assets of the banks, while the proportion in state-owned banks is 1.2%. Foreign banks mainly lend in foreign currencies, and they borrow mainly in VND.
Experts have said that the profit of foreign banks will reduce as domestic banks want to lower the percentage of borrowing from other credit institutions. This will force foreign banks to apply other measures to restructure their income.
The experts have said that foreign banks plan to expand their services, offering services on the financial market, services on card and commercial support. Especially, foreign banks will pay more attention to retail services, as they begin eyeing the market with 85mil people.
The Hong Kong and Shanghai Banking Corporation (HSBC) and Standard Chartered have been leading in providing retail services with the initial services of asset and transaction management for small- and medium-size enterprises and individuals.
In the time to come, foreign banks will introduce other products, including lending to serve the consumption demand, lending to individual clients (foreigners living and working in Vietnam, and Vietnamese high income earners) and providing credit to small- and medium-size enterprises.
They will also provide modern products like helping Vietnamese enterprises access the international capital market, implementing swap transactions and other derivatives.
It is clear that foreign banks have outstanding advantages over domestic banks in providing such high-grade services. And it is clear that foreign banks do not intend to compete with domestic banks in terms of quantity of services, but try to provide better quality services.
Source: VNE
While domestic banks have been growing rapidly in terms of network and chartered capital, foreign banks in Vietnam have not made any recent advances.
According to the Department for Banks and Non-bank Credit Institutions under the State Bank of Vietnam, in 1997-2006, the chartered capital of credit institutions increased by 4.96 times on average, while the figure was only 2.35 for foreign banks.
The market share of foreign banks has narrowed: down from 16.6% to 9.7% in terms of total assets, from 15.9% to 9.7% in terms of mobilised capital, and from 19.8% to 8.9% in terms of outstanding loans.
Due to many reasons, including ones relating to legal framework, the level of economic development, income and Vietnamese people’s habits, products and services provided by foreign banks in Vietnam remain limited.
Most foreign banks have been focusing on several services, like lending (wholesale lending), commercial support (opening accounts in VND and foreign currencies, money remittance, letter of credit L/C, frame agreement on commercial support), funding export-import projects, or funding projects. The main clients of foreign banks are foreign-invested production and processing enterprises, and big Vietnamese companies which have good business results.
It has been very difficult for foreign banks to expand their targeted clients. While foreign banks only establish credit relations with companies with healthy financial capability, transparent information, many Vietnamese companies cannot meet the requirements. That explains why foreign banks just access domestic enterprises through contracts on syndicated loans with domestic banks.
Up to now, the income for foreign banks has come mainly from lending activities and capital trading on the inter-bank market.
Statistics show that the borrowing and lending sums of foreign banks to other credit institutions in Hanoi account for 44.5% of the total assets of the banks, while the proportion in state-owned banks is 1.2%. Foreign banks mainly lend in foreign currencies, and they borrow mainly in VND.
Experts have said that the profit of foreign banks will reduce as domestic banks want to lower the percentage of borrowing from other credit institutions. This will force foreign banks to apply other measures to restructure their income.
The experts have said that foreign banks plan to expand their services, offering services on the financial market, services on card and commercial support. Especially, foreign banks will pay more attention to retail services, as they begin eyeing the market with 85mil people.
The Hong Kong and Shanghai Banking Corporation (HSBC) and Standard Chartered have been leading in providing retail services with the initial services of asset and transaction management for small- and medium-size enterprises and individuals.
In the time to come, foreign banks will introduce other products, including lending to serve the consumption demand, lending to individual clients (foreigners living and working in Vietnam, and Vietnamese high income earners) and providing credit to small- and medium-size enterprises.
They will also provide modern products like helping Vietnamese enterprises access the international capital market, implementing swap transactions and other derivatives.
It is clear that foreign banks have outstanding advantages over domestic banks in providing such high-grade services. And it is clear that foreign banks do not intend to compete with domestic banks in terms of quantity of services, but try to provide better quality services.
Source: VNE
ANZ buys into SSI
Australia and New Zealand Banking Group Ltd. said on Monday it had acquired a 10 percent stake in Vietnam's top stock broker Saigon Securities Inc. for US$88 million, further boosting its Asian expansion.
The acquisition values the Saigon Securities at about $880 million, compared with its Friday's market value of about $481.3 million, Reuters reported Monday.
ANZ is paying around 283,360 Vietnamese dong ($17.6) per share, based on Reuters calculations, a hefty premium of about 83 percent over Saigon Securities' last trade price for its minority stake, based on the US dollar conversion.
ANZ senior managing director, Bob Edgar, said the strategic partnership with SSI would benefit ANZ's existing institutional capital markets business in the fast-growing Vietnamese economy.
"This unique partnership combines the strong local market capabilities of SSI with ANZ's regional access, and builds on the existing relationship between the two organizations," Edgar said in a statement.
Saigon Securities, which also advises state-owned companies undergoing privatization and underwrites share and debt issues, reported a four times rise its first-quarter profit to US$28.8 million from a year ago. Quarterly revenue rose to US$35.5 million.
ANZ, which is Australia's third-biggest lender, has been aggressively expanding into Asia to offset any potential slowdown in its main Australia and New Zealand markets.
ANZ has spent about A$1.5 billion in buying largely small minority stakes in banks from Indonesia to China and analysts are expecting new Chief Executive Officer Michael Smith, who takes charge in October, to continue with ANZ's Asian growth strategy.
Smith has a strong background in Asian banking, having been HSBC Holdings' Asian business head.
ANZ has also been looking to boost its stockbroking business in Australia, and in April took control of E*Trade Australia Ltd.
Established in 2000, Saigon Securities listed on the Hanoi stock exchange in December last year.
"We look forward to further developing our relationship with ANZ and leveraging their international expertise to take full advantage of the opportunities presented by economic growth in Vietnam," Saigon Securities' chairman and chief executive officer Nguyen Duy Hung said.
Vietnam has averaged GDP growth of more than 7.5 percent for the past five years, and the industry and services sectors now account for more than 82 percent of the economy.
Source: Thanh Nien
The acquisition values the Saigon Securities at about $880 million, compared with its Friday's market value of about $481.3 million, Reuters reported Monday.
ANZ is paying around 283,360 Vietnamese dong ($17.6) per share, based on Reuters calculations, a hefty premium of about 83 percent over Saigon Securities' last trade price for its minority stake, based on the US dollar conversion.
ANZ senior managing director, Bob Edgar, said the strategic partnership with SSI would benefit ANZ's existing institutional capital markets business in the fast-growing Vietnamese economy.
"This unique partnership combines the strong local market capabilities of SSI with ANZ's regional access, and builds on the existing relationship between the two organizations," Edgar said in a statement.
Saigon Securities, which also advises state-owned companies undergoing privatization and underwrites share and debt issues, reported a four times rise its first-quarter profit to US$28.8 million from a year ago. Quarterly revenue rose to US$35.5 million.
ANZ, which is Australia's third-biggest lender, has been aggressively expanding into Asia to offset any potential slowdown in its main Australia and New Zealand markets.
ANZ has spent about A$1.5 billion in buying largely small minority stakes in banks from Indonesia to China and analysts are expecting new Chief Executive Officer Michael Smith, who takes charge in October, to continue with ANZ's Asian growth strategy.
Smith has a strong background in Asian banking, having been HSBC Holdings' Asian business head.
ANZ has also been looking to boost its stockbroking business in Australia, and in April took control of E*Trade Australia Ltd.
Established in 2000, Saigon Securities listed on the Hanoi stock exchange in December last year.
"We look forward to further developing our relationship with ANZ and leveraging their international expertise to take full advantage of the opportunities presented by economic growth in Vietnam," Saigon Securities' chairman and chief executive officer Nguyen Duy Hung said.
Vietnam has averaged GDP growth of more than 7.5 percent for the past five years, and the industry and services sectors now account for more than 82 percent of the economy.
Source: Thanh Nien
Friday, July 06, 2007
Setting up securities companies: opportunity over
There are now 55 operational securities companies, and some 50 others are waiting for operation licences from the State Securities Commission (SSC). However, experts have said that the golden time to establish securities companies is passed.
The director of a newly set up securities company said that most of the companies set up late last year were still having difficulty making profit. The right time for setting up securities companies was five or six years ago, when the stock market began operating. The companies established at that ‘golden time’ have been able to make fat profit.
Of the five sectors securities companies are allowed to operate in, brokerage services and self-business (companies make securities investment themselves) can bring the biggest profit. The companies set up in the very first period of the stock market, including SSI, BSC, BVSC, VCBS and ACBS, can attract many clients thanks to their 5-6 years of experience.
As for self-business, big money fell into the hands of these securities companies when share prices increased many fold over the prices at which the companies bought shares.
Meanwhile, opportunities to make profit from securities investment deals have not come for newly set up companies. Share prices were very high at the time the companies were set up but have been falling since March, leaving no money for these companies, some of which have even incurred losses from their investment deals.
The director of a securities company said that in the long term, the stock market would further develop, but that history would not repeat itself: share prices will not increase as dramatically as last year, and securities companies will not have the opportunity to get super profit.
Though many securities companies will be set up in the time to come, experts still believe that there will not be an excess of securities companies as people have said, as small companies that cannot meet the demands of clients will be forced to close.
In fact, room is always available for companies which can provide high-quality services. Recently, securities companies have been overloaded due to the sharply increasing number of clients. Many new clients have been refused service by big companies, prompting them to approach newly set companies.
Source: VNE
The director of a newly set up securities company said that most of the companies set up late last year were still having difficulty making profit. The right time for setting up securities companies was five or six years ago, when the stock market began operating. The companies established at that ‘golden time’ have been able to make fat profit.
Of the five sectors securities companies are allowed to operate in, brokerage services and self-business (companies make securities investment themselves) can bring the biggest profit. The companies set up in the very first period of the stock market, including SSI, BSC, BVSC, VCBS and ACBS, can attract many clients thanks to their 5-6 years of experience.
As for self-business, big money fell into the hands of these securities companies when share prices increased many fold over the prices at which the companies bought shares.
Meanwhile, opportunities to make profit from securities investment deals have not come for newly set up companies. Share prices were very high at the time the companies were set up but have been falling since March, leaving no money for these companies, some of which have even incurred losses from their investment deals.
The director of a securities company said that in the long term, the stock market would further develop, but that history would not repeat itself: share prices will not increase as dramatically as last year, and securities companies will not have the opportunity to get super profit.
Though many securities companies will be set up in the time to come, experts still believe that there will not be an excess of securities companies as people have said, as small companies that cannot meet the demands of clients will be forced to close.
In fact, room is always available for companies which can provide high-quality services. Recently, securities companies have been overloaded due to the sharply increasing number of clients. Many new clients have been refused service by big companies, prompting them to approach newly set companies.
Source: VNE
Tuesday, July 03, 2007
Fat profits set off race to open stock brokerages in Vietnam
Applications to set up securities brokerages continue to pour in, with even state firms in unrelated businesses joining the scramble, all attracted by the profitability of the business.
The State Securities Commission (SSC) said in the first half of this year some 15 new firms were licensed, taking the total number to 65 from 14 last year.
Over 80 more applications were awaiting approval.
Last year mostly banks, financial institutions, and insurance companies set up securities companies.
But recently several state-owned firms operating in unrelated sectors have filed applications with an eye on the profits brokerages make in Vietnam’s underserved stock market.
Most brokers reported a sharp rise in first quarter net profit.
Saigon Securities Inc., one of the biggest, said its profit rose fourfold year-on-year to VND465 billion (US$29 million) on revenues of VND573 billion.
Bao Viet Securities Company, an arm of Bao Viet Insurance Corp., and brokerages run by commercial banks Asia Commercial Joint Stock Bank (ACB), Bank for Foreign Trade of Vietnam (Vietcombank), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), and Eastern Asia Bank (EAB) all reported quarterly profits of over VND100 billion.
They all charge commissions of 0.2 to 0.5 percent on transactions.
The Ho Chi Minh and Hanoi bourses together report trades of around VND1 trillion a day, meaning commissions of VND2 – VND5 billion for the brokerages.
With the explosion in the stock market and securities business, insiders are concerned about the shortage of experienced brokerage staff and the fierce competition for personnel.
A firm needs at least 60 brokers to handle just the securities business.
Nguyen Ngoc Tuoi, general director of Danang Securities Company, said there was huge demand for experienced staff which was running well ahead of supply.
The SSC recently approved the setting up of five more centers to provide securities training. But their trainees will only join the job market next year.
Source: Thanh Nien
The State Securities Commission (SSC) said in the first half of this year some 15 new firms were licensed, taking the total number to 65 from 14 last year.
Over 80 more applications were awaiting approval.
Last year mostly banks, financial institutions, and insurance companies set up securities companies.
But recently several state-owned firms operating in unrelated sectors have filed applications with an eye on the profits brokerages make in Vietnam’s underserved stock market.
Most brokers reported a sharp rise in first quarter net profit.
Saigon Securities Inc., one of the biggest, said its profit rose fourfold year-on-year to VND465 billion (US$29 million) on revenues of VND573 billion.
Bao Viet Securities Company, an arm of Bao Viet Insurance Corp., and brokerages run by commercial banks Asia Commercial Joint Stock Bank (ACB), Bank for Foreign Trade of Vietnam (Vietcombank), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), and Eastern Asia Bank (EAB) all reported quarterly profits of over VND100 billion.
They all charge commissions of 0.2 to 0.5 percent on transactions.
The Ho Chi Minh and Hanoi bourses together report trades of around VND1 trillion a day, meaning commissions of VND2 – VND5 billion for the brokerages.
With the explosion in the stock market and securities business, insiders are concerned about the shortage of experienced brokerage staff and the fierce competition for personnel.
A firm needs at least 60 brokers to handle just the securities business.
Nguyen Ngoc Tuoi, general director of Danang Securities Company, said there was huge demand for experienced staff which was running well ahead of supply.
The SSC recently approved the setting up of five more centers to provide securities training. But their trainees will only join the job market next year.
Source: Thanh Nien
Monday, July 02, 2007
Prices increase, depositors depressed
With the currently offered deposit interest rates and the CPI (consumer price index) growth rate of 5.2% by the end of June 2007, depositors are currently struggling to make a profit.
Mrs Van, a staff of a financial company, said that she made a deposit at a bank in January 2007 with the interest rate of 0.75% per month. She estimated that she could get the profit of 4.75% of the deposit sum. However, as the CPI grew by 5.2% in the first six months, Mrs Van, in fact, could not make any profit.
In this case, the interest rate offered by the bank is called ‘the minus (-) interest rate’.
Commenting about the minus interest rate, an economist said that in principle banks must ensure real profit for depositors with the ‘plus (+) interest rate’ policy in order to attract more capital to the banking system (the offered interest rate should take the CPI growth rate into consideration).
The economist said that banks were now paying special attention to mobilising more capital in foreign currencies in order to meet the increased demand from enterprises. Banks have to raise the offered interest rates for foreign currencies deposits by 0.08% per annum (short-term deposits), and 0.1% per annum (long-term deposits) on average, compared to those in March 2007.
In June alone, at least four banks announced interest rate increases. Vietcombank (HCM City branch) led the movement, announcing a new interest rate commencing on June 8 (5% for 12-month term and 4.75% for 9-month term deposits). On June 20, EAB also raised the interest rates on deposits of all terms (5.25% for 12-month, 5.1% for 9-month term deposits). Just five days later, Sacombank announced it would raise offered interest rates by 0.05-0.2% per annum. Eximbank also jumped onto the bandwagon by announcing on June 29 that it would raise interest rates on US$ deposits by 0.05-0.2%.
Though the interest rates for US$ deposits are increasing, experts don’t think that people will begin making deposits in US$ instead of VND.
“One should not think that he can avoid exchange rate risks by selling VND and depositing in US$. Once he needs to spend money, he will still have to sell US$ to get VND, which means he will still be subject to the exchange rate fluctuation,” an analyst said.
In fact, the members of the Vietnam Banking Association in April reached an agreement on lowering deposit interest rates. However, many banks have ignored the agreement, saying that they still needed to consider the issue thoroughly, especially as the inflation rate remained high, and that banks should ensure real profit for depositors.
Sacombank has just announced it will lower interest rates on all terms of deposits, commencing from June 26 (0.76% per month for 12-month term, and 0.745% for 9-month term deposits). However, in a different move, Eximbank on June 29 announced it would raise deposit interest rates with the sharpest increases for 18-month term deposits and longer.
The director of a bank reiterated that the central bank had initiated the double compulsory reserve rate in an effort to reduce bank’s usable capital and control credit growth.
The move by the central bank will put a lot of pressure on banks, forcing them to reduce deposit interest rates and raise lending interest rates, he said.
Source: VNE
Mrs Van, a staff of a financial company, said that she made a deposit at a bank in January 2007 with the interest rate of 0.75% per month. She estimated that she could get the profit of 4.75% of the deposit sum. However, as the CPI grew by 5.2% in the first six months, Mrs Van, in fact, could not make any profit.
In this case, the interest rate offered by the bank is called ‘the minus (-) interest rate’.
Commenting about the minus interest rate, an economist said that in principle banks must ensure real profit for depositors with the ‘plus (+) interest rate’ policy in order to attract more capital to the banking system (the offered interest rate should take the CPI growth rate into consideration).
The economist said that banks were now paying special attention to mobilising more capital in foreign currencies in order to meet the increased demand from enterprises. Banks have to raise the offered interest rates for foreign currencies deposits by 0.08% per annum (short-term deposits), and 0.1% per annum (long-term deposits) on average, compared to those in March 2007.
In June alone, at least four banks announced interest rate increases. Vietcombank (HCM City branch) led the movement, announcing a new interest rate commencing on June 8 (5% for 12-month term and 4.75% for 9-month term deposits). On June 20, EAB also raised the interest rates on deposits of all terms (5.25% for 12-month, 5.1% for 9-month term deposits). Just five days later, Sacombank announced it would raise offered interest rates by 0.05-0.2% per annum. Eximbank also jumped onto the bandwagon by announcing on June 29 that it would raise interest rates on US$ deposits by 0.05-0.2%.
Though the interest rates for US$ deposits are increasing, experts don’t think that people will begin making deposits in US$ instead of VND.
“One should not think that he can avoid exchange rate risks by selling VND and depositing in US$. Once he needs to spend money, he will still have to sell US$ to get VND, which means he will still be subject to the exchange rate fluctuation,” an analyst said.
In fact, the members of the Vietnam Banking Association in April reached an agreement on lowering deposit interest rates. However, many banks have ignored the agreement, saying that they still needed to consider the issue thoroughly, especially as the inflation rate remained high, and that banks should ensure real profit for depositors.
Sacombank has just announced it will lower interest rates on all terms of deposits, commencing from June 26 (0.76% per month for 12-month term, and 0.745% for 9-month term deposits). However, in a different move, Eximbank on June 29 announced it would raise deposit interest rates with the sharpest increases for 18-month term deposits and longer.
The director of a bank reiterated that the central bank had initiated the double compulsory reserve rate in an effort to reduce bank’s usable capital and control credit growth.
The move by the central bank will put a lot of pressure on banks, forcing them to reduce deposit interest rates and raise lending interest rates, he said.
Source: VNE
Long-term mortgages open property market
Banks are beginning to widen the time frame on home loan deals from 10-15 years to as long as 30 years as the market matures and consumer incomes rise.
Phu My Hung JSC, a real estate developer, has for example recently signed agreements with nine banks to help provide consumers with 20-30 year home loans, including market leaders like Techcombank and Sacombank.
Housing agreements, over 25-30 year time frames are already popular in many other countries, says Nguyen Huu Dang, head of marketing at the Housing Development Bank (HDB), and finally Vietnam is catching on to the trend.
The HDB, another of the nine banks partnering with Phu My Hung, is even allowing clients to take out mortgages worth the full value of the property.
"These new services would offer people with stable incomes more opportunities to buy homes," says Dang.
HSBC is even delving into the home loan market, offering clients 25-year deals on 80% of property values.
Tran Xuan Huy, a Sacombank deputy director, indicated the bank has just begun its long term home loan programme this month, so it is still too early to determine its success, but foresees huge potential in the market.
Sacombank on Wednesday sealed a VND500mil (US$31,250) deal in which the International Finance Corporation, the World Bank's private investment arm, will lend financial support to consumers wanting to buy, build or repair homes.
Many other property developers are now searching or have already joined forces with banks to offer loan packages including the Khanh Hoi Import-Export Co in HCM City, which has jumped in bed with Incombank.
The two are offering a 20 year loans on 50% of a property's value.
Many consumers, though, still struggle with interest rates, which for the time being has curbed the number of financing deals inked.
Khanh Hoi reports that 90% of units sold in its latest apartment block have not used long term loan agreements or mortgages.
Even at an interest rate of 1% over 20 years, the monthly payments are still high for many consumers, said a Khanh Hoi representative in a recent interview.
On a 57sq.m apartment, the monthly fee could be as much as VND6mil (US$375) on a 20-year deal, said the representative. News reports put the average wage of a Vietnamese white collar worker in HCM City at around US$400-1,000.
Huy, though, remains confident that the property market will continue to grow this year, which will only encourage more banks to offer new and different home financing products.
"This is good for our co-operation [with developers and consumers] and for the domestic real estate market as a whole," says Huy.
Source: VNE
Phu My Hung JSC, a real estate developer, has for example recently signed agreements with nine banks to help provide consumers with 20-30 year home loans, including market leaders like Techcombank and Sacombank.
Housing agreements, over 25-30 year time frames are already popular in many other countries, says Nguyen Huu Dang, head of marketing at the Housing Development Bank (HDB), and finally Vietnam is catching on to the trend.
The HDB, another of the nine banks partnering with Phu My Hung, is even allowing clients to take out mortgages worth the full value of the property.
"These new services would offer people with stable incomes more opportunities to buy homes," says Dang.
HSBC is even delving into the home loan market, offering clients 25-year deals on 80% of property values.
Tran Xuan Huy, a Sacombank deputy director, indicated the bank has just begun its long term home loan programme this month, so it is still too early to determine its success, but foresees huge potential in the market.
Sacombank on Wednesday sealed a VND500mil (US$31,250) deal in which the International Finance Corporation, the World Bank's private investment arm, will lend financial support to consumers wanting to buy, build or repair homes.
Many other property developers are now searching or have already joined forces with banks to offer loan packages including the Khanh Hoi Import-Export Co in HCM City, which has jumped in bed with Incombank.
The two are offering a 20 year loans on 50% of a property's value.
Many consumers, though, still struggle with interest rates, which for the time being has curbed the number of financing deals inked.
Khanh Hoi reports that 90% of units sold in its latest apartment block have not used long term loan agreements or mortgages.
Even at an interest rate of 1% over 20 years, the monthly payments are still high for many consumers, said a Khanh Hoi representative in a recent interview.
On a 57sq.m apartment, the monthly fee could be as much as VND6mil (US$375) on a 20-year deal, said the representative. News reports put the average wage of a Vietnamese white collar worker in HCM City at around US$400-1,000.
Huy, though, remains confident that the property market will continue to grow this year, which will only encourage more banks to offer new and different home financing products.
"This is good for our co-operation [with developers and consumers] and for the domestic real estate market as a whole," says Huy.
Source: VNE
Bridge Sec to buy Vietnam HASECO stake for $13 mln
South Korean brokerage Bridge Securities Co. Ltd. said on Monday it will buy a 20 percent stake in Vietnam's Hai Phong Securities Co. (HASECO, HPC) for $13 million.
"We signed a contract for the strategic investment on June 30 and will buy 4 million shares out of 15 million new shares to be issued by Hai Phong Securities Joint Stock Company," Bridge said in a filing with the Financial Supervisory Commission.
The share purchase will cost 12 billion won ($13.01 million), it added.
The Vietnamese securities firm said on June 19 that it aimed to raise up to 350 billion dong ($21.7 million) by selling new shares in July. It has a chartered capital of 50 billion dong.Bridge Securities, led by Chief Executive Ly Sang-jun, who has said he had a royal Vietnamese ancestor, has been setting its sights on Vietnam to strike deals related to the privatisation of state-owned companies.
Its parent firm, Golden Bridge Finance Group, planned to raise $300 million in project funds to invest in Vietnam this year, Ly told Reuters in an interview in March.
HASECO shares were quoted at 72,400 dong, down 7.9 percent.
Source: Reuters
"We signed a contract for the strategic investment on June 30 and will buy 4 million shares out of 15 million new shares to be issued by Hai Phong Securities Joint Stock Company," Bridge said in a filing with the Financial Supervisory Commission.
The share purchase will cost 12 billion won ($13.01 million), it added.
The Vietnamese securities firm said on June 19 that it aimed to raise up to 350 billion dong ($21.7 million) by selling new shares in July. It has a chartered capital of 50 billion dong.Bridge Securities, led by Chief Executive Ly Sang-jun, who has said he had a royal Vietnamese ancestor, has been setting its sights on Vietnam to strike deals related to the privatisation of state-owned companies.
Its parent firm, Golden Bridge Finance Group, planned to raise $300 million in project funds to invest in Vietnam this year, Ly told Reuters in an interview in March.
HASECO shares were quoted at 72,400 dong, down 7.9 percent.
Source: Reuters
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