HCM bourse :
The session this morning saw exactly what happened in the session earlier. Stocks of medium and low prices saw continuous price escalations, while those of high prices and market capitalization fell sharply. The electronic board was overwhelmed with green as roughly one half of the listed stocks rose. The market’s statistics showed that there were 52 rising stocks, 47 falling ones and 16 stills. Modest points gained by rising stocks failed to compensate for the relatively more severely losses incurred by the bluechips, which ultimately resulted in the fall of the overall market indicator. Closing the session, VN-Index closed at 920.48 points, down 6.66 points, or 0.72% against the session earlier.
Among the top advancers were HAX and LBM. The sharpest riser of the market, HAX, saw a VND 3,500 increase and roughly 30,000 shares successfully matched. Next in the list were LBM, NSC, PJT and SHC with a VND 2,500 increase. The only two big stocks that saw rises wer TCT and VNM. The former earned an additional VND 2,000 while the latter was entitled to a VND 1,000 increase. Of the 52 rising stocks, there were only 4 stocks with prices above VND 70,000.
In the reverse direction, IMP lost VND 7,000 to close at VND 160,000. Next in the list were BMC, DHG, RIC, each lost VND 5,000.
In terms of trade volume, the stock of highest liquidity in the session, STB, saw roughly 650,000 shares matched. Next were STB, HTV, VF1, FPT and PVD with matched volume ranging in 140,000-190,000 units.
Hanoi bourse :
In the mean time, HaSTC index enjoyed a slight rise of 0.77 points, or 0.3% to close at 257.6 points. The total matched volume and value remained consistently high. The former closed at 1.69 million shares while the latter at VND 151 billion, up slightly against those of the previous session. Statistics showed that there were 59 rising stocks, 21 falling stocks and 9 stills.
S99 and SD7 confirmed its strong foothold in the top advancers list with increases of VND 19,500 and VND 13,400, respectively. RCL was back on the top advancers list, up VND 10,900. SD5 and SNG increased by VND 8,700 and VND 5,900, respectively.
In the reverse directiono, giant SSI lost VND 4,800, positioning itself as the stock most severely hit by price fall. Though slided, the stock saw a stunning high number of shares matched, which amounted to roughly 400,000 units by the end of the session. Included in the top gainers list were HJS, NST, ILC and S55 with decreases ranging from VND 1,000-VND 2,000.
In terms of trade volume, stocks most successfully traded on the bourse were SSI, ACB, POT, TLC.
Source: Infotv
Tuesday, September 11, 2007
Vinamilk says Jan-August profit $43 million
Vietnam's top dairy product maker, said on Tuesday it made a profit of 702 billion dong ($43.4 million), or 78 percent of its annual target, in the first eight months of this year.
Source: Reuters
Vinamilk had revenues of 4.37 trillion dong in the January-August period, or 58.8 percent of its annual target, the firm said in a statement of unaudited results.
It did not say if the profit was gross or net.
The Ho Chi Minh City-based firm also gave no comparative figures for the same period last year, but its January-August profit this year was already 9 percent higher than the net earnings in the first nine months of last year.
Vinamilk aims to raise its annual profit this year by 22.7 percent from 2006 to 898 billion dong on revenues of 7.43 trillion dong.
Shares in Vinamilk closed up 0.63 percent at 161,000 dong on the Ho Chi Minh Stock Exchange.Source: Reuters
Vincom to float in $600 mln listing
Vietnam property developer Vincom (VIC) will float all of its 80 million shares on Ho Chi Minh Stock Exchange next week in $600 million stock market listing, the company said on Tuesday.
The Hanoi-based company will float the shares at starting price of 119,000 dong ($7.4), similar to the average price Vincom shares were sold to retail investors at an auction of five million shares in July this year, traders said.
The shares are allowed to rise or fall by a 20 percent margin from the listing price on the first day of trading, according to stock market rules.
Vincom, which owns an office and shopping complex in Hanoi and a five-star resort in Nha Trang, forecast its next year net profit will rise 9 percent to $8.6 million from the previous year thanks to to strong demand for property.
It forecast an 11 percent rise in sales to $15.2 million, taking its return on equity to 17 percent from 16 percent this year.
Vincom forecast 2009 net profit to soar 700 percent to $71 million from 2008, as it completes the sale of several apartment buildings.
In June the Ho Chi Minh City municipal government granted Vincom 8,000 square metres (86,110 sq ft) of land in the District 1 commercial centre for a $250-million shopping mall and office building.
The company is also branching out into the energy sector and financial services and has plans to set up an investment fund and a brokerage with state-run Vietindebank.
Source: Reuters
The Hanoi-based company will float the shares at starting price of 119,000 dong ($7.4), similar to the average price Vincom shares were sold to retail investors at an auction of five million shares in July this year, traders said.
The shares are allowed to rise or fall by a 20 percent margin from the listing price on the first day of trading, according to stock market rules.
Vincom, which owns an office and shopping complex in Hanoi and a five-star resort in Nha Trang, forecast its next year net profit will rise 9 percent to $8.6 million from the previous year thanks to to strong demand for property.
It forecast an 11 percent rise in sales to $15.2 million, taking its return on equity to 17 percent from 16 percent this year.
Vincom forecast 2009 net profit to soar 700 percent to $71 million from 2008, as it completes the sale of several apartment buildings.
In June the Ho Chi Minh City municipal government granted Vincom 8,000 square metres (86,110 sq ft) of land in the District 1 commercial centre for a $250-million shopping mall and office building.
The company is also branching out into the energy sector and financial services and has plans to set up an investment fund and a brokerage with state-run Vietindebank.
Source: Reuters
Gemadept says 2008 profit to jump 50 pct
Vietnam's top forwarder Gemadept Corp (GMD) forecast its profit next year would jump 50 percent from this year as it puts an office building, a port and a warehouse into operation.
"Even if we cannot increase our current business, next year we will have, maybe, a 50-percent profit increase compared to 2007," Gemadept CEO Do Van Minh told Reuters in an interview on Monday at the company's Ho Chi Minh City headquarters.
Minh did not say if the forecast profit was pre-tax or net, but Gemadept has projected an increase in net profit this year of 25 percent to 30 percent from last year's net 156 billion dong ($9.7 million).
Source: Reuters
"Even if we cannot increase our current business, next year we will have, maybe, a 50-percent profit increase compared to 2007," Gemadept CEO Do Van Minh told Reuters in an interview on Monday at the company's Ho Chi Minh City headquarters.
Minh did not say if the forecast profit was pre-tax or net, but Gemadept has projected an increase in net profit this year of 25 percent to 30 percent from last year's net 156 billion dong ($9.7 million).
Source: Reuters
Monday, September 10, 2007
Reverse moves on bourses
HCM bourse :
The session this morning saw reverse moves made by the Northern and Southern bourse. In HCM bourse, that one half of the listed stocks moved in the upward trend failed to keep the VN-Index from sliding. In Hanoi bourse, 57 out of 89 listed stocks rose, but HaSTC index inched up slowly. The Southern bourse’s total volume saw slight decrease the third session in a row but still exceed 6 million shares.
Closing the session this morning, though the bourse was overwhelmed with 57 rising stocks, the price indicator suffered 7 points, or 0.75% to close at 927.14 points. The market saw roughly 6.25 million shares changing hands, worth a combined VND 474 billion.
Stocks of high market price and big listings headed back to close down after a week of heavy trade. Among the losers were BMC, TCT, BMP, VNM, DHG, SAM, FPT,PVD,etc. of which BMC was reported to be most severely hit by price falls. The stock lost VND 10,000 but still closed above VND 500,000. DHG, KDC, PVD lost VND 3,000. FPT, SAM, VNM suffered VND 2,000 each.
Stocks that were reported to stick to their reference prices were REE, GMD, STB.
In the reverse direction, the advancers list included stock of medium and low prices. Such stocks saw modest increase. RIC and UNI led the top up VND 4,000 each. The new comer, which made its bourse debut last week, ACL, saw increase of VND 3,000. Next in the list were BT6, SFI, LBM, LGC…
Included in the top active list by volume were STB, VF1, VID, ACL and RIC. STB led such list with volume amounting to roughly 900,000 units.
Hanoi bourse:
In Hanoi bourse, the advancing impetus gained in last week’s sessions kept HaSTC index to rise by a slight 0.18 points. The market saw roughly 1.6 million shares chaning hands, worth a combined VND 136 billion. Compared to the closing session last week, the total volume stayed nearly the same while value lost 23.16%, which meant that local investors were intensifying their buying of lower –priced stocks.
57 out of 89 listed stocks were reported on the rise. Included in the advancers list were S99, SD7, ILC, SD5 and RCLwith increasing band being expanded. S99 rose a sharp VND 17,000. Next in the list were S SD7, ILC, SD5 and RCL.
In the reverse direction, BVS saw continuous slide with a fall of VND 4,400. Included in the list were PLC, HLY, NTP and HTP. Other sliders’ falls were restricted to VND 1,000 each only.
Included in the top active list by volume were SSI, NTP and ACB. SSI headed back on downward trend after a week of stunning rise. The stock’s volume reached 321,400 units. TBC saw sharp rise with roughly 160,000 shares matched. Foreign investors bought in a total of 106,900 units while sold out 153,800 units, which together accounted for nearly 16.19% of the market’s total trading volume. Stocks of their buying interest included PVI (47,100 shares); NTP (35,100 shares);HPS (10,900 shares) and SSI (7,900 shares).
The session this morning saw reverse moves made by the Northern and Southern bourse. In HCM bourse, that one half of the listed stocks moved in the upward trend failed to keep the VN-Index from sliding. In Hanoi bourse, 57 out of 89 listed stocks rose, but HaSTC index inched up slowly. The Southern bourse’s total volume saw slight decrease the third session in a row but still exceed 6 million shares.
Closing the session this morning, though the bourse was overwhelmed with 57 rising stocks, the price indicator suffered 7 points, or 0.75% to close at 927.14 points. The market saw roughly 6.25 million shares changing hands, worth a combined VND 474 billion.
Stocks of high market price and big listings headed back to close down after a week of heavy trade. Among the losers were BMC, TCT, BMP, VNM, DHG, SAM, FPT,PVD,etc. of which BMC was reported to be most severely hit by price falls. The stock lost VND 10,000 but still closed above VND 500,000. DHG, KDC, PVD lost VND 3,000. FPT, SAM, VNM suffered VND 2,000 each.
Stocks that were reported to stick to their reference prices were REE, GMD, STB.
In the reverse direction, the advancers list included stock of medium and low prices. Such stocks saw modest increase. RIC and UNI led the top up VND 4,000 each. The new comer, which made its bourse debut last week, ACL, saw increase of VND 3,000. Next in the list were BT6, SFI, LBM, LGC…
Included in the top active list by volume were STB, VF1, VID, ACL and RIC. STB led such list with volume amounting to roughly 900,000 units.
Hanoi bourse:
In Hanoi bourse, the advancing impetus gained in last week’s sessions kept HaSTC index to rise by a slight 0.18 points. The market saw roughly 1.6 million shares chaning hands, worth a combined VND 136 billion. Compared to the closing session last week, the total volume stayed nearly the same while value lost 23.16%, which meant that local investors were intensifying their buying of lower –priced stocks.
57 out of 89 listed stocks were reported on the rise. Included in the advancers list were S99, SD7, ILC, SD5 and RCLwith increasing band being expanded. S99 rose a sharp VND 17,000. Next in the list were S SD7, ILC, SD5 and RCL.
In the reverse direction, BVS saw continuous slide with a fall of VND 4,400. Included in the list were PLC, HLY, NTP and HTP. Other sliders’ falls were restricted to VND 1,000 each only.
Included in the top active list by volume were SSI, NTP and ACB. SSI headed back on downward trend after a week of stunning rise. The stock’s volume reached 321,400 units. TBC saw sharp rise with roughly 160,000 shares matched. Foreign investors bought in a total of 106,900 units while sold out 153,800 units, which together accounted for nearly 16.19% of the market’s total trading volume. Stocks of their buying interest included PVI (47,100 shares); NTP (35,100 shares);HPS (10,900 shares) and SSI (7,900 shares).
Friday, September 07, 2007
Idicies increase
HCM bourse :
This morning saw the second consecutive rise of the market. Price indicators moved up, fueled by the advancing impetus gained in the session earlier.
There were reportedly around 50 rising stocks, 35 falling stocks and 30 stills, which prompted the Vn-Index to rise to 934.13 points, up a slight 5.77 points or 0.62% against the session earlier. The total matched volume remained high. HCM bourse saw 6.72 million shares changing hands, worth a combined VND 535.6 billion.
Price rises remained modest and stretched out with 50 rising stocks. The sharpest riser of the market gained an additional VND 6,000 only. Such stocks of low maket prices as LBM, VID, SGC, VTB, TRI, TRC,NSC, PJT,etc. kept moving up, many of which were reported to beat their ceiling prices. BMC, LGC, PVD, VNM advanced while many others saw fall, noticably BMC, TCT, SGH, IMP. The decreases, however, were restricted to VND 4,000 only. BMC and TCT, the two stocks of heavy fluctuations, fell today. The former lost VND 2,000 while the latter lost VND 4,000. The newly-listed stock, ACL, regained VND 1,500 after its sharp fall yesterday.
In terms of trade volume, STB remained the most-traded stock with as many as 916,000 shares changing hands. In the mean time, such stocks as VF1, PPC, PVD remained heavily traded. With roughly 180,000 shares changing hands, SHC earned a post in the top active list by volume.
Hanoi bourse :
In Hanoi bourse, increasing band was extended for the majority of rising stocks. Noticeably, the total trade volume and value remained consistently high for the last 4 trading sessions. In today’s session, the market saw a total of 1.67 million shares changing hands, worth a consolidated VND 177.2 billion. There wre 54 rising stocks, 18 falling stocks and 17 stills.
In the upward trend, S99 led the top advancers list with an increase of VND 15,700 to close at VND 177,300. Other stocks as ILC, SSI, SD5 and SDC saw sharp rises which ranged from VND 4,200 to VND 9,100.
In the reverse trend, except for MCO which fell by VND 3,600, other losers saw modest falls, 13 of which saw decreases not exceeding VND 1,000.
In terms of trade volume, SSI earned a stunning VND 8,800 and led the top active list by volume with roughly 570,000 shares matched, far lagging NTP, TBC, ACB and SD9 behind. When the price index saw significant improvement, foreign investors reduced their trading power. They bought in a total of 67,300 units and sold out 17,000 units, which together accounted for roughly 5% of the market’s total trade volume.
This morning saw the second consecutive rise of the market. Price indicators moved up, fueled by the advancing impetus gained in the session earlier.
There were reportedly around 50 rising stocks, 35 falling stocks and 30 stills, which prompted the Vn-Index to rise to 934.13 points, up a slight 5.77 points or 0.62% against the session earlier. The total matched volume remained high. HCM bourse saw 6.72 million shares changing hands, worth a combined VND 535.6 billion.
Price rises remained modest and stretched out with 50 rising stocks. The sharpest riser of the market gained an additional VND 6,000 only. Such stocks of low maket prices as LBM, VID, SGC, VTB, TRI, TRC,NSC, PJT,etc. kept moving up, many of which were reported to beat their ceiling prices. BMC, LGC, PVD, VNM advanced while many others saw fall, noticably BMC, TCT, SGH, IMP. The decreases, however, were restricted to VND 4,000 only. BMC and TCT, the two stocks of heavy fluctuations, fell today. The former lost VND 2,000 while the latter lost VND 4,000. The newly-listed stock, ACL, regained VND 1,500 after its sharp fall yesterday.
In terms of trade volume, STB remained the most-traded stock with as many as 916,000 shares changing hands. In the mean time, such stocks as VF1, PPC, PVD remained heavily traded. With roughly 180,000 shares changing hands, SHC earned a post in the top active list by volume.
Hanoi bourse :
In Hanoi bourse, increasing band was extended for the majority of rising stocks. Noticeably, the total trade volume and value remained consistently high for the last 4 trading sessions. In today’s session, the market saw a total of 1.67 million shares changing hands, worth a consolidated VND 177.2 billion. There wre 54 rising stocks, 18 falling stocks and 17 stills.
In the upward trend, S99 led the top advancers list with an increase of VND 15,700 to close at VND 177,300. Other stocks as ILC, SSI, SD5 and SDC saw sharp rises which ranged from VND 4,200 to VND 9,100.
In the reverse trend, except for MCO which fell by VND 3,600, other losers saw modest falls, 13 of which saw decreases not exceeding VND 1,000.
In terms of trade volume, SSI earned a stunning VND 8,800 and led the top active list by volume with roughly 570,000 shares matched, far lagging NTP, TBC, ACB and SD9 behind. When the price index saw significant improvement, foreign investors reduced their trading power. They bought in a total of 67,300 units and sold out 17,000 units, which together accounted for roughly 5% of the market’s total trade volume.
Thursday, September 06, 2007
Stock indexes increase slightly
HCM bourse :
After yesterday’s falls on both bourses, the situation was somewhat relieved today when increases were witnessed. Vn-Index rose a slight 2.79 points, while HaSTC index saw a 0.85 point rise. Though not as heavy as yesterday’s , today’ s trade remained one among the heaviest for the last couple of month.
There were reportedly around 54 rising stocks, 33 falling stocks and 28 stills. Vn-Index gained 2.79 points more, closing at 928.36 points. A total of 7.3 million shares changed hands, worth a combined VND 571.52 billion.
Of the 33 falling stocks, none was reported to lose more than VND 2,500. The new comer ACL, which made its bourse debut yesterday, was recognized the stock most severely hit by price fall. The stock saw a VND 2,500 fall. Among those suffering VND 2,000 wre BMP, DHG, NKD. The rest 21 falling stocks saw decreasing band not exceeding VND 1,000 each.
BMC drew much of investors’ attention by its sharp rise and fall in the couple of sessions. After 3 successive decreasing morning, the stock was reported to see an increase of VND 7,000. TCT closed up VND 10,000. Other sharp advancers included LGC, RIC, HAP. KDC, GMD rose VND 2,000. In the mean time, FPT, REE and VNE closed at their reference price. The two fund VF1 and BF1 slightly fell but saw heavy trade, especially VF1.
In terms of trade volume, the trade volume of many among the most-traded stocks on the bourse saw decreases against those of the session earlier. STB led the top active list by volume with as many as 960,000 shares matched. Next in the list were BF1, BBT, PVD, and LBM.
Hanoi bourse:
Closing the session this morning , HaSTC closed at 254.57 points, up a slight 0.85 point, or 0.34% against the session earlier. The market saw a total of 991,200 units changing hands, worth a consolidated VND 103.32 billion. The number of rising and falling stocks remained balanced. There were 36 rising stocks, 37 falling ones, and 16 stills.
S99 extended its string of rising session with a sharp increase of VND 12,700. The morning witnessed the second consecutive session in which the top advancers list featured S99, S64 and ILC. The second sharpest riser, ILC, saw only VND 6,300 increase. Other stocks’ added points did not exceed VND 3,000.
In the reverse direction, BVS saw sharp fall, losing VND 5,300 to close at VND 379,600. Other stocks of sharp falls includedPSC, SD7, NBC, SD3 with decreases restricted to VND 3,300.
In terms of trade volume, no significant changes were witnessed with the top active list by volume in the last couple of sessions. TBC confirmed its place in such list due to a stunning sold-out of the stock by foreign investors. Next in the list were NTP and SD9 with roughly 44,000 and 35,000 shares successfully matched, respectively. Foreign investors bought in 42,000 shares and sold out 76,700 units, which together holding up to 12.22% of the market’s total trade volume.
Source: Infotv
After yesterday’s falls on both bourses, the situation was somewhat relieved today when increases were witnessed. Vn-Index rose a slight 2.79 points, while HaSTC index saw a 0.85 point rise. Though not as heavy as yesterday’s , today’ s trade remained one among the heaviest for the last couple of month.
There were reportedly around 54 rising stocks, 33 falling stocks and 28 stills. Vn-Index gained 2.79 points more, closing at 928.36 points. A total of 7.3 million shares changed hands, worth a combined VND 571.52 billion.
Of the 33 falling stocks, none was reported to lose more than VND 2,500. The new comer ACL, which made its bourse debut yesterday, was recognized the stock most severely hit by price fall. The stock saw a VND 2,500 fall. Among those suffering VND 2,000 wre BMP, DHG, NKD. The rest 21 falling stocks saw decreasing band not exceeding VND 1,000 each.
BMC drew much of investors’ attention by its sharp rise and fall in the couple of sessions. After 3 successive decreasing morning, the stock was reported to see an increase of VND 7,000. TCT closed up VND 10,000. Other sharp advancers included LGC, RIC, HAP. KDC, GMD rose VND 2,000. In the mean time, FPT, REE and VNE closed at their reference price. The two fund VF1 and BF1 slightly fell but saw heavy trade, especially VF1.
In terms of trade volume, the trade volume of many among the most-traded stocks on the bourse saw decreases against those of the session earlier. STB led the top active list by volume with as many as 960,000 shares matched. Next in the list were BF1, BBT, PVD, and LBM.
Hanoi bourse:
Closing the session this morning , HaSTC closed at 254.57 points, up a slight 0.85 point, or 0.34% against the session earlier. The market saw a total of 991,200 units changing hands, worth a consolidated VND 103.32 billion. The number of rising and falling stocks remained balanced. There were 36 rising stocks, 37 falling ones, and 16 stills.
S99 extended its string of rising session with a sharp increase of VND 12,700. The morning witnessed the second consecutive session in which the top advancers list featured S99, S64 and ILC. The second sharpest riser, ILC, saw only VND 6,300 increase. Other stocks’ added points did not exceed VND 3,000.
In the reverse direction, BVS saw sharp fall, losing VND 5,300 to close at VND 379,600. Other stocks of sharp falls includedPSC, SD7, NBC, SD3 with decreases restricted to VND 3,300.
In terms of trade volume, no significant changes were witnessed with the top active list by volume in the last couple of sessions. TBC confirmed its place in such list due to a stunning sold-out of the stock by foreign investors. Next in the list were NTP and SD9 with roughly 44,000 and 35,000 shares successfully matched, respectively. Foreign investors bought in 42,000 shares and sold out 76,700 units, which together holding up to 12.22% of the market’s total trade volume.
Source: Infotv
Imexpharm expects 6 pct profit rise
Imexpharm (IMP), Vietnam's second largest pharmaceutical firm, expects its net profit to rise 6.1 percent to 50 billion dong ($3.1 million) this year, the company report said on Thursday.
Imexpharm, based in the Mekong Delta province of Dong Thap, expected revenues of 530 billion dong ($33 million) this year, up from 525 billion dong last year.
The company, which specialises in antibiotics and vitamins, also said it planned to pay a dividend of 20-25 percent this year, unchanged from 2006.
Imexpharm, the second largest domestic pharmaceutical firm last year in terms of sales after Hau Giang Pharmceutical Co (DHG), said it aimed to raise its domestic market share to 7 percent next year from 4 percent.
Hau Giang Pharmaceutical had first-half revenues of 554.4 billion dong, more than double Imexpharm's.
Imexpharm shares edged up 0.59 percent on Thursday to close at 171,000 dong ($10.5) on the Ho Chi Minh Stock Exchange while shares in Hau Giang Pharmaceutical fell 0.51 percent to 388,000 dong ($24) each.
Imexpharm, based in the Mekong Delta province of Dong Thap, expected revenues of 530 billion dong ($33 million) this year, up from 525 billion dong last year.
The company, which specialises in antibiotics and vitamins, also said it planned to pay a dividend of 20-25 percent this year, unchanged from 2006.
Imexpharm, the second largest domestic pharmaceutical firm last year in terms of sales after Hau Giang Pharmceutical Co (DHG), said it aimed to raise its domestic market share to 7 percent next year from 4 percent.
Hau Giang Pharmaceutical had first-half revenues of 554.4 billion dong, more than double Imexpharm's.
Imexpharm shares edged up 0.59 percent on Thursday to close at 171,000 dong ($10.5) on the Ho Chi Minh Stock Exchange while shares in Hau Giang Pharmaceutical fell 0.51 percent to 388,000 dong ($24) each.
Vietnam to export steel by 2010
Under the strategy on steel industry development from 2007-2015 with a vision towards 2025, which has been approved by the Prime Minister, Vietnam strives to export 0.5mil tonnes of steel of different kinds.
According to the Ministry of Industry and Trade, the total volume of finished steel to be demanded by 2010 will be 11-12mil tonnes. The figures will be 15-16mil tonnes by 2015 and 24-25mil tonnes by 2025.
The general goal of the steel industry is to satisfy at the highest possible level the demand for steel products of the national economy and make steel for export. As for cast iron production, Vietnam aims to churn out 1.5-1.9mil tonnes by 2010, 5-5.8mil tonnes by 2015 and 10-12mil tonnes by 2025. As for ingot steel production, the local industry strives to put out 3.5-4.5mil tonnes by 2010, 6-8mil tonnes by 2015 and 12-15mil by 2025. Meanwhile, the production of finished steel is expected to provide 6.3-6.5mil tonnes by 2010, 11-12mil by 2015, and 19-22mil tonnes by 2025, including 11-13mil tonnes of flat steel and 0.2mil tonnes of special products.
Not only aiming to satisfy domestic demand, the strategy says that Vietnam will export steel products. However, the targeted exports prove to be modest: 0.5-0.7mil tonnes of cast iron and steel of different kinds by 2010. The volume to be exported 15 years later, by 2025, will be 1.2-1.5mil tonnes.
The strategy mentions the six big projects, saying that the implementation of the six projects, scheduled for 2007-2015, will be the most important tasks. These include 1. the Ha Tinh Steel Combinate (expected capacity 4.5mil tonnes/year, to be operational in 2011) 2. Dung Quat Complex (5mil tonnes/ year, the second phase of the project to begin in 2011) 3. South Korea’s Posco’s hot and cold rolled and galvanised steel mill (3mil tonnes/year) 4. the plate rolled steel mill to be invested in by India’s ESSA and a local partner 5. the project on expanding Thai Nguyen Cast Iron and Steel Mill and 6. the Lao Cai Steel Combinate.
Besides high capacity cast iron blast furnaces, Vietnam will also pay appropriate attention to developing medium- and small-scale workshops in northern mountainous areas, including Lao Cai, Tuyen Quang, Cao Bang, Ha Giang, Yen Bai, Bac Kan with the total capacity of 1mill tonnes a year.
In the 2016-2015 period, Vietnam will focus on producing steel with electricity-run furnaces and consider producing special steel products used in engine manufacturing and national defence.
Under the recently approved strategy, Vietnam will need $10-12bil from 2007-2025 for the investment in steel mills, of which $8bil will be used in 2007-2015. In order to have such a huge capital, Vietnam will have to diversify capital sources while pushing up the equitisation process.
Eight groups of solutions for the steel industry’s development are mentioned in the strategy, including ones on investment cooperation, material source development, training staffs, investment in science and technologies, and environmental protection as well.
Source: VNE
According to the Ministry of Industry and Trade, the total volume of finished steel to be demanded by 2010 will be 11-12mil tonnes. The figures will be 15-16mil tonnes by 2015 and 24-25mil tonnes by 2025.
The general goal of the steel industry is to satisfy at the highest possible level the demand for steel products of the national economy and make steel for export. As for cast iron production, Vietnam aims to churn out 1.5-1.9mil tonnes by 2010, 5-5.8mil tonnes by 2015 and 10-12mil tonnes by 2025. As for ingot steel production, the local industry strives to put out 3.5-4.5mil tonnes by 2010, 6-8mil tonnes by 2015 and 12-15mil by 2025. Meanwhile, the production of finished steel is expected to provide 6.3-6.5mil tonnes by 2010, 11-12mil by 2015, and 19-22mil tonnes by 2025, including 11-13mil tonnes of flat steel and 0.2mil tonnes of special products.
Not only aiming to satisfy domestic demand, the strategy says that Vietnam will export steel products. However, the targeted exports prove to be modest: 0.5-0.7mil tonnes of cast iron and steel of different kinds by 2010. The volume to be exported 15 years later, by 2025, will be 1.2-1.5mil tonnes.
The strategy mentions the six big projects, saying that the implementation of the six projects, scheduled for 2007-2015, will be the most important tasks. These include 1. the Ha Tinh Steel Combinate (expected capacity 4.5mil tonnes/year, to be operational in 2011) 2. Dung Quat Complex (5mil tonnes/ year, the second phase of the project to begin in 2011) 3. South Korea’s Posco’s hot and cold rolled and galvanised steel mill (3mil tonnes/year) 4. the plate rolled steel mill to be invested in by India’s ESSA and a local partner 5. the project on expanding Thai Nguyen Cast Iron and Steel Mill and 6. the Lao Cai Steel Combinate.
Besides high capacity cast iron blast furnaces, Vietnam will also pay appropriate attention to developing medium- and small-scale workshops in northern mountainous areas, including Lao Cai, Tuyen Quang, Cao Bang, Ha Giang, Yen Bai, Bac Kan with the total capacity of 1mill tonnes a year.
In the 2016-2015 period, Vietnam will focus on producing steel with electricity-run furnaces and consider producing special steel products used in engine manufacturing and national defence.
Under the recently approved strategy, Vietnam will need $10-12bil from 2007-2025 for the investment in steel mills, of which $8bil will be used in 2007-2015. In order to have such a huge capital, Vietnam will have to diversify capital sources while pushing up the equitisation process.
Eight groups of solutions for the steel industry’s development are mentioned in the strategy, including ones on investment cooperation, material source development, training staffs, investment in science and technologies, and environmental protection as well.
Source: VNE
Finance leasing unfamiliar to Vietnamese companies
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
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
Sacombank reports soaring profit
The gross profit of Sacombank (STB), Vietnam's sixth-largest lender, in the first eight months of this year was nearly double that of the whole of 2006, an executive was quoted on Thursday as saying.
The profit was 900 billion dong ($55.7 million), up from a pre-tax 543 billion dong last year, Sacombank chairman Dang Van Thanh was quoted by the Securities Investment newspaper as telling a company meeting.
Thanh did not give a net profit figure, but said the Ho Chi Minh City-based bank aimed for a full year gross profit of 1.4 trillion dong ($86.6 million).
Sacombank, whose formal name is Saigon Thuong Tin Commercial Bank, has said its seven-month profit more than doubled as loans surged 139 percent from a year earlier to $1.1 billion.
The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 30 percent of Sacombank, the ceiling for foreign ownership of listed banks in Vietnam.
Shares in Sacombank, the first listed bank in the communist ruled country, rose 0.92 percent to 55,000 dong ($3.4) on Thursday.
Sacombank nearly doubled its registered capital to 4.45 trillion dong last month through a share issue as it sought to expand business at home and elsewhere in Asia.
Source: Reuters
The profit was 900 billion dong ($55.7 million), up from a pre-tax 543 billion dong last year, Sacombank chairman Dang Van Thanh was quoted by the Securities Investment newspaper as telling a company meeting.
Thanh did not give a net profit figure, but said the Ho Chi Minh City-based bank aimed for a full year gross profit of 1.4 trillion dong ($86.6 million).
Sacombank, whose formal name is Saigon Thuong Tin Commercial Bank, has said its seven-month profit more than doubled as loans surged 139 percent from a year earlier to $1.1 billion.
The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 30 percent of Sacombank, the ceiling for foreign ownership of listed banks in Vietnam.
Shares in Sacombank, the first listed bank in the communist ruled country, rose 0.92 percent to 55,000 dong ($3.4) on Thursday.
Sacombank nearly doubled its registered capital to 4.45 trillion dong last month through a share issue as it sought to expand business at home and elsewhere in Asia.
Source: Reuters
Vietnam eyes more ambitious 2008 growth of 9.2 pct
Vietnam said on Thursday it has raised its economic growth target to between 9.1 percent and 9.2 percent next year from an earlier 8.7 percent, with the aim of boosting incomes and reducing poverty.
Prime Minister Nguyen Tan Dung told a cabinet meeting on Wednesday that GDP growth of 9 percent or more was attainable, the government said in a report on its Web site (www.chinhphu.gov.vn).
Dung told the cabinet that Vietnam should strive for an investment rate of 41-42 percent of GDP next year in development projects with priority given to attracting foreign investment, speeding privatisation, building highways, airports and ports.
"This is a breakthrough step to achieve industrialisation and modernisation," Dung said in the government report.
Vietnam has one of the fastest-growing economies after China, but needs big improvements in infrastructure to achieve its goal of becoming an industrialised country to compete in the regional and global economy.
The higher GDP growth target was aimed at raising Vietnam's per capita income to $1,000 in 2008 and cutting the number of poor families to 11 percent from 14.75 percent forecast for this year, Dung said.
Previously, the government had a per capita income target of $1,000 by 2010.
Government projections for 2008 are all above the targets set by the Planning and Investment Ministry (MPI), which aimed for GDP growth in 2008 of 8.6-8.9 percent and per capita income reaching $956 to $960, the ministry said in a report.
It forecast per capita income of $835 this year from $720 in 2006.
It said contribution from agriculture, fisheries and forestry to GDP next year would ease to 19 percent from 19.8 percent expected this year, while the industry and construction sectors would boost their part in GDP to 42.6 percent from 42.1 percent.
The service sector was also expected to increase its stake in GDP to 38.4 percent in 2008 from 38.1 percent in 2007.
This year GDP would grow 8.4 percent to 8.5 percent, above an initial target of 8.2-8.5 percent, thanks to faster growth in all sectors, the MPI report delivered to the cabinet said.
In April, the World Bank forecast Vietnam's GDP growth at 8 percent for both 2007 and 2008. The Asian Development Bank said in March the Southeast Asian economy would grow 8.5 percent next year after an 8.3 percent expansion this year.
Vietnam joined the World Trade Organisation in January but foreign investors say infrastructure in key sectors such as transport, energy, telecoms, banking and financial needs huge investment.
The government would pursue a stable exchange rate policy and keep inflation lower than GDP growth next year, the report said without elaborating.
Vietnam has been struggling to control inflation as foreign investment pour into one of the world's fastest-growing economies, with the central bank buying dollars to keep the dong from appreciating.
Source: Reuters
Prime Minister Nguyen Tan Dung told a cabinet meeting on Wednesday that GDP growth of 9 percent or more was attainable, the government said in a report on its Web site (www.chinhphu.gov.vn).
Dung told the cabinet that Vietnam should strive for an investment rate of 41-42 percent of GDP next year in development projects with priority given to attracting foreign investment, speeding privatisation, building highways, airports and ports.
"This is a breakthrough step to achieve industrialisation and modernisation," Dung said in the government report.
Vietnam has one of the fastest-growing economies after China, but needs big improvements in infrastructure to achieve its goal of becoming an industrialised country to compete in the regional and global economy.
The higher GDP growth target was aimed at raising Vietnam's per capita income to $1,000 in 2008 and cutting the number of poor families to 11 percent from 14.75 percent forecast for this year, Dung said.
Previously, the government had a per capita income target of $1,000 by 2010.
Government projections for 2008 are all above the targets set by the Planning and Investment Ministry (MPI), which aimed for GDP growth in 2008 of 8.6-8.9 percent and per capita income reaching $956 to $960, the ministry said in a report.
It forecast per capita income of $835 this year from $720 in 2006.
It said contribution from agriculture, fisheries and forestry to GDP next year would ease to 19 percent from 19.8 percent expected this year, while the industry and construction sectors would boost their part in GDP to 42.6 percent from 42.1 percent.
The service sector was also expected to increase its stake in GDP to 38.4 percent in 2008 from 38.1 percent in 2007.
This year GDP would grow 8.4 percent to 8.5 percent, above an initial target of 8.2-8.5 percent, thanks to faster growth in all sectors, the MPI report delivered to the cabinet said.
In April, the World Bank forecast Vietnam's GDP growth at 8 percent for both 2007 and 2008. The Asian Development Bank said in March the Southeast Asian economy would grow 8.5 percent next year after an 8.3 percent expansion this year.
Vietnam joined the World Trade Organisation in January but foreign investors say infrastructure in key sectors such as transport, energy, telecoms, banking and financial needs huge investment.
The government would pursue a stable exchange rate policy and keep inflation lower than GDP growth next year, the report said without elaborating.
Vietnam has been struggling to control inflation as foreign investment pour into one of the world's fastest-growing economies, with the central bank buying dollars to keep the dong from appreciating.
Source: Reuters
Wednesday, September 05, 2007
VN-Index, HaSTC-Index on the decline
Closing the session this morning, the number of matched shares reached a high 8.9 million units, worth a consolidated VND 771 billion. Heavy trade witnessed , yet the majority of stock was matched at lower prices, prompting the VN-Index to close down 4.28 points, or 0.46% at 925.57 points. Of the 115 listed stock, including the new comer ALC, 36 were reportedly on the rise, while 53 others fell and 25 stood still.
HCM bourse :
Investors’ excitement did not last long as both the bourses reversed back to the downward trend after a sharp rise yesterday. The trade volume, however, saw its fresh two-month high, indicating positive signs for the market.
Closing the session this morning, the number of matched shares reached a high 8.9 million units, worth a consolidated VND 771 billion. Heavy trade witnessed , yet the majority of stock was matched at lower prices, prompting the VN-Index to close down 4.28 points, or 0.46% at 925.57 points. Of the 115 listed stock, including the new comer ALC, 36 were reportedly on the rise, while 53 others fell and 25 stood still.
Contrary to yesterday’s session when increases were seen with the majority of listed stock, this morning saw some, mostly stocks of medium and low prices on the rise. Of the 36 rising stock, PVD, TAC, IMP and LGC were those with prices exceeding VND 100,000. The sharpest riser, LGC, was entitled to a rise of VND 5,000. 14 other stocks restriced their increases to VND 1,000 only, including the two fund BF1 and VF1. In the reverse direction , the top losers list saw most big stocks tumbling, including KDC, VNM, FPT, NKD, SJS, GMD, REE, SAM,etc. These stocks suffered VND 500 – VND 6,000 each. BMC led the top losers list with decrease hitting VND 10,000. Its companion, TCT, closed at its reference price.
The new comer, ACL, made its bourse debut, closing at VND 81,000 and saw a total of 217,000 shares changing hands.
In terms of trade volume, 5 most active stocks on the market, namely STB, VF1, PPC, FPT, and VSH. STB saw rougly 1 million shares matched. VF1 saw a stunning high trade volume with roughly 840,000 units matched.
Hanoi bourse :
Closing the session this mornign, HaSTCclosed at 253.72 points, down a sharp 2.42 points, or 0.94% against the session earlier. Though the market price indicator slightly suffered, the total volume and value remained high. A total of 1 million shares changed hands, worth a combined VND 104.39 billion. There were 43 rising stock, 23 falling ones, and 23 stills.
S99 led the top advancer list with great points added. The stock gained an additional VND 13,500 and closed at VND 148,900. The stock’s matched volume, however, remained modest at 100 units only. Other sharp risers included S55, ILC, S64 and NTP with increasing band from VND 2,900 to VND 5,300 each.
In the reverse direction, BVS suffered sharp falls, losing VND 12,100 and led the top losers list with only 1,700 units matched. Other losers restricted their losses to VND 3,000.
In terms of trade volume, except for the frequent presence of SSI, ACB, and NTP on the top active list by volume, such list this morning saw TBC and ICF. This was TBC’s second sharp heavy trade. Foreign investors traded a total of 171,400 units, of which 139,500 units were counted for buying volume. Of the 31,900 shares sold out by such group, TBC accounted for a high 30,000 units.
Source: Infotv
HCM bourse :
Investors’ excitement did not last long as both the bourses reversed back to the downward trend after a sharp rise yesterday. The trade volume, however, saw its fresh two-month high, indicating positive signs for the market.
Closing the session this morning, the number of matched shares reached a high 8.9 million units, worth a consolidated VND 771 billion. Heavy trade witnessed , yet the majority of stock was matched at lower prices, prompting the VN-Index to close down 4.28 points, or 0.46% at 925.57 points. Of the 115 listed stock, including the new comer ALC, 36 were reportedly on the rise, while 53 others fell and 25 stood still.
Contrary to yesterday’s session when increases were seen with the majority of listed stock, this morning saw some, mostly stocks of medium and low prices on the rise. Of the 36 rising stock, PVD, TAC, IMP and LGC were those with prices exceeding VND 100,000. The sharpest riser, LGC, was entitled to a rise of VND 5,000. 14 other stocks restriced their increases to VND 1,000 only, including the two fund BF1 and VF1. In the reverse direction , the top losers list saw most big stocks tumbling, including KDC, VNM, FPT, NKD, SJS, GMD, REE, SAM,etc. These stocks suffered VND 500 – VND 6,000 each. BMC led the top losers list with decrease hitting VND 10,000. Its companion, TCT, closed at its reference price.
The new comer, ACL, made its bourse debut, closing at VND 81,000 and saw a total of 217,000 shares changing hands.
In terms of trade volume, 5 most active stocks on the market, namely STB, VF1, PPC, FPT, and VSH. STB saw rougly 1 million shares matched. VF1 saw a stunning high trade volume with roughly 840,000 units matched.
Hanoi bourse :
Closing the session this mornign, HaSTCclosed at 253.72 points, down a sharp 2.42 points, or 0.94% against the session earlier. Though the market price indicator slightly suffered, the total volume and value remained high. A total of 1 million shares changed hands, worth a combined VND 104.39 billion. There were 43 rising stock, 23 falling ones, and 23 stills.
S99 led the top advancer list with great points added. The stock gained an additional VND 13,500 and closed at VND 148,900. The stock’s matched volume, however, remained modest at 100 units only. Other sharp risers included S55, ILC, S64 and NTP with increasing band from VND 2,900 to VND 5,300 each.
In the reverse direction, BVS suffered sharp falls, losing VND 12,100 and led the top losers list with only 1,700 units matched. Other losers restricted their losses to VND 3,000.
In terms of trade volume, except for the frequent presence of SSI, ACB, and NTP on the top active list by volume, such list this morning saw TBC and ICF. This was TBC’s second sharp heavy trade. Foreign investors traded a total of 171,400 units, of which 139,500 units were counted for buying volume. Of the 31,900 shares sold out by such group, TBC accounted for a high 30,000 units.
Source: Infotv
Bao Minh teams up with US insurance giant
The Bao Minh Insurance Joint Stock Company on September 4 signed an agreement with Federal Insurance Company (Labuan), a wholly owned subsidiary of US-based insurance giant – Chubb Corporation, to offer speciality liability insurance inside Viet Nam.
Under the agreement, Bao Minh, one of the country’s major insurance players will provide speciality liability insurance products for securities companies and management liability insurance products for companies listed at local bourses.
For its part, Chubb Corporation will offer technical training and cooperate in the area of reinsurance to help Bao Minh introduce the products to the market.
The two partners will also hook up to update local businesses on advanced business management skills to successfully operate within the World Trade Organisation (WTO).
The partnership will help Bao Minh diversify its liability insurance products and prevent businesses from management and financial risks, according to Tran Vinh Duc, the company’s Chief Executive Officer.
Senior Vice President and Managing Director of Chubb Corporation for Asia-Pacific Region, Michael J. Cassella, said that through the partnership, the corporation has made a firm commitment to Vietnamese businesses.
Under the agreement, Bao Minh, one of the country’s major insurance players will provide speciality liability insurance products for securities companies and management liability insurance products for companies listed at local bourses.
For its part, Chubb Corporation will offer technical training and cooperate in the area of reinsurance to help Bao Minh introduce the products to the market.
The two partners will also hook up to update local businesses on advanced business management skills to successfully operate within the World Trade Organisation (WTO).
The partnership will help Bao Minh diversify its liability insurance products and prevent businesses from management and financial risks, according to Tran Vinh Duc, the company’s Chief Executive Officer.
Senior Vice President and Managing Director of Chubb Corporation for Asia-Pacific Region, Michael J. Cassella, said that through the partnership, the corporation has made a firm commitment to Vietnamese businesses.
Share items with ‘little room’ remain attractive
Foreign investors are scrambling to purchase shares of companies in which the room for foreign investors is nearly run out, despite the fact that the PE indexes of these companies remain relatively high.
The information about the changes in foreign ownership ratio in AGF (down from 49% to 45%) after the issuance of additional shares has given foreign investors the opportunity to buy more AGF. The AGF purchased volume accounts for 50-80% of total transaction volume of this share item.
Similarly, after the foreign ownership ratio reduced as a result of the issuance of additional shares in order to raise the chartered capital to VND545bil, foreign investors rushed to buy SAM. Just several days ago, the mistake by a securities depository centre in defining the foreign ownership ratio in Sacombank has given foreign investors a gift: they could buy a lot of STB due to the mistake.
In fact, share items that foreign investors are rushing to buy are the ones of the companies operating in profitable fields, including banking (which has the impressive growth rate of 40-45% per annum), seafood (30%), real estate, seaports, infrastructure and telecommunications.
Though the PE indexes of these companies are relatively high, at 30-40, the share items remain attractive in the eyes of investors as the issuance companies all gain the growth rate of 30-40% per annum. Experts said that with the growth rate of 30-40% per annum, the acceptable PE index would be 30 or 40, since the price increases can be offset by the rapid growth rate in profit of the listing companies.
In fact, experts said that share prices had been decreasing considerably and were now at ‘acceptable’ levels. By the end of August, BT6 had lost 30% in value, GMD 42%, REE 32%, and STB 50% compared to their highest price levels.
Investors have thought that the demand for securities was very low in the ‘correction’ period of the market. However, what happened on the market showed the reverse result. The fact that foreign investors hunted for blue chips and the share items with little room showed that the investors’ interests in key share items remained very high.
To date, it remains unclear about the possibility of more room being offered to foreign investors. The Ministry of Planning and Investment is drawing up a decree on the implementation of WTO commitments in foreign direct investment. Once the decree is drawn up, the list of investment fields with investment limitations or preferences will be clearer.
The information about the changes in foreign ownership ratio in AGF (down from 49% to 45%) after the issuance of additional shares has given foreign investors the opportunity to buy more AGF. The AGF purchased volume accounts for 50-80% of total transaction volume of this share item.
Similarly, after the foreign ownership ratio reduced as a result of the issuance of additional shares in order to raise the chartered capital to VND545bil, foreign investors rushed to buy SAM. Just several days ago, the mistake by a securities depository centre in defining the foreign ownership ratio in Sacombank has given foreign investors a gift: they could buy a lot of STB due to the mistake.
In fact, share items that foreign investors are rushing to buy are the ones of the companies operating in profitable fields, including banking (which has the impressive growth rate of 40-45% per annum), seafood (30%), real estate, seaports, infrastructure and telecommunications.
Though the PE indexes of these companies are relatively high, at 30-40, the share items remain attractive in the eyes of investors as the issuance companies all gain the growth rate of 30-40% per annum. Experts said that with the growth rate of 30-40% per annum, the acceptable PE index would be 30 or 40, since the price increases can be offset by the rapid growth rate in profit of the listing companies.
In fact, experts said that share prices had been decreasing considerably and were now at ‘acceptable’ levels. By the end of August, BT6 had lost 30% in value, GMD 42%, REE 32%, and STB 50% compared to their highest price levels.
Investors have thought that the demand for securities was very low in the ‘correction’ period of the market. However, what happened on the market showed the reverse result. The fact that foreign investors hunted for blue chips and the share items with little room showed that the investors’ interests in key share items remained very high.
To date, it remains unclear about the possibility of more room being offered to foreign investors. The Ministry of Planning and Investment is drawing up a decree on the implementation of WTO commitments in foreign direct investment. Once the decree is drawn up, the list of investment fields with investment limitations or preferences will be clearer.
Acquisitions: a back-door market entry?
Acquiring an existing company is an increasingly attractive investment option for both foreign and domestic investors seeking to increase market share quickly.
ANCO Joint Stock Co, a domestic food and beverage maker, acquired a Nestle milk plant in the town of Ba Vi in Ha Tay Province. The acquisition includes a license to use the Nestle brand name for one year on fresh milk and yogurt products produced by the plant.
Asia Pacific Breweries Ltd, a Singapore-invested firm that owns Viet Nam Brewery Ltd (VBL), similarly expanded its capacity recently by acquiring an 80-per-cent interest in Quang Nam VBL Ltd, while Viettel bypassed the need to develop an outlet network by acquiring Nettra's.
There are a variety of factors that push one company to purchase another. Some takeovers are opportunistic and encouraged by the target company's reasonable price. Or the acquiring company expects to increase its bottom line with the acquisition of the target company.
Other takeovers are considered strategic for the acquiring company to enter into a new market without undue risk or the time and expenses needed to start a new business. The acquiring company may also aim to eliminate or reduce competition.
For the time being, acquisitions also may be the only practical means of doing business in a number of sectors. For example, the Law on Real Estate Transactions, enacted on June 29, 2006, places condition on legal capital with regard to entities wishing to operate in this sector, but the level of legal capital has not been specified. In the meantime, the registration of all real estate businesses are being held up, pending the issuance of a guiding regulation.
A few clever investors, however, have found a way to jump over this obstacle by acquiring an existing company already registered to conduct business in this sector.
Procedures for acquiring a company are specified in the Law on Competition of 2004, Decree No 116/2005/ND-CP of September 15, 2005, and Article 56 of Decree No 108/2006/ND-CP of September 22, 2006, which details and guides implementation of the Law on Investment.
The availability of acquisitions as a doorway into some markets or lines of business has, in turn, spurred the growth of business consulting and auditing services, as well as specialised transaction floors in which companies can offer themselves up for sale via professional brokers.
Established mergers and acquisitions (M&A) law in other countries classifies acquisitions into two types: share purchases, under which the target company itself is acquired, and asset purchases, under which assets of the target company are acquired but not the target company itself.
The laws of Vietnam on M&A, however, are not yet perfected, and even the definition of an acquisition is vague. Article 17.3 of the Law on Competition comes closest, stating: "Acquisition of enterprises refers to an act whereby an enterprise acquires the whole or part of property of another enterprise sufficient to control or dominate all or one of the trades of the acquired enterprise."
Decree No 116/2005/ND-CP defines control or domination to mean that the acquiring company holds more than 50% of voting rights at the general shareholders meeting or on the board of management or otherwise per the charter of the acquired company can control or dominate the financial policies and operations of the acquired company. The law, in other words, has heretofore been silent on the issue of acquisition by means of asset purchase.
Decree No 108/2006/ND-CP sets out some procedures for a foreign investor to obtain official approval of an acquisition. However, the' relationship of this approval process to procedures for obtaining an investment licence are ambiguous.
Whether it can be understood that the procedures to be followed will be those for amending an investment licence isn't entirely clear, however, so some foreign investors may run into a wall when authorised State or local authorities delay approvals of acquisitions while they await guidelines.
Acquisition deals may also be examined with respect to competition rules regarding monopolies or economic concentrations, a process that may be hampered or delayed due to the lack of official data on the market and the market share of enterprises.
ANCO Joint Stock Co, a domestic food and beverage maker, acquired a Nestle milk plant in the town of Ba Vi in Ha Tay Province. The acquisition includes a license to use the Nestle brand name for one year on fresh milk and yogurt products produced by the plant.
Asia Pacific Breweries Ltd, a Singapore-invested firm that owns Viet Nam Brewery Ltd (VBL), similarly expanded its capacity recently by acquiring an 80-per-cent interest in Quang Nam VBL Ltd, while Viettel bypassed the need to develop an outlet network by acquiring Nettra's.
There are a variety of factors that push one company to purchase another. Some takeovers are opportunistic and encouraged by the target company's reasonable price. Or the acquiring company expects to increase its bottom line with the acquisition of the target company.
Other takeovers are considered strategic for the acquiring company to enter into a new market without undue risk or the time and expenses needed to start a new business. The acquiring company may also aim to eliminate or reduce competition.
For the time being, acquisitions also may be the only practical means of doing business in a number of sectors. For example, the Law on Real Estate Transactions, enacted on June 29, 2006, places condition on legal capital with regard to entities wishing to operate in this sector, but the level of legal capital has not been specified. In the meantime, the registration of all real estate businesses are being held up, pending the issuance of a guiding regulation.
A few clever investors, however, have found a way to jump over this obstacle by acquiring an existing company already registered to conduct business in this sector.
Procedures for acquiring a company are specified in the Law on Competition of 2004, Decree No 116/2005/ND-CP of September 15, 2005, and Article 56 of Decree No 108/2006/ND-CP of September 22, 2006, which details and guides implementation of the Law on Investment.
The availability of acquisitions as a doorway into some markets or lines of business has, in turn, spurred the growth of business consulting and auditing services, as well as specialised transaction floors in which companies can offer themselves up for sale via professional brokers.
Established mergers and acquisitions (M&A) law in other countries classifies acquisitions into two types: share purchases, under which the target company itself is acquired, and asset purchases, under which assets of the target company are acquired but not the target company itself.
The laws of Vietnam on M&A, however, are not yet perfected, and even the definition of an acquisition is vague. Article 17.3 of the Law on Competition comes closest, stating: "Acquisition of enterprises refers to an act whereby an enterprise acquires the whole or part of property of another enterprise sufficient to control or dominate all or one of the trades of the acquired enterprise."
Decree No 116/2005/ND-CP defines control or domination to mean that the acquiring company holds more than 50% of voting rights at the general shareholders meeting or on the board of management or otherwise per the charter of the acquired company can control or dominate the financial policies and operations of the acquired company. The law, in other words, has heretofore been silent on the issue of acquisition by means of asset purchase.
Decree No 108/2006/ND-CP sets out some procedures for a foreign investor to obtain official approval of an acquisition. However, the' relationship of this approval process to procedures for obtaining an investment licence are ambiguous.
Whether it can be understood that the procedures to be followed will be those for amending an investment licence isn't entirely clear, however, so some foreign investors may run into a wall when authorised State or local authorities delay approvals of acquisitions while they await guidelines.
Acquisition deals may also be examined with respect to competition rules regarding monopolies or economic concentrations, a process that may be hampered or delayed due to the lack of official data on the market and the market share of enterprises.
Vinashin inks major deals with Malaysian partners
State-owned Vietnam Shipbuilding Industry Group, or Vinashin, has said it will set up new joint ventures with the Malaysian-based budget airline AirAsia and Lion Group to form a new carrier and build a steel mill in central Vietnam.
A Vinashin official told the Daily that a letter of intent for the establishment of a low-cost carrier in Vietnam was signed between AirAsia and Vinashin Group in the Malaysian capital last Friday.
AirAsia chief executive officer Tony Fernandes and Vinashin chairman and CEO Pham Thanh Binh signed the agreement in the Malaysian capital of Kuala Lumpur, with the participation of Vietnam's Prime Minister Nguyen Tan Dung who was there for the celebration of Malaysia's 50th nationhood.
The airline venture will also make AirAsia the second foreign investor to hold a stake in a Vietnamese airline after Australia's Qantas Airways Ltd., which spent US$50mil acquiring a 30% stake in Pacific Airlines in April this year.
The new carrier, which will be called Vina AirAsia, will initially have a fleet of nine, aircraft with the shipbuilder holding a 70% stake and AirAsia the remaining 30%.
In the letter of intent, AirAsia and Vinashin will establish a joint-venture company with total estimated capital of US$30mil. Both will establish the low-cost airline in Vietnam based on AirAsia's successful business model.
This deal is another move taken by AirAsia to further tap the increasingly lucrative civil aviation market in Vietnam.
The planned venture will include securing a license to operate the new Vietnamese airline to serve domestic, regional and international routes.
According to the letter of intent, Vinashin will help the joint venture secure regulatory approval from the aviation authority as well as concessions, permits, licenses, certificates and any other approval necessary for the working of the new airline.
Meanwhile, AirAsia will help acquire aircraft at the most competitive price and will also provide aviation and other technical expertise, technology transfer in the purchase and leasing of aircraft, engineering and maintenance services, pilot and cabin crew training, and airline marketing, distribution, franchising and branding skills.
Both two sides plan to formally sign a contract on September 20 and Vina AirAsia is planed to begin service in July 2008.
Under Vietnamese law, foreign investors are permitted to own up to 49% of a joint-stock air carrier. Currently, Vietnam is home to three airlines - Vietnam Airlines, Pacific Airlines and Vasco.
AirAsia has been successful in the Hanoi-Bangkok and the Hanoi-Kuala Lumpur services though it only launched the first route in October 2005 and the other in October last year.
The seat occupancy averages 80% for the three daily Hanoi-Bangkok flights and the two daily flights between Hanoi and Kuala Lumpur.
AirAsia is now preparing to begin the service to HCMC, hopefully this year to attract more passengers traveling between Vietnam and the two countries.
"The growth potential in Vietnam's air travel market is significant and we are very excited to be working with a colossal corporation in Vietnam to develop this opportunity," said Fernandes of AirAsia.
"We are very confident that both parties will enjoy not only a productive and profitable outcome together but also the exchange of fresher ideas, skills and technologies."
On the same day, Vinashin signed a deal with Malaysia's Lion Group to build a giant steel mill worth up to US$7.3bil in central Vietnam.
The facility will be built in Ninh Thuan Province to produce eight million tons of steel a year. Investment would be US$2.8bil for the first phase while another US$4.5bil would be spent in the second phase.
The signing of this deal was also witnessed by Prime Minister Dung.
Source: VNE
A Vinashin official told the Daily that a letter of intent for the establishment of a low-cost carrier in Vietnam was signed between AirAsia and Vinashin Group in the Malaysian capital last Friday.
AirAsia chief executive officer Tony Fernandes and Vinashin chairman and CEO Pham Thanh Binh signed the agreement in the Malaysian capital of Kuala Lumpur, with the participation of Vietnam's Prime Minister Nguyen Tan Dung who was there for the celebration of Malaysia's 50th nationhood.
The airline venture will also make AirAsia the second foreign investor to hold a stake in a Vietnamese airline after Australia's Qantas Airways Ltd., which spent US$50mil acquiring a 30% stake in Pacific Airlines in April this year.
The new carrier, which will be called Vina AirAsia, will initially have a fleet of nine, aircraft with the shipbuilder holding a 70% stake and AirAsia the remaining 30%.
In the letter of intent, AirAsia and Vinashin will establish a joint-venture company with total estimated capital of US$30mil. Both will establish the low-cost airline in Vietnam based on AirAsia's successful business model.
This deal is another move taken by AirAsia to further tap the increasingly lucrative civil aviation market in Vietnam.
The planned venture will include securing a license to operate the new Vietnamese airline to serve domestic, regional and international routes.
According to the letter of intent, Vinashin will help the joint venture secure regulatory approval from the aviation authority as well as concessions, permits, licenses, certificates and any other approval necessary for the working of the new airline.
Meanwhile, AirAsia will help acquire aircraft at the most competitive price and will also provide aviation and other technical expertise, technology transfer in the purchase and leasing of aircraft, engineering and maintenance services, pilot and cabin crew training, and airline marketing, distribution, franchising and branding skills.
Both two sides plan to formally sign a contract on September 20 and Vina AirAsia is planed to begin service in July 2008.
Under Vietnamese law, foreign investors are permitted to own up to 49% of a joint-stock air carrier. Currently, Vietnam is home to three airlines - Vietnam Airlines, Pacific Airlines and Vasco.
AirAsia has been successful in the Hanoi-Bangkok and the Hanoi-Kuala Lumpur services though it only launched the first route in October 2005 and the other in October last year.
The seat occupancy averages 80% for the three daily Hanoi-Bangkok flights and the two daily flights between Hanoi and Kuala Lumpur.
AirAsia is now preparing to begin the service to HCMC, hopefully this year to attract more passengers traveling between Vietnam and the two countries.
"The growth potential in Vietnam's air travel market is significant and we are very excited to be working with a colossal corporation in Vietnam to develop this opportunity," said Fernandes of AirAsia.
"We are very confident that both parties will enjoy not only a productive and profitable outcome together but also the exchange of fresher ideas, skills and technologies."
On the same day, Vinashin signed a deal with Malaysia's Lion Group to build a giant steel mill worth up to US$7.3bil in central Vietnam.
The facility will be built in Ninh Thuan Province to produce eight million tons of steel a year. Investment would be US$2.8bil for the first phase while another US$4.5bil would be spent in the second phase.
The signing of this deal was also witnessed by Prime Minister Dung.
Source: VNE
Tuesday, September 04, 2007
VN-Index, HaSTC-Index bounce back
HCM bourse :
As expected, the market opened the new month with upbeat signs and the majority of stocks reportedly on the rise. The market price indicators in HCM and Hanoi market saw significant added points, putting an end to their strings of pullback sessions, which contributed to the lessened interests and patience of local investors in the last “dreadful” month of August.
What happened in the market this morning lived up to investors’ expectations. The electronic board was overwhelmed with green of 96 rising stocks. Those said to lose headed back, earning additional points. In the overall upward trend, stocks of such industries as hi-tech, banking and finance, pharmaceuticals,etc. saw significant rises. Vn-Index closed at 929.85 points, up a sharp 21.48 points, or 2.37% against the session earlier. Heavy trade was witnessed as the number of matched shares reached a high 6.68 million, worth VND 570.34 billion. Investors’ worriness relief, accompanied by positive signals from the world’s market and HSBC reports might act as the engine fuelling market growth.
There were 96 rising stocks, 7 falling stocks and 11 stills. Though price gains were limited, the overwhelming number of rising stocks was instrumental in boosting the market price indicator. IMP and DMC, the two stocks earned the most in the session, gained an additional VND 8,000 and VND 7,000, respectively. Next sharp risers were those of high prices, including KDC, SJS, REE with increases limited to VND 6,000 each. Other stocks of high market prices, including SAM, VNM, FPT, PVD, NKD,DHG,etc. saw increases exceeding VND 2,000 each.
Those stocks previously earned points, namely BMC, TCT and SGH saw falls. BMC suffered VND 8,000 while TCT by VND 15,000.
In terms of trade volume, the majority of stocks were reported to see volume increase, while 3 out of 5 most liquid stocks’ volume namely STB, VF1 and VNM fell.
Hanoi bourse :
Hanoi bourse closed at 256.14 points, up a moderate 3.59 points against the session earllier. The market’s total trade volume amounted to 1,066,000 shares, worth a combined VND 103.6 billion. There were 52 rising stocks, 8 falling stocks and 29 stills.
S99 was back on the top advancers list with sharp increases. The stock closed up VND 12,300. Next in the list were ILC, SD7, S64 and SSI with increases ranging from VND 3,700 to VND 4,500. In the reverse trend, VMC, DAE, NTP, STP and SD9 led the top losers list. The stocks’ decreases, however, was restricted to VND 3,900 only. NTP saw falls after string of rising sessions.
Foreign investors increased their trade today. The group traded a total of 250,000 shares, of which 110,000 units were counted for buying volume and the rest 140,000 for selling one. Noticeably, TBC accounted for rougly 135,000 shares of the selling volume.
Source: Infotv
As expected, the market opened the new month with upbeat signs and the majority of stocks reportedly on the rise. The market price indicators in HCM and Hanoi market saw significant added points, putting an end to their strings of pullback sessions, which contributed to the lessened interests and patience of local investors in the last “dreadful” month of August.
What happened in the market this morning lived up to investors’ expectations. The electronic board was overwhelmed with green of 96 rising stocks. Those said to lose headed back, earning additional points. In the overall upward trend, stocks of such industries as hi-tech, banking and finance, pharmaceuticals,etc. saw significant rises. Vn-Index closed at 929.85 points, up a sharp 21.48 points, or 2.37% against the session earlier. Heavy trade was witnessed as the number of matched shares reached a high 6.68 million, worth VND 570.34 billion. Investors’ worriness relief, accompanied by positive signals from the world’s market and HSBC reports might act as the engine fuelling market growth.
There were 96 rising stocks, 7 falling stocks and 11 stills. Though price gains were limited, the overwhelming number of rising stocks was instrumental in boosting the market price indicator. IMP and DMC, the two stocks earned the most in the session, gained an additional VND 8,000 and VND 7,000, respectively. Next sharp risers were those of high prices, including KDC, SJS, REE with increases limited to VND 6,000 each. Other stocks of high market prices, including SAM, VNM, FPT, PVD, NKD,DHG,etc. saw increases exceeding VND 2,000 each.
Those stocks previously earned points, namely BMC, TCT and SGH saw falls. BMC suffered VND 8,000 while TCT by VND 15,000.
In terms of trade volume, the majority of stocks were reported to see volume increase, while 3 out of 5 most liquid stocks’ volume namely STB, VF1 and VNM fell.
Hanoi bourse :
Hanoi bourse closed at 256.14 points, up a moderate 3.59 points against the session earllier. The market’s total trade volume amounted to 1,066,000 shares, worth a combined VND 103.6 billion. There were 52 rising stocks, 8 falling stocks and 29 stills.
S99 was back on the top advancers list with sharp increases. The stock closed up VND 12,300. Next in the list were ILC, SD7, S64 and SSI with increases ranging from VND 3,700 to VND 4,500. In the reverse trend, VMC, DAE, NTP, STP and SD9 led the top losers list. The stocks’ decreases, however, was restricted to VND 3,900 only. NTP saw falls after string of rising sessions.
Foreign investors increased their trade today. The group traded a total of 250,000 shares, of which 110,000 units were counted for buying volume and the rest 140,000 for selling one. Noticeably, TBC accounted for rougly 135,000 shares of the selling volume.
Source: Infotv
13 joint stock banks waiting to be set up
By the end of August 2007, 13 applications to establish new joint stock banks had been put on the table of the State Bank Governor.
Following the wave of setting up securities companies, the wave of establishing new banks has been kicked off, experts say.
In fact, the race to establish banks started at the same time as the race to establish securities companies, in early 2006. However, in the past year, several tens of new securities companies have been established while no joint bank has been allowed to be established yet.
At the beginning of 2007, the State Bank of Vietnam reportedly received 25 applications to establish new joint stock banks, nearly equal to the number of urban joint stock banks now operational in Vietnam.
However, as the central bank decided to set higher requirements on new banks (the required chartered capital for an urban bank has been raised from VND70bil to VND1tril [$62.5mil]), several banks pulled out, and by the end of August 2007 the number of applications was 13.
The submitted projects all have expected chartered capital higher than the required level: FPT Bank VND1tril ($62.5mil), Lien Viet VND3,300bil ($206.25mil), Viet Tin VND1,680bil ($105mil), Kinh Bac VND1,500bil ($93.75mil). However, experts have pointed out that though having big chartered capital, new banks will still face a lot of challenges.
One of the biggest challenges is the personnel crisis. Though thousands of university students graduate each year, the increasing demand for employees remains unmet, especially demand for high-level, qualified staff.
In addition, banks will face risks in developing networks. As they will focus on retail services, network development is the most important task. Meanwhile, it is very difficult to find locations for setting up transaction offices nowadays. The new stretch of road from Kim Lien to O Cho Dua in Hanoi, which is 900 m long only, has welcomed 8 branches and transaction offices of different banks. There are four bank offices on the first floors of the two adjacent buildings in Trung Hoa-Nhan Chinh new urban area.
Moreover, banks will face a lot of other difficulties in technology, training, corporate governance and advertisement.
Source: VNE
Following the wave of setting up securities companies, the wave of establishing new banks has been kicked off, experts say.
In fact, the race to establish banks started at the same time as the race to establish securities companies, in early 2006. However, in the past year, several tens of new securities companies have been established while no joint bank has been allowed to be established yet.
At the beginning of 2007, the State Bank of Vietnam reportedly received 25 applications to establish new joint stock banks, nearly equal to the number of urban joint stock banks now operational in Vietnam.
However, as the central bank decided to set higher requirements on new banks (the required chartered capital for an urban bank has been raised from VND70bil to VND1tril [$62.5mil]), several banks pulled out, and by the end of August 2007 the number of applications was 13.
The submitted projects all have expected chartered capital higher than the required level: FPT Bank VND1tril ($62.5mil), Lien Viet VND3,300bil ($206.25mil), Viet Tin VND1,680bil ($105mil), Kinh Bac VND1,500bil ($93.75mil). However, experts have pointed out that though having big chartered capital, new banks will still face a lot of challenges.
One of the biggest challenges is the personnel crisis. Though thousands of university students graduate each year, the increasing demand for employees remains unmet, especially demand for high-level, qualified staff.
In addition, banks will face risks in developing networks. As they will focus on retail services, network development is the most important task. Meanwhile, it is very difficult to find locations for setting up transaction offices nowadays. The new stretch of road from Kim Lien to O Cho Dua in Hanoi, which is 900 m long only, has welcomed 8 branches and transaction offices of different banks. There are four bank offices on the first floors of the two adjacent buildings in Trung Hoa-Nhan Chinh new urban area.
Moreover, banks will face a lot of other difficulties in technology, training, corporate governance and advertisement.
Source: VNE
Stock market to recover by year’s end?
The stock market is expected to see optimistic signs in the third and fourth quarters of the year, when listing companies begin reaping fruits in their business.
Though the stock market is still lackluster with falls in prices, experts still believe that the bourse will recover its prosperity by the end of the year.
The good performance of listing companies, the interest of foreign investors in Vietnam’s stocks, the equitisation and IPOs of big corporations all are believed will help warm up the market. Moreover, investors will increase trading once they believe that share prices have returned to their actual values.
In a meeting with the press in early August, 2007, Chairman of the State Securities Commission (SSC) Vu Bang said he was optimistic about the development of Vietnam’s stock market. “I believe that the market still has many opportunities to develop as the foreign capital flow keeps rising. Many big foreign investors have expressed their interest in Vietnam’s stocks, including Goldman Sachs and Merrill Lynch,” said Mr Bang.
Huy Nam, securities and finance expert, also said that the bourse would be better towards the year’s end. However, he declined to forecast how much better the market would be.
Though the market has been in the ‘correction’ period, it has not witnessed serious setbacks, and investors have not fled. Mr Nam said that his survey showed that the number of new accounts opened at securities companies was still rising weekly.
Hoang Xuan Quyen, Head of the Research Division under the Tan Viet Securities Company, also said that the stock market would warm up towards the year’s end, though he warned that it would not warm up much. What can bring hope to investors are satisfactory business results of listing companies in the third and fourth quarters of the year (the third and fourth quarters are always the best season of enterprises).
SSC has announced that a taskforce in charge of auctioning shares has been established. The taskforce will programme the auctions of shares of equitising enterprises, ensuring the auctions in the harmonisation with the stock market situation and the listing of other enterprises.
Hanoi Boston Group under Vietnam Report Co has released a report about the stock market from August 31-September 7, saying that it is the right time to buy stocks again.
The sideways of the VN Index, hovering at the 900 point level, still fills investors with doubt about the recovery of the market. However, it is clear that the 900 point level is a firm bottom of the share prices. Investors who buy shares at this time have reason to believe that they are buying at the lowest possible price levels.
For these reasons, the group has advised investors to buy stocks at this moment, when share prices have returned to the actual value, and the picture of the stock market has become brighter than last month.
Meanwhile, the Hong Kong and Shanghai Banking Corporation (HSBC) has released a report about Vietnam’s stock market, the conclusions of which prove to coincide with the suggestions by Hanoi Boston Group. “We recommend investors look to buy Vietnamese equities again. Earnings are growing strongly, and valuations now look reasonable. The catalyst may be successful privatisation offerings in Q4,” the report reads.
If considering the main indexes of the national economy, one would see that it is the right time to make investment in stocks: the national economy growth is rapid and firmly, inflation has been controlled, the profits of listing company are very high, while the growth rate of EPS is clearly lower than the net profit growth rate due to the dilution effects of new issuances. The EPS growth rate, according to HSBC, is 22-25%, higher than that of China (15%) and Malaysia (19%). It is likely that the VN Index will return to the 1,150 point level by the end of this year.
Investment funds are expected to push up disbursement in September. To date, only a small proportion of capital has been disbursed, while funds are still awaiting the big IPOs slated for the fourth quarter of the year.
Source: VNE
Though the stock market is still lackluster with falls in prices, experts still believe that the bourse will recover its prosperity by the end of the year.
The good performance of listing companies, the interest of foreign investors in Vietnam’s stocks, the equitisation and IPOs of big corporations all are believed will help warm up the market. Moreover, investors will increase trading once they believe that share prices have returned to their actual values.
In a meeting with the press in early August, 2007, Chairman of the State Securities Commission (SSC) Vu Bang said he was optimistic about the development of Vietnam’s stock market. “I believe that the market still has many opportunities to develop as the foreign capital flow keeps rising. Many big foreign investors have expressed their interest in Vietnam’s stocks, including Goldman Sachs and Merrill Lynch,” said Mr Bang.
Huy Nam, securities and finance expert, also said that the bourse would be better towards the year’s end. However, he declined to forecast how much better the market would be.
Though the market has been in the ‘correction’ period, it has not witnessed serious setbacks, and investors have not fled. Mr Nam said that his survey showed that the number of new accounts opened at securities companies was still rising weekly.
Hoang Xuan Quyen, Head of the Research Division under the Tan Viet Securities Company, also said that the stock market would warm up towards the year’s end, though he warned that it would not warm up much. What can bring hope to investors are satisfactory business results of listing companies in the third and fourth quarters of the year (the third and fourth quarters are always the best season of enterprises).
SSC has announced that a taskforce in charge of auctioning shares has been established. The taskforce will programme the auctions of shares of equitising enterprises, ensuring the auctions in the harmonisation with the stock market situation and the listing of other enterprises.
Hanoi Boston Group under Vietnam Report Co has released a report about the stock market from August 31-September 7, saying that it is the right time to buy stocks again.
The sideways of the VN Index, hovering at the 900 point level, still fills investors with doubt about the recovery of the market. However, it is clear that the 900 point level is a firm bottom of the share prices. Investors who buy shares at this time have reason to believe that they are buying at the lowest possible price levels.
For these reasons, the group has advised investors to buy stocks at this moment, when share prices have returned to the actual value, and the picture of the stock market has become brighter than last month.
Meanwhile, the Hong Kong and Shanghai Banking Corporation (HSBC) has released a report about Vietnam’s stock market, the conclusions of which prove to coincide with the suggestions by Hanoi Boston Group. “We recommend investors look to buy Vietnamese equities again. Earnings are growing strongly, and valuations now look reasonable. The catalyst may be successful privatisation offerings in Q4,” the report reads.
If considering the main indexes of the national economy, one would see that it is the right time to make investment in stocks: the national economy growth is rapid and firmly, inflation has been controlled, the profits of listing company are very high, while the growth rate of EPS is clearly lower than the net profit growth rate due to the dilution effects of new issuances. The EPS growth rate, according to HSBC, is 22-25%, higher than that of China (15%) and Malaysia (19%). It is likely that the VN Index will return to the 1,150 point level by the end of this year.
Investment funds are expected to push up disbursement in September. To date, only a small proportion of capital has been disbursed, while funds are still awaiting the big IPOs slated for the fourth quarter of the year.
Source: VNE
Racing against time to achieve economic growth rate of 8.5%
To obtain the target for GDP growth rate of 8.5 percent set by the National Assembly and control the inflation rate, the Government and localities must make more effort and introduce stronger measures.
Earlier August 2007, Doctor Vo Tri Thanh, head of the Department for International Economic Integration Policy under the Central Institute for Economic Management (CIEM), said the target for GDP growth rate of 8-8.5 percent is within reach. But many other economic experts said the annual GDP growth rate will be around 8.3 percent.
According to Doctor Nguyen Dinh Anh from the Financial Science Academy said if this year the target for GDP growth rate of 8.5 percent is not fulfilled it will be difficult to implement economic growth rates in the next three years.
Researcher Nguyen Trung said the annual GDP growth rate of 7-8 percent in the past years is one of the nation’s strengths. However, Vietnam should look at imbalanced issues during the development process, for example economic vision and strategy, development requirements and management capacity, infrastructure supply and demand, quality, quantity and supply and demand in human resources development.
In the past three years, it was not Vietnam (with an annual GDP growth rate of 8.13 percent), but Cambodia (with an annual GDP growth rate of 10.5 percent) trailing after “Giant” China. In Southern Asia, India ranks third with an annual GDP growth rate of 8.73 percent.
In 1986 – the first year of implementation of the Doi Moi (Renewal) process, Vietnam’s average per capita income was US$200 lower than China, US$997 lower than Thailand, US$1,950 lower than Malaysia and US$6,940 lower than the Republic of Korea. But the differences in 2006 were US$1,100, US$2,140, US$4,520 and US$17,000, respectively. These figures show big income gaps between Vietnam and these countries.
To obtain an economic growth rate of 8.5 percent, Mr Anh said Vietnam should consider growth related factors such as labour productivity and investment capital. In the past eight months, many industrial products achieved high growth, including air conditioners (70.2 percent), automobiles (65.5 percent), machine tools (60 percent), motorbikes (28.1 percent) and electric engines (26.3 percent). Exports in the first eight months of this year increased by 19 percent to nearly US$31.2 billion, but the real added values were not high as most products are manufactured under contract.
Imports seemed to reduce (Import in August decreased 0.4 percent compared to July) but imports in the eight months was still up by 30 percent compared to the same period last year. Many economists expect an increase in investment.
According to the Ministry of Finance, investment capital disbursement in the past eight months only reached around 40 percent of the yearly plan due to the low feasibility of big projects, for example a Dinh Vu DAP factory project. Dr Vo Chi Thanh said to ensure the economic growth rate, the Government and relevant ministries, departments and localities should pay more attention to the issue.
Many experts said factors affecting Vietnamese growth are mainly long-term development factors. In the past eight months, Vietnam attracted an additional US$8.3 billion foreign direct investment (FDI) capital. Thus, average FDI into Vietnam is more than US$1 billion a month, up nearly 40 percent compared to last year.
Mr Thanh said there are three main snags in long-term development: institutions, human resources and infrastructure. There is a lack of human resources, especially high-level human resources. The price of high-level human resources is higher than in Shanghai, China. Besides, infrastructure, such as roads and electricity is poor. These snags cannot be resolved in several months.
In addition to these three snags, Vietnam is likely to face an unstable macro economy and hunger in the central region. If these five issues are resolved, Vietnam will achieve a growth rate of 8.5 percent, creating a firm foundation for economic growth in next few years.
Source: VNE
Earlier August 2007, Doctor Vo Tri Thanh, head of the Department for International Economic Integration Policy under the Central Institute for Economic Management (CIEM), said the target for GDP growth rate of 8-8.5 percent is within reach. But many other economic experts said the annual GDP growth rate will be around 8.3 percent.
According to Doctor Nguyen Dinh Anh from the Financial Science Academy said if this year the target for GDP growth rate of 8.5 percent is not fulfilled it will be difficult to implement economic growth rates in the next three years.
Researcher Nguyen Trung said the annual GDP growth rate of 7-8 percent in the past years is one of the nation’s strengths. However, Vietnam should look at imbalanced issues during the development process, for example economic vision and strategy, development requirements and management capacity, infrastructure supply and demand, quality, quantity and supply and demand in human resources development.
In the past three years, it was not Vietnam (with an annual GDP growth rate of 8.13 percent), but Cambodia (with an annual GDP growth rate of 10.5 percent) trailing after “Giant” China. In Southern Asia, India ranks third with an annual GDP growth rate of 8.73 percent.
In 1986 – the first year of implementation of the Doi Moi (Renewal) process, Vietnam’s average per capita income was US$200 lower than China, US$997 lower than Thailand, US$1,950 lower than Malaysia and US$6,940 lower than the Republic of Korea. But the differences in 2006 were US$1,100, US$2,140, US$4,520 and US$17,000, respectively. These figures show big income gaps between Vietnam and these countries.
To obtain an economic growth rate of 8.5 percent, Mr Anh said Vietnam should consider growth related factors such as labour productivity and investment capital. In the past eight months, many industrial products achieved high growth, including air conditioners (70.2 percent), automobiles (65.5 percent), machine tools (60 percent), motorbikes (28.1 percent) and electric engines (26.3 percent). Exports in the first eight months of this year increased by 19 percent to nearly US$31.2 billion, but the real added values were not high as most products are manufactured under contract.
Imports seemed to reduce (Import in August decreased 0.4 percent compared to July) but imports in the eight months was still up by 30 percent compared to the same period last year. Many economists expect an increase in investment.
According to the Ministry of Finance, investment capital disbursement in the past eight months only reached around 40 percent of the yearly plan due to the low feasibility of big projects, for example a Dinh Vu DAP factory project. Dr Vo Chi Thanh said to ensure the economic growth rate, the Government and relevant ministries, departments and localities should pay more attention to the issue.
Many experts said factors affecting Vietnamese growth are mainly long-term development factors. In the past eight months, Vietnam attracted an additional US$8.3 billion foreign direct investment (FDI) capital. Thus, average FDI into Vietnam is more than US$1 billion a month, up nearly 40 percent compared to last year.
Mr Thanh said there are three main snags in long-term development: institutions, human resources and infrastructure. There is a lack of human resources, especially high-level human resources. The price of high-level human resources is higher than in Shanghai, China. Besides, infrastructure, such as roads and electricity is poor. These snags cannot be resolved in several months.
In addition to these three snags, Vietnam is likely to face an unstable macro economy and hunger in the central region. If these five issues are resolved, Vietnam will achieve a growth rate of 8.5 percent, creating a firm foundation for economic growth in next few years.
Source: VNE
Friday, August 31, 2007
Stock indexes record modest bumps
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
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
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.
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