Vietnam's stock market hit a new lifetime high Friday, rising 4.1% to end at 1023.05 points as investors sought shares in Petrovietnam oil service firm PV Drilling , traders said.
The VN Index on the Ho Chi Minh City Securities Trading Center closed above 1,000 points for the first time, market data showed.
"The Index has crossed the resistance level of 1,000 points, which will certainly boost investors' confidence in further growth in the short run," Deputy Director of Habubank Securities Nguyen Lam Dung told Reuters.
"The amount of money, including foreign funds flowing, into the market is huge while the supply of stocks is still limited."
The capitalization of the market, which opened in July 2000 and now trades shares in 106 companies, rose to 11.5 billion US$. The index has grown 206.4% since the end of 2005.
Shares in PV Drilling, the oil well service and drilling arm of state oil monopoly Petrovietnam, rose to its lifetime high of 295,000 VND (18.3 US$), up 4.98%, almost hitting the 5-percent daily limit regulated by the exchange.
Shares of the firm trade nearly 127% higher than their debut prices on Dec. 5 last year.
"The energy sector continues to attract a lot of attention from investors and foreign funds," a trader in Hanoi said.
Meanwhile, shares in the blue chip high-tech firm FPT also almost climbed to the daily limit, rising 4.9% to close at 578,000 VND (35.8 US$) per share.
FPT expects profit and sales growth, generated mainly from mobile handset sales, Internet services and outsourcing units, of up to 50% this year and next.
Vietnam's communist government has said it aimed to boost the stock market's capitalisation to 20 billion US$ by the end of the year, or 30% of gross domestic product.
It wants to expand the economy by up to 8.5% this year after 8.17% growth in 2006.
Source: Thanh Nien
Friday, January 19, 2007
Vinacapital sees growth opportunity in Viet Nam’s technology industry
Managing Director of VinaCapital Group, Don Lam, has said that the fund management company sees Viet Nam ’s emerging technology industry as a major growth opportunity.
Director Lam explained that “ Viet Nam has one of the world’s youngest populations, with about 70% of its population younger than 30. These young people are strongly represented the country’s rapidly growing consumer class and they are exceptionally eager to make the latest technologies part of their daily lives.”
Last October, VinaCapital teamed up with Silicon Valley ’s Draper Fisher Jurvetson (DFJ) to launch a 50 million US$ technology frontier fund. The DFJ VinaCapital L.P. seeks to invest in opportunities that complement the expertise and successful ventures of its partners in technology initiatives and to further expand Internet penetration in Viet Nam .
“By focusing on the upcoming equitisation in the media industry and fostering the development of start-up technology companies, the DFJ VinaCapital LP hopes to play a central role in the emergence of this industry,” Lam said.
Established in 2003, VinaCapital is managing the 560mio US$ Viet Nam Opportunity Fund (VOF), which is Viet Nam ’s best-performing fund in 2004, and the 205mio US$ VinaLand Fund (VNL). Both funds are currently listed on the London Stock Exchange.
Lam went on to say that VOF invests primarily in listed and OTC-traded equities, private equity, and real estate projects, and focuses on key growth areas in the domestic economy.
“We target companies with experienced management, proven business models, and attractive exit opportunities,” Lam said, adding that 2006 was VOF’s best year yet, with an annual return of 65%, and its market capitalisation nearly reaching 1 billion US$.
“We are very pleased with our performance in 2006, but see even greater opportunities in 2007,” Lam said.
Regarding Viet Nam ’s officially accession to the World Trade Organisation (WTO), Lam noted that “lower tariffs will lead to sizeable increases in foreign direct investment (FDI).”
He confirmed that the record FDI of 9.9 billion US$ in 2006 is an indication of the economy’s dynamism and attractiveness, and “full WTO membership is sure to lead to even bigger investments from abroad.”
“We have already seen the entrance of some major foreign investment banks like Deutsche Bank and Merrill Lynch, and more are bound to follow as the rest of the world sees how much Viet Nam has to offer,” Lam added.
He also noted that freer trade and greater competition will eventually lead to consolidation.
VinaCapital expects to see an increase in merger and acquisition activity, the director said. “The recent takeover of Bao Minh CMG by the Japanese insurer Dai Ichi Life is a great example of a very successful Vietnamese company drawing the attention of big foreign players who are interested in entering the Vietnamese market.”
Source: VNA
Director Lam explained that “ Viet Nam has one of the world’s youngest populations, with about 70% of its population younger than 30. These young people are strongly represented the country’s rapidly growing consumer class and they are exceptionally eager to make the latest technologies part of their daily lives.”
Last October, VinaCapital teamed up with Silicon Valley ’s Draper Fisher Jurvetson (DFJ) to launch a 50 million US$ technology frontier fund. The DFJ VinaCapital L.P. seeks to invest in opportunities that complement the expertise and successful ventures of its partners in technology initiatives and to further expand Internet penetration in Viet Nam .
“By focusing on the upcoming equitisation in the media industry and fostering the development of start-up technology companies, the DFJ VinaCapital LP hopes to play a central role in the emergence of this industry,” Lam said.
Established in 2003, VinaCapital is managing the 560mio US$ Viet Nam Opportunity Fund (VOF), which is Viet Nam ’s best-performing fund in 2004, and the 205mio US$ VinaLand Fund (VNL). Both funds are currently listed on the London Stock Exchange.
Lam went on to say that VOF invests primarily in listed and OTC-traded equities, private equity, and real estate projects, and focuses on key growth areas in the domestic economy.
“We target companies with experienced management, proven business models, and attractive exit opportunities,” Lam said, adding that 2006 was VOF’s best year yet, with an annual return of 65%, and its market capitalisation nearly reaching 1 billion US$.
“We are very pleased with our performance in 2006, but see even greater opportunities in 2007,” Lam said.
Regarding Viet Nam ’s officially accession to the World Trade Organisation (WTO), Lam noted that “lower tariffs will lead to sizeable increases in foreign direct investment (FDI).”
He confirmed that the record FDI of 9.9 billion US$ in 2006 is an indication of the economy’s dynamism and attractiveness, and “full WTO membership is sure to lead to even bigger investments from abroad.”
“We have already seen the entrance of some major foreign investment banks like Deutsche Bank and Merrill Lynch, and more are bound to follow as the rest of the world sees how much Viet Nam has to offer,” Lam added.
He also noted that freer trade and greater competition will eventually lead to consolidation.
VinaCapital expects to see an increase in merger and acquisition activity, the director said. “The recent takeover of Bao Minh CMG by the Japanese insurer Dai Ichi Life is a great example of a very successful Vietnamese company drawing the attention of big foreign players who are interested in entering the Vietnamese market.”
Source: VNA
Thursday, January 18, 2007
Nha Be withdraws from listing at HASTC
The Hanoi Securities Trading Centre (HASTC) has approved the Nha Be Garment Joint Stock Company’s proposal to withdraw its application for listing at HASTC. This is for the second time a company cancels its plan to list at HASTC.
One month ago, at the end of December 2006, VIB Bank also decided to withdraw the applications for listing at HASTC.
Analysts said that the Nha Be and VIB bank decided to cancel their listing at HASTC because they could not list on the bourse before January 1, 2007 in order to enjoy tax incentives. Under the previously applied regulations, listing companies could enjoy the 50% corporate income tax reduction for two years. However, the tax incentives have been removed since January 1, 2007.
Nha Be Company applied for listing 6.4mil shares at HASTC on November 22, 2006. The state now holds 51% in the company, its staffs hold 26.4% and outside investors 22.6%.
Source: VNE
One month ago, at the end of December 2006, VIB Bank also decided to withdraw the applications for listing at HASTC.
Analysts said that the Nha Be and VIB bank decided to cancel their listing at HASTC because they could not list on the bourse before January 1, 2007 in order to enjoy tax incentives. Under the previously applied regulations, listing companies could enjoy the 50% corporate income tax reduction for two years. However, the tax incentives have been removed since January 1, 2007.
Nha Be Company applied for listing 6.4mil shares at HASTC on November 22, 2006. The state now holds 51% in the company, its staffs hold 26.4% and outside investors 22.6%.
Source: VNE
Is there insider trading?
The Vietnam Association of Financial Investors (VAFI) has sent a document to the Ministry of Finance proposing to change existing securities trading centres into joint stock companies. According to VAFI, the current mode of operation of the trading centres proves to be unsuitable, and can cause information to leak, paving the way for the development of insider trading.
Under the current regulations, listing companies are not allowed to make public information about themselves prior to securities companies. They must send the information to securities trading centres, so that the centres can make public the information first. The mechanism on information declaration can generate information leaks, which is taboo for the stock market.
In many share auctions, the lists of the foreign and domestic institutional investors are known beforehand, which puts investors who do not have relations with management agency officials at a disadvantage.
Nguyen Hoang Hai, Secretary General of VAFI, said that it would be better if listing companies sent information to securities trading centres and press agencies at the same time.
However, Mr Hai’s suggestion proves to be unfeasible, according to Tran Van Dung, Director of the Hanoi Securities Trading Centre (HASTC).
Mr Dung said that HASTC, as the market regulatory body, must keep strict control over information declarations: It must filter information before making it public. There may be ‘sensitive’ information, and it could happen that the trading centre has to stop transactions and then declare the information. He said that although this had not yet occurred in Vietnam it could happen in the future.
According to Mr Dung, under the current procedures, the information from listing companies is transferred to the transaction registration division first, where the staffs make reports for submission to the centre’s leaders before the information is made public.
Source: VNE
Under the current regulations, listing companies are not allowed to make public information about themselves prior to securities companies. They must send the information to securities trading centres, so that the centres can make public the information first. The mechanism on information declaration can generate information leaks, which is taboo for the stock market.
In many share auctions, the lists of the foreign and domestic institutional investors are known beforehand, which puts investors who do not have relations with management agency officials at a disadvantage.
Nguyen Hoang Hai, Secretary General of VAFI, said that it would be better if listing companies sent information to securities trading centres and press agencies at the same time.
However, Mr Hai’s suggestion proves to be unfeasible, according to Tran Van Dung, Director of the Hanoi Securities Trading Centre (HASTC).
Mr Dung said that HASTC, as the market regulatory body, must keep strict control over information declarations: It must filter information before making it public. There may be ‘sensitive’ information, and it could happen that the trading centre has to stop transactions and then declare the information. He said that although this had not yet occurred in Vietnam it could happen in the future.
According to Mr Dung, under the current procedures, the information from listing companies is transferred to the transaction registration division first, where the staffs make reports for submission to the centre’s leaders before the information is made public.
Source: VNE
US insurer pulls out of Vietnam
Leading US insurer New York Life International has announced it will withdraw from Vietnam and seems likely to focus on more profitable markets.
Erin Pham, its chief representative, said the company was packing up because it was unable to invest funds in Vietnam.
However, other sources said that the company was more keen on China, India, and Thailand.
New York Life opened its representative office in Vietnam in 2000 and applied the next year to establish a wholly-owned insurance company.
But after waiting in vain for three years to get a license, New York Life decided to withdraw the application in 2004.
In June 2005 it finally got the license.
Source: Thanh Nien
Erin Pham, its chief representative, said the company was packing up because it was unable to invest funds in Vietnam.
However, other sources said that the company was more keen on China, India, and Thailand.
New York Life opened its representative office in Vietnam in 2000 and applied the next year to establish a wholly-owned insurance company.
But after waiting in vain for three years to get a license, New York Life decided to withdraw the application in 2004.
In June 2005 it finally got the license.
Source: Thanh Nien
VN-Index decreases by 2%
After gaining for 10 consecutive sessions the VN-Index plunged 16.64 points to close at 964.96. There were 36 gainers and 47 losers.
The first session actually saw a buying frenzy which drove the index above the 1,000-point mark.
Analysts said there was massive selling in the last two sessions, pushing down the market.
On an eventful day, turnover was 551 billion VND (34mio US$) higher than the previous session, at 1.38 trillion VND (86mio US$).
But oil technical service company PVD saw big buying and hit the 5% upper ceiling. It gained 12,000 VND to close at 268,000 VND.
Other blue chips like IT developer FPT, confectionary maker KDC, dairy producer KDC, and refrigeration engineering firm REE all edged down.
Lam Dao Thao, a senior consultant at the Vietnamese Orient Commercial Joint Stock Bank, said the market might stabilize if listed firms announced good results for 2006. But poor results would cause a steep decline, he warned.
Source: Thanh Nien
The first session actually saw a buying frenzy which drove the index above the 1,000-point mark.
Analysts said there was massive selling in the last two sessions, pushing down the market.
On an eventful day, turnover was 551 billion VND (34mio US$) higher than the previous session, at 1.38 trillion VND (86mio US$).
But oil technical service company PVD saw big buying and hit the 5% upper ceiling. It gained 12,000 VND to close at 268,000 VND.
Other blue chips like IT developer FPT, confectionary maker KDC, dairy producer KDC, and refrigeration engineering firm REE all edged down.
Lam Dao Thao, a senior consultant at the Vietnamese Orient Commercial Joint Stock Bank, said the market might stabilize if listed firms announced good results for 2006. But poor results would cause a steep decline, he warned.
Source: Thanh Nien
Fisheries industry to invest 3.56 trillion Dong
The Ministry of Fisheries said that it would mobilise some 3.56 trillion Dong (roughly 222.5mio US$) to invest in aquatic product processing and trading from 2007 to 2010.
The capital, of which 253 billion Dong from the State Budget, will be spent on promoting brand names, tracking the origin of products, supervising, warning of impacts to environment, and preventing diseases in aquatic products. The industry plans to focus on trade promotion and market research, and speed up its integration into the world market.
An aquatic product market network will also be established to facilitate the management of products, their quantity and quality, and food safety.
The industry sets a target that as many as 100 enterprises processing aquatic products for export would meet its standards on food safety by 2010.
Source: VNA
The capital, of which 253 billion Dong from the State Budget, will be spent on promoting brand names, tracking the origin of products, supervising, warning of impacts to environment, and preventing diseases in aquatic products. The industry plans to focus on trade promotion and market research, and speed up its integration into the world market.
An aquatic product market network will also be established to facilitate the management of products, their quantity and quality, and food safety.
The industry sets a target that as many as 100 enterprises processing aquatic products for export would meet its standards on food safety by 2010.
Source: VNA
Wednesday, January 17, 2007
Experienced investors worried
The first days of 2007 seemed to be the hottest days so far in Viet Nam's stock market with the VN-Index rising for the 10th consecutive trading day, prompting expectations that it would exceed the 1,000-point mark in upcoming trading sessions.
The trading session at the Ho Chi Minh City Trading Centre on Jan. 16 saw mass purchase orders from investors, pushing the VN-Index rise to a record 983.6 points.
The prices went up for 65 types of shares, while 30 others underwent decreases and 13 remained unchanged.
Many investors were enthusiastic with the rising trend and stepping up their investment to get a piece of the profits.
However, the overheating market worried some long-term investors, who adopted a cautious watch-and-see stance.
On the darker side, about 15-20% of the listed companies saw their shares drop. In the Jan. 16 session, seven types of shares dipped to floor prices.
According to Nguyen Duy Hung, General Director of the Sai Gon Securities Incorporated (SSI), a such steep growth was not good for the market and adjustments are sure to follow. However, he said there is little possibility for deep adjustment.
Source: VNA
The trading session at the Ho Chi Minh City Trading Centre on Jan. 16 saw mass purchase orders from investors, pushing the VN-Index rise to a record 983.6 points.
The prices went up for 65 types of shares, while 30 others underwent decreases and 13 remained unchanged.
Many investors were enthusiastic with the rising trend and stepping up their investment to get a piece of the profits.
However, the overheating market worried some long-term investors, who adopted a cautious watch-and-see stance.
On the darker side, about 15-20% of the listed companies saw their shares drop. In the Jan. 16 session, seven types of shares dipped to floor prices.
According to Nguyen Duy Hung, General Director of the Sai Gon Securities Incorporated (SSI), a such steep growth was not good for the market and adjustments are sure to follow. However, he said there is little possibility for deep adjustment.
Source: VNA
Malaysian company evaluates listing in Vietnam
Furniweb Industrial Products Berhad is exploring the possibility of listing its unit in Vietnam in a move to take advantage of the fast-growing Vietnamese economy.
The company said on Tuesday that it had appointed a corporate adviser licensed in Vietnam to evaluate the listing of Furniweb Manufacturing (Vietnam) Co Ltd on the Ho Chi Minh City securities trading center (HSTC).
Furniweb Vietnam, located in the Dong Nai province, manufactures and sells upholstery webbings and covered elastic yarn. It recorded a revenue of 7.8mio US$ in 2005.
The company said the sizeable presence of foreign direct investments in Vietnam, which has a population of 84 million, and the opening up of the economy were favorable factors for the proposed listing.
The proposed listing would also allow Furniweb to access Vietnam's capital market to raise funds for future expansion.
Source: Thanh Nien
The company said on Tuesday that it had appointed a corporate adviser licensed in Vietnam to evaluate the listing of Furniweb Manufacturing (Vietnam) Co Ltd on the Ho Chi Minh City securities trading center (HSTC).
Furniweb Vietnam, located in the Dong Nai province, manufactures and sells upholstery webbings and covered elastic yarn. It recorded a revenue of 7.8mio US$ in 2005.
The company said the sizeable presence of foreign direct investments in Vietnam, which has a population of 84 million, and the opening up of the economy were favorable factors for the proposed listing.
The proposed listing would also allow Furniweb to access Vietnam's capital market to raise funds for future expansion.
Source: Thanh Nien
Banks start price war
Banks are engaged a new price war, according to Nguyen Thi Kim Thanh, deputy chief of the central bank’s Monetary Policy Department, as rates steadily rise.
In the capital, 12-month term deposit rates are now around 9.36% for dong account and 5.3% for US-dollar accounts, according to the State Bank of Viet Nam.
The trend began as early as October of last year when Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) increased annual deposit rates by 0.12-0.24%, depending on the account’s denomination.
Several weeks later, Southeast Asia Bank (SeaBank) followed with their own 0.01-0.03% hike on monthly rates.
Experts attributed the price war mainly to harsh competition in the market for new customers.
Nguyen Hoai Anh, general director of An Binh Commercial Bank (ACB), says that newly-established banks must raise interest rates to attract new customers away from the more popular big banks. For their part, larger financial institutes have responded with their own rate hikes and special offers.
There is a fear in the industry that once a customer begins using a bank’s services it will be very difficult and costly to lure them away.
The nation’s booming stock market has also contributed to the price war. Returns on stock investments are, currently, much higher than on bank accounts. As a result, money is pouring into the securities market, limiting the available capital for savings.
In addition to rate hikes, banks also launched new promotional campaigns.
The Bank for Investment and Development of Viet Nam (BIDV) offered customers 10 billion VND (625,000 US$) in prizes, while the Military Bank (MB) spent 1 billion VND (62,500 US$) on tours to Europe. Sai Gon Joint Stock Commercial Bank (SACOMBANK) even offered people gold.
Source: VNS
In the capital, 12-month term deposit rates are now around 9.36% for dong account and 5.3% for US-dollar accounts, according to the State Bank of Viet Nam.
The trend began as early as October of last year when Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) increased annual deposit rates by 0.12-0.24%, depending on the account’s denomination.
Several weeks later, Southeast Asia Bank (SeaBank) followed with their own 0.01-0.03% hike on monthly rates.
Experts attributed the price war mainly to harsh competition in the market for new customers.
Nguyen Hoai Anh, general director of An Binh Commercial Bank (ACB), says that newly-established banks must raise interest rates to attract new customers away from the more popular big banks. For their part, larger financial institutes have responded with their own rate hikes and special offers.
There is a fear in the industry that once a customer begins using a bank’s services it will be very difficult and costly to lure them away.
The nation’s booming stock market has also contributed to the price war. Returns on stock investments are, currently, much higher than on bank accounts. As a result, money is pouring into the securities market, limiting the available capital for savings.
In addition to rate hikes, banks also launched new promotional campaigns.
The Bank for Investment and Development of Viet Nam (BIDV) offered customers 10 billion VND (625,000 US$) in prizes, while the Military Bank (MB) spent 1 billion VND (62,500 US$) on tours to Europe. Sai Gon Joint Stock Commercial Bank (SACOMBANK) even offered people gold.
Source: VNS
Vinaconex increases chartered capital
The Viet Nam Construction and Import-Export Joint Stock Corporation (Vinaconex JSC) expects to raise its chartered capital from 1.5 trillion VND (93mio US$) to VND2 trillion (124mio US$) in the first quarter of the year.
To meet the mark, the corporation will issue shares targeted at potential foreign partners specialising in cement, construction material production, real estate and finance. The State will retain 51 per cent of the firm. It now controls 64 per cent of shares, worth 960 billion VND (59.6mio US$)
Vinaconex JSC expects to reach 5 trillion VND (312.5mio US$) in chartered capital by 2010 through the issuance of shares.
Aside from equitisation, the company’s road map for growth will depend on stock trading and the demand for development.
Since the firm’s first share issuance, the stake of six strategic investors – which include domestic banks, investment funds and securities companies – has increased more than three fold to reach 33 million shares.
Source: VNS
To meet the mark, the corporation will issue shares targeted at potential foreign partners specialising in cement, construction material production, real estate and finance. The State will retain 51 per cent of the firm. It now controls 64 per cent of shares, worth 960 billion VND (59.6mio US$)
Vinaconex JSC expects to reach 5 trillion VND (312.5mio US$) in chartered capital by 2010 through the issuance of shares.
Aside from equitisation, the company’s road map for growth will depend on stock trading and the demand for development.
Since the firm’s first share issuance, the stake of six strategic investors – which include domestic banks, investment funds and securities companies – has increased more than three fold to reach 33 million shares.
Source: VNS
Singaporean securities company opens office in HCMC
The State Securities Commission of Vietnam today granted a licence to Singapore’s Kim Eng Securities Pte Ltd to open a representative office in Ho Chi Minh City.
Kim Eng Securities Pte Ltd's primary business and stronghold is in securities brokerage for both retail and institutional clients. Its other services include research, online trading, equity underwriting, investment in quoted and unquoted securities, share financing, investment advisory, and custodian services.
Source: VNE
Kim Eng Securities Pte Ltd's primary business and stronghold is in securities brokerage for both retail and institutional clients. Its other services include research, online trading, equity underwriting, investment in quoted and unquoted securities, share financing, investment advisory, and custodian services.
Source: VNE
Seafood exports target 3.6 billion US$ in 2007
The fisheries sector expects to reach an export turnover of 3.6 billion US$ in 2007, a year-on-year increase of 7.02%, and strives to net 3.8 million tonnes of products, including 2 million tonnes from fishing and 1.8 million tonnes from aquaculture.
The target was set at a meeting held in Ha Noi on Jan. 16 to review the sector's performance in 2006 and discuss its plan for 2007.
Addressing the meeting, Permanent Deputy Prime Minister Nguyen Sinh Hung requested that the sector breed more economically valueable species in order to increase.
Source: VNA
The target was set at a meeting held in Ha Noi on Jan. 16 to review the sector's performance in 2006 and discuss its plan for 2007.
Addressing the meeting, Permanent Deputy Prime Minister Nguyen Sinh Hung requested that the sector breed more economically valueable species in order to increase.
Source: VNA
Vietnamese stockmarket still hot
Vietnamese stocks jumped for the 10th straight day Tuesday. Analysts attributing it to investors’ speculation in blue chips.
The VN-Index gained 36.45 points, or 3.9%, to close at 983.6. There were 65 gainers and 30 losers.
The analysts said the 1,000-point mark could be breached in the next session.
Trading volumes jumped by 12.4 percent to 6.93 million shares. Turnover rose by 16%t to 829 billion VND (51.6mio US$).
Investors were reportedly interested in heavyweights ahead of their final quarter results.
Two-thirds of the 65 gainers hit the price ceiling of 5%, including several blue chips.
IT company FPT led the list, gaining 27,000 VND to 578,000 VND, and petroleum technical services PVD rose by 12,000 VND to 256,000 VND.
But analysts warned of high risks due to a lack of transparency, information, and professional management.
Tuesday, January 16, 2007
Singaporean bank conducts due dilligence on Vietnamese bank
United Overseas Bank (UOB), Singapore's second-biggest bank, said on Tuesday it had reached an agreement over a possible strategic investment in Vietnam's Southern Commercial Bank and was examining the bank's books.
Several Singapore companies have announced, or are looking at, investments in Vietnam as part of a broader regional expansion. Singapore's third-biggest bank, Oversea-Chinese Banking Corp. , last year bought a 10% stake in VP Bank for 15.7mio US$.
"Parties are now negotiating the definitive agreements for the investment and UOB is currently conducting due dilligence on Southern Bank," UOB said in a statement. It gave no financial details.
Established in 1993, Southern Commercial Bank is a joint stock commercial bank with assets of 8 trillion VNDong (498mio US$), 44 branches and about 1,060 staff.
HSBC bank said in a research report in November that Vietnam's joint stock banks are small in size and controlled only 15% of the lending market in 2005, while state-owned commercial banks controlled 75% of the lending market.
HSBC said that Southern Commercial Bank is unlisted and trades on Vietnam's over-the-counter market with an estimated market capitalisation of $135mio US$.
Source: Reuters
Several Singapore companies have announced, or are looking at, investments in Vietnam as part of a broader regional expansion. Singapore's third-biggest bank, Oversea-Chinese Banking Corp. , last year bought a 10% stake in VP Bank for 15.7mio US$.
"Parties are now negotiating the definitive agreements for the investment and UOB is currently conducting due dilligence on Southern Bank," UOB said in a statement. It gave no financial details.
Established in 1993, Southern Commercial Bank is a joint stock commercial bank with assets of 8 trillion VNDong (498mio US$), 44 branches and about 1,060 staff.
HSBC bank said in a research report in November that Vietnam's joint stock banks are small in size and controlled only 15% of the lending market in 2005, while state-owned commercial banks controlled 75% of the lending market.
HSBC said that Southern Commercial Bank is unlisted and trades on Vietnam's over-the-counter market with an estimated market capitalisation of $135mio US$.
Source: Reuters
Brewery buys bank stake
Leading Vietnamese beer maker Sabeco has bought a 5% stake in Phuong Dong Commercial Bank, in which French bank BNP Paribas has agreed to invest, a bank official said on Tuesday.
The shares in the unlisted Ho Chi Minh City-based lender known as Oricombank were valued in the deal at face value of 31.5 billion VNDong (1.95mio US$), the official said.
"The deal was reached based on our mutual interest and future cooperation," he said without elaboration. Sabeco is the short name for state-run Saigon Beer Alcohol Beverage Corporation.
Oricombank now has a registered capital of 567 billion VNDong, but the value of the deal with Sabeco took into account the bank's new capital of 630 billion VNDong that included the BNP Paribas investment, the bank official said.
Oricombank would be valued at 302mio US$ as its shares are traded at 77,500 VNDong (4.8 US$) on the unofficial markets. Oricombank has yet to say when it plans to list on the country's stock market.
BNP Paribas, the euro zone's second-biggest bank by market capitalisation, said in November it would buy a 10% stake in Oricombank.
The French bank did not disclose the value of the stake. It was expected to finalise the investment in Oricombank later this month or in February once central bank approval was in place, the Oricombank official said.
Major investors holding stakes of at least 10% in Oricombank now include two companies in Ho Chi Minh City, the Finance Management Committee of the Communist Party branch in Ho Chi Minh City and state-run Vietcombank.
Sabeco, the brewer of Saigon Beer and Beer 333, said in October it would double its beer output to 1 billion litres by 2010 when Vietnam's per capita beer consumption is forecast at 28 litres, up from 18 litres in 2006, state media have reported.
Sabeco's production capacity grew 16% in each of 2005 and 2006. It is expected to announce a partial privatisation plan soon under which the state would reduce its stake to 51% over the next few years.
Source: Reuters
The shares in the unlisted Ho Chi Minh City-based lender known as Oricombank were valued in the deal at face value of 31.5 billion VNDong (1.95mio US$), the official said.
"The deal was reached based on our mutual interest and future cooperation," he said without elaboration. Sabeco is the short name for state-run Saigon Beer Alcohol Beverage Corporation.
Oricombank now has a registered capital of 567 billion VNDong, but the value of the deal with Sabeco took into account the bank's new capital of 630 billion VNDong that included the BNP Paribas investment, the bank official said.
Oricombank would be valued at 302mio US$ as its shares are traded at 77,500 VNDong (4.8 US$) on the unofficial markets. Oricombank has yet to say when it plans to list on the country's stock market.
BNP Paribas, the euro zone's second-biggest bank by market capitalisation, said in November it would buy a 10% stake in Oricombank.
The French bank did not disclose the value of the stake. It was expected to finalise the investment in Oricombank later this month or in February once central bank approval was in place, the Oricombank official said.
Major investors holding stakes of at least 10% in Oricombank now include two companies in Ho Chi Minh City, the Finance Management Committee of the Communist Party branch in Ho Chi Minh City and state-run Vietcombank.
Sabeco, the brewer of Saigon Beer and Beer 333, said in October it would double its beer output to 1 billion litres by 2010 when Vietnam's per capita beer consumption is forecast at 28 litres, up from 18 litres in 2006, state media have reported.
Sabeco's production capacity grew 16% in each of 2005 and 2006. It is expected to announce a partial privatisation plan soon under which the state would reduce its stake to 51% over the next few years.
Source: Reuters
Experts optimistic about investments in Vietnam
Viet Nam's accession to the World Trade Organisation (WTO), together with its stable political and social situation, and propitious investment environment, have put the country in the first place for investment to many foreign financial investors in 2007.
According to David G.Fernandez, managing director of the Singapore-based JP Chase Morgan Bank, Viet Nam will top the bank's investment priority this year.
The year 2007, he said, will witness considerable changes in the capital market of Viet Nam with an increase in the number of companies joining the securities market.
He forecasted that Viet Nam's Gross Domestic Product (GDP) in 2007 will increase by 0.1-0.3% from the registered level of 8.2% in 2006 and the value of the Vietnamese Dong will rise 0.5% in comparison with that of US$.
Viet Nam, however, should perfect its legal system and equitise more state-owned enterprises so as to meet the increasing demands of securities investors, said the manager.
Sharing the same optimistic view about Viet Nam, the Director of the UK's Dragon Capital, Dominic Scriven, one of the leading foreign experts in Viet Nam in terms of capital mobilisation and investment consultancy, asserted that he found a stable and potential investment environment in Viet Nam.
According to Dominic, many foreign investors also agreed that Viet Nam boasts more secured environment and larger potentials than other countries in the region.
The Dragon Capital's asset and investment capital in Viet Nam currently amount to 800mio US$, including stocks of nearly half of the listed companies.
Source: VNA
According to David G.Fernandez, managing director of the Singapore-based JP Chase Morgan Bank, Viet Nam will top the bank's investment priority this year.
The year 2007, he said, will witness considerable changes in the capital market of Viet Nam with an increase in the number of companies joining the securities market.
He forecasted that Viet Nam's Gross Domestic Product (GDP) in 2007 will increase by 0.1-0.3% from the registered level of 8.2% in 2006 and the value of the Vietnamese Dong will rise 0.5% in comparison with that of US$.
Viet Nam, however, should perfect its legal system and equitise more state-owned enterprises so as to meet the increasing demands of securities investors, said the manager.
Sharing the same optimistic view about Viet Nam, the Director of the UK's Dragon Capital, Dominic Scriven, one of the leading foreign experts in Viet Nam in terms of capital mobilisation and investment consultancy, asserted that he found a stable and potential investment environment in Viet Nam.
According to Dominic, many foreign investors also agreed that Viet Nam boasts more secured environment and larger potentials than other countries in the region.
The Dragon Capital's asset and investment capital in Viet Nam currently amount to 800mio US$, including stocks of nearly half of the listed companies.
Source: VNA
Vietnamese cement production meets demand in 2010
The cement industry will fully meet the national demand by 2010 with supply expected to reach 60 million tonnes against 50 million tonnes for the national demand volume.
Experts voiced concerns over the fact that small projects are booming while strong investment has appeared to be very rare, making investment risky. They warned that a situation where a large number of businesses operate separately may lead to an unhealthy competition such as dumping products.
The industry has, therefore, called for a faster pace in equitising State-owned enterprises (SOEs) and setting up a national cement consortium with advanced technology and financially strong enough to compete in the international market.
The national demand for cement reached 32.5 million tonnes in 2006.
Source: VNA
Experts voiced concerns over the fact that small projects are booming while strong investment has appeared to be very rare, making investment risky. They warned that a situation where a large number of businesses operate separately may lead to an unhealthy competition such as dumping products.
The industry has, therefore, called for a faster pace in equitising State-owned enterprises (SOEs) and setting up a national cement consortium with advanced technology and financially strong enough to compete in the international market.
The national demand for cement reached 32.5 million tonnes in 2006.
Source: VNA
HAPACO's refinery project funded by German bank
Tissue paper maker Hapaco said on Tuesday it had secured a deal to borrow 128mio US$ from a German bank to finance a 150mio US$ oil refinery project.
The refinery would have a 1mio tonnes per year capacity in an industrial zone in the northern port of Haiphong in which Belgian-based investment venture International Port Engineering and Management has a stake.
"We are still looking for the financing of the remaining 15% investment for the project," a Hapaco spokeswoman said.
The 128mio US$ is provided by Sachsen LB of Germany.
Hapaco officials have said the plant would use around 20,000 barrels per day of Vietnamese crude oil when it starts operating by 2010.
Several foreign firms including Russia's Techno Star have sought to build refineries with investment of under 500mio US$ but energy experts say none have materialised because of lack of access to crude, which is controlled by state-run oil monopoly Petrovietnam.
Hapaco's stock closed at 40,900 VNDong (2.53 US$) per share on the Ho Chi Minh City Securities Trading Center on Monday, up 4.87% from last Friday, taking its market capitalisation to around 15mio US$.
Vietnam, the third largest crude oil producer in Southeast Asia with average daily output of about 350,000 barrels, still relies entirely on oil product imports as it lacks refineries.
Petrovietnam awarded a contract to build the country's first refinery in June, with the 130,000-bpd plant slated to start operation by early 2009.
Source: Reuters
The refinery would have a 1mio tonnes per year capacity in an industrial zone in the northern port of Haiphong in which Belgian-based investment venture International Port Engineering and Management has a stake.
"We are still looking for the financing of the remaining 15% investment for the project," a Hapaco spokeswoman said.
The 128mio US$ is provided by Sachsen LB of Germany.
Hapaco officials have said the plant would use around 20,000 barrels per day of Vietnamese crude oil when it starts operating by 2010.
Several foreign firms including Russia's Techno Star have sought to build refineries with investment of under 500mio US$ but energy experts say none have materialised because of lack of access to crude, which is controlled by state-run oil monopoly Petrovietnam.
Hapaco's stock closed at 40,900 VNDong (2.53 US$) per share on the Ho Chi Minh City Securities Trading Center on Monday, up 4.87% from last Friday, taking its market capitalisation to around 15mio US$.
Vietnam, the third largest crude oil producer in Southeast Asia with average daily output of about 350,000 barrels, still relies entirely on oil product imports as it lacks refineries.
Petrovietnam awarded a contract to build the country's first refinery in June, with the 130,000-bpd plant slated to start operation by early 2009.
Source: Reuters
Foreign investors increase speculations
In a interview with VNE, Nguyen Doan Hung, Deputy Chairman of the State Securities Commission (SSC) said:
"Foreign investors are superior to domestic ones in terms of knowledge, experience and financial capability. The foreign investors can be divided into two groups. Foreign institutional investors aim to medium and long term investment, they do not buy securities today and sell them out tomorrow, they have clear portfolios. Meanwhile, the second group of foreign investors aims at short term investment, in order words, they make speculations, they purchase and sell securities all the time. I can see more and more foreign investors of this group. (...)
The statistics showed that foreign investors now hold 30% of total capital in the stock market. In recent transactions, domestic investors bought and sold securities following foreign investors’ moves, they do not have detailed investment strategies."
Source: VNE
Vietnam expects faster industy growth in 2007
Experts expect that 2007, the first year Viet Nam enjoys the World Trade Organisation (WTO) membership, would open opportunities for its industry with export revenues estimated at 35.5 billion US$, or 17% over 2006.The Industrial Ministry reported that major hard currency earners remain to be crude oil, garments, textile and leather shoes.
Crude oil export sector is likely to reach 16.1 million tonnes while the garment and textiles sector expects to earn 7 billion US$ in exports.
Facing high dumping tariffs, the leather shoe industry is forecast to have a lower export growth rate with revenues estimated at 4 billion US$.
Leading in exports will be electronics and computer parts industries with growth rates estimated at 35.6%, wood products, 31.3% and plastics, 21.3%.
Economists said the WTO membership will bring in bigger challenges to the industrial sector as it will have to abide by the free trade-oriented body's strict rules, especially on goods and services trading and intellectual property. Under its commitments to the WTO, Viet Nam has to halve tariffs from 25% to 12.6% on 9,465 categories of industrial goods in the next five or seven years. In addition, non-tariff barriers, such as quotas, subsidies and customs procedures, will also be removed.
Industry Minister Hoang Trung Hai unveiled a plan to speed up the process towards a market economy, thus establishing a legal foundation for the ministry to fulfil the nation's commitments to the international community. Efforts will be made to lure influxes of foreign investment into those key industries which have great potential for exports such as electronic and computers, plastic products and food processing, said the minister.
He also said top priority will be given to highly competitive products including garments, textiles and footwear. Trade promotion campaigns will be intensified to boost shares in traditional markets such as the European Union and the United States and explore new markets in Africa, South America and the Middle-East, Hai confirmed.
He also pledged to push up administrative reforms in the export-relevant processes, especially customs procedures, the taxation and fee-collecting systems, in an effort to reduce product costs and improve exports' competitive edges.
The minister also called on businesses to take immediate steps to reduce production costs, conduct market surveys to meet market demand and intensify investment in science and technology for the export-oriented food processing industry.
The industry sector recorded a growth rate of 17% in 2006 with total export revenues reaching over 30 billion US$, accounting for 76% of the national export value. Industries have set up records in foreign direct investment over the past years, drawing 490 projects with a combined investment of over 5 billion US$.
Source: VNA
Agribank's assets grow by 22.7% in 2006
State-run Vietnam Bank for Agriculture and Rural Development, the country's largest lender, said its assets rose 22.7% in 2006 from the previous year to 233.9 trillion VNDong (14.5 billion US$).
Loans by Agribank were 15.7% higher at the end of 2006 at 186.33 trillion VNDong (11.5 billion US$).
A report says: "While lending has achieved a high and continuous growth, the bad debt based on new standards in line with the international accounting practice only accounted for 1.9% of the total loans."
Agribank, ordered by the government to go public in 2008 following similar moves by state-run Vietcombank and Mekong Delta Housing Bank this year, had aimed to keep the bad debt ratio at 5% in 2006.
Deposits expanded 24.3% last year to 225.5 trillion VNDong (13.9 billion US$), the bank said. Agribank said it raised more of the funds from the public partly through several bond issues and had reduced reliance on central bank loans.
Source: Reuters
Loans by Agribank were 15.7% higher at the end of 2006 at 186.33 trillion VNDong (11.5 billion US$).
A report says: "While lending has achieved a high and continuous growth, the bad debt based on new standards in line with the international accounting practice only accounted for 1.9% of the total loans."
Agribank, ordered by the government to go public in 2008 following similar moves by state-run Vietcombank and Mekong Delta Housing Bank this year, had aimed to keep the bad debt ratio at 5% in 2006.
Deposits expanded 24.3% last year to 225.5 trillion VNDong (13.9 billion US$), the bank said. Agribank said it raised more of the funds from the public partly through several bond issues and had reduced reliance on central bank loans.
Source: Reuters
Monday, January 15, 2007
SACOMBANK looks back on a successfull 2006
The total assets of Saigon Thuong Tin Commercial Bank (SACOMBANK) rose 72% from a year earlier to 24.86 trillion VNDong (1.54 billion US$) at the end of last year, the bank said in a statement.
Gross profit soared 78% from 2005 to 544 billion VNDong in 2006, the year the Ho Chi Minh City-based bank became Vietnam's first bank in Vietnam to list shares on the country's stock market.
Sacombank said loans at the end of last year were 73% higher than end-2005 at 14.54 trillion VNDong, while deposits increased 75% at 21.52 trillion VNDong.
Earlier this month, Fitch Ratings affirmed Sacombank's Individual rating at 'D' and its Support rating at '5', saying the ratings reflected the bank's "adequate balance sheet strength and good profitability".
The bank has achieved a 237-% growth in its balance sheet over the three years to end-2005, Fitch Ratings said.
Around 40% of Sacombank's loans went to consumers and the remaining 60% were extended to private businesses, reflecting its niche focus in the retail business segments neglected by state-run banks, the rating agency has said.
Sacombank's assets are the sixth-biggest in Vietnam, following four state-run banks and Asia Commercial Bank.
"Despite its rapid growth, Sacombank has maintained good asset quality," Fitch Ratings said.
Sacombank shares started trading on July 12, 2006 in the Ho Chi Minh City Securities Trading Center, making the lender the country's largest listed company at the time and boosting Vietnam's stock market value then by 53%.
The bank has three foreign strategic shareholders, the World Bank's International Finance Corp., Dragon Capital and ANZ Bank, which altogether held 26.3% of stake.
On Monday, Sacombank shares gained 0.69% to close at 72,500 VNDong (4.5US$). Sacombank bank is the market's fourth-largest firm after information technology firm FPT, dairy product maker Vinamilk and Petrovietnam Drilling and Well Services Co.
Source: Reuters
Gross profit soared 78% from 2005 to 544 billion VNDong in 2006, the year the Ho Chi Minh City-based bank became Vietnam's first bank in Vietnam to list shares on the country's stock market.
Sacombank said loans at the end of last year were 73% higher than end-2005 at 14.54 trillion VNDong, while deposits increased 75% at 21.52 trillion VNDong.
Earlier this month, Fitch Ratings affirmed Sacombank's Individual rating at 'D' and its Support rating at '5', saying the ratings reflected the bank's "adequate balance sheet strength and good profitability".
The bank has achieved a 237-% growth in its balance sheet over the three years to end-2005, Fitch Ratings said.
Around 40% of Sacombank's loans went to consumers and the remaining 60% were extended to private businesses, reflecting its niche focus in the retail business segments neglected by state-run banks, the rating agency has said.
Sacombank's assets are the sixth-biggest in Vietnam, following four state-run banks and Asia Commercial Bank.
"Despite its rapid growth, Sacombank has maintained good asset quality," Fitch Ratings said.
Sacombank shares started trading on July 12, 2006 in the Ho Chi Minh City Securities Trading Center, making the lender the country's largest listed company at the time and boosting Vietnam's stock market value then by 53%.
The bank has three foreign strategic shareholders, the World Bank's International Finance Corp., Dragon Capital and ANZ Bank, which altogether held 26.3% of stake.
On Monday, Sacombank shares gained 0.69% to close at 72,500 VNDong (4.5US$). Sacombank bank is the market's fourth-largest firm after information technology firm FPT, dairy product maker Vinamilk and Petrovietnam Drilling and Well Services Co.
Source: Reuters
JV to provide new mobile phone network
Hutchison Telecommunications International Ltd. said a 655-million US$ joint-venture mobile phone network it opened in Vietnam on Monday was expected to break even in two years.
The 50/50 venture, named HT Mobile, operates a third-generation mobile communication network using CDMA-2000 technology nationwide, company officials said.
"We expect the venture to break even after two years of operation," Hutchison Telecom Chief Executive Dennis Lui said at an event to announce the service.
Hutchison and unlisted Hanoi Telecommunications Joint Stock Co. will, over 15 years, provide value-added services over the cellular mobile network such as data transmission, video calls, Internet access and wireless services.
As of December 2006, the Southeast Asian country had about 16 million mobile phone users out of a population of 84 million.
Source: Reuters
The 50/50 venture, named HT Mobile, operates a third-generation mobile communication network using CDMA-2000 technology nationwide, company officials said.
"We expect the venture to break even after two years of operation," Hutchison Telecom Chief Executive Dennis Lui said at an event to announce the service.
Hutchison and unlisted Hanoi Telecommunications Joint Stock Co. will, over 15 years, provide value-added services over the cellular mobile network such as data transmission, video calls, Internet access and wireless services.
As of December 2006, the Southeast Asian country had about 16 million mobile phone users out of a population of 84 million.
Source: Reuters
VN-Index exceeds 900-points mark
The VN-Index rocketed 98.2 points to exceed the 900-point threshold, closing at 914.8 with 46 gainers and 42 losers.
Market watchdogs forecast the 1,000-point mark would be well within reach this week if the trend continued.
Trading volume reported 8.2 million shares valued at 1.03 trillion VND (64mio US$)
The top three performers were CII (Ho Chi Minh City-based Infrastructure Investment and Development Co), FPT (IT developer), and GMD (Gemadept), hit the ceiling by 5%.
FPT led the top winner list gaining 25,000 VND to close 525,000 VND per unit; the GMD runner up increasing 9,000 VND to 189,000 VND; and CII made gains of 3,000 VND to 63,000 VND.
Other stock market heavyweights like SAM (Cables And Telecom Materials Joint Stock Company) and PVD (PetroVietnam Drilling and Service Co) increased by between 10,000 VND to 11,000 VND to close at 211,000 VND and 233,000 VND respectively.
Foreign investors continued to pump 392 billion VND (24mio US$) into buying 3.2 million shares.
Source: Than Nien
Market watchdogs forecast the 1,000-point mark would be well within reach this week if the trend continued.
Trading volume reported 8.2 million shares valued at 1.03 trillion VND (64mio US$)
The top three performers were CII (Ho Chi Minh City-based Infrastructure Investment and Development Co), FPT (IT developer), and GMD (Gemadept), hit the ceiling by 5%.
FPT led the top winner list gaining 25,000 VND to close 525,000 VND per unit; the GMD runner up increasing 9,000 VND to 189,000 VND; and CII made gains of 3,000 VND to 63,000 VND.
Other stock market heavyweights like SAM (Cables And Telecom Materials Joint Stock Company) and PVD (PetroVietnam Drilling and Service Co) increased by between 10,000 VND to 11,000 VND to close at 211,000 VND and 233,000 VND respectively.
Foreign investors continued to pump 392 billion VND (24mio US$) into buying 3.2 million shares.
Source: Than Nien
Vietnamese bank starts joint venture with American insurance
Under the deal, the International Assurance Inc, or AIA will launch the insurance product via the Bank for Investment and Development of Vietnam (BIDV), designed to insure client incomes, loans and other financial resources.
AIA, part of the US leading AIG group, has set up comprehensive cooperation with BIDV since 2005, under a contractual agreement.
Accordingly, AIA has sold its products via BIDV and carry out investment activities with BIDV while the latter considers a credit limit for AIA.
The two sides plan also cooperate in other securities services.
AIA has delivered a range of products via four banks including BIDV, the Vietnam International Bank (VIB), the Southern Bank, and Hong Kong Shanghai Banking Group (HSBC).
BIDV is one of Vietnam's largest State-owned banks having payment relations with more than 800 banks around the world. Its contract with AIA has laid the foundation for a long-term relationship with AIG.
Source: Thanh Nien
Vietnamese Banks report high revenues in 2006
Following announcements of double and even triple annual earnings growth over the last few weeks, bank stocks are again in vogue as investors prepare to reap high dividends payments.
Asia Commercial Bank (ACB) topped the money list, reporting 568 billion VNDong (35.5mio US$ ) in 2006 pre-tax profits. ACB mobilised nearly 39.5 trillion VNDong (2.5 billion US$) through selling shares and deposit services, and provided 17.1 trillion VNDong (1.1 billion US$) in loans, a 77 and 79% year-on-year increase respectively.
The bank is expected to issue a 38% dividend payment, 8% of which will be issued in cash while the remaining 30% will be through share options..With pre-tax profits at 447 billion VNDong ( 27.93mio US$), Sai Gon Thuong Tin Commercial Bank (Sacombank) plans a 20-22% dividend issuance. Sacombank intends to use much of last year's earnings as legal and working capital.
Meanwhile, shareholders of the Export and Import Commercial Bank (Eximbank) expect to receive a 55% dividend payment on the back of 340 billion VNDong (21.3mio US$) in pre-tax profits.
In addition to strong profits, banks also reported strong asset accumulation. ACB reported VNDong 42.5 trillion VNDong ( 2.65mio US$) in assets, more than double from where it was at the start of 2006. Sacombank and Eximbank saw similar results with 24 trillion VNDong (1.5mio US$) and 17 trillion VNDong (1.06mio US$) in assets, up 58% and 49% respectively over the previous year.
Industry insiders attributed the impressive results to the country's economic growth, and the development of financial products and services, like term deposit accounts and preferential credit policies.
Source: VNA
Asia Commercial Bank (ACB) topped the money list, reporting 568 billion VNDong (35.5mio US$ ) in 2006 pre-tax profits. ACB mobilised nearly 39.5 trillion VNDong (2.5 billion US$) through selling shares and deposit services, and provided 17.1 trillion VNDong (1.1 billion US$) in loans, a 77 and 79% year-on-year increase respectively.
The bank is expected to issue a 38% dividend payment, 8% of which will be issued in cash while the remaining 30% will be through share options..With pre-tax profits at 447 billion VNDong ( 27.93mio US$), Sai Gon Thuong Tin Commercial Bank (Sacombank) plans a 20-22% dividend issuance. Sacombank intends to use much of last year's earnings as legal and working capital.
Meanwhile, shareholders of the Export and Import Commercial Bank (Eximbank) expect to receive a 55% dividend payment on the back of 340 billion VNDong (21.3mio US$) in pre-tax profits.
In addition to strong profits, banks also reported strong asset accumulation. ACB reported VNDong 42.5 trillion VNDong ( 2.65mio US$) in assets, more than double from where it was at the start of 2006. Sacombank and Eximbank saw similar results with 24 trillion VNDong (1.5mio US$) and 17 trillion VNDong (1.06mio US$) in assets, up 58% and 49% respectively over the previous year.
Industry insiders attributed the impressive results to the country's economic growth, and the development of financial products and services, like term deposit accounts and preferential credit policies.
Source: VNA
Power company to list on Ho Chi Minh City stock exchange
Pha Lai thermo-electric Joint Stock Co., coded PPC, scheduled to list on HCM City Securities Trading Centre on January 26 after ending its trading on Ha Noi Securities Trading Centre on Jan. 13.
PPC shares were traded in Ha Noi on May 19 last year at a face value of 10,000 VND (0.62 US$) per unit and with the total volume of 307 million shares.
The company also has the largest chartered capital of any company listed in the domestic stock market.
PetroVietnam Finance Co, one of the company's largest shareholders, has started selling 186,000 of a total 6,569,500 million shares to re-structure its investment profile since January 10.
Source: VNA
PPC shares were traded in Ha Noi on May 19 last year at a face value of 10,000 VND (0.62 US$) per unit and with the total volume of 307 million shares.
The company also has the largest chartered capital of any company listed in the domestic stock market.
PetroVietnam Finance Co, one of the company's largest shareholders, has started selling 186,000 of a total 6,569,500 million shares to re-structure its investment profile since January 10.
Source: VNA
Mekong Capital's Enterprise Fund invests more in magnet wire producer
The Mekong Enterprise Fund II will invest an additional 6.3mio US$ in the Dong Nai-based Ngo Han Joint Stock Company.
The fund, the second begun by management company Mekong Capital, has already invested 1.91mio US$ in Ngo Han.
The Mekong Enterprise Fund II expects to increase its investments when the 30% cap on foreign ownership in unlisted companies is lifted.
The company's previous Mekong Enterprise Fund I (now fully invested and closed) had invested 1.9mio US$ in Ngo Han Joint-Stock Company, one of the most successful of all of its investments, in early 2004.
Ngo Thi Thong, chairwoman of Ngo Han, said: "This additional investment will greatly help our company grow more quickly and become more effective."
Chris Freund, Mekong Capital's managing director, said: "Since our first fund's investment in Ngo Han in early 2004, its revenues have grown 57% annually over the past three years, while net profit has grown 60% per annum. This has been an excellent investment for us and we expect the strong growth to continues to expand capacity and strengthen its management team."
Ngo Han is one of the largest manufactures of magnet wire in Viet Nam, with 35mio US$ turnover in 2006. It is making preparations to list on the stock market next year.
The 50mio US$ million Mekong Enterprise Fund II is a private equity fund focusing on equity investments in unlisted companies in Viet Nam, which at the time of the original investment are typically about two to four years away from listing on one of the country's two stock exchanges.
Ngo Han is the second investment of Mekong Enterprise Fund II.
Source: VNA
The fund, the second begun by management company Mekong Capital, has already invested 1.91mio US$ in Ngo Han.
The Mekong Enterprise Fund II expects to increase its investments when the 30% cap on foreign ownership in unlisted companies is lifted.
The company's previous Mekong Enterprise Fund I (now fully invested and closed) had invested 1.9mio US$ in Ngo Han Joint-Stock Company, one of the most successful of all of its investments, in early 2004.
Ngo Thi Thong, chairwoman of Ngo Han, said: "This additional investment will greatly help our company grow more quickly and become more effective."
Chris Freund, Mekong Capital's managing director, said: "Since our first fund's investment in Ngo Han in early 2004, its revenues have grown 57% annually over the past three years, while net profit has grown 60% per annum. This has been an excellent investment for us and we expect the strong growth to continues to expand capacity and strengthen its management team."
Ngo Han is one of the largest manufactures of magnet wire in Viet Nam, with 35mio US$ turnover in 2006. It is making preparations to list on the stock market next year.
The 50mio US$ million Mekong Enterprise Fund II is a private equity fund focusing on equity investments in unlisted companies in Viet Nam, which at the time of the original investment are typically about two to four years away from listing on one of the country's two stock exchanges.
Ngo Han is the second investment of Mekong Enterprise Fund II.
Source: VNA
Saturday, January 13, 2007
Share acquisition best way for foreign banks into Vietnam
Despite Vietnam’s novel WTO membership, the best route for foreign banks will continue to be share acquisition of domestic financial institutions, due to strict governance.
The establishment of wholly-foreign owned bank subsidiaries still faces technical hurdles that are hard to overcome, said Le Duc Thuy, governor of the State Bank of Vietnam.
Recently Shanghai, Hong Kong banking group HSBC unveiled its plan to double its 10% stake in the Vietnam Technological and Commercial Bank to 20% soon after reaching agreement on price and obtaining the central bank’s nod.
HSBC spent 17.3mio US$ to buy 10% the Techcombank stake earlier last year.
The French banking group BNP Paribas had acquired a 10% stake in the Vietnamese Orient Commercial Joint Stock Bank, or OCB, becoming the latter’s strategic partner late last year.
OCB’s strategy is to expand in fast-growing emerging markets, aiming to eventually elevate outside holdings to 20%.
The bank representative said it was ready to sell an additional 10% of the bank’s equities to the French bank if it received the central bank’s nod to do so.
And many other foreign banks that had holdings of 10% in Vietnamese joint stock banks expected to raise their ownership post-WTO as effective way to join the local banking industry intensively.
Under the country’s WTO commitments to open up banking industry foreign banks are eligible to found their own subsidiaries and branches in Vietnam as of January 4, 2007.
The SBV said it received around 10 applications from foreign banks to establish their wholly-owned subsidiaries in Vietnam) but the majority were unqualified.
The requirements for foreign banks to set up their own subsidiaries in the country are strict.
Under the rules, only banking institutions (not all investors) are entitled in minimum holdings of 51% in new subsidiaries.
The current rules require a new foreign bank subsidiary to have at least 70mio US$ in chartered capital and 10 billion US$ in total assets.
Thuy said these were just principle conditions but not every foreign bank could meet.
Additionally, the governments of two respective countries must have agreements on surveillance of banks before getting the license to enter the country’s banking sector.
Source: Thanh Nien
The establishment of wholly-foreign owned bank subsidiaries still faces technical hurdles that are hard to overcome, said Le Duc Thuy, governor of the State Bank of Vietnam.
Recently Shanghai, Hong Kong banking group HSBC unveiled its plan to double its 10% stake in the Vietnam Technological and Commercial Bank to 20% soon after reaching agreement on price and obtaining the central bank’s nod.
HSBC spent 17.3mio US$ to buy 10% the Techcombank stake earlier last year.
The French banking group BNP Paribas had acquired a 10% stake in the Vietnamese Orient Commercial Joint Stock Bank, or OCB, becoming the latter’s strategic partner late last year.
OCB’s strategy is to expand in fast-growing emerging markets, aiming to eventually elevate outside holdings to 20%.
The bank representative said it was ready to sell an additional 10% of the bank’s equities to the French bank if it received the central bank’s nod to do so.
And many other foreign banks that had holdings of 10% in Vietnamese joint stock banks expected to raise their ownership post-WTO as effective way to join the local banking industry intensively.
Under the country’s WTO commitments to open up banking industry foreign banks are eligible to found their own subsidiaries and branches in Vietnam as of January 4, 2007.
The SBV said it received around 10 applications from foreign banks to establish their wholly-owned subsidiaries in Vietnam) but the majority were unqualified.
The requirements for foreign banks to set up their own subsidiaries in the country are strict.
Under the rules, only banking institutions (not all investors) are entitled in minimum holdings of 51% in new subsidiaries.
The current rules require a new foreign bank subsidiary to have at least 70mio US$ in chartered capital and 10 billion US$ in total assets.
Thuy said these were just principle conditions but not every foreign bank could meet.
Additionally, the governments of two respective countries must have agreements on surveillance of banks before getting the license to enter the country’s banking sector.
Source: Thanh Nien
EVN plans further public offerings
Electricity of Vietnam (EVN) was urged to take drastic measures to advance the public auction of its shares to raise capital and become a key player in the national economy, the government cabinet leader said.
Deputy Prime Minister Nguyen Sinh Hung gave orientation to EVN at a conference Friday to review the group’s operations during 2006 and also discuss plans upcoming time.
Hung directed the state utility to focus on share sales in both its affiliates and electricity projects.
EVN could call on investment inflows from domestic investment organizations and individuals into its power development projects in Vietnam, Laos or Cambodia.
It’s suggested that the group’s electricity distribution projects to hospital and schools should also go public.
The Deputy PM emphasized that the intensive process to go public would be an effective way for the group to create a healthy and abundant financial source.
To establish a competitive electricity market in the future, he stressed EVN should continue to speed up share sales in its subsidiaries, and create favourable conditions for all economic sectors to engage in the electricity market.
With the new operating model, the EVN Group has the latitude to expand into telecommunications, mechanical engineering, tourism and real estate.
The past year of 2006 was a difficult one for EVN, working against dramatically lower water levels in hydro power plant reservoirs.
The group still managed to proved total electricity output of nearly 59 billion kWh during the last year despite of harsh weather conditions, ensuring power security for the national economy.
Pham Le Thanh general director of EVN said several shortcomings plagued the group during the previous year, including the substantial loss of power, drawn-out disbursement in infrastructure development projects and ineffective power saving programs.
These would be big challenges for EVN this year.
The group had priced 1 trillion VND (62mio US$) in bonds to yield 9.70%, by late last year.
The proceeds of the 10-year issue, the utility’s eighth offer last year, would be used for the construction of power plants.
The bonds, carrying a coupon rate of 9.70%, were priced at par to yield 9.70%. They will mature on Dec. 19, 2016.
The latest offer took EVN's bond sales last year to 6 trillion VND (375mio US$), all on the domestic market.
Goals
EVN has so far seen 21 of its affiliates go public, with all operating efficiently. Several of them have their shares listed on the nation’s stock exchanges.
The group is in the process of transforming an additional 19 affiliates into shareholding companies, striving to do so by 2008, save for its power transmission units.
EVN plans to sell its holdings in Ninh Binh, Thac Mo and Ba Ria power plants on Hanoi and Ho Chi Minh City Securities Trading Centers in the first quarter this year.
It looks set to become the country's first issuer of overseas corporate bonds Thursday, as state media reported it had sought permission to sell 150mio US$ worth.
The bonds would be sold on international markets to raise funds for power plants.
The Hanoi-based utility, which dominates the electricity industry in booming Vietnam, has submitted plans of the bond issue to the Finance Ministry for approval.
It has set targets of generating approximately 97 billion kWh by 2010 to meet an annual growth rate of 15-17%, and supplying electricity to 95% of rural households.
Source: Thanh Nien
Deputy Prime Minister Nguyen Sinh Hung gave orientation to EVN at a conference Friday to review the group’s operations during 2006 and also discuss plans upcoming time.
Hung directed the state utility to focus on share sales in both its affiliates and electricity projects.
EVN could call on investment inflows from domestic investment organizations and individuals into its power development projects in Vietnam, Laos or Cambodia.
It’s suggested that the group’s electricity distribution projects to hospital and schools should also go public.
The Deputy PM emphasized that the intensive process to go public would be an effective way for the group to create a healthy and abundant financial source.
To establish a competitive electricity market in the future, he stressed EVN should continue to speed up share sales in its subsidiaries, and create favourable conditions for all economic sectors to engage in the electricity market.
With the new operating model, the EVN Group has the latitude to expand into telecommunications, mechanical engineering, tourism and real estate.
The past year of 2006 was a difficult one for EVN, working against dramatically lower water levels in hydro power plant reservoirs.
The group still managed to proved total electricity output of nearly 59 billion kWh during the last year despite of harsh weather conditions, ensuring power security for the national economy.
Pham Le Thanh general director of EVN said several shortcomings plagued the group during the previous year, including the substantial loss of power, drawn-out disbursement in infrastructure development projects and ineffective power saving programs.
These would be big challenges for EVN this year.
The group had priced 1 trillion VND (62mio US$) in bonds to yield 9.70%, by late last year.
The proceeds of the 10-year issue, the utility’s eighth offer last year, would be used for the construction of power plants.
The bonds, carrying a coupon rate of 9.70%, were priced at par to yield 9.70%. They will mature on Dec. 19, 2016.
The latest offer took EVN's bond sales last year to 6 trillion VND (375mio US$), all on the domestic market.
Goals
EVN has so far seen 21 of its affiliates go public, with all operating efficiently. Several of them have their shares listed on the nation’s stock exchanges.
The group is in the process of transforming an additional 19 affiliates into shareholding companies, striving to do so by 2008, save for its power transmission units.
EVN plans to sell its holdings in Ninh Binh, Thac Mo and Ba Ria power plants on Hanoi and Ho Chi Minh City Securities Trading Centers in the first quarter this year.
It looks set to become the country's first issuer of overseas corporate bonds Thursday, as state media reported it had sought permission to sell 150mio US$ worth.
The bonds would be sold on international markets to raise funds for power plants.
The Hanoi-based utility, which dominates the electricity industry in booming Vietnam, has submitted plans of the bond issue to the Finance Ministry for approval.
It has set targets of generating approximately 97 billion kWh by 2010 to meet an annual growth rate of 15-17%, and supplying electricity to 95% of rural households.
Source: Thanh Nien
Friday, January 12, 2007
Bao Minh sells life insurance
The Bao Minh Insurance Corporation and the Australian financial and banking group, Commonwealth announced to transfer the Life Insurance Bao Minh CMG to Dai-ichi Mutual Life Insurance of Japan.
The transfer, which is awaiting approval from State management agencies, will be performed in the first half of this year.
The Life Insurance Bao Minh CMG is the only joint venture of its kind in Viet Nam. It is the fifth largest life insurance company in the country in terms of revenue. The joint venture has 50 representative offices nationwide.
Dai-ichi Mutual Life Insurance is the second largest life insurance firm in Japan. The transfer is part of the company's strategy to expand its operations in Asia.
Source: VNA
The transfer, which is awaiting approval from State management agencies, will be performed in the first half of this year.
The Life Insurance Bao Minh CMG is the only joint venture of its kind in Viet Nam. It is the fifth largest life insurance company in the country in terms of revenue. The joint venture has 50 representative offices nationwide.
Dai-ichi Mutual Life Insurance is the second largest life insurance firm in Japan. The transfer is part of the company's strategy to expand its operations in Asia.
Source: VNA
Vietnam catfish producer to list
Nam Viet Joint Stock Company, Navico, one of Vietnam's largest tra catfish producers and processors, plans to make an initial public offering of shares and list on the Ho Chi Minh City exchange in the first quarter of this year.
The company has three processing plants with a combined daily capacity of 1,300 tons, a fish oil and fish powder processing factory, and a package making plant.
It reported an export revenue of 160mio US$ last year and hopes to increase it to 200mio US$ this year.
It plans to expand into eight new foreign markets, taking the number of export markets to 60.
Source: Thanh Nien
"Big risks at the Vietnamese stock market"
“There are latent big risks in the stock market,” Director General of the Bank of Investment and Development of Vietnam (BIDV) Tran Bac Ha said, when describing the stock market.
Mr Ha has called on management authorities to set up a mechanism to ensure the safety of investors and protect them from heavy losses caused by big fluctuations.
Mr Ha said that he could see in the market the alliances of investors that control the market by forcing the prices down and making the prices go up. He cited an example to show that the investors make investment decisions by feeling. Right after the Director of the HCM City Securities Trading Centre Tran Dac Sinh warned about the overly high prices of securities, the market cooled down in the next three transactions and many investors incurred big losses.
“It is the right time to set up the regulations on preventing the controlling of market prices and cornering of the market,” Mr Ha said.
Chairman of the State Securities Commission Vu Bang said that the price increases in March and April, the decreases in July, and then the sharp increases in November and December showed the uncertainty of market transactions. The market is affected by the small-scale market, and the fact that investors mostly make short-term investments.
Mr Bang also expressed his concern about the operation of the free securities market, which he said was not transparent enough and not controllable, and also very risky. The bad operation of the free market can cause the instability of the official securities market and the financial system.
Meanwhile, Director General of Saigon Securities Incorporated (SSI) Nguyen Duy Hung said that a healthy stock market did not rely on foreign demand, while foreign investors were ruling the roost in the Vietnamese stock market. It is a tendency that domestic investors always follow foreign investors in their investment decisions.
Mr Bang said that the stock market should be built in a way so that institutional investors will play the key role in the market’s development, while encouraging the participation of professional institutions like banks, insurance companies, investment funds and securities companies.
The solution of limiting the unofficial market was mentioned as an important way to minimise the risks in the market. The Securities Law stipulates that activities of offering for selling or purchasing securities in small ads on websites are not acceptable.
Meanwhile, Deputy Director of the VF1 fund management company stressed the need to make things transparent in the stock market. “I know some prospectuses that do not have any significance, and in some cases, the prospectus can lead investors far away from what they need to know,” Ms Hong said.
The Ministry of Finance has proposed the application of a mechanism which would allow the State Bank of Vietnam to exchange information and control the forex flow, as well as supervise the operations of credit institutions in securities-related activities.
Source: VNE
Mr Ha has called on management authorities to set up a mechanism to ensure the safety of investors and protect them from heavy losses caused by big fluctuations.
Mr Ha said that he could see in the market the alliances of investors that control the market by forcing the prices down and making the prices go up. He cited an example to show that the investors make investment decisions by feeling. Right after the Director of the HCM City Securities Trading Centre Tran Dac Sinh warned about the overly high prices of securities, the market cooled down in the next three transactions and many investors incurred big losses.
“It is the right time to set up the regulations on preventing the controlling of market prices and cornering of the market,” Mr Ha said.
Chairman of the State Securities Commission Vu Bang said that the price increases in March and April, the decreases in July, and then the sharp increases in November and December showed the uncertainty of market transactions. The market is affected by the small-scale market, and the fact that investors mostly make short-term investments.
Mr Bang also expressed his concern about the operation of the free securities market, which he said was not transparent enough and not controllable, and also very risky. The bad operation of the free market can cause the instability of the official securities market and the financial system.
Meanwhile, Director General of Saigon Securities Incorporated (SSI) Nguyen Duy Hung said that a healthy stock market did not rely on foreign demand, while foreign investors were ruling the roost in the Vietnamese stock market. It is a tendency that domestic investors always follow foreign investors in their investment decisions.
Mr Bang said that the stock market should be built in a way so that institutional investors will play the key role in the market’s development, while encouraging the participation of professional institutions like banks, insurance companies, investment funds and securities companies.
The solution of limiting the unofficial market was mentioned as an important way to minimise the risks in the market. The Securities Law stipulates that activities of offering for selling or purchasing securities in small ads on websites are not acceptable.
Meanwhile, Deputy Director of the VF1 fund management company stressed the need to make things transparent in the stock market. “I know some prospectuses that do not have any significance, and in some cases, the prospectus can lead investors far away from what they need to know,” Ms Hong said.
The Ministry of Finance has proposed the application of a mechanism which would allow the State Bank of Vietnam to exchange information and control the forex flow, as well as supervise the operations of credit institutions in securities-related activities.
Source: VNE
KPMG audits FPT
KPMG signed a contract to provide auditing services for the Corporation for Financing and Promoting Technology (FPT) .
Under the contract, KPMG will audit financial reports by all affiliates of FPT, including three branches, five subsidiary companies, one university and five training and business centres in the 2007, 2008 and 2009 fiscal years. The move is considered one of FPT's efforts to prepare for the listing on foreign stock exchanges, meet the requirements of strategic investors and better ensure the interest of its shareholders.
Source: VNA
Under the contract, KPMG will audit financial reports by all affiliates of FPT, including three branches, five subsidiary companies, one university and five training and business centres in the 2007, 2008 and 2009 fiscal years. The move is considered one of FPT's efforts to prepare for the listing on foreign stock exchanges, meet the requirements of strategic investors and better ensure the interest of its shareholders.
Source: VNA
New regulation on capital requirements planned
Vietnam plans to ask all companies listed on the country's main stock market to raise their registered capital to 80 billion VND (5mio US$) from 10 billion VND currently.
Authorities will soon issue a new regulation to implement this requirement, Do Huu Phuc, spokesman at Ho Chi Minh City's Securities Trading Center (HSTC) said.
"Vietnam will build the HSTC into a major stock exchange for large companies to list their shares," Phuc continued.
Currently, 106 companies are listed on the HSTC, which was launched in July 2000, and 65 of them have a registered capital below VND80 billion.
"The authorities are proposing to give them two years to raise their capital, and the government is expected to approve this proposal soon," Phuc noted.
He added that companies which fail to meet the requirement by the deadline would be moved to Hanoi's Securities Trading Center, or HASTC, which is the country's official over-the-counter market.
Phuc said the move was part of general plans to improve standards at Vietnam's stock markets. The authorities have already announced new rules that require listed companies undergo regular audits.
In addition to changing the criteria for listing on the HSTC, a State Securities Commission official said the authorities will develop the HASTC as the stock market for medium and small companies. Currently, it lists 87 company stocks with a total market capitalization of 4 billion US$.
"HASTC will become the OTC market for medium and small stocks, and also the market for all government and corporate bonds," the official said.
The proposal was welcomed by market participants.
Increasing the registered capital of listed companies is an indication of the government's determination to build up and further develop the stock market, according to Nguyen Duy Hung, a director at Saigon Securities Inc., the largest brokerage firm in Vietnam in terms of capital.
In addition, as the value and status of the stock market grows, the government needs to work to protect investors with the application of stringent regulations, according to Vuong Quan Hoang, a director at InvestVietnam Inc., an investment consultant firm based in Hanoi.
"To attract more foreign investors, market regulations will need to be implemented more stringently," he said.
By then end of 2006, the two stock markets had a total market capitalization of $14 billion, equivalent 22.7% of Vietnam's gross domestic product.
Source: Thanh Nien
Thursday, January 11, 2007
Goldman Sachs turns attention to Vietnam
CEO Loyd Blankfein flew to Vietnam this week to meet officials from the government and the country's central bank.
Other investment banks interested in Vietnam include ABN Amro, Citigroup and Merrill Lynch, which has a securities joint venture there.
The Vietnamese government is overseeing a major privatization program. Its shares in companies from industries such as cement, chemicals, textiles and transport are all likely to be sold to investors within the next three years.
Source: Thanh Nien
Other investment banks interested in Vietnam include ABN Amro, Citigroup and Merrill Lynch, which has a securities joint venture there.
The Vietnamese government is overseeing a major privatization program. Its shares in companies from industries such as cement, chemicals, textiles and transport are all likely to be sold to investors within the next three years.
Source: Thanh Nien
Stable growth of Vietnam's insurance industry
Viet Nam's insurance industry last year saw stable growth as insurance businesses were actively preparing for international integration, said experts from the Finance Ministry.
Despite many difficulties and risks caused by three heavy storms, the total revenue of the insurance sector in 2006 saw a 10 percent increase over 2005, reaching nearly 18,000 billion VND. The revenues from non-life insurance premiums reached 7,000 billion VND; from life insurance, 8,300 billion VND; and from investment activities, 2,700 billion VND.
Phung Ngoc Khanh, Vice Chairman of the Insurance Department of the Finance Ministry, said that the industry has become an important channel in mobilising capital from financial sources for the economy's long-term investment. In 2006, it supplied about 34,400 billion VND for re-investment in the economy, an increase of 7,500 billion VND over 2005. Meanwhile, it completed the payment of more than 4,500 billion VND in compensations for the insured.
The year 2006 also witnessed accelerated equitisation of insurance businesses. Bao Viet is the last State-own insurance business that received the Prime Minister's approval to be equitised. Furthermore, it will be developed into a finance-insurance group.
Also in 2006, equitised Vinare and Bao Minh companies joined on the Ha Noi Securities Trading Centre, causing fever in the securities market.
The insurance market is bustling with various forms of businesses offered by both foreign and domestic businesses like AIG and Lyberty Mutual and joint stock companies like the Toan Cau and the Agriculture and Rural Development Bank Insurance Joint Stock Company.
Domestic insurers last year made themselves ready for strong competition as Viet Nam committed to remove all limitations for wholly foreign invested insurance companies as from Jan. 1, 2008. Such areas as construction and installation, oil and gas and high-risk construction projects and public security are to be opened to foreigners.
Khanh also noted that the Vietnamese insurance industry in the coming years will diversify its products to attract customers forms every economic sector; not set up new State-owned insurance companies in order to avoid division of the market.
Source: VNA
Despite many difficulties and risks caused by three heavy storms, the total revenue of the insurance sector in 2006 saw a 10 percent increase over 2005, reaching nearly 18,000 billion VND. The revenues from non-life insurance premiums reached 7,000 billion VND; from life insurance, 8,300 billion VND; and from investment activities, 2,700 billion VND.
Phung Ngoc Khanh, Vice Chairman of the Insurance Department of the Finance Ministry, said that the industry has become an important channel in mobilising capital from financial sources for the economy's long-term investment. In 2006, it supplied about 34,400 billion VND for re-investment in the economy, an increase of 7,500 billion VND over 2005. Meanwhile, it completed the payment of more than 4,500 billion VND in compensations for the insured.
The year 2006 also witnessed accelerated equitisation of insurance businesses. Bao Viet is the last State-own insurance business that received the Prime Minister's approval to be equitised. Furthermore, it will be developed into a finance-insurance group.
Also in 2006, equitised Vinare and Bao Minh companies joined on the Ha Noi Securities Trading Centre, causing fever in the securities market.
The insurance market is bustling with various forms of businesses offered by both foreign and domestic businesses like AIG and Lyberty Mutual and joint stock companies like the Toan Cau and the Agriculture and Rural Development Bank Insurance Joint Stock Company.
Domestic insurers last year made themselves ready for strong competition as Viet Nam committed to remove all limitations for wholly foreign invested insurance companies as from Jan. 1, 2008. Such areas as construction and installation, oil and gas and high-risk construction projects and public security are to be opened to foreigners.
Khanh also noted that the Vietnamese insurance industry in the coming years will diversify its products to attract customers forms every economic sector; not set up new State-owned insurance companies in order to avoid division of the market.
Source: VNA
Keeping inflation below the growth rate
Vietnam’s monetary market will continue to be stable this year with interest rates under control, and the central bank will maintain its policy to keep inflation below the growth rate, the bank governor said.
Governor Le Duc Thuy also forecast at a press conference in Hanoi Wednesday that the range of US$/Dong exchange rate would fluctuate within 1%.
The international monetary market would leave lesser impacts on local market this year than it did in the last two consecutive years, he added.
The State Bank of Vietnam (SBV), forecast that credits would post a growth rate of between 20-21% this year and the Vietnamese dong would not be devalued further thanks to a dynamic economy and increasing supply of hard currencies.
Based on the forecast, Thuy said SBV would continue to pursue a “careful but flexible” monetary policy in order to keep inflation below the growth rate, a target set by the legislative National Assembly.
Vietnam, a new member of the World Trade Organization, has allowed foreign banks to establish subsidiary banks in the country, a move that will make the financial-banking market more active.
Governor Thuy said the SBV had already received 10 applications for opening branches, representative offices and wholly-foreign owned banks from giant financial-banking groups around the world.
Source: Thanh Nien
Governor Le Duc Thuy also forecast at a press conference in Hanoi Wednesday that the range of US$/Dong exchange rate would fluctuate within 1%.
The international monetary market would leave lesser impacts on local market this year than it did in the last two consecutive years, he added.
The State Bank of Vietnam (SBV), forecast that credits would post a growth rate of between 20-21% this year and the Vietnamese dong would not be devalued further thanks to a dynamic economy and increasing supply of hard currencies.
Based on the forecast, Thuy said SBV would continue to pursue a “careful but flexible” monetary policy in order to keep inflation below the growth rate, a target set by the legislative National Assembly.
Vietnam, a new member of the World Trade Organization, has allowed foreign banks to establish subsidiary banks in the country, a move that will make the financial-banking market more active.
Governor Thuy said the SBV had already received 10 applications for opening branches, representative offices and wholly-foreign owned banks from giant financial-banking groups around the world.
Source: Thanh Nien
ITACO pays high Tet bonuses
Dang Thanh Tam, Director General of the Tan Tao Industrial Zone Development Company (ITACO), said that the company may give bonuses of up to VND1bil ($62,500) to prominent individuals.
Mr Tam said that the high bonus should be seen not only as the recognition of the efforts and high results of labourers, but also as a method to keep talents. Therefore, it is understandable why the company plans to give such a high bonus.
Prominent individuals will be given a gift which is equal to 10-20% of the turnover the individuals can bring to the company. One staff of the company received a 1mio US$ bonus on the 2005 Tet. The lowest bonus level applied in the company was 7mio VND per person, equal to two month’s pay.
Besides the bonus given on Tet as gifts, the staffs who hold key positions in the company for more than three years and commit to work for the company for a long time will be allocated land and vehicles for travelling. At the weekend, they can go on holiday with these vehicles while still receiving full pay. Any staff of ITACO who wants to follow training courses to increase their knowledge will be supported by the company.
When ITACO began listing on the bourse in November, all the members of the company were given a bonus in the form of company shares.
Source: VNE
Mr Tam said that the high bonus should be seen not only as the recognition of the efforts and high results of labourers, but also as a method to keep talents. Therefore, it is understandable why the company plans to give such a high bonus.
Prominent individuals will be given a gift which is equal to 10-20% of the turnover the individuals can bring to the company. One staff of the company received a 1mio US$ bonus on the 2005 Tet. The lowest bonus level applied in the company was 7mio VND per person, equal to two month’s pay.
Besides the bonus given on Tet as gifts, the staffs who hold key positions in the company for more than three years and commit to work for the company for a long time will be allocated land and vehicles for travelling. At the weekend, they can go on holiday with these vehicles while still receiving full pay. Any staff of ITACO who wants to follow training courses to increase their knowledge will be supported by the company.
When ITACO began listing on the bourse in November, all the members of the company were given a bonus in the form of company shares.
Source: VNE
Plans for stock market expansion
Vietnam will allow more share listings, improve the legal framework and restructure its small but fast-growing stock market this year.
The measures would boost the stock market's capitalization to 20 billion US$ by the end of the year, or 30% of gross domestic product, the newspaper "Tin Tuc" quoted State Securities Commission chairman Vu Bang. The Finance Ministry would also seek to expand the operation of stock broking firms and boost surveillance to improve transparency and corporate governance, he said.
Vietnam would need to upgrade the market's information technology, provide more training for staff and raise public awareness of securities investment.
The Ho Chi Minh City Securities Trading Center opened in July 2000 and now trades shares in 105 companies and Sacombank as well as certificates of two investment funds and a number of government bonds.
"The awareness and knowledge of companies and people on the stock market has risen significantly," Finance Minister Vu Van Ninh was quoted as saying last week in an interview with the ministry-run Vietnam Financial Times newspaper. "This is a good base to develop the stock market into a long-term fund raising channel for the economy".
Reflecting investor interest and the economic growth, the Vietnam share index ended 2006 at 751,77 points, a rise of 145% over the year. Market capitalization was 9 billion US$. The index hit a lifetime high yesterday, rising 2.5% to close at 865.71 points.
In the Hanoi over-the-counter market , where 86 companies and a bank are listed, the index also hit a lifetime high on Wednesday at 291.2 points.
Source: REUTERS
The measures would boost the stock market's capitalization to 20 billion US$ by the end of the year, or 30% of gross domestic product, the newspaper "Tin Tuc" quoted State Securities Commission chairman Vu Bang. The Finance Ministry would also seek to expand the operation of stock broking firms and boost surveillance to improve transparency and corporate governance, he said.
Vietnam would need to upgrade the market's information technology, provide more training for staff and raise public awareness of securities investment.
The Ho Chi Minh City Securities Trading Center opened in July 2000 and now trades shares in 105 companies and Sacombank as well as certificates of two investment funds and a number of government bonds.
"The awareness and knowledge of companies and people on the stock market has risen significantly," Finance Minister Vu Van Ninh was quoted as saying last week in an interview with the ministry-run Vietnam Financial Times newspaper. "This is a good base to develop the stock market into a long-term fund raising channel for the economy".
Reflecting investor interest and the economic growth, the Vietnam share index ended 2006 at 751,77 points, a rise of 145% over the year. Market capitalization was 9 billion US$. The index hit a lifetime high yesterday, rising 2.5% to close at 865.71 points.
In the Hanoi over-the-counter market , where 86 companies and a bank are listed, the index also hit a lifetime high on Wednesday at 291.2 points.
Source: REUTERS
Wednesday, January 10, 2007
VN-Index keeps rising
Yesterday the VN-Index rose 19.8 points to 844.9, beating the record of 825.11 mark on the previous session, with 50 gainers and 31 losers. The total trading volume was 8.1 million shares worth 823 billion VND (51mio US$).
The top five winners including SJS (Song Da Urban and Industrial Zone Investment and Development Company); DHG (Hau Giang Pharmaceutical Joint Stock Company); PVD (Petroleum Services and Drilling Co); KDC (Kinh Do Co); and BMP (Binh Minh Plastic).
Foreign investors yesterday bought 3.1 million shares worth 418 billion VND (26mio US$), making up 51 percent of the total trading market. Their favored stocks included PVD, VSH (Vinh Son-Song Hinh Hydroelectricity Joint Stock Company) and VNM (Vinamilk Co). Meanwhile they sold only 225,000 shares.
Market analysts said mounting speculation over stocks among foreign investors produced a positive impact on domestic investors who tended to increase purchases.
Petrochemical Company prepares for auction
The Nitrogenous Fertilizer and Petrochemical Company (PVFCCo) will auction its shares for the first time at the end of the first quarter this year.
The daily “Lao Dong” (Labour) quoted a company source as saying that PVFCCo is working out its auction plan, in which the State will hold controlling stake of more than 50% of the total shares.
It is scheduled that together with the auction, the Phu My Nitro-fertilizer Factory, run by PVFCCo, will list its shares on the stock market.
The modern factory has been in operation since 2002 with a daily capacity of 2,200 tonnes of urea fertilizer and 1,350 tonnes of ammonia.
Source: VNA
The daily “Lao Dong” (Labour) quoted a company source as saying that PVFCCo is working out its auction plan, in which the State will hold controlling stake of more than 50% of the total shares.
It is scheduled that together with the auction, the Phu My Nitro-fertilizer Factory, run by PVFCCo, will list its shares on the stock market.
The modern factory has been in operation since 2002 with a daily capacity of 2,200 tonnes of urea fertilizer and 1,350 tonnes of ammonia.
Source: VNA
Tuesday, January 09, 2007
Bank cards are not popular in Vietnam
Visa’s chief representative and manager for Vietnam, Cambodia and Laos said its recent survey showed that very few domestic residents knew about card payment services.
The survey was made among more than 1,000 residents in the northern Hanoi capital and the southern Ho Chi Minh City.
The current penetration of banking is very low in the country – only 6% or so of the population had a bank account.Card payment services are unpopular in Vietnam as few residents have bank accounts and information on their convenience has yet to reach the masses, read a Visa International market survey.
As many 58% of interviewed residents answered they were not rich so they did not open a bank account. People generally only moved on to holding a payment card after they have a saving or current account. The small number of bank accounts promised huge opportunity to expand both banking and card payment services in Vietnam, according to Visa.
In fact Visa International has obtained strong growth in the country over the past few years.
The number of Visa cardholders in Vietnam was growing at an annual rate of 70% and Visa had attracted some 200,000 debit and credit cardholders by late last year.
Visa had seen successful launches with its partner banks like Eximbank, ACB, Sacombank, ANZ and Techcombank particularly Visa Debit.
This payment product gives the cardholders all the benefits of Visa, while allowing them to effectively manage their payments directly from their accounts without incurring debt.
With a large population with rising incomes, the opportunities that Vietnam presented to Visa were huge.
This year Visa plans to increase its coordination with 17 partners in Vietnam and the relevant offices to develop the products and services that would fit the Vietnamese market and that drive the shift from cash to payment cards. It targets to educate the market about the benefits of payment cards in terms of convenience, security, ease of use, travel and domestic shopping among others. Visa’s key segments will be supermarkets, hotels, restaurants and filling stations.
Source: Thanh Nien
The survey was made among more than 1,000 residents in the northern Hanoi capital and the southern Ho Chi Minh City.
The current penetration of banking is very low in the country – only 6% or so of the population had a bank account.Card payment services are unpopular in Vietnam as few residents have bank accounts and information on their convenience has yet to reach the masses, read a Visa International market survey.
As many 58% of interviewed residents answered they were not rich so they did not open a bank account. People generally only moved on to holding a payment card after they have a saving or current account. The small number of bank accounts promised huge opportunity to expand both banking and card payment services in Vietnam, according to Visa.
In fact Visa International has obtained strong growth in the country over the past few years.
The number of Visa cardholders in Vietnam was growing at an annual rate of 70% and Visa had attracted some 200,000 debit and credit cardholders by late last year.
Visa had seen successful launches with its partner banks like Eximbank, ACB, Sacombank, ANZ and Techcombank particularly Visa Debit.
This payment product gives the cardholders all the benefits of Visa, while allowing them to effectively manage their payments directly from their accounts without incurring debt.
With a large population with rising incomes, the opportunities that Vietnam presented to Visa were huge.
This year Visa plans to increase its coordination with 17 partners in Vietnam and the relevant offices to develop the products and services that would fit the Vietnamese market and that drive the shift from cash to payment cards. It targets to educate the market about the benefits of payment cards in terms of convenience, security, ease of use, travel and domestic shopping among others. Visa’s key segments will be supermarkets, hotels, restaurants and filling stations.
Source: Thanh Nien
Vietnamese don't like to borrow money from banks
Only 2% of polled Vietnamese people said that they would borrow money from commercial banks, while most said they would borrow from relatives or friends.
AC Nielsen has released the results of its survey on the personal finance management (PFM) of Vietnamese people.
The survey was conducted on 1,000 individuals living in Hanoi and HCM City who were divided into three groups, A, B and C, after considering their personal conditions (the assets they have, including houses, vehicles and home appliances). The 1,000 individuals were all aged from 18 to 50, and they were interviewed directly in their homes.
A very astonishingly low percentage of polled individuals, 2%, said that they would apply for bank loans if they needed capital, while the majority of people said that they would borrow from family members, relatives, or friends.
The survey has pointed out that borrowing money from banks is not a habit of Vietnamese people. Most people think that it is very complicated to get bank loans, and that the interest rates that banks offer are too high for them. Vietnamese people only use the sums of money they can save, and make payments in cash when buying valuable assets. If they don’t have enough money to run their projects, they would ask relatives or friends. With the loans from the relatives, they would not have to pay interest and not have to go through complicated procedures to get the loans.
A small percentages of polled individuals said that they had bank accounts: 50% in Hanoi and 31% in HCM City. Meanwhile, 21% of the people said that they knew about credit cards, 8% knew about debit cards, and 91% knew about ATM cards.
58% of the questioned people said that they did not have much money; therefore, there was no need to open accounts at banks, though many belong to the class of people who are considered rich and have valuable assets. Many of them think that it would be unsafe to deposit assets at banks. Foreign currencies and gold are considered the safest tools of investment.
The Director General of AC Nielsen Vietnam said that he hoped the company’s survey would help banks have more understanding about the financial capability and habits of Vietnamese people so they could make suitable decisions in providing services related to savings, cards, investment, and payment methods.
Source: VNE
AC Nielsen has released the results of its survey on the personal finance management (PFM) of Vietnamese people.
The survey was conducted on 1,000 individuals living in Hanoi and HCM City who were divided into three groups, A, B and C, after considering their personal conditions (the assets they have, including houses, vehicles and home appliances). The 1,000 individuals were all aged from 18 to 50, and they were interviewed directly in their homes.
A very astonishingly low percentage of polled individuals, 2%, said that they would apply for bank loans if they needed capital, while the majority of people said that they would borrow from family members, relatives, or friends.
The survey has pointed out that borrowing money from banks is not a habit of Vietnamese people. Most people think that it is very complicated to get bank loans, and that the interest rates that banks offer are too high for them. Vietnamese people only use the sums of money they can save, and make payments in cash when buying valuable assets. If they don’t have enough money to run their projects, they would ask relatives or friends. With the loans from the relatives, they would not have to pay interest and not have to go through complicated procedures to get the loans.
A small percentages of polled individuals said that they had bank accounts: 50% in Hanoi and 31% in HCM City. Meanwhile, 21% of the people said that they knew about credit cards, 8% knew about debit cards, and 91% knew about ATM cards.
58% of the questioned people said that they did not have much money; therefore, there was no need to open accounts at banks, though many belong to the class of people who are considered rich and have valuable assets. Many of them think that it would be unsafe to deposit assets at banks. Foreign currencies and gold are considered the safest tools of investment.
The Director General of AC Nielsen Vietnam said that he hoped the company’s survey would help banks have more understanding about the financial capability and habits of Vietnamese people so they could make suitable decisions in providing services related to savings, cards, investment, and payment methods.
Source: VNE
ACB's preliminary 2006 results
The assets of Asia Commercial Bank (ACB) Vietnam's fifth largest bank, were up 85.1% at the end of 2006 from a year earlier at 44.9 trillion VND (2.78 bio US$), the bank said in a statement.
Its gross profit in 2006 soared 77.2% from 2005 to 682.4 billion VNVND (42.3mio US$), the Ho Chi Minh City-based bank, which listed shares on the Hanoi over-the-counter stock market, the statement issued on Monday said.
The results had not been audited, the bank said.
Earlier, ACB had forecast profits in 2006 would be around 661 billion VND.
Its outstanding loans last year jumped 78.9% from 2005 to 17.12 trillion VND while deposits grew 77.1% to 39.55 trillion VND, the statement said.
ACB shares fell 0.9% to close at 156,000 VND on Tuesday, with 48,900 shares traded.
ACB made its share debut on the Hanoi market in late November 2006
Its listing, the second by a bank in Vietnam, is not an IPO but a progression to formal OTC trading from the unregulated sector. In July, Sacombank (STB) listed on the main board, the Ho Chi Minh City Securities Trading Center.
In a country of 84mio US$ people but only 5mio US$ bank accounts, bankers say deposits are expected to grow about 22% a year to 100 billion US$ by 2010 from 36 billion US$ in 2006.
ACB planned to grow twice that rate, at 45 to 50% over the next five years, Chief Executive Ly Xuan Hai told Reuters in an interview before the bank's share debut.
Foreign investors hold a combined 30% in ACB.
Standard Chartered Plc. owns 8.6% of ACB, the biggest stake of ACB's four foreign shareholders.
The World Bank's IFC and Connaught Investors Ltd. of the Jardine Matheson Group each has 7.3%, while Dragon Financial Holdings Ltd. Co. owns 6.8%.
ACB executives have said the bank's listing in Hanoi was part of its northern expansion as it planned to control more than a tenth of Vietnam's 10 billion deposit market by 2010.
Source: Reuters
Its gross profit in 2006 soared 77.2% from 2005 to 682.4 billion VNVND (42.3mio US$), the Ho Chi Minh City-based bank, which listed shares on the Hanoi over-the-counter stock market, the statement issued on Monday said.
The results had not been audited, the bank said.
Earlier, ACB had forecast profits in 2006 would be around 661 billion VND.
Its outstanding loans last year jumped 78.9% from 2005 to 17.12 trillion VND while deposits grew 77.1% to 39.55 trillion VND, the statement said.
ACB shares fell 0.9% to close at 156,000 VND on Tuesday, with 48,900 shares traded.
ACB made its share debut on the Hanoi market in late November 2006
Its listing, the second by a bank in Vietnam, is not an IPO but a progression to formal OTC trading from the unregulated sector. In July, Sacombank (STB) listed on the main board, the Ho Chi Minh City Securities Trading Center.
In a country of 84mio US$ people but only 5mio US$ bank accounts, bankers say deposits are expected to grow about 22% a year to 100 billion US$ by 2010 from 36 billion US$ in 2006.
ACB planned to grow twice that rate, at 45 to 50% over the next five years, Chief Executive Ly Xuan Hai told Reuters in an interview before the bank's share debut.
Foreign investors hold a combined 30% in ACB.
Standard Chartered Plc. owns 8.6% of ACB, the biggest stake of ACB's four foreign shareholders.
The World Bank's IFC and Connaught Investors Ltd. of the Jardine Matheson Group each has 7.3%, while Dragon Financial Holdings Ltd. Co. owns 6.8%.
ACB executives have said the bank's listing in Hanoi was part of its northern expansion as it planned to control more than a tenth of Vietnam's 10 billion deposit market by 2010.
Source: Reuters
IPO plans of state-owned entreprises
The Ministry of Transport and Telecommunications will equitise its 11 corporations later this year.
Under the ministry’s plan, Civil Engineering Construction Corporation 1 (Cienco 1), Cienco 5, Thang Long Construction Corporation, Viet Nam Waterway Construction Corporation (Vinawaco) and Southern Waterborne Transport Corporation (SOWATCO) will be equitised in 2007.
The ministry added that Viet Nam Airlines Corporation will be equitised in 2008, while Cienco 4, Cienco 6, Cienco 8, Viet Nam Motors Industry Corporation (Vinamotor), and Northern Waterborne Transport Corporation will be equitised in 2009.
According to the ministry, it has instructed the above corporations to work out their equitisation plans to submit to the Prime Minister for approval.
Source: VNA
Vice President advises Vinamilk
Vice President Truong My Hoa called on Vietnam’s leading dairy producer Vinamilk to develop into a powerful economic player to face competition during the country’s integration into the global economy.
Hoa, during her working visit to the Ho Chi Minh City-based company, urged Vinamilk to further improve quality and boost diversification of its products, as well as scout out new market. It should also focus its investment on centralized material zones like financing farmers to develop dairy cow herds and taking the initiative in raw material sources, in order to achieve sustainable development, she added.
The listed dairy maker was oriented to target 50% of material for dairy production sourcing domestically in the next five years. Vinamilk was a favourite among foreign investors because of its solid performance. The company, which holds 75% of the dairy market, is valued at 930 mio US$. It has invested in other businesses, including the packaging company V-Pack and infrastructure and property projects.It has also invested nearly 747,000 US$ to construct V.Mart convenience stores throughout the country, aiming to cement distribution of its award winning products.
Vinamil-branded products have exported to the US, Canada and France, among other markets.
The firm plans to list its shares on the Singapore stock exchange this year.
Source: Thanh Nien
Hoa, during her working visit to the Ho Chi Minh City-based company, urged Vinamilk to further improve quality and boost diversification of its products, as well as scout out new market. It should also focus its investment on centralized material zones like financing farmers to develop dairy cow herds and taking the initiative in raw material sources, in order to achieve sustainable development, she added.
The listed dairy maker was oriented to target 50% of material for dairy production sourcing domestically in the next five years. Vinamilk was a favourite among foreign investors because of its solid performance. The company, which holds 75% of the dairy market, is valued at 930 mio US$. It has invested in other businesses, including the packaging company V-Pack and infrastructure and property projects.It has also invested nearly 747,000 US$ to construct V.Mart convenience stores throughout the country, aiming to cement distribution of its award winning products.
Vinamil-branded products have exported to the US, Canada and France, among other markets.
The firm plans to list its shares on the Singapore stock exchange this year.
Source: Thanh Nien
Securities companies seek to increase their capital
Raising chartered capital proves to be the thing securities companies must do if they want to exist. Under the current regulations, securities companies must have required levels of capital to be eligible to do certain kinds of business. For example, they must have at least 2billion VND to provide securities brokerage services, 12billion VND to do securities trading themselves, and 22billion VND to act as the guarantor for securities issuance. Now several companies cannot guarantee securities issuance due to low capital.
The Securities Law has become effective, and the decree guiding the implementation of the law will be enacted in some days, which will set higher capital requirements on securities companies. The companies will have to have 200billion VND to be eligible to do all kinds of available securities businesses, instead of 43billion VND as currently.
An official from the State Securities Commission said that securities companies would be given more time to increase their capital. If the requirements on minimum capital are effective right from the enactment date, two-thirds of companies would have to shut down.
It is the right time for securities companies to increase their chartered capital. Investors are ready to inject money in securities companies which have been performing well in a fast-growing stock market.
Nguyen Duy Hung, Chairman of SSI, said that the prestigious securities companies which have been operating for a long time will find it easy to increase their capital by issuing more shares. Especially, it will be easier for the three listing securities companies to raise funds from the stock market.
The capital raising will also be not so difficult for newly set up companies, or for companies that have low chartered capital. The stock market in Vietnam is very promising, and investors are ready to make investments in securities companies, especially foreign investors.
Le Dac Son, Director General of VP Bank, which has set up a securities company, asserted that the securities company would meet the capital requirement right when the decree with the stipulation on required capital was enacted.
Biggest securities companies in Vietnam by chartered capital:
Saigon Securities Inc. 500billion VND
Sacombank Securities Co. 300billion VND
ACB Securities Co. 250billion VND
Vietcombank Securities Co. (VCBS) 200billion VND
Source: VNE
Investment fund to increase capital
The investment management company Mekong Capital said last week that one of its funds will invest up to 6.25mio US$ in a manufacturing company in Vietnam.
The Mekong Enterprise Fund II, a private equity fund launched in June 2006, has already made an initial investment of 1.9mio US$ in Ngo Han Joint Stock Company, which is one of the largest manufacturers of magnet wire in Vietnam.The fund expected to invest more after the Vietnamese law on the 30 percent limit on foreign ownership in unlisted companies has been clarified. This is an ongoing relationship for Mekong Capital. Its original fund, Mekong Enterprise Fund Ltd, which it launched in 2002, originally invested $1.85 million in Ngo Han in early 2004.
“Since our first fund invested in Ngo Han in early 2004, Ngo Han’s revenues have grown at 57% per year over those three years, while their net profit has grown at a rate of 60% per year over those same three years,” the report quoted Chris Freund, Managing Director of Mekong Capital, as saying.He said Mekong Capital expected the strong growth to continue, especially as the company continued “to expand capacity and strengthen its management team.”
Ngo Han, which employs around 200 people and is located in southern Dong Nai province, is expected to have achieved over $35 million in revenue in 2006 in an industry that may not seem all that glamorous.
Its CEO Nguyen Tien said Mekong Enterprise Fund II’s investment “affirmed the long term relationship and support to the company for the great mutual benefit in the future.”
Ngo Thi Thong, the co-founder and Chairwoman of Ngo Han, expected the investment would prepare the company for a “successful listing.”
The $50 million Mekong Enterprise Fund II is a private equity fund focusing on equity investments in unlisted companies in Vietnam, which at the time of the original investment, are typically about two-to-four years away from a listing on one of Vietnam’s stock exchanges.
Ngo Han is the second investment of Mekong Enterprise Fund II. The previous investment made by the fund is International Consumption Products Joint Stock Company (ICP), a fast-growing consumer products company which owns several leading brands in Vietnam including X-Men, Dr. Men and OCleen.
Source: Thanh Nien
The story of East Asia Bank and Citigroup
The Memorandum of Understanding (MOU) on cooperation between Eas Asia Bank (EAB) and the US-based Citigroup was signed in September 2006. A source said that just before the MOU was signed, Citigroup asked EAB about the prices of shares EAB would sell to Citigroup. EAB answered: six fold the nominal value at least. At that time, Citigroup hurried EAB to make the deal as the US-based group wanted the contract on share transfer to be inked on the occasion of the APEC Summit 2006 so it could invite US President G. Bush to attend the signing ceremony.
However, EAB was not hasty. At the end of 2006, the total chartered capital of the bank was only 880billion VND (55mio US$). EAB’s management board has drawn up a roadmap for raising capital to 2trillion VND(125mio US$) in 2007, under which the bonus shares and the shares to be sold to the existing shareholders (at the preferential price, equal to the face value) will account for 60% of the newly issued shares. The sum of 416billion VND (26mio US$) accumulated in the last few years will also be added to the chartered capital. Meanwhile, 30% of the chartered capital, or 600billion VND (37.5mio US$), will be sold to Citigroup. The extraordinary shareholders’ meeting held two weeks ago saw the approval of the roadmap.
EAB has made a move which can bring the maximum benefit to its shareholders. It did not sell shares to foreign investors when its chartered capital was low. While other banks decided to sell 10% of their shares to foreign banks at the cost of several tens of millions of dollars (HSBC successfully purchased 10% of Techcombank’s shares for 27mio US$), 10% of EAB would cost at least 1,200billion VND, or 75mio US$ When EAB said that the selling price would be at least six times higher than the shares’ face value, it means the floor price, while in fact, the actual value of the shares would be much higher than the floor price.
Citigroup is planning to buy 10% of EAB shares right in the first quarter of this year, while the remaining 20% will be collected later. As such, in order to possess 3/10 of EAB, Citigroup will have to spend not less than 225mio US$.
“EAB will finish the selling of 30% of its stakes to Citigroup in 2007. By September 30, 2007, Citigroup will have to complete the capital contribution to EAB,” Tran Phuong Binh, Director General of EAB, said during the shareholders’ meeting. “If Citigroup buys 20% of shares after the date, the other 10% of shares will be sold to other foreign partners”.
While Bank of America, a rival of Citigroup, focuses on China, Citigroup considers Vietnam a key market in Asia. Through EAB, Citigroup wants to penetrate Vietnam’s financial market and improve its position among operational foreign banks in Vietnam. HSBC was first in Vietnam in 2006 with the profit growth rate of 300%, leaving other rivals far behind, including Citibank, Standard Chartered Bank, ANZ, Calyon, BNP Paribas, and Deutsche Bank.
Mr Binh has affirmed that EAB will become the joint stock bank with the highest chartered capital in Vietnam by 2008. With the support of Citigroup, EAB will follow new strategies in order to get higher profit. In the immediate time, the bank will implement the project on providing credit packages to medium- and small-size enterprises. It will also join the three-party joint venture specialising in producing and exporting ATMs, ABCs (auto banking centre) which permit deposits, withdrawals and transfers in VND and foreign currencies. The joint venture has three partners, the US-based Indochina Capital, EAB and China-based GRG. Meanwhile, EAB is planning to kick start the construction of its new headquarters in Ho Chi Minh City.
Seventeen months have gone since the first meeting between EAB and Citigroup. The final negotiation will take place in mid January before the two sides sign the investment contract. One of the topics of the upcoming meeting will be the compulsory time for Citigroup to hold shares.
Mr Binh said: “We want Citigroup to hold the shares they purchase for at least 10 years. The 10 year duration proves to be reasonable. If the duration is less than 10 years, Citigroup may sell shares when it feels it can make profit, which would be unbeneficial to EAB. If the duration is more than 10 years, the share purchasing price will not be high."
Source: VNE
However, EAB was not hasty. At the end of 2006, the total chartered capital of the bank was only 880billion VND (55mio US$). EAB’s management board has drawn up a roadmap for raising capital to 2trillion VND(125mio US$) in 2007, under which the bonus shares and the shares to be sold to the existing shareholders (at the preferential price, equal to the face value) will account for 60% of the newly issued shares. The sum of 416billion VND (26mio US$) accumulated in the last few years will also be added to the chartered capital. Meanwhile, 30% of the chartered capital, or 600billion VND (37.5mio US$), will be sold to Citigroup. The extraordinary shareholders’ meeting held two weeks ago saw the approval of the roadmap.
EAB has made a move which can bring the maximum benefit to its shareholders. It did not sell shares to foreign investors when its chartered capital was low. While other banks decided to sell 10% of their shares to foreign banks at the cost of several tens of millions of dollars (HSBC successfully purchased 10% of Techcombank’s shares for 27mio US$), 10% of EAB would cost at least 1,200billion VND, or 75mio US$ When EAB said that the selling price would be at least six times higher than the shares’ face value, it means the floor price, while in fact, the actual value of the shares would be much higher than the floor price.
Citigroup is planning to buy 10% of EAB shares right in the first quarter of this year, while the remaining 20% will be collected later. As such, in order to possess 3/10 of EAB, Citigroup will have to spend not less than 225mio US$.
“EAB will finish the selling of 30% of its stakes to Citigroup in 2007. By September 30, 2007, Citigroup will have to complete the capital contribution to EAB,” Tran Phuong Binh, Director General of EAB, said during the shareholders’ meeting. “If Citigroup buys 20% of shares after the date, the other 10% of shares will be sold to other foreign partners”.
While Bank of America, a rival of Citigroup, focuses on China, Citigroup considers Vietnam a key market in Asia. Through EAB, Citigroup wants to penetrate Vietnam’s financial market and improve its position among operational foreign banks in Vietnam. HSBC was first in Vietnam in 2006 with the profit growth rate of 300%, leaving other rivals far behind, including Citibank, Standard Chartered Bank, ANZ, Calyon, BNP Paribas, and Deutsche Bank.
Mr Binh has affirmed that EAB will become the joint stock bank with the highest chartered capital in Vietnam by 2008. With the support of Citigroup, EAB will follow new strategies in order to get higher profit. In the immediate time, the bank will implement the project on providing credit packages to medium- and small-size enterprises. It will also join the three-party joint venture specialising in producing and exporting ATMs, ABCs (auto banking centre) which permit deposits, withdrawals and transfers in VND and foreign currencies. The joint venture has three partners, the US-based Indochina Capital, EAB and China-based GRG. Meanwhile, EAB is planning to kick start the construction of its new headquarters in Ho Chi Minh City.
Seventeen months have gone since the first meeting between EAB and Citigroup. The final negotiation will take place in mid January before the two sides sign the investment contract. One of the topics of the upcoming meeting will be the compulsory time for Citigroup to hold shares.
Mr Binh said: “We want Citigroup to hold the shares they purchase for at least 10 years. The 10 year duration proves to be reasonable. If the duration is less than 10 years, Citigroup may sell shares when it feels it can make profit, which would be unbeneficial to EAB. If the duration is more than 10 years, the share purchasing price will not be high."
Source: VNE
Monday, January 08, 2007
New fund management company licensed
The An Binh Fund Management Joint Stock Company was licensed in late December with an initial charter capital of 8 billion VND (497,000 US$). The firm aims to form and manage a securities investment fund and related trading activities.
In the closing days of 2006, the State Securities Commission granted licenses to six additional firms to establish fund management companies. They were: Ban Viet, An Phuc, Phuong Dong, An Phu, Hai Phong and Phu Lan.
Source: VNA
High demand for bank shares
Shares of commercial banks are still attractive to investors, but ordinary investors are not these banks' main target.Though most commercial banks, with the exceptions of Sai Gon Thuong Tin Commercial Bank (Sacombank) and Asia Commercial Bank (ACB), have not yet listed shares on the stock markets, investors continue to favour banking shares due to the bank's consistent operational transparency and high annual dividends.
Southern Bank plans to raise its chartered capital to 1.4 trillion VND (87.4mio US$), while the current level stands at 600 billion VND (37.4mio US$). Likewise, Eximbank expects to increase its chartered capital from 815 billion VND (51mio US$) to 1.2 trillion VND (75mio US$).
Experts reckon that to some extent the banking sector has not been put under as much competitive pressure as other industries, thus bank shares are predicted to continue winning investors' favour.
While investors have great expectations for profits gained from bank shares, banks are largely concerned with attracting strategic investors and potential foreign partners with whom to work toward breakthroughs in technology, management and services.
To date, only four commercial banks have sold shares to foreign financial institutions: ACB, Sacombank, VPBank and Techcombank.
Source: VNA
Southern Bank plans to raise its chartered capital to 1.4 trillion VND (87.4mio US$), while the current level stands at 600 billion VND (37.4mio US$). Likewise, Eximbank expects to increase its chartered capital from 815 billion VND (51mio US$) to 1.2 trillion VND (75mio US$).
Experts reckon that to some extent the banking sector has not been put under as much competitive pressure as other industries, thus bank shares are predicted to continue winning investors' favour.
While investors have great expectations for profits gained from bank shares, banks are largely concerned with attracting strategic investors and potential foreign partners with whom to work toward breakthroughs in technology, management and services.
To date, only four commercial banks have sold shares to foreign financial institutions: ACB, Sacombank, VPBank and Techcombank.
Source: VNA
Sunday, January 07, 2007
Vietnam stocks hit new high
Vietnam’s stock market index soared 3.51% to close at a new lifetime high on Friday as blue chips made all-around gains. The VN-Index rose 28.57 points to 817.39, beating the record of 809 set on December 20, with 67 gainers and 20 losers.
Hanoi-based infrastructure developer SJS became the first stock to cross the VND600,000 mark, hitting the 5 percent ceiling to close at VND604,000.
IT developer FPT also rose 5 percent to close at VND495,000.
Other heavyweights to gain 5 percent were REE which closed at VND326,290, GMD which closed at VND396,720, and VNM which closed at VND632,890.
Nguyen Van Dung, director of the Hanoi Securities Trading Center, added that foreign portfolio inflows into the market had jumped because of optimistic forecasts on the country’s economy and stock exchange by international financers like Merrill Lynch and Credit Suisse.
Source: Thanh Nien
Hanoi-based infrastructure developer SJS became the first stock to cross the VND600,000 mark, hitting the 5 percent ceiling to close at VND604,000.
IT developer FPT also rose 5 percent to close at VND495,000.
Other heavyweights to gain 5 percent were REE which closed at VND326,290, GMD which closed at VND396,720, and VNM which closed at VND632,890.
Nguyen Van Dung, director of the Hanoi Securities Trading Center, added that foreign portfolio inflows into the market had jumped because of optimistic forecasts on the country’s economy and stock exchange by international financers like Merrill Lynch and Credit Suisse.
Source: Thanh Nien
Eastern Asia Bank plans IPO
The Ho Chi Minh City-based Eastern Asia Bank plans to issue shares worth 1.2 trillion VND (70mio US$) this year to raise its chartered capital to 2 trillion VND.
The issue will be in two phases. In the first, the bank will issue 520 billion VND (32mio US$) worth shares to existing shareholders.
In the second phase, it will offer a 30% stake, worth 600 billion VND (37.5mio US$), to foreign investors.
The bank has also agreed to sell 10% to Citigroup Inc., the world’s biggest bank by market capitalization.
In Vietnam foreign holding in a bank by any single party is now capped at 10%. But if the limit is scrapped Citigroup will pick up a 29% stake in EAB.
If the limit is retained EAB said it would sell to other foreign partners.
Following the announcement, the EAB stock, traded on the over-the-counter-market, shot up to 42mio VND(2,598 US$) from 34mio VND (2,103 US$) last week.
EAB now is an agent for the US money transfer company MoneyGram. Money sent through MoneyGram’s network of 84,000 offices in 170 countries can now be received at EAB.
The bank is also an agent for some 40 other global money transfer companies and has reported payments from these enterprises at nearly 690mio US$ in 2005.
Source: Thanh Nien
The issue will be in two phases. In the first, the bank will issue 520 billion VND (32mio US$) worth shares to existing shareholders.
In the second phase, it will offer a 30% stake, worth 600 billion VND (37.5mio US$), to foreign investors.
The bank has also agreed to sell 10% to Citigroup Inc., the world’s biggest bank by market capitalization.
In Vietnam foreign holding in a bank by any single party is now capped at 10%. But if the limit is scrapped Citigroup will pick up a 29% stake in EAB.
If the limit is retained EAB said it would sell to other foreign partners.
Following the announcement, the EAB stock, traded on the over-the-counter-market, shot up to 42mio VND(2,598 US$) from 34mio VND (2,103 US$) last week.
EAB now is an agent for the US money transfer company MoneyGram. Money sent through MoneyGram’s network of 84,000 offices in 170 countries can now be received at EAB.
The bank is also an agent for some 40 other global money transfer companies and has reported payments from these enterprises at nearly 690mio US$ in 2005.
Source: Thanh Nien
Chinese investors show interest in Vietnam
More than 430 Chinese businesses and industrial associations in Guangzhou attended a conference organized by the Vietnamese Ministry of Investment and Planning, introducing Vietnam’s investment environment.
Participants at the event were updated about Vietnam’s investment environment and its preferential policies designed to attract foreign investments.
According to Vietnam’s Consul General to Guangzhou, Vo Thinh, China is one of Vietnamese major markets, with two-way trade turnover reaching 10 billion US$ in 2006. As of last November, China had 402 investment projects in Vietnam, making up a combined registered capital of $825 million.
Source: VNA
Participants at the event were updated about Vietnam’s investment environment and its preferential policies designed to attract foreign investments.
According to Vietnam’s Consul General to Guangzhou, Vo Thinh, China is one of Vietnamese major markets, with two-way trade turnover reaching 10 billion US$ in 2006. As of last November, China had 402 investment projects in Vietnam, making up a combined registered capital of $825 million.
Source: VNA
Friday, January 05, 2007
Foreign Investors: Transactions in Vietnam Dong
Investors must transact in Vietnamese dong on indirect investments to Viet Nam, according to Decree 160/2006/ND-CP, regulating the detailed implementation of the ordinance on foreign currency.
Under the decree, foreign investors, including individuals and organisations, considered non-residents in Viet Nam, must open accounts for indirect investment in Vietnamese dong with banks.
Indirect investment coming in foreign currency must be converted into dong, and all transactions related to it must be carried via the account in dong.
Investors can change Vietnamese dong in their accounts to buy foreign currency for transferring overseas. Current account foreign currency for transactions for residents and non-residents in Viet Nam remains the same as before.
Meanwhile, according to the State Bank of Viet Nam stipulations, amount of foreign currencies, Vietnamese dong, and gold transferred in and out of the country are subject to changes under certain circumstances.
Source: VNA
Under the decree, foreign investors, including individuals and organisations, considered non-residents in Viet Nam, must open accounts for indirect investment in Vietnamese dong with banks.
Indirect investment coming in foreign currency must be converted into dong, and all transactions related to it must be carried via the account in dong.
Investors can change Vietnamese dong in their accounts to buy foreign currency for transferring overseas. Current account foreign currency for transactions for residents and non-residents in Viet Nam remains the same as before.
Meanwhile, according to the State Bank of Viet Nam stipulations, amount of foreign currencies, Vietnamese dong, and gold transferred in and out of the country are subject to changes under certain circumstances.
Source: VNA
Vietnamese trade deficit widened 2006
The Vietnamese trade deficit widened last year, driven by rising imports of machinery, as the country prepared to join the World Trade Organization.
The gap increased by 6 percent from 2005 to 4.81bio US$, according to preliminary figures released by the General Statistics Office in Hanoi. Exports rose 22% to 39.6bio US$, while imports climbed 20% to 44.4bio US$.
Vietnamese companies have increased their imports of foreign-made equipment in order to prepare for increased competition as the country of 85 million people joins the World Trade Organization. Vietnam will become the 150th member of the trade arbiter on Jan. 11.
Bach Van Mung, director of the planning and investment department of the Ministry of Trade, said, "Domestic companies want to upgrade their production technology and expand their operations to strengthen their ability to compete with foreign companies in the post-WTO accession period. The increase in the trade deficit is a positive signal that shows the country's economy is on the move."
Purchases of foreign-made machinery and mechanical goods rose 24% last year to 6.56bio US$, the Vietnamese General Statistics Office said.
"Imports of machinery and equipment recovered strongly," the World Bank said, in a report prepared for a conference last month in Hanoi. "This upturn stems in good part from the equipment needs related to the construction of the Dung Quat industrial zone, which includes an oil refinery."
The refinery at Dung Quat Bay in the central province of Quang Ngai is scheduled to be started in 2009 and could meet as much as two-fifths of domestic gasoline demand. Vietnamese imports of petroleum products in 2006 rose 16 percent to 5.85bio US$.
Steel imports fell 1% to 2.91bio US$. Imports of cloth rose 23% to 2.95bio US$, "reflecting the input requirements of garment exports," according to the World Bank.
Garments and textiles were Vietnam's second-biggest export last year, rising 20% to 5.81bio US$. The quotas that Vietnamese garment exports to the United States have faced will disappear when Vietnam joins the WTO. "The Vietnamese garment industry has matured," said Eric Conforti, the president of Kore Garments of Canada, which operates two plants in southern Vietnam. "They have moved into nonquota categories, and also moved into more niche categories, away from the Chinese-dominated sectors."
Crude oil exports rose 13% by value last year to 8.32bio US$, even while declining 8% by volume, according to General Statistics Office figures. Oil production in Vietnam, the third-biggest Southeast Asian producer after Indonesia and Malaysia, is expected to stabilize this year after two years in decline, according to Ministry of Finance projections.
Footwear exports rose 17% to 3.56bio US$, while seafood shipments jumped 23% to 3.36bio US$. Wood product exports rose 22% to 1.9bio US$.
Vietnam's "wood-processing industry, mainly wooden furniture for exports, experienced rapid growth over the last five years," the agricultural attaché's office at the U.S. Embassy in Hanoi said last month. "The upward trend continues, though at a somewhat less rapid pace."
Source: BloombergThursday, January 04, 2007
Vietnam Airlines profit lower than expected
Vietnam Airlines reported below-target profits for 2006 Wednesday despite increased flights, passenger numbers and turnover, partly blaming higher fuel costs for it.
Turnover was 17.5 trillion VND (nearly 1.1bio US$), 5% higher than expected and up 12.4 percent year-on-year.
But profits were only 304.5 billion VND (19mio US$), or 8% below the target. The statement did not indicate year-on-year change in profit.
"The price of oil was 18.25 percent higher than expected, leading to an increase of 767 billion VND in fuel costs."Higher aircraft leasing costs, fierce competition from international airlines, bad weather, bird flu risks, and security concerns were also factors.
Vietnam expected to increase growth despite worldwide slowdown
Viet Nam's economy is forecast to enjoy many advantages and gain a robust growth rate, despite an expected slowdown of the world's economy and other market difficulties in 2007, said experts.
Sharing this forecast, Dr. Tran Dinh Thien, Deputy Director of the Viet Nam Economics Institute, said that Viet Nam, as being in the world's most dynamic region, would not fall into the general decline of the world's economy.
Compared to 2006, a lower world's economic growth rate would mean that there will not be much unexpected ups and downs in world's prices, particularly in material and energy prices.
In addition to that, Viet Nam's economy will benefit from its own advantages thanks to the country's accession to the World Trade Organisation (WTO), the US endorsement of the permanent normal trade relations (PNTR) with Viet Nam and the results gained in the APEC year 2006.
These factors, together with the achievements gained by the country in 2006, such as an economic growth rate of more than 8 percent, recorded foreign investment capital, official development assistance, and import-export turnover, are considered to be strong momentum bringing about growth opportunities for Viet Nam in 2007.
According to Thien, foreign investors would continue to pour their capital into Viet Nam since the country was regarded as the second fastest Asian growing economy. Viet Nam would also have chances to expand further to the world's biggest markets.
He said that the recent emergence of the private sector and the boom of the securities market was a proof of the country's abundant economic internal force.
However, economically speaking, Thien said that Viet Nam's current export staples are mainly based on available natural advantages and unskilled labourers. These advantages will not remain on the long-term, thus businesses should work hard to find future strategies which are more sustainable.
The economist also mentioned other factors that may affect the country in the long-term, which Viet Nam needs to overcome in 2007, such as infrastructure for development.
Source: VNA
Sharing this forecast, Dr. Tran Dinh Thien, Deputy Director of the Viet Nam Economics Institute, said that Viet Nam, as being in the world's most dynamic region, would not fall into the general decline of the world's economy.
Compared to 2006, a lower world's economic growth rate would mean that there will not be much unexpected ups and downs in world's prices, particularly in material and energy prices.
In addition to that, Viet Nam's economy will benefit from its own advantages thanks to the country's accession to the World Trade Organisation (WTO), the US endorsement of the permanent normal trade relations (PNTR) with Viet Nam and the results gained in the APEC year 2006.
These factors, together with the achievements gained by the country in 2006, such as an economic growth rate of more than 8 percent, recorded foreign investment capital, official development assistance, and import-export turnover, are considered to be strong momentum bringing about growth opportunities for Viet Nam in 2007.
According to Thien, foreign investors would continue to pour their capital into Viet Nam since the country was regarded as the second fastest Asian growing economy. Viet Nam would also have chances to expand further to the world's biggest markets.
He said that the recent emergence of the private sector and the boom of the securities market was a proof of the country's abundant economic internal force.
However, economically speaking, Thien said that Viet Nam's current export staples are mainly based on available natural advantages and unskilled labourers. These advantages will not remain on the long-term, thus businesses should work hard to find future strategies which are more sustainable.
The economist also mentioned other factors that may affect the country in the long-term, which Viet Nam needs to overcome in 2007, such as infrastructure for development.
Source: VNA
Coffee trade center to open in Central Highland
A coffee trading centre will open soon in Buon Ma Thuot, the Central Highland province of Dak Lak - the country's biggest coffee growing area, with the aim to help coffee growers increase their incomes.
The Buon Ma Thuot Coffee Exchange Centre (BCEC) will professionalize the purchase and export of coffee in Viet Nam, helping raise the quality of Viet Nam's export coffee and protect coffee growers' interests.
In the first stage of operation, BCEC will initially serve as an auction floor but later it will be upgraded facilities to be able to perform e-transaction for export contracts between Vietnamese businesses and the London International Financial Futures and Options Exchange (LIFFE).
Van Thanh Huy, President of the Viet Nam Coffee and Cacao Association said that coffee for trading at BCEC will undergo strict quality control. The centre with 4 ha storehouse, will also provide depository service for farmers.
According to the Viet Nam Coffee-Cacao Association, coffee price will remain high in the coming time because the world demand for coffee is on the rise. Viet Nam expects to earn 950 million USD from coffee exports this year, a 5 percent increase over last year.
Source: VNA
The Buon Ma Thuot Coffee Exchange Centre (BCEC) will professionalize the purchase and export of coffee in Viet Nam, helping raise the quality of Viet Nam's export coffee and protect coffee growers' interests.
In the first stage of operation, BCEC will initially serve as an auction floor but later it will be upgraded facilities to be able to perform e-transaction for export contracts between Vietnamese businesses and the London International Financial Futures and Options Exchange (LIFFE).
Van Thanh Huy, President of the Viet Nam Coffee and Cacao Association said that coffee for trading at BCEC will undergo strict quality control. The centre with 4 ha storehouse, will also provide depository service for farmers.
According to the Viet Nam Coffee-Cacao Association, coffee price will remain high in the coming time because the world demand for coffee is on the rise. Viet Nam expects to earn 950 million USD from coffee exports this year, a 5 percent increase over last year.
Source: VNA
Vietnamese believe in bright future
Viet Nam is home to the most optimistic residents in the world, with more than nine out of every 10 citizens interviewed in the four main cities (94%) saying 2007 will be better than 2006, according to the Gallup International Association’s Voice of the People Survey.
The result is remarkably consistent – Viet Nam has been at the head of the optimist chart for the last four years.
According to the managing director of the AC Nielsen Viet Nam, Chris Morley, increasing amounts of foreign direct investment in recent years has fuelled the sweeping hopeful outlooks.
Vietnamese economic expert Le Dang Doanh thinks Vietnamese people are optimistic because of the country’s political and social stability, and the gradual economic improvement. However, he noted that annual income is lower than that in many countries that are less optimistic.
The survey points out that optimism is particularly high in countries which are upbeat about economic prospects and do not have major concerns about unemployment or industrial disputes increasing in 2007.
The result is remarkably consistent – Viet Nam has been at the head of the optimist chart for the last four years.
According to the managing director of the AC Nielsen Viet Nam, Chris Morley, increasing amounts of foreign direct investment in recent years has fuelled the sweeping hopeful outlooks.
Vietnamese economic expert Le Dang Doanh thinks Vietnamese people are optimistic because of the country’s political and social stability, and the gradual economic improvement. However, he noted that annual income is lower than that in many countries that are less optimistic.
The survey points out that optimism is particularly high in countries which are upbeat about economic prospects and do not have major concerns about unemployment or industrial disputes increasing in 2007.
Differing expectations on this year's inflation
Although inflation was kept to a 6.6% increase in 2006 from the previous year, there will be external pressures at play that will fuel a rise in the Consumer Price Index (CPI) this year to between 7 - 7.5%, the deputy director of the Institute of Prices Analysis said.
Beside the expected increase of oil prices, pressure on domestic energy market will come from the planned reduction of government subsidies on electricity, coal, petrol and oil. The Government has already approved an electricity price increase, and the Viet Nam National Coal and Mineral Industries Group (Vinacomin) has suggested a 20 per cent increase in coal prices for its four largest industrial end users of electricity, cement, fertiliser and paper from January 2007.
However, some experts think that the CPI this year will see an increase lower than that of 2006, and will hover at around 6% for 2007. This opinion is supported by the arguments, that with Viet Nam’s inclusion into the World Trade Organisation, imported goods duties will decrease, which would lead to a decline of imported goods prices.
Beside the expected increase of oil prices, pressure on domestic energy market will come from the planned reduction of government subsidies on electricity, coal, petrol and oil. The Government has already approved an electricity price increase, and the Viet Nam National Coal and Mineral Industries Group (Vinacomin) has suggested a 20 per cent increase in coal prices for its four largest industrial end users of electricity, cement, fertiliser and paper from January 2007.
However, some experts think that the CPI this year will see an increase lower than that of 2006, and will hover at around 6% for 2007. This opinion is supported by the arguments, that with Viet Nam’s inclusion into the World Trade Organisation, imported goods duties will decrease, which would lead to a decline of imported goods prices.
Vietnam Airlines transports nearly 7mio passengers
Vietnam Airlines has transported over 6.8 million passengers in 2006, nearly 1 million more than the previous year, and 106,600 tonnes of cargo.
The airlines recorded a seat occupancy rate of 71.9%.
Last year, Vietnam Airlines signed a contract with American Airlines to conduct flights to the US and opened a direct route between Ha Noi and Luong Prabang in Laos. It plans to open a non-stop route to the US by the end of 2007.
Source: VNA
The airlines recorded a seat occupancy rate of 71.9%.
Last year, Vietnam Airlines signed a contract with American Airlines to conduct flights to the US and opened a direct route between Ha Noi and Luong Prabang in Laos. It plans to open a non-stop route to the US by the end of 2007.
Source: VNA
Tuesday, January 02, 2007
State Bank of Vietnam keeps interest rates stable
The Vietnamese central bank announced, that key interest rates remain unchanged for first months of the year.
The State Bank of Vietnam (SBV) maintained the base Dong lending rate at 8.25%, refinance rate for credit institutions at 6.5%, and the discount rate at 4.5%.
Source: Thanh Nien
The State Bank of Vietnam (SBV) maintained the base Dong lending rate at 8.25%, refinance rate for credit institutions at 6.5%, and the discount rate at 4.5%.
Source: Thanh Nien
Vietnam Airlines' IPO this year
National carrier Viet Nam Airlines will be equitised by next year according to a Prime Minister's decision.
Viet Nam Airlines has a registered capital of 5.74 trillion VND (358.8mio US$) and runs 18 other units, three affiliates, nine joint-stock concerns, and four joint ventures.
Source: VNA
Petrovietnam Insurance sold 23% of stock to public
PetroVietnam Insurance Company (PVI) sold of 11,729,900 shares in an auction or 23.5% of its entire chartered capital. The company offered an initial asking price of VND11,500 (0.72$).
More than 5,200 investors bought the shares. The shares were sold at an average price of VND160,250, 14 times higher than the initial offering price.
The subsidiary of Viet Nam Oil and Gas Corporation (PetroVietnam) has a chartered capital of VND500 billion (31mio US$) with the State holding 70%.
The company is one of the country’s leading insurers, and commanded a 13% market share last year.
PVI is expected to record an after-tax profit of VND47.9 billion (2.98mio US$) on a turnover of VND1.3 trillion (81mio US$) by the end of the year, nearly doubling last year’s figures. The company is also expected to pay out a 10.57 per cent dividends in 2007, 12.6% in 2008 and 12.9% in 2009.
Source: VNS
More than 5,200 investors bought the shares. The shares were sold at an average price of VND160,250, 14 times higher than the initial offering price.
The subsidiary of Viet Nam Oil and Gas Corporation (PetroVietnam) has a chartered capital of VND500 billion (31mio US$) with the State holding 70%.
The company is one of the country’s leading insurers, and commanded a 13% market share last year.
PVI is expected to record an after-tax profit of VND47.9 billion (2.98mio US$) on a turnover of VND1.3 trillion (81mio US$) by the end of the year, nearly doubling last year’s figures. The company is also expected to pay out a 10.57 per cent dividends in 2007, 12.6% in 2008 and 12.9% in 2009.
Source: VNS
Subscribe to:
Posts (Atom)
