Vietnamese life insurers had another lean year in 2006, the third in a row, with premiums collected falling marginally.
The industry’s Annual Premium Equivalent (APE), which measures the new business in a year, fell by 3.5% last year, the Vietnam Insurance Association said.
US insurer AIA was the hardest hit with its APE plunging by 32%.
The UK insurer Prudential Vietnam and Canada’s Manulife saw their APE drop by 15% and 9%.
Only Japan’s Dai-ichi Life Insurance Group and US’s ACE Insurance Co. were in positive territory, growing respectively at 7% and 11%.
In terms of total premiums collected, Prudential topped with 5%, followed by the domestic Bao Viet Life Insurance Company with just 1.1%.
The number of insurance agents fell by 31%, a further source of concern for the industry. Applications for fresh agency fell even faster – by 42%.
Source: Thanh Nien
Thursday, April 12, 2007
EVN seeks 875 mio US$ for new facilities
The Electricity of Viet Nam (EVN) Group is seeking for at least 14,000 billion VND (875 million USD) for new power facilities in 2007.
EVN said it plans to get this needed capital from shareholders in its 30 new joint stock companies, which will go public soon. Of the 32 new companies, 24 will be involved in generating power.
Observers believe this sum will ease EVN's capital demands necessary for the construction of new power plants.
It is predicted that the country will cope with severe shortage of power this summer.
Source: VNA
EVN said it plans to get this needed capital from shareholders in its 30 new joint stock companies, which will go public soon. Of the 32 new companies, 24 will be involved in generating power.
Observers believe this sum will ease EVN's capital demands necessary for the construction of new power plants.
It is predicted that the country will cope with severe shortage of power this summer.
Source: VNA
Vinamilk's investment plan
Viet Nam Dairy Products JSC (Vinamilk-VNM) plans to invest over 1.74 trillion VND into existing and new projects this year. About 628.34 billion VND (39.27 million USD) will go toward existing projects, which include buying more cows.
The remaining 1,121 trillion VND (70 million USD) is earmarked for new projects, like constructing new facilities in the Phu My Hung urban zone.
Vinamilk has also decided to issue over 8.85 million shares, representing a 5% stake in the company, on the Singapore stock exchange.
Source: VNA
The remaining 1,121 trillion VND (70 million USD) is earmarked for new projects, like constructing new facilities in the Phu My Hung urban zone.
Vinamilk has also decided to issue over 8.85 million shares, representing a 5% stake in the company, on the Singapore stock exchange.
Source: VNA
REE's earnings in 2006 tripled
Over the next three years, the Refrigeration Electrical Engineering Corporation (REE) plans to increase its charter capital to VND2 trillion (US$125 million), up five times over the current level, through continued revenue growth and branching out into new areas.
Last year, the company earned VND824.14 billion (about $51.5 million) in revenue, more than triple that of 2005, with pre-tax profits at nearly VND299 billion ($18.69 million).
Earnings grew, says REE chairwoman Nguyen Thi Mai Thanh, due to strong gains in all business areas - mechanical and electrical engineering (M&E), air-condition and home appliance sales, real estate and financial investments.
Financial investments alone contributed VND149.2 billion ($9.33 million) to profits, representing 50 per cent of earnings from the four above mentioned areas.
Much of the revenue growth was through newly established subsidiaries. The company spent VND70 billion ($4.38 million) to set up REE Land JSC, and VND11 billion ($687,500) to create REE Electricity JSC. The parent owns 70 and 30 per cent in the subsidiaries respectively.
Thanh says the company will continue to expand its business activities, helping achieve its VND2 trillion chartered capital target by 2010. REE plans to invest in public infrastructure - such as electricity utilities, waterworks and mining - and invest further in existing ventures.
REE has already committed nearly $1 billion to building new hydro and thermoelectric power plants, and has helped establish the REE-Chuong Duong Land Corp with VND160 billion in charter capital.
The company will issue more shares on the stock market over the next three years.
"In this period, we will gradually equitise our affiliates to mobilise new resources and broaden the scale of these companies," said Thanh. REE predicts 2007 revenue to hit VND1 trillion ($62.5 million) with VND340 billion ($21.25 million) in pre-tax profits.
By 2010, the company forecasts earnings to reach VND2.6 trillion ($162.5 million) and profits of VND900 billion ($56.25 million).
Source: VNS
Last year, the company earned VND824.14 billion (about $51.5 million) in revenue, more than triple that of 2005, with pre-tax profits at nearly VND299 billion ($18.69 million).
Earnings grew, says REE chairwoman Nguyen Thi Mai Thanh, due to strong gains in all business areas - mechanical and electrical engineering (M&E), air-condition and home appliance sales, real estate and financial investments.
Financial investments alone contributed VND149.2 billion ($9.33 million) to profits, representing 50 per cent of earnings from the four above mentioned areas.
Much of the revenue growth was through newly established subsidiaries. The company spent VND70 billion ($4.38 million) to set up REE Land JSC, and VND11 billion ($687,500) to create REE Electricity JSC. The parent owns 70 and 30 per cent in the subsidiaries respectively.
Thanh says the company will continue to expand its business activities, helping achieve its VND2 trillion chartered capital target by 2010. REE plans to invest in public infrastructure - such as electricity utilities, waterworks and mining - and invest further in existing ventures.
REE has already committed nearly $1 billion to building new hydro and thermoelectric power plants, and has helped establish the REE-Chuong Duong Land Corp with VND160 billion in charter capital.
The company will issue more shares on the stock market over the next three years.
"In this period, we will gradually equitise our affiliates to mobilise new resources and broaden the scale of these companies," said Thanh. REE predicts 2007 revenue to hit VND1 trillion ($62.5 million) with VND340 billion ($21.25 million) in pre-tax profits.
By 2010, the company forecasts earnings to reach VND2.6 trillion ($162.5 million) and profits of VND900 billion ($56.25 million).
Source: VNS
Hapaco increases equity through stock options
At the company’s annual general meeting last week, Hai Phong Paper JSC (Hapaco) shareholders approved a plan to issue an additional 18 million shares to raise its chartered capital to VND240 billion(US$15 million) this year.
The shares will be issued in two lots, the first of which will consist of 9.2 million shares.
The first lot will be handed out as a dividend payment with the remaining shares sold to current shareholders, strategic investors and Hapaco employees.
The second lot will include shares issued as a bonus to existing shareholders with the remaining auctioned to the public.
Hapaco Chairman Nguyen Duong Hien said current shareholders will be able to buy shares in the first lot at VND10,000-25,000 a piece. The board will decide on the final price once the company’s fund raising plan is approved by the State Securities Commission, said Hien.
Hapaco reported VND230 billion ($14.4 million) in 2006 revenues, up 45.5 per cent over the previous year, and more than VND20 billion in net profit, a 60 per cent year-on-year increase.
With plans to open the Hai Ha Paper Plant in the second quarter and break ground on a petrochemical plant, Hapaco forecasts 2007 profits to hit VND22 billion on the back of VND260 billion in revenue.
Hapaco is also planning to invest in pulp paper plants, the Tien Sa Pharmaceutical Plant and office real estate.
Source: VNS
The shares will be issued in two lots, the first of which will consist of 9.2 million shares.
The first lot will be handed out as a dividend payment with the remaining shares sold to current shareholders, strategic investors and Hapaco employees.
The second lot will include shares issued as a bonus to existing shareholders with the remaining auctioned to the public.
Hapaco Chairman Nguyen Duong Hien said current shareholders will be able to buy shares in the first lot at VND10,000-25,000 a piece. The board will decide on the final price once the company’s fund raising plan is approved by the State Securities Commission, said Hien.
Hapaco reported VND230 billion ($14.4 million) in 2006 revenues, up 45.5 per cent over the previous year, and more than VND20 billion in net profit, a 60 per cent year-on-year increase.
With plans to open the Hai Ha Paper Plant in the second quarter and break ground on a petrochemical plant, Hapaco forecasts 2007 profits to hit VND22 billion on the back of VND260 billion in revenue.
Hapaco is also planning to invest in pulp paper plants, the Tien Sa Pharmaceutical Plant and office real estate.
Source: VNS
Bourse to automate order matching
The HCM City Securities Trading Center plans to begin an automatic order matching session from May 7 while still maintaining two time-order matching sessions.
Le Hai Tra, deputy director of the center, said more orders could be handled with the automatic matching session.
Time-order matching that will establish the opening price will occur between 8:30-9am.
From 9-10am the automatic order matching session will take place and from 10-10:30am the time-order matching session, which will set the closing price.
Negotiated transactions for shares and fund certificates will take place between 10:30-11am.
Bond deals will be done via negotiations as normal from 8:30-11am.
From May 7, three new order types at the opening (ATO), at the close (ATC) and at market price (MP), will be put in use. Currently only the limit order is in operation.
ATO and limited orders will be for the first and the second session.
Limit and MP orders will be for the second automatic matching session and the ATC order for the final session.
Price fluctuating limits will remain at 5% from the previous day’s closing price.
For foreign investors, if a buying order is not matched, the order will be cancelled, and if it is matched partly, the remaining of the order will be cancelled automatically.
The cancellations are done to give the market time to discover how much remaining room is left for foreign investors.
Foreign ownership currently cannot exceed the regulated room limits (49% for listed companies and 30% for listed banks).
Any newly listed organisation and its consulting securities company will have to offer the expected price as reference for its first trading day.
That first day’s fluctuation will be 30%. This is different from the current practice, which establishes share or certificate prices by order matching on the first day.
If the price is not established for the share or fund certificate on the first three trading days, the listed organisation will have to redefine its reference price.
Also from May 7, a big lot of shares or certificates will comprise 20,000 units rather than 10,000, as currently regulated.
From June 7, a round lot will be 100 shares or certificates, up from the current 10 units.
In another development, on Monday the securities center awarded trading member certificates to four additional securities companies, Bien Viet, Sao Viet, Tam Nhin and VP Bank Securities.
Source: VNS
Le Hai Tra, deputy director of the center, said more orders could be handled with the automatic matching session.
Time-order matching that will establish the opening price will occur between 8:30-9am.
From 9-10am the automatic order matching session will take place and from 10-10:30am the time-order matching session, which will set the closing price.
Negotiated transactions for shares and fund certificates will take place between 10:30-11am.
Bond deals will be done via negotiations as normal from 8:30-11am.
From May 7, three new order types at the opening (ATO), at the close (ATC) and at market price (MP), will be put in use. Currently only the limit order is in operation.
ATO and limited orders will be for the first and the second session.
Limit and MP orders will be for the second automatic matching session and the ATC order for the final session.
Price fluctuating limits will remain at 5% from the previous day’s closing price.
For foreign investors, if a buying order is not matched, the order will be cancelled, and if it is matched partly, the remaining of the order will be cancelled automatically.
The cancellations are done to give the market time to discover how much remaining room is left for foreign investors.
Foreign ownership currently cannot exceed the regulated room limits (49% for listed companies and 30% for listed banks).
Any newly listed organisation and its consulting securities company will have to offer the expected price as reference for its first trading day.
That first day’s fluctuation will be 30%. This is different from the current practice, which establishes share or certificate prices by order matching on the first day.
If the price is not established for the share or fund certificate on the first three trading days, the listed organisation will have to redefine its reference price.
Also from May 7, a big lot of shares or certificates will comprise 20,000 units rather than 10,000, as currently regulated.
From June 7, a round lot will be 100 shares or certificates, up from the current 10 units.
In another development, on Monday the securities center awarded trading member certificates to four additional securities companies, Bien Viet, Sao Viet, Tam Nhin and VP Bank Securities.
Source: VNS
Huge profits from securities trading and retail banking
It has been asked why joint stock banks earned such fat profit in the first quarter of 2007 when it has been very hard to mobilise capital.
One year ago, when joint stock banks all set the target of multi-fold increases in gross profit for 2007, they were described as ‘too ambitious’. However, the smooth operation of the banks in the first quarter has shown that the targets are within reach.
By March 31, 2007, the total assets of ACB had reached VND50,326 billion (US$3,145.37 million), double the same period last year. The bank reported the pre-tax profit of VND18,246 billion (US$1,140.37 million), nearly a 3.5-fold increase.
The profit Asia Commercial Bank (ACB) gained in the first three months of the year accounted for 25.5% of its 2007 plan – VND1,500 billion (US$93.75 million).
Meanwhile, Sacombank reported the accumulative pre-tax profit of more than VND302 billion (US$18.87 million), an increase of 188% over the same period last year.
Eximbank has also reported encouraging business performances in the first quarter of the year with the pre-tax profit of VND177 billion (US$11.06 million), or 2.6-fold higher than the same period last year. The bank’s bad debt ratio stayed at a very low level, 0.85%, much lower than the safety line at 2% given by the central bank.
In 2007, the bank plans to have the total assets of more than VND31 trillion (US$1.93 billion), chartered capital of VND2,800 billion (US$175 million) and pre-tax profit at more than VND600 billion (US$37.5 million).
Besides the three top profit-making banks, Techcombank, VP Bank, VIB Bank, and Military Bank have also been named as big profitable banks.
VP Bank reported the first quarter profit of VND72 billion (US$4.5 million), double that of the same period last year. Though the bank’s shareholders’ meeting approved a plan to get the profit of VND350 billion (US$21.87 million), the director board still thinks that the VND400 billion (US$25 million) goal is completely feasible.
By the end of March 2007, VIB Bank’s total assets had reportedly reached VND18 trillion (US$1.12 billion), increasing by 104%, and pre-tax profit reached VND64 billion (US$4 million), increasing by 70%.
Techcombank has not declared its business results for the first quarter of 2007, but the two-month business performance was very satisfactory. The bank had the total assets of VND20 trillion (US$1.25 billion) by the end of February, and the accumulative profit of VND46.5 billion (US$2.90 million).
Analysts said that the turnover from securities trading could make a big contribution to the bank’s satisfactory business performance.
Dragon Capital, in its recent analysis about ACB, said that in 2006, the non-banking operations of the bank, mostly from its securities company (which is the third-biggest securities company in Vietnam), made only a modest contribution to the total profit of the bank. However, the contribution of securities trading activities is expected to be very considerable in the future.
The marketing director of a joint stock bank also said that the operation of the securities company, to which the bank makes capital contributions, proves to be very encouraging, and can bring high profit. However, the director has declined to discuss the turnover from the bank’s securities company, reasoning that the profit from the company was not counted towards the bank’s general profit.
Meanwhile, Le Dac Son, Director General of VP Bank, said that the bank’s profit had come from traditional services (lending, banking retail), as VP Bank’s securities company has just been operating for three months.
When asked about the prospectus in the coming months, leaders of all joint stock banks prove to be very optimistic. They said that the first quarter is always the most difficult period in a year, as it is always difficult to mobilise capital after the traditional Tet. However, the business results proved to be encouraging in the first quarter, and ‘well begun is half done’.
One year ago, when joint stock banks all set the target of multi-fold increases in gross profit for 2007, they were described as ‘too ambitious’. However, the smooth operation of the banks in the first quarter has shown that the targets are within reach.
By March 31, 2007, the total assets of ACB had reached VND50,326 billion (US$3,145.37 million), double the same period last year. The bank reported the pre-tax profit of VND18,246 billion (US$1,140.37 million), nearly a 3.5-fold increase.
The profit Asia Commercial Bank (ACB) gained in the first three months of the year accounted for 25.5% of its 2007 plan – VND1,500 billion (US$93.75 million).
Meanwhile, Sacombank reported the accumulative pre-tax profit of more than VND302 billion (US$18.87 million), an increase of 188% over the same period last year.
Eximbank has also reported encouraging business performances in the first quarter of the year with the pre-tax profit of VND177 billion (US$11.06 million), or 2.6-fold higher than the same period last year. The bank’s bad debt ratio stayed at a very low level, 0.85%, much lower than the safety line at 2% given by the central bank.
In 2007, the bank plans to have the total assets of more than VND31 trillion (US$1.93 billion), chartered capital of VND2,800 billion (US$175 million) and pre-tax profit at more than VND600 billion (US$37.5 million).
Besides the three top profit-making banks, Techcombank, VP Bank, VIB Bank, and Military Bank have also been named as big profitable banks.
VP Bank reported the first quarter profit of VND72 billion (US$4.5 million), double that of the same period last year. Though the bank’s shareholders’ meeting approved a plan to get the profit of VND350 billion (US$21.87 million), the director board still thinks that the VND400 billion (US$25 million) goal is completely feasible.
By the end of March 2007, VIB Bank’s total assets had reportedly reached VND18 trillion (US$1.12 billion), increasing by 104%, and pre-tax profit reached VND64 billion (US$4 million), increasing by 70%.
Techcombank has not declared its business results for the first quarter of 2007, but the two-month business performance was very satisfactory. The bank had the total assets of VND20 trillion (US$1.25 billion) by the end of February, and the accumulative profit of VND46.5 billion (US$2.90 million).
Analysts said that the turnover from securities trading could make a big contribution to the bank’s satisfactory business performance.
Dragon Capital, in its recent analysis about ACB, said that in 2006, the non-banking operations of the bank, mostly from its securities company (which is the third-biggest securities company in Vietnam), made only a modest contribution to the total profit of the bank. However, the contribution of securities trading activities is expected to be very considerable in the future.
The marketing director of a joint stock bank also said that the operation of the securities company, to which the bank makes capital contributions, proves to be very encouraging, and can bring high profit. However, the director has declined to discuss the turnover from the bank’s securities company, reasoning that the profit from the company was not counted towards the bank’s general profit.
Meanwhile, Le Dac Son, Director General of VP Bank, said that the bank’s profit had come from traditional services (lending, banking retail), as VP Bank’s securities company has just been operating for three months.
When asked about the prospectus in the coming months, leaders of all joint stock banks prove to be very optimistic. They said that the first quarter is always the most difficult period in a year, as it is always difficult to mobilise capital after the traditional Tet. However, the business results proved to be encouraging in the first quarter, and ‘well begun is half done’.
Transport capacity hinders fertiliser production
The lack of input materials caused by limited transport capability has caused big difficulties for local fertiliser producers.
The Southern Fertiliser Company said that it had to transport apatite ore from Lao Cai in the north to its plant in Long Thanh district in the southern province of Dong nai. The company first carried apatite ore from Lao Cai to Hai Phong port by train, and then shipped ore from Hai Phong to Long Thanh district by sea.
However, as the transportation fees of both means of transport have increased considerably in the last time, and the transportation capability is limited, the company cannot get enough materials to feed the production line.
Bui Quang Lanh, Director of Van Dien Phosphate Fertiliser Company, said that since January 1, 2007, input material transportation fees had increased by VND30,000/tonne, while the fees for carrying finished products to consumption points had also increased by VND40,000/tonne. At the same time, the prices of many kinds of input material have increased sharply, making the production cost of fertiliser much higher.
Despite the higher transportation fees, companies are still facing difficulties in transporting input materials to their plants or carrying finished products to consumption places due to bad transport capability.
Urea, Kali, SA, DAP, the main input materials for NPK fertiliser, which account for 70-90% of NPK content, all have seen sharp price increases. The price of urea, for example, has risen from VND4,400.kg to VND5,000/kg, kali from VND3,600/kg to VND4,000/kg. It is estimated that the production cost of one tonne of NPK has increased by VND150-300,000.
The Lam Thao Superphosphate and Chemicals Company said that the company put out 650,000 tonnes a year, a half of which must be made right at this time to be provided to farmers for the summer-autumn crop. However, the company is facing big difficulties due to the dramatic increases in prices.
Mr Lanh from Van Dien Phosphate Fertiliser Company said that the company had raised its selling price by VND30,000/tonne for phosphate fertiliser, and VND50-100,000/tonne for NPK, commencing April 1. However, the increases prove to be not enough to cover the input material price increases.
He said that since January 1, 2007, the production cost for one tonne of phosphate fertiliser had increased by VND110,000/tonne, and for NPK by VND150-300,000. However, the company did not raise the selling price in the first quarter of the year, thus ‘giving’ farmers VND8-10bil.
Mr Lanh has announced that phosphate fertiliser will see the price increase of VND30,000/tonne as of May 1, 2007, and another VND40,000/tonne as of June 1, 2007.
Source: VNE
The Southern Fertiliser Company said that it had to transport apatite ore from Lao Cai in the north to its plant in Long Thanh district in the southern province of Dong nai. The company first carried apatite ore from Lao Cai to Hai Phong port by train, and then shipped ore from Hai Phong to Long Thanh district by sea.
However, as the transportation fees of both means of transport have increased considerably in the last time, and the transportation capability is limited, the company cannot get enough materials to feed the production line.
Bui Quang Lanh, Director of Van Dien Phosphate Fertiliser Company, said that since January 1, 2007, input material transportation fees had increased by VND30,000/tonne, while the fees for carrying finished products to consumption points had also increased by VND40,000/tonne. At the same time, the prices of many kinds of input material have increased sharply, making the production cost of fertiliser much higher.
Despite the higher transportation fees, companies are still facing difficulties in transporting input materials to their plants or carrying finished products to consumption places due to bad transport capability.
Urea, Kali, SA, DAP, the main input materials for NPK fertiliser, which account for 70-90% of NPK content, all have seen sharp price increases. The price of urea, for example, has risen from VND4,400.kg to VND5,000/kg, kali from VND3,600/kg to VND4,000/kg. It is estimated that the production cost of one tonne of NPK has increased by VND150-300,000.
The Lam Thao Superphosphate and Chemicals Company said that the company put out 650,000 tonnes a year, a half of which must be made right at this time to be provided to farmers for the summer-autumn crop. However, the company is facing big difficulties due to the dramatic increases in prices.
Mr Lanh from Van Dien Phosphate Fertiliser Company said that the company had raised its selling price by VND30,000/tonne for phosphate fertiliser, and VND50-100,000/tonne for NPK, commencing April 1. However, the increases prove to be not enough to cover the input material price increases.
He said that since January 1, 2007, the production cost for one tonne of phosphate fertiliser had increased by VND110,000/tonne, and for NPK by VND150-300,000. However, the company did not raise the selling price in the first quarter of the year, thus ‘giving’ farmers VND8-10bil.
Mr Lanh has announced that phosphate fertiliser will see the price increase of VND30,000/tonne as of May 1, 2007, and another VND40,000/tonne as of June 1, 2007.
Source: VNE
How will securities services develop?
The stock market has just begun taking shape in Vietnam in the past few years. However, the market scale and the demand for securities services are all expected to see sharp increases in the time to come.
Figures released by the Ministry of Finance show that the stock market has made big leaps in the recent past with the total market capitalisation at 22.7% of GDP by the end of 2006, or 20-fold higher than 2005.
The number of listing companies has risen from 41 in 2005 to 193 in 2006. Some 100,000 accounts for securities transactions were opened in December 2006 (including 1,870 accounts by foreign investors), three-fold higher than the end of 2005. It is estimated that the figure may see a 3- or 4-fold increase by 2010.
Regarding institutional investors, there have been 35 investment funds, including 23 foreign based ones and 12 domestic funds. Moreover, there are nearly 50 institutions which make authorised investments via securities companies.
Nguyen Van Chi, Deputy Director of the International Cooperation Department under the Ministry of Finance (MoF), said that the appearance of foreign institutions in the market would have good impact on the market’s development. However, there are latent high risks as the infrastructure system is not developed enough to meet the market demand. The rapid development of the stock market will also be a big challenge for the State Securities Commission and MoF to keep supervision over and control transactions.
Meanwhile, Do Ngoc Huynh and his collaborators, the policy consultancy team, have released the results of the survey, which showed that the demand for new services, like investment, finance, legal consultancy, and asset management will increase in the coming time.
The demand for these services will increase as the result of more listing companies and higher volume of securities to be issued in the market.
Under WTO commitments, foreign securities service providers will have the right to open representative offices and set up joint ventures with up to 49% of foreign ownership.
They will be able to set up 100% entities providing securities services five years after the admission time, and set up branches of foreign companies in Vietnam which provide services like asset management or financial information providing.
The number of securities companies has seen a considerable increase, from 14 at the end of 2005 to 55 by the end of 2006. These companies have the average chartered capital of VND77bil/company ($4.81mil), an increase of 26% over the end of 2005.
There are 18 operational investment fund management companies, 41 institutions which get involved in securities depository activities, six depository banks, 8 independent auditing firms, which have been authorised to provide auditing services to the companies, operating in the stock market.
Up to now, the participation of the foreign side on the stock market has just been seen in individual or institutional investors rather than securities service providers, excluding several fund management companies.
Though foreign institutions and individuals have just shown limited involvement in Vietnam’s stock market, it is expected that the involvement will become deeper in the time to come, when the market further develops. Therefore, domestic securities service providers will have to face fierce competition with foreign rivals.
Experts said that it is unavoidable to see more and more service providers in the market, including foreign ones. The participation of foreign service providers should be seen as a good thing, which will create favourable conditions for technology transfer and drive the market to a high level of professionalism.
Source: VNE
Figures released by the Ministry of Finance show that the stock market has made big leaps in the recent past with the total market capitalisation at 22.7% of GDP by the end of 2006, or 20-fold higher than 2005.
The number of listing companies has risen from 41 in 2005 to 193 in 2006. Some 100,000 accounts for securities transactions were opened in December 2006 (including 1,870 accounts by foreign investors), three-fold higher than the end of 2005. It is estimated that the figure may see a 3- or 4-fold increase by 2010.
Regarding institutional investors, there have been 35 investment funds, including 23 foreign based ones and 12 domestic funds. Moreover, there are nearly 50 institutions which make authorised investments via securities companies.
Nguyen Van Chi, Deputy Director of the International Cooperation Department under the Ministry of Finance (MoF), said that the appearance of foreign institutions in the market would have good impact on the market’s development. However, there are latent high risks as the infrastructure system is not developed enough to meet the market demand. The rapid development of the stock market will also be a big challenge for the State Securities Commission and MoF to keep supervision over and control transactions.
Meanwhile, Do Ngoc Huynh and his collaborators, the policy consultancy team, have released the results of the survey, which showed that the demand for new services, like investment, finance, legal consultancy, and asset management will increase in the coming time.
The demand for these services will increase as the result of more listing companies and higher volume of securities to be issued in the market.
Under WTO commitments, foreign securities service providers will have the right to open representative offices and set up joint ventures with up to 49% of foreign ownership.
They will be able to set up 100% entities providing securities services five years after the admission time, and set up branches of foreign companies in Vietnam which provide services like asset management or financial information providing.
The number of securities companies has seen a considerable increase, from 14 at the end of 2005 to 55 by the end of 2006. These companies have the average chartered capital of VND77bil/company ($4.81mil), an increase of 26% over the end of 2005.
There are 18 operational investment fund management companies, 41 institutions which get involved in securities depository activities, six depository banks, 8 independent auditing firms, which have been authorised to provide auditing services to the companies, operating in the stock market.
Up to now, the participation of the foreign side on the stock market has just been seen in individual or institutional investors rather than securities service providers, excluding several fund management companies.
Though foreign institutions and individuals have just shown limited involvement in Vietnam’s stock market, it is expected that the involvement will become deeper in the time to come, when the market further develops. Therefore, domestic securities service providers will have to face fierce competition with foreign rivals.
Experts said that it is unavoidable to see more and more service providers in the market, including foreign ones. The participation of foreign service providers should be seen as a good thing, which will create favourable conditions for technology transfer and drive the market to a high level of professionalism.
Source: VNE
Vietnam to become power importer by 2015
Richard Spencer, senior energy specialist under the World Bank in Vietnam, talked about the possible threats caused by the power shortage in Vietnam over the next few years.
One of the hottest topics nowadays, which is being discussed at all energy-related workshops, is the prolonged power shortage in Vietnam.
In fact, every country in the world experiences a period of power shortage in its process of economic development, and every country settles the problems in its own way. However, according to Mr Spencer, Vietnam is one of few nations in the world which sees a too rapid economic development and too sharp increase in power demand.
The World Bank has released a report which said that Vietnam would see a continued high economic growth rate in 2007, at 8.3%, and the figure is expected to reach 8.5% in the next year. With such a high economic growth rate, the demand for power will increase rapidly. The increase in power demand is estimated to reach 15-17% this year and 20% in 2008.
With such an increase in power demand, Vietnam will become a power import nation by 2015. This will be a big problem for policy makers in the next few years.
Mr Spencer said that the bad programming in power plant development was the main reason behind the power shortage. In Thailand, special attention has been paid to the programming of the power industry, while it is quite different in Vietnam, and it is understandable why electricity is lacking.
The suggestion Mr Spencer has made to settle the power shortage problem is that Vietnam should cooperate with regional countries in electricity grid development. The international grid will help Vietnam get the electricity volume it needs through agreements on purchasing power among the involved parties.
In order to do that, it would be necessary to develop infrastructure items, build transmission stations, linking the power regulatory centres of the regional nations. The stations would inform neighbours about power shortages when necessary, and electricity would be transferred from Laos to Vietnam and vice versa.
The building of such an international grid proves to be within reach and it should be kicked off by bilateral agreements on power purchasing and selling.
In the world, the signing of bilateral agreements and building up of common markets in several fields have been implemented. One typical example is the bilateral agreement signed between the US and Mexico.
However, Mr Spencer has warned that a series of problems will arise when national power grids connect to each other. Countries which connect their power markets have to use the same technology, have suitable operation plans, and share many other common principles. Meanwhile, they also have to think about solutions to possible conflicts, including disputes in payment method, power prices and others.
Source: VNE
One of the hottest topics nowadays, which is being discussed at all energy-related workshops, is the prolonged power shortage in Vietnam.
In fact, every country in the world experiences a period of power shortage in its process of economic development, and every country settles the problems in its own way. However, according to Mr Spencer, Vietnam is one of few nations in the world which sees a too rapid economic development and too sharp increase in power demand.
The World Bank has released a report which said that Vietnam would see a continued high economic growth rate in 2007, at 8.3%, and the figure is expected to reach 8.5% in the next year. With such a high economic growth rate, the demand for power will increase rapidly. The increase in power demand is estimated to reach 15-17% this year and 20% in 2008.
With such an increase in power demand, Vietnam will become a power import nation by 2015. This will be a big problem for policy makers in the next few years.
Mr Spencer said that the bad programming in power plant development was the main reason behind the power shortage. In Thailand, special attention has been paid to the programming of the power industry, while it is quite different in Vietnam, and it is understandable why electricity is lacking.
The suggestion Mr Spencer has made to settle the power shortage problem is that Vietnam should cooperate with regional countries in electricity grid development. The international grid will help Vietnam get the electricity volume it needs through agreements on purchasing power among the involved parties.
In order to do that, it would be necessary to develop infrastructure items, build transmission stations, linking the power regulatory centres of the regional nations. The stations would inform neighbours about power shortages when necessary, and electricity would be transferred from Laos to Vietnam and vice versa.
The building of such an international grid proves to be within reach and it should be kicked off by bilateral agreements on power purchasing and selling.
In the world, the signing of bilateral agreements and building up of common markets in several fields have been implemented. One typical example is the bilateral agreement signed between the US and Mexico.
However, Mr Spencer has warned that a series of problems will arise when national power grids connect to each other. Countries which connect their power markets have to use the same technology, have suitable operation plans, and share many other common principles. Meanwhile, they also have to think about solutions to possible conflicts, including disputes in payment method, power prices and others.
Source: VNE
Equitisation of Vietnamese state-owned enterprises to be accelerated
Vietnam's Finance Ministry plans to double the market capitalization of Vietnam's stock markets by 2010, a senior ministry official said Wednesday.
Pham Phan Dung, director of the ministry's department of banks and credit organizations, said the government was determined to speed up economic reforms to bring more state companies to the market in the next four years.
"By 2010, all of the major state companies, including large commercial banks, should list their shares on the stock markets, which will account for 50% of the GDP," Dung told Dow Jones Newswires.
Currently, the country's stock market in Ho Chi Minh City has 109 issues with a market capitalization of $15 billion, and the official over-the-counter market in Hanoi has 86 issues with market capitalization of US$5.9 billion.
Vietnam would also set up and operate a market for bonds and debt instruments by then, Dung noted. Vietnam has a small bond market now.
Dung said the government would only retain absolute control of companies involved in vital operations, such as national power distribution, large ports, mass transportation and television.
By the end of May, the Finance Ministry will decide which companies under its management fall under this vital-operations category, and from June the government will speed up the sales of the state's stakes in other companies, including Bao Viet Insurance Corp., Hanoi Beer Co. and Saigon Beer Co.
As part of Vietnam's commitments for entry into the World Trade Organization in early 2007, the country must gradually open its companies to foreign investors, he said.
Vietnamese law currently allows foreigners to own up to 49% of companies and up to 30% of banks, but these limits will be lifted based on the WTO commitments, he added, without giving a specific date.
So far the state has sold its stakes in more than 3,000 state-owned companies, but only a small number of them have listed shares on the stock markets, according to MOF's figures.
Source: Thanh Nien
Pham Phan Dung, director of the ministry's department of banks and credit organizations, said the government was determined to speed up economic reforms to bring more state companies to the market in the next four years.
"By 2010, all of the major state companies, including large commercial banks, should list their shares on the stock markets, which will account for 50% of the GDP," Dung told Dow Jones Newswires.
Currently, the country's stock market in Ho Chi Minh City has 109 issues with a market capitalization of $15 billion, and the official over-the-counter market in Hanoi has 86 issues with market capitalization of US$5.9 billion.
Vietnam would also set up and operate a market for bonds and debt instruments by then, Dung noted. Vietnam has a small bond market now.
Dung said the government would only retain absolute control of companies involved in vital operations, such as national power distribution, large ports, mass transportation and television.
By the end of May, the Finance Ministry will decide which companies under its management fall under this vital-operations category, and from June the government will speed up the sales of the state's stakes in other companies, including Bao Viet Insurance Corp., Hanoi Beer Co. and Saigon Beer Co.
As part of Vietnam's commitments for entry into the World Trade Organization in early 2007, the country must gradually open its companies to foreign investors, he said.
Vietnamese law currently allows foreigners to own up to 49% of companies and up to 30% of banks, but these limits will be lifted based on the WTO commitments, he added, without giving a specific date.
So far the state has sold its stakes in more than 3,000 state-owned companies, but only a small number of them have listed shares on the stock markets, according to MOF's figures.
Source: Thanh Nien
FPT wants to establish a bank
The bank and the investment fund management firm would have a chartered capital of VND150 billion (US$9.3 million) and VND36.3 billion ($2.25 million) respectively, the Ho Chi Minh City Securities Trading Center said in a statement.
FPT, whose full name is the Corporation for Financing and Promoting Technology, specialises in software development and outsourcing. It also runs retail chains for mobile handsets and computers.
The company, which has a market capitalisation of nearly $2 billion, has projected profit and sale growth at 40-50% in 2007 and 2008, thanks to new lines of business. They range from telephone services to cable television and education services.
On Wednesday, FPT shares closed up 0.8% at VND525,000 ($32.6) a share, but were still 21% lower than their year-high price of VND665,000.
Source: Thanh Nien
Wednesday, April 11, 2007
Firms discriminated on new share offers
Some publicly listed enterprises have violated the law by discriminating amongst shareholders in the process of issuing new shares, said Nguyen Dinh Cung, head of the Working Group on Enterprise Law Implementation under the Central Economic Management and Research Institute.
VIPCO (VIP), with chartered captial of VND421.2 billion (US$26.32 million), lists on the HCM City bourse. In its annual shareholder meeting last month, the company planned an additional share issue in order to raise its chartered capital to VND600 billion ($37.5 million).
Under its plan, VIPCO decided to issue 17,880,000 shares, of which Petrolimex, already holding a 51-per-cent interest, would buy 9,118,800 shares at an issue price of VND15,000 ($0.93) per share. Other current shareholders would be allowed to buy the remaining 8,761,200 shares at a ratio of 50:21 at a price over VND40,000 ($2.50) per share.
Before issuing additional shares, listed enterprises must comply with provisions in three legal documents, including the Law on Enterprises, the charter of each enterprise and administrative regulations applied to listed enterprises, noted Nguyen The Tho, head of the Issuance Management Board of the State Securities Commission.
Under these regulations, shareholders must be treated equally, and shareholders with the same classes of shares must enjoy the same rights and benefits.
Article 78 of Law on Enterprises provided that enterprises must issue common shares, Cung said. Preferred shares, paying dividends and carrying higher voting power, were only optional.
"It’s ridiculous to say that because founding shareholders have contributed more than current shareholders, they were priviledged to buy more or buy at lower prices," Cung said.
Cung accused VIPCO, along with Xuan Mai Concrete Co and Vitaco, with violating the law. He said that, in the case of VIPCO, shareholders had a right to raise their voices in spite of the fact that unlawful decisions were ratyfied in the shareholders meeting.
Regulations governing listed companies entitle shareholders to protect their interests under the law. Resolutions adopted by shareholders that violate the basic interests or rights of shareholders can be deemed invalid. If they cause losses to the company, the management board and executives of the company can bear personal liability.
VIPCO executives could not be reached for comment.
Bui Nguyen Hoan, a State Securities Commission representative in HCM City, said that discrimination amid shareholders was absolutely wrong. Shareholders must have the same rights, interests and duties, he said. He highlighted that there were some companies which rewarded major shareholders but not minor ones, an unlawful action.
Bui Quang Nghiem, a lawyer and deputy chairman of the HCM City Lawyers Association, said that a decision on how many shares enterprises could issue to strategic shareholders and to other shareholders depended on the enterprise. However, all shareholders must have rights to buy newly issued shares in the same ratio, based on the volume of shares they already held.
In the case of Xuan Mai Concrete Joint Stock Co, with registered capital of VND60 billion ($3.75 million), the company plans to issue an additional two million shares with a face value of VND20,000 ($1.25) to exisiting shareholders at different ratios.
Founding shareholders would allowed to buy shares at a ratio of 1:1 to existing shares, while the ratio would be 2:1 for current shareholders.
Xuan Mai general director Pham Hoang Huy explained that he also reviewed the article in the Law on Enterprises but chose the different ratios to guarantee the interests of shareholders, the State, staff and the company.
The interests of minor shareholders were being ignored, said Le Dang Doanh, senior economic, who also warned Viet Nam ranked 107 on the Bank’s list of countries protecting the interests of shareholders.
Source: VNS
VIPCO (VIP), with chartered captial of VND421.2 billion (US$26.32 million), lists on the HCM City bourse. In its annual shareholder meeting last month, the company planned an additional share issue in order to raise its chartered capital to VND600 billion ($37.5 million).
Under its plan, VIPCO decided to issue 17,880,000 shares, of which Petrolimex, already holding a 51-per-cent interest, would buy 9,118,800 shares at an issue price of VND15,000 ($0.93) per share. Other current shareholders would be allowed to buy the remaining 8,761,200 shares at a ratio of 50:21 at a price over VND40,000 ($2.50) per share.
Before issuing additional shares, listed enterprises must comply with provisions in three legal documents, including the Law on Enterprises, the charter of each enterprise and administrative regulations applied to listed enterprises, noted Nguyen The Tho, head of the Issuance Management Board of the State Securities Commission.
Under these regulations, shareholders must be treated equally, and shareholders with the same classes of shares must enjoy the same rights and benefits.
Article 78 of Law on Enterprises provided that enterprises must issue common shares, Cung said. Preferred shares, paying dividends and carrying higher voting power, were only optional.
"It’s ridiculous to say that because founding shareholders have contributed more than current shareholders, they were priviledged to buy more or buy at lower prices," Cung said.
Cung accused VIPCO, along with Xuan Mai Concrete Co and Vitaco, with violating the law. He said that, in the case of VIPCO, shareholders had a right to raise their voices in spite of the fact that unlawful decisions were ratyfied in the shareholders meeting.
Regulations governing listed companies entitle shareholders to protect their interests under the law. Resolutions adopted by shareholders that violate the basic interests or rights of shareholders can be deemed invalid. If they cause losses to the company, the management board and executives of the company can bear personal liability.
VIPCO executives could not be reached for comment.
Bui Nguyen Hoan, a State Securities Commission representative in HCM City, said that discrimination amid shareholders was absolutely wrong. Shareholders must have the same rights, interests and duties, he said. He highlighted that there were some companies which rewarded major shareholders but not minor ones, an unlawful action.
Bui Quang Nghiem, a lawyer and deputy chairman of the HCM City Lawyers Association, said that a decision on how many shares enterprises could issue to strategic shareholders and to other shareholders depended on the enterprise. However, all shareholders must have rights to buy newly issued shares in the same ratio, based on the volume of shares they already held.
In the case of Xuan Mai Concrete Joint Stock Co, with registered capital of VND60 billion ($3.75 million), the company plans to issue an additional two million shares with a face value of VND20,000 ($1.25) to exisiting shareholders at different ratios.
Founding shareholders would allowed to buy shares at a ratio of 1:1 to existing shares, while the ratio would be 2:1 for current shareholders.
Xuan Mai general director Pham Hoang Huy explained that he also reviewed the article in the Law on Enterprises but chose the different ratios to guarantee the interests of shareholders, the State, staff and the company.
The interests of minor shareholders were being ignored, said Le Dang Doanh, senior economic, who also warned Viet Nam ranked 107 on the Bank’s list of countries protecting the interests of shareholders.
Source: VNS
Tuesday, April 10, 2007
VN-Index slightly weaker, HaSTC-Index up
Over 6.14 million shares, valued at more than 692.55 billion VND, changed hands in the morning session at the Ho Chi Minh City Securities Trading Centre, 29 shares increased, 48 dropped and 32 others remained unchanged.
However, the capital's HaSTC-Index fared a little better, gaining 4.23 points to end trading at 405.17 points.
A total of 1.21 million stocks, worth more than 176.6 billion VND, were traded, with 44 stocks registering a price decline, 32 went on the rise and a further 10 leveled off at the Ha Noi Securities Trading Centre.
Although over half of traded stocks in the centre experienced losses, the HaSTC-Index still rose thanks to a sharp gains by blue chippers, such as SDA and ACB.
Several months ago, when the stock market was described as overheated, even shares of listed companies who were seen to be performing poorly in their business operations were recording surging share gains.
However in recent sessions, traded stock turnover has remained comparatively small, as investors have become more bearish with their decisions. Market experts have pointed to the say the securities market adjusting itself, as the dividend payment period has finished and the State Securities Commission and the State Bank of Viet Nam has tightened controls over the issuance of shares.
Source: VNA
However, the capital's HaSTC-Index fared a little better, gaining 4.23 points to end trading at 405.17 points.
A total of 1.21 million stocks, worth more than 176.6 billion VND, were traded, with 44 stocks registering a price decline, 32 went on the rise and a further 10 leveled off at the Ha Noi Securities Trading Centre.
Although over half of traded stocks in the centre experienced losses, the HaSTC-Index still rose thanks to a sharp gains by blue chippers, such as SDA and ACB.
Several months ago, when the stock market was described as overheated, even shares of listed companies who were seen to be performing poorly in their business operations were recording surging share gains.
However in recent sessions, traded stock turnover has remained comparatively small, as investors have become more bearish with their decisions. Market experts have pointed to the say the securities market adjusting itself, as the dividend payment period has finished and the State Securities Commission and the State Bank of Viet Nam has tightened controls over the issuance of shares.
Source: VNA
Bao Viet to sell 60 mio shares to public
The Viet Nam Insurance Corporation (Bao Viet) will sell nearly 60 million shares, equivalent to 8.74% of its chartered capital, to the public when it turns into a joint stock company.
The Ministry of Finance said the sale of shares would be conducted through auctions at the stock market.
Of the total offered shares, 13.6 million (2% of the chartered capital) will be sold to foreign investors; 3.4 million shares (0.5%) to domestic organisations; and 340,000 shares (0.05%) to domestic individual investors.
Source: VNA
The Ministry of Finance said the sale of shares would be conducted through auctions at the stock market.
Of the total offered shares, 13.6 million (2% of the chartered capital) will be sold to foreign investors; 3.4 million shares (0.5%) to domestic organisations; and 340,000 shares (0.05%) to domestic individual investors.
Source: VNA
Lacking auditors for boom
The stock market boom in 2006 has led to the serious shortage of auditors authorised to audit listing companies and institutions operating in the stock market.
At the end of March, BHP Auditing and Accountant Consultancy Services Company lost the right to audit securities issuance institutions, listing companies and securities trading institutions since the company does not have enough auditors as required by the State Securities Commission (SSC).
The other remaining 11 auditing firms, which have been authorised by SSC to audit the institutions operating in the stock market, are also facing the serious shortage of labour force.
The stock market boom in 2006 with the massive listing of joint stock companies and the massive establishment of securities companies all have made the labour force shortage in auditing firms more serious. Eleven authorised auditing firms will have to audit 195 listing companies and 55 operational securities firms. It is clear that securities firms do not have many choices in having their financial reports audited.
Under the current regulations, auditing firms which have been operating for three years and more, and have 10 auditors and more, are eligible to apply to SSC for the authorisation to audit listing companies.
In order to settle the current problem of lacking auditors, SSC has recently informed auditing firms that firms which can meet the stipulated requirements should send applications to SSC for prompt approval. Under the current regulations, the agency only considers applications every two years.
Le Lan Huong, a senior staff at Grant Thorton, a foreign owned auditing and financial consultancy service provider, said that the firm was going to submit an application for the SSC’s approval in April. The information proves to be good news for auditing firms.
However, Mrs Huong has acknowledged that lacking labour is one of the hottest problems now in auditing firms, stressing that the lack of auditors would influence the quality of auditing services.
She said that auditing firms now all complained that they lacked staff and they would employ all experienced candidates.
Dao Xuan Dung, Director of UHY, complained that the labour force in auditing firms had never witnessed such a serious shortage as nowadays. “Labour force is the biggest problem of auditing firms,” Mr Dung said.
UHY, for example, once had 10 auditors who had practising licences, but two of them have left for other companies.
Hoang Duc Hung, Director of Enterprise Consultancy and Auditing Division under Ernst & Young Vietnam, said that the staff who had quit their jobs were mainly female staff who had 3-4 years of experience and practising licenses.
Several years ago, many employees left auditing firms to work for banks, while they now are leaving both auditing firms and banks to work for securities companies, a suitable decision as the stock market is developing strongly. Ernst & Young Vietnam, for example, lost 10 auditors in 2006.
Securities trading companies and investment funds are now offering high wages in a bid to attract more experts. High salary levels (offered salaries may be double the levels the staff receive from their current companies) and the right to buy shares at preferential prices prove to be very attractive in the eyes of auditors.
In securities trading companies, the salary level is not less than VND20mil a month for the post of manager. In addition, managers may have the right to buy VND500mil-1bil worth of shares at face value.
Mr. Hung said that Ernst & Young had to apply a new policy in order to attract more employees. In 2006, the total salaries paid to its staff increased by 20%, while more training courses were provided and office facilities were upgraded.
The ongoing crisis of financial experts in Vietnam has reminded Rhys Alan Johnson, training expert of ACCA, of the situation of Eastern European countries and China in the 1990s. In order to settle the problem of staff shortage, the countries had to hire senior experts from the US and the UK. Now, the countries which once lacked staff are exporting their experts to the countries which once provided financial experts to them.
However, it will be more difficult for Vietnam to settle the current problem. Mr. Johnson said that ACCA (Association of Chartered Certified Accountants) is trying to design a mini training course, and the trainees of the course will get CAT (Certified Accounting Technician).
Source: VNN
At the end of March, BHP Auditing and Accountant Consultancy Services Company lost the right to audit securities issuance institutions, listing companies and securities trading institutions since the company does not have enough auditors as required by the State Securities Commission (SSC).
The other remaining 11 auditing firms, which have been authorised by SSC to audit the institutions operating in the stock market, are also facing the serious shortage of labour force.
The stock market boom in 2006 with the massive listing of joint stock companies and the massive establishment of securities companies all have made the labour force shortage in auditing firms more serious. Eleven authorised auditing firms will have to audit 195 listing companies and 55 operational securities firms. It is clear that securities firms do not have many choices in having their financial reports audited.
Under the current regulations, auditing firms which have been operating for three years and more, and have 10 auditors and more, are eligible to apply to SSC for the authorisation to audit listing companies.
In order to settle the current problem of lacking auditors, SSC has recently informed auditing firms that firms which can meet the stipulated requirements should send applications to SSC for prompt approval. Under the current regulations, the agency only considers applications every two years.
Le Lan Huong, a senior staff at Grant Thorton, a foreign owned auditing and financial consultancy service provider, said that the firm was going to submit an application for the SSC’s approval in April. The information proves to be good news for auditing firms.
However, Mrs Huong has acknowledged that lacking labour is one of the hottest problems now in auditing firms, stressing that the lack of auditors would influence the quality of auditing services.
She said that auditing firms now all complained that they lacked staff and they would employ all experienced candidates.
Dao Xuan Dung, Director of UHY, complained that the labour force in auditing firms had never witnessed such a serious shortage as nowadays. “Labour force is the biggest problem of auditing firms,” Mr Dung said.
UHY, for example, once had 10 auditors who had practising licences, but two of them have left for other companies.
Hoang Duc Hung, Director of Enterprise Consultancy and Auditing Division under Ernst & Young Vietnam, said that the staff who had quit their jobs were mainly female staff who had 3-4 years of experience and practising licenses.
Several years ago, many employees left auditing firms to work for banks, while they now are leaving both auditing firms and banks to work for securities companies, a suitable decision as the stock market is developing strongly. Ernst & Young Vietnam, for example, lost 10 auditors in 2006.
Securities trading companies and investment funds are now offering high wages in a bid to attract more experts. High salary levels (offered salaries may be double the levels the staff receive from their current companies) and the right to buy shares at preferential prices prove to be very attractive in the eyes of auditors.
In securities trading companies, the salary level is not less than VND20mil a month for the post of manager. In addition, managers may have the right to buy VND500mil-1bil worth of shares at face value.
Mr. Hung said that Ernst & Young had to apply a new policy in order to attract more employees. In 2006, the total salaries paid to its staff increased by 20%, while more training courses were provided and office facilities were upgraded.
The ongoing crisis of financial experts in Vietnam has reminded Rhys Alan Johnson, training expert of ACCA, of the situation of Eastern European countries and China in the 1990s. In order to settle the problem of staff shortage, the countries had to hire senior experts from the US and the UK. Now, the countries which once lacked staff are exporting their experts to the countries which once provided financial experts to them.
However, it will be more difficult for Vietnam to settle the current problem. Mr. Johnson said that ACCA (Association of Chartered Certified Accountants) is trying to design a mini training course, and the trainees of the course will get CAT (Certified Accounting Technician).
Source: VNN
Power consultant sells shares in IPO
A small consulting firm in Vietnam's fast-expanding energy sector has raised 157.92 billion dong ($9.8 million) by selling 22% of its shares, the Hanoi stock market said on Monday.
Power Engineering Consultant Company 1 (PECC1) sold all 2,202,700 shares on offer to domestic investors at an auction on Friday, the stock exchange said in a statement which did not disclose the identities of the buyers.
The shares were sold at an average price of 71,695 dong ($4.5), above the 11,000-dong initial price set for bidding.
The Hanoi-based company, of which state utility group Vietnam Electricity owns 51%, did not say when it planned to list the shares or how the proceeds would be invested.
Employees hold the remaining 26.97% of PECC1, which provides plant designs and development plans for the energy sector. It has been working on many power projects, including the construction of the $2.3 billion Son La hydro power plant.
Investors have shown increasing interest in shares of Vietnamese energy sector companies as the economy is expected to expand more than 8% this year.
Interest has surged especially in recent months as the country faced routine power outages due to water shortages, brokers said. Hydro power generates 40% of Vietnam's electricity.
In the PECC1 share sale, investors bid to buy 14.8 million shares, far above the 2.2 million on offer.
Source: Reuters
Power Engineering Consultant Company 1 (PECC1) sold all 2,202,700 shares on offer to domestic investors at an auction on Friday, the stock exchange said in a statement which did not disclose the identities of the buyers.
The shares were sold at an average price of 71,695 dong ($4.5), above the 11,000-dong initial price set for bidding.
The Hanoi-based company, of which state utility group Vietnam Electricity owns 51%, did not say when it planned to list the shares or how the proceeds would be invested.
Employees hold the remaining 26.97% of PECC1, which provides plant designs and development plans for the energy sector. It has been working on many power projects, including the construction of the $2.3 billion Son La hydro power plant.
Investors have shown increasing interest in shares of Vietnamese energy sector companies as the economy is expected to expand more than 8% this year.
Interest has surged especially in recent months as the country faced routine power outages due to water shortages, brokers said. Hydro power generates 40% of Vietnam's electricity.
In the PECC1 share sale, investors bid to buy 14.8 million shares, far above the 2.2 million on offer.
Source: Reuters
Bao Viet to sell stake to foreign investors
Vietnam's largest insurance firm Bao Viet will offer an 18% stake to foreign investors while the state will retain 65.34% of ownership, the official Vietnam News Agency reported on Monday.
The Vietnam Insurance group, known as Bao Viet, will auction more than 59.4 million shares or 8.74% of the firm's total to the public and 0.7% to employees and the remaining 7.22% to strategic investors, the report said.
The Finance Ministry said the partial privatisation for Bao Viet has been approved but it did not disclose a date for the share auction, the report said.
Company officials could not immediately be reached for comment.
The Vietnam News Agency said Bao Viet group will have a registered capital of 6.8 trillion dong ($422 million).
Communist-ruled Vietnam limits foreign ownership at 49% in a non-bank listed company.
Last year, the Vietnam National Re-Insurance Corporation (VNR) and Bao Minh Insurance Corp. (BMI) became the country's first insurance sector firms to have listed shares on the over-the-counter Hanoi Securities Trading Center
Bao Viet Securities (BVS), a subsidiary of Bao Viet, also listed on the Hanoi exchange last December.
The securities firm is a new business of Bao Viet which has said it would diversify into banking, financial leasing, real estate and public health insurance.
Vietnam's insurance sector has grown rapidly in recent years in line with the economy, which is targeted to expand 8.5% this year after growth of more than 8% in 2005 and 2006.
Source: Reuters
The Vietnam Insurance group, known as Bao Viet, will auction more than 59.4 million shares or 8.74% of the firm's total to the public and 0.7% to employees and the remaining 7.22% to strategic investors, the report said.
The Finance Ministry said the partial privatisation for Bao Viet has been approved but it did not disclose a date for the share auction, the report said.
Company officials could not immediately be reached for comment.
The Vietnam News Agency said Bao Viet group will have a registered capital of 6.8 trillion dong ($422 million).
Communist-ruled Vietnam limits foreign ownership at 49% in a non-bank listed company.
Last year, the Vietnam National Re-Insurance Corporation (VNR) and Bao Minh Insurance Corp. (BMI) became the country's first insurance sector firms to have listed shares on the over-the-counter Hanoi Securities Trading Center
Bao Viet Securities (BVS), a subsidiary of Bao Viet, also listed on the Hanoi exchange last December.
The securities firm is a new business of Bao Viet which has said it would diversify into banking, financial leasing, real estate and public health insurance.
Vietnam's insurance sector has grown rapidly in recent years in line with the economy, which is targeted to expand 8.5% this year after growth of more than 8% in 2005 and 2006.
Source: Reuters
Tan Viet Securities joins HCMC Trading Center
The HCMC Securities Trading Center late last week welcomed its 39th securities company, Tan Viet Securities Incorporated (TVSI) with a chartered capital of VND55 billion.
TVSI offers brokerage, consulting and underwriting among other services related to the stock exchange.
It is expected to scale up its short term capital to VND128 billion by month’s end and to VND300 billion by the end of the year.
The company has won four financial consulting contracts with corporate customers.
Its institutional shareholders include the Saigon Commercial Joint Stock Bank and the information technology HiPT.
Source: Thanh Nien
TVSI offers brokerage, consulting and underwriting among other services related to the stock exchange.
It is expected to scale up its short term capital to VND128 billion by month’s end and to VND300 billion by the end of the year.
The company has won four financial consulting contracts with corporate customers.
Its institutional shareholders include the Saigon Commercial Joint Stock Bank and the information technology HiPT.
Source: Thanh Nien
Vietnamese stock markets recover slightly on Monday
Vietnamese shares opened up the week on a slight incline as both the Ho Chi Minh City and Hanoi indexes increased by just under 1%.
The Hanoi OTC (over-the-counter) market saw 1.4 million shares being traded for VND181 billion.
On Monday, the HCMC bourse saw a trading volume of 2.98 million shares worth VND381 billion (US$24 million), down by 26.1% and 25% respectively from the Friday.
It also recorded the lowest trading volume since early this year, according market analysts.
The market closed with the electronic board alight in red, with only 26 green gainers, while some 58 shares turned red and lost ground.
The gainer list was led by blue chips like STB and SJS, up VND2,000 to VND147,000 and VND356,000 respectively; FPT rising by VND 5,000 to VND515,000; and KDC gaining by VND6,000 to VND199,000.
Particularly, BMC soared by VND21,000 to close at VND500,000, becoming the first small stock to hit the VND500,000 benchmark per share besides the two heavyweights FPT and SJS.
STB continued to lead the market in both trading volume and turnover with 373,760 shares changing hands for VND55 billion.
The two mutual funds lost slightly with as PRUBF1 decreasing VND100 to close at VND14,700 and VFMVF1 dropped VND200 to VND35,600.
Foreign investors were net buyers with 433,870 shares worth VND63 billion, accounting for 15% of the total market, including blue chips like FPT, KDC and PPC among others.
Pham Quyet Thang, head of Vietcombank Securities Company’s trading section, said trading demand among domestic investors remained heavy despite the downward trend of the market.
He added that many investors opened up the week at the Vietcombank trading floor optimistic of a quick recovery.
According to Nguyen Duy Hung, chairman of Saigon Securities Inc., the number of new investors to open securities accounts had declined sharply, however, investors have yet to fold up their tents, withdraw money or close their accounts.
Source: Than Nien
The Hanoi OTC (over-the-counter) market saw 1.4 million shares being traded for VND181 billion.
On Monday, the HCMC bourse saw a trading volume of 2.98 million shares worth VND381 billion (US$24 million), down by 26.1% and 25% respectively from the Friday.
It also recorded the lowest trading volume since early this year, according market analysts.
The market closed with the electronic board alight in red, with only 26 green gainers, while some 58 shares turned red and lost ground.
The gainer list was led by blue chips like STB and SJS, up VND2,000 to VND147,000 and VND356,000 respectively; FPT rising by VND 5,000 to VND515,000; and KDC gaining by VND6,000 to VND199,000.
Particularly, BMC soared by VND21,000 to close at VND500,000, becoming the first small stock to hit the VND500,000 benchmark per share besides the two heavyweights FPT and SJS.
STB continued to lead the market in both trading volume and turnover with 373,760 shares changing hands for VND55 billion.
The two mutual funds lost slightly with as PRUBF1 decreasing VND100 to close at VND14,700 and VFMVF1 dropped VND200 to VND35,600.
Foreign investors were net buyers with 433,870 shares worth VND63 billion, accounting for 15% of the total market, including blue chips like FPT, KDC and PPC among others.
Pham Quyet Thang, head of Vietcombank Securities Company’s trading section, said trading demand among domestic investors remained heavy despite the downward trend of the market.
He added that many investors opened up the week at the Vietcombank trading floor optimistic of a quick recovery.
According to Nguyen Duy Hung, chairman of Saigon Securities Inc., the number of new investors to open securities accounts had declined sharply, however, investors have yet to fold up their tents, withdraw money or close their accounts.
Source: Than Nien
Monday, April 09, 2007
Financial Times sees Vietnam as significant Asian oil producer
The Financial Times says that Viet Nam is already an increasingly significant oil producer within Asia.
According to the newspaper, Viet Nam is in the midst of a great energy rush, as leading international energy companies flock to the country to prospect for and develop oil and natural gas off its long coastline.
“Along with its surging sales of shoes, garments, furniture, seafood, rice and other labour-intensive products to overseas markets, Vietnam in 2005 had net exports of 110,000 barrels per day of crude oil, mostly selling it to refiners in Japan, the Republic of Korea, and Singapore,” the newspaper wrote.
It said that prospects for the significant expansion of Viet Nam 's domestic energy production look promising, as big oil companies plan to bring new fields into production to meet both the country's own rapidly growing domestic demand for energy and further exploration.
The newspaper, however, warned that Viet Nam ’s oil industry “is facing a bottleneck on its potentially rapid growth,” namely a scarcity of qualified, experienced personnel to staff the rising number of new rigs.
Source: VNA
According to the newspaper, Viet Nam is in the midst of a great energy rush, as leading international energy companies flock to the country to prospect for and develop oil and natural gas off its long coastline.
“Along with its surging sales of shoes, garments, furniture, seafood, rice and other labour-intensive products to overseas markets, Vietnam in 2005 had net exports of 110,000 barrels per day of crude oil, mostly selling it to refiners in Japan, the Republic of Korea, and Singapore,” the newspaper wrote.
It said that prospects for the significant expansion of Viet Nam 's domestic energy production look promising, as big oil companies plan to bring new fields into production to meet both the country's own rapidly growing domestic demand for energy and further exploration.
The newspaper, however, warned that Viet Nam ’s oil industry “is facing a bottleneck on its potentially rapid growth,” namely a scarcity of qualified, experienced personnel to staff the rising number of new rigs.
Source: VNA
Joint-stock banks report huge profits
A number of joint-stock commercial banks in Ho Chi Minh City reported multi-fold increases in gross profits for the first quarter of this year.
The Asia Commercial Bank (ACB) registered 413 billion VND in pre-tax profits, a 3.75 fold increase year on year. Its deposits rose by 80% and gross assets are valued at over 50.3 trillion VND.
The Saigon Commercial Bank (SACOMBANK) reported a 302 billion VND in pre-tax profits, almost doubling the figure it made in the first quarter of last year. Its gross asset value reached 28.6 trillion VND.
The Viet Nam Export-Import Bank (EXIMBANK) recorded 177 billion VND in gross profits, representing a year-on-year increase of 160%.
The Saigon Commercial Joint-stock Company (SCB) also reported a two-fold increase in gross profits which stood at 65 billion VND.
Source: VNA
The Asia Commercial Bank (ACB) registered 413 billion VND in pre-tax profits, a 3.75 fold increase year on year. Its deposits rose by 80% and gross assets are valued at over 50.3 trillion VND.
The Saigon Commercial Bank (SACOMBANK) reported a 302 billion VND in pre-tax profits, almost doubling the figure it made in the first quarter of last year. Its gross asset value reached 28.6 trillion VND.
The Viet Nam Export-Import Bank (EXIMBANK) recorded 177 billion VND in gross profits, representing a year-on-year increase of 160%.
The Saigon Commercial Joint-stock Company (SCB) also reported a two-fold increase in gross profits which stood at 65 billion VND.
Source: VNA
Housing Development Bank to increase capital
The HCMC Housing Development Bank (HDB) has announced plans to scale up its chartered capital via share and bond sales. The bank aims to boost capital from VND500 billion to VND2 trillion this year.
The share issue will be launched into two phases.
In the first phase, HDB will issue nearly 170,000 shares at a face value of VND1 million each in next quarter to pay dividends.
The bank will also sell 315,000 shares at VND2 million each to existing shareholders and issue nearly 17,000 shares to staff members at preferential prices.
The bank aims to have chartered equity worth VND1 trillion when this issuing phase is closed in early July.
In the second phase planned for the year’s end, the bank’ board of directors will consider issuing shares or convertible bonds to big corporations or foreign banks who can help HDB develop technology, management and expand its network.
The bank aims to almost double its total assets to VND7.9 trillion and set VND167 billion in pre-tax profit this year.
HDB also plans to set up a securities offshoot, a fund manager, a real estate and a finance leasing firm.
Source: Thanh Nien
The share issue will be launched into two phases.
In the first phase, HDB will issue nearly 170,000 shares at a face value of VND1 million each in next quarter to pay dividends.
The bank will also sell 315,000 shares at VND2 million each to existing shareholders and issue nearly 17,000 shares to staff members at preferential prices.
The bank aims to have chartered equity worth VND1 trillion when this issuing phase is closed in early July.
In the second phase planned for the year’s end, the bank’ board of directors will consider issuing shares or convertible bonds to big corporations or foreign banks who can help HDB develop technology, management and expand its network.
The bank aims to almost double its total assets to VND7.9 trillion and set VND167 billion in pre-tax profit this year.
HDB also plans to set up a securities offshoot, a fund manager, a real estate and a finance leasing firm.
Source: Thanh Nien
HCMC stocks drop, recovery predicted
Vietnamese stocks rode the seesaw again Friday as the Ho Chi Minh City index dropped and the Hanoi index gained as hopes for a quick HCMC market recovery were fueled by positive forecasts by the World Bank.
HCMC’s VN-Index lost 15.06 points to close 1033.92 while the Hanoi’s HASTC-Index gained 5.66 points to close at 398.68. The Hanoi market saw trading volumes worth VND185 billion Friday.
The HCMC bourse wrapped up the week with 12 gainers and up to 82 losers. Around 5 million shares ware traded for VND530 billion (US$33 million), 4.9 percent down over the previous session.
Sacombank (STB) stocks lead the market in both trading volume and value with 662,690 shares being traded for VND96 billion, accounting for 18.92 percent of the total market.
Some major heavyweights continued their downhill roll over the weekend session, with prices for VNM (Vinamilk Corp), FPT (IT developer), and KDC (Kinh Do confectioner) dropping by VND3,000, VND5,000 and VND6,000 respectively.
Foreign investors bid for 597,710 shares while offering only 31,040 shares.
The two mutual funds lost as PRUBF1 decreased VND400 to close at VND14,800 and VFMVF1 dropped VND700 to finish up at VND35,800.
However, analysts forecast that the market might bounce back in the near future in line with the World Bank’s newly released semi-annual East Asia and Pacific Update.
WB figures estimated that capital sources pumped into the country securities market reached $24.4 billion to date from 500 million in late 2005.
Of the figure some $4 billion came from foreign sources.
The global lender forecast that the market would expand on the back of 20 state-run giant corporations scheduled to list on the exchange this year.
Source: Thanh Nien
Deregulation of petrol prices insignificant
Experts have argued that a Government decree issued Friday to lift state fixing of retail petrol prices in line with WTO commitments will not affect prices significantly.
A trade ministry expert said that though prices are now regulated by importers and not the government, no importers will collude to raise prices as the ministry monitors their import volumes, prices and profits.
The petrol enterprises have to regularly report figures to the ministry based on which authorities could prevent price hikes from adversely affecting customers. The ministry also has the influence to encourage firms to only lower prices when world prices drop, he added.
Another oil expert said the floating of prices will not initiate a price war to cut prices and win customers because all 11 oil importers are state-run and “they are not so silly as to intensely compete with on another”.
Of the 11, Petrolimex makes up 55% of market share. Another expert said Petrolimex is the “eldest brother” and other oil enterprises will simply base their prices on the giant firm.
Several large private petrol companies currently banned from importing the fuels are eagerly upgrading their facilities and scrambling to join the elite 11-strong group.
“We have storehouses, land, and everything. We are waiting for an import permit”, a private oil firm owner said.
Despite being one of Southeast Asia’s largest crude exporters, Vietnam which joined the WTO early this year, does not yet have its own refinery, and remains heavily dependent on petroleum product imports.
Last year’s oil subsidy bill was VND8-9 trillion (499 – 561 million US$).
Source: Thanh Nien
A trade ministry expert said that though prices are now regulated by importers and not the government, no importers will collude to raise prices as the ministry monitors their import volumes, prices and profits.
The petrol enterprises have to regularly report figures to the ministry based on which authorities could prevent price hikes from adversely affecting customers. The ministry also has the influence to encourage firms to only lower prices when world prices drop, he added.
Another oil expert said the floating of prices will not initiate a price war to cut prices and win customers because all 11 oil importers are state-run and “they are not so silly as to intensely compete with on another”.
Of the 11, Petrolimex makes up 55% of market share. Another expert said Petrolimex is the “eldest brother” and other oil enterprises will simply base their prices on the giant firm.
Several large private petrol companies currently banned from importing the fuels are eagerly upgrading their facilities and scrambling to join the elite 11-strong group.
“We have storehouses, land, and everything. We are waiting for an import permit”, a private oil firm owner said.
Despite being one of Southeast Asia’s largest crude exporters, Vietnam which joined the WTO early this year, does not yet have its own refinery, and remains heavily dependent on petroleum product imports.
Last year’s oil subsidy bill was VND8-9 trillion (499 – 561 million US$).
Source: Thanh Nien
Friday, April 06, 2007
Ninh Binh Thermal Power Company offers to public
A small Vietnamese power firm will auction more than 4 million shares to the public this month to raise at least $3.8 million, the over-the-counter Hanoi stock market said on Thursday.
Ninh Binh Thermal Power Company, a subsidiary of state utility Vietnam Electricity (EVN), would auction 4,088,095 shares, or 31.78% of the company, in an initial public offering on April 18, the market said in a statement.
The company, which operates a coal-fired power plant in Ninh Binh province, 90 km (55 miles) south of Hanoi, set a starting price for bids at 15,000 dong ($0.93) per share, which suggested the firm would be valued at nearly $12 million.
Ninh Binh, EVN's fourth subsidiary to launch an IPO this year, has yet to announce a listing date.
EVN would retain a 51% stake in the firm and employees would be able to buy the remaining 17.22%, the statement said.
Last year, the Ninh Binh plant produced 795 million kilowatt hours (kWh) of electricity, 13.6% above its average annual production but only 1.3% of Vietnam's total.
The emergence of more private businesses and a rise in disposable incomes have pushed electricity demand growth to around 15% in recent years, driving the communist government to plan 60 additional power plants by 2020.
The Ninh Binh power company said it would spend up to $17 million to upgrade its current plant and also planned a $402 million investment in a second plant to be operational by 2010.
Last month, Prime Minister Nguyen Tan Dung said the state would keep full ownership or the majority of shares in power plants with a capacity of 100 megawatts or more.
This week, the government approved the partial privatisation of 24 EVN subsidiaries in 2007 and five next year.
Investors have shown increasing interest in shares of Vietnamese energy sector companies as the economy is expected to expand more than 8% this year.
Source: Reuters
Ninh Binh Thermal Power Company, a subsidiary of state utility Vietnam Electricity (EVN), would auction 4,088,095 shares, or 31.78% of the company, in an initial public offering on April 18, the market said in a statement.
The company, which operates a coal-fired power plant in Ninh Binh province, 90 km (55 miles) south of Hanoi, set a starting price for bids at 15,000 dong ($0.93) per share, which suggested the firm would be valued at nearly $12 million.
Ninh Binh, EVN's fourth subsidiary to launch an IPO this year, has yet to announce a listing date.
EVN would retain a 51% stake in the firm and employees would be able to buy the remaining 17.22%, the statement said.
Last year, the Ninh Binh plant produced 795 million kilowatt hours (kWh) of electricity, 13.6% above its average annual production but only 1.3% of Vietnam's total.
The emergence of more private businesses and a rise in disposable incomes have pushed electricity demand growth to around 15% in recent years, driving the communist government to plan 60 additional power plants by 2020.
The Ninh Binh power company said it would spend up to $17 million to upgrade its current plant and also planned a $402 million investment in a second plant to be operational by 2010.
Last month, Prime Minister Nguyen Tan Dung said the state would keep full ownership or the majority of shares in power plants with a capacity of 100 megawatts or more.
This week, the government approved the partial privatisation of 24 EVN subsidiaries in 2007 and five next year.
Investors have shown increasing interest in shares of Vietnamese energy sector companies as the economy is expected to expand more than 8% this year.
Source: Reuters
Vietnam State Bank activities increased significantly last year
Vietnam central bank open market transactions jumped 21 percent to $7.7 billion in 2006, data showed on Thursday.
The central bank sold 87.4 trillion dong ($5.4 billion) worth of debt, representing 70.4 percent of total transactions, which was a significant rise from 950 billion dong in 2005.
"The transactions have been an effective instrument of the central bank especially when there has been a huge surplus of dong in commercial banks since last year," a dealer with a foreign bank branch in Ho Chi Minh City said.
As of March, the central bank raised trading days for open market transactions to four weekly from three earlier, excluding Monday, an official with the market said.
Source: Reuters
The central bank sold 87.4 trillion dong ($5.4 billion) worth of debt, representing 70.4 percent of total transactions, which was a significant rise from 950 billion dong in 2005
"The transactions have been an effective instrument of the central bank especially when there has been a huge surplus of dong in commercial banks since last year," a dealer with a foreign bank branch in Ho Chi Minh City said.
As of March, the central bank raised trading days for open market transactions to four weekly from three earlier, excluding Monday, an official with the market said.
Source: Reuters
Vietnam's Sacombank almost triples gross profit
Vietnam's sixth-largest lender, Saigon Thuong Tin Commercial Bank (STB), said on Friday its quarterly gross profit nearly tripled to 302 billion dong ($18.8 million), boosted by new deposit products and Internet banking.
Sacombank launched a flexible term deposit product that allows early withdrawal without penalty and e-banking services in the first quarter, spokesman Tran Thi Bao Ngoc said.
"These products have contributed to raising the number of accounts in our bank and added up to the overall results," Ngoc said by telephone from Ho Chi Minh City.
Total assets at the Ho Chi Minh City-based bank grew 21% from the end of 2006 to 30 trillion dong ($1.9 billion) as at March 31, he said.
The bank said it did not have a net profit figure available for the unaudited quarterly result.
Sacombank has set a target of more than doubling its gross profit this year to $74.6 million and increasing its annual dividend to 1,400 dong (9 U.S. cents) per share, paid in shares, from 1,200 dong last year.
Last July the bank became the first bank in Vietnam to list on the country's stock market the Ho Chi Minh City Securities Trading Center. The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 26.3% of Sacombank.
Source: Reuters
Sacombank launched a flexible term deposit product that allows early withdrawal without penalty and e-banking services in the first quarter, spokesman Tran Thi Bao Ngoc said.
"These products have contributed to raising the number of accounts in our bank and added up to the overall results," Ngoc said by telephone from Ho Chi Minh City.
Total assets at the Ho Chi Minh City-based bank grew 21% from the end of 2006 to 30 trillion dong ($1.9 billion) as at March 31, he said.
The bank said it did not have a net profit figure available for the unaudited quarterly result.
Sacombank has set a target of more than doubling its gross profit this year to $74.6 million and increasing its annual dividend to 1,400 dong (9 U.S. cents) per share, paid in shares, from 1,200 dong last year.
Last July the bank became the first bank in Vietnam to list on the country's stock market the Ho Chi Minh City Securities Trading Center. The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 26.3% of Sacombank.
Source: Reuters
Vietnam plans 1 billion in bonds, loans for refinery
Vietnam said it plans to raise $1 billion from foreign currency bonds and loans to help meet the $2.5 billion price tag for the country's first oil refinery.
The bonds would be issued in the domestic and overseas markets, the finance ministry said, adding it will conduct direct negotiations with foreign lenders for the loans.
"The capital raising process will depend on the implementation progress of the project," the finance ministry said in a report published on Friday on the government's Web site.
State-oil-monopoly Petrovietnam began building the Dung Quat refinery in the central province of Quang Ngai in 2005 after years of delays caused by fund shortages and design changes.
The refinery will have a production capacity of 130,000 barrels per day and its completion in 2009 will be a milestone for the country.
Vietnam produces around 350,000 barrels per day of crude oil but in the absence of any significant refining capacity currently imports almost all of its oil products.
The finance ministry said state-run Vietnam Bank for Development would manage the proceeds from the bond sales and loans.
In October 2005 Vietnam sold its debut eurobond worth $750 million, having received orders for more than $4.5 billion. Hanoi said the issue helped set a benchmark for the country's creditworthiness and similar issues by domestic firms.
Moody's sovereign rating for Vietnam is Ba3, Standard and Poor's is BB+ and Fitch's is BB.
Petrovietnam has said it plans to issue more than $500 million in overseas bonds next year to help fund a second oil refinery.
Source: Reuters
The bonds would be issued in the domestic and overseas markets, the finance ministry said, adding it will conduct direct negotiations with foreign lenders for the loans.
"The capital raising process will depend on the implementation progress of the project," the finance ministry said in a report published on Friday on the government's Web site.
State-oil-monopoly Petrovietnam began building the Dung Quat refinery in the central province of Quang Ngai in 2005 after years of delays caused by fund shortages and design changes.
The refinery will have a production capacity of 130,000 barrels per day and its completion in 2009 will be a milestone for the country.
Vietnam produces around 350,000 barrels per day of crude oil but in the absence of any significant refining capacity currently imports almost all of its oil products.
The finance ministry said state-run Vietnam Bank for Development would manage the proceeds from the bond sales and loans.
In October 2005 Vietnam sold its debut eurobond worth $750 million, having received orders for more than $4.5 billion. Hanoi said the issue helped set a benchmark for the country's creditworthiness and similar issues by domestic firms.
Moody's sovereign rating for Vietnam is Ba3, Standard and Poor's is BB+ and Fitch's is BB.
Petrovietnam has said it plans to issue more than $500 million in overseas bonds next year to help fund a second oil refinery.
Source: Reuters
Vinamilk tries to enter beer market with SABMiller
Vinamilk is to team up with global brewer SABMiller as its looks to enter the country's dynamic beer market.
The news continues the trend of multinational brewers looking for local partners to better adapt to the demands of Vietnamese consumers, and a general growth in appetite for beer in the country.
Vinamilk, which already holds a strong distribution presence and knowledge of the local market through its dairy operations, will combine with SAB to help push the brewers leading brands like Peroni, Pilsner UrQuell and Miller into the country.
A new €33 million plant, which opened its door last week, is expected to allow the two groups to produce 100m liters of beer per year.
However, the venture faces strong competition from a number of other multinational brewers keen on cornering the Vietnamese market.
Just last month, rival Calrsberg acquired a 10 percent stake in Vietnam's second largest brewer, Habeco, which is a state-owned company.
Despite having been operating in the country since 1993, Carlsberg has recently stepped up its production capabilities as the market reaches fruition.
The expected average annual growth for beer production in Vietnam is around eight per cent, according to the company's estimates.
As a result, Carlsberg expects to see beer sales in the country to rise to from around 15 million to 28.1 million hectoliters by 2015, making the market the third largest in Asia.
This confidence was recently also matched by Asia Pacific Breweries (APB), which sees Vietnam as a vital player in the lucrative regional demand for beer.
APB heralded its increasing presence in the Indochina market as a key factor in their successful first quarter results, with recent purchases such as the acquisition of the Fosters brand in Vietnam helping it to a 26 per cent increase in volume.
Source: Thanh Nien
The news continues the trend of multinational brewers looking for local partners to better adapt to the demands of Vietnamese consumers, and a general growth in appetite for beer in the country.
Vinamilk, which already holds a strong distribution presence and knowledge of the local market through its dairy operations, will combine with SAB to help push the brewers leading brands like Peroni, Pilsner UrQuell and Miller into the country.
A new €33 million plant, which opened its door last week, is expected to allow the two groups to produce 100m liters of beer per year.
However, the venture faces strong competition from a number of other multinational brewers keen on cornering the Vietnamese market.
Just last month, rival Calrsberg acquired a 10 percent stake in Vietnam's second largest brewer, Habeco, which is a state-owned company.
Despite having been operating in the country since 1993, Carlsberg has recently stepped up its production capabilities as the market reaches fruition.
The expected average annual growth for beer production in Vietnam is around eight per cent, according to the company's estimates.
As a result, Carlsberg expects to see beer sales in the country to rise to from around 15 million to 28.1 million hectoliters by 2015, making the market the third largest in Asia.
This confidence was recently also matched by Asia Pacific Breweries (APB), which sees Vietnam as a vital player in the lucrative regional demand for beer.
APB heralded its increasing presence in the Indochina market as a key factor in their successful first quarter results, with recent purchases such as the acquisition of the Fosters brand in Vietnam helping it to a 26 per cent increase in volume.
Source: Thanh Nien
Thursday, April 05, 2007
Incombank wants to sell larger stake to outsiders
Vietnam state-run Incombank is seeking the government’sx approval for its plan to sell more than the allowable 30% of state holdings to outsiders as it goes public this year.
The commercial bank, known as Bank for Industry and Commerce, is one of the four state-run banks ordered by the government to undertake partial share sales in 2007.
It wants to sell 49% stakes to strategic partners, foreign financial institutions, private investors and senior staff.
However, the government allows it, as well as the three other banks, to sell a 30% to outsiders.
The state is supposed to retain control of the remaining 70% of the banks.
The Hanoi-based bank, which has registered capital of VND10 trillion (US$625 million) is also expected to list its shares on the country’s stock market later this year.
Incombank is now in the process of finding a foreign consultant to manage its initial public offering (IPO), planned for October.
The lender is expected to pick up an advisor by May.
A banking expert who chose to remain anonymous said seven international banks will take part in the tendering process - Lehman Brothers, Merrill Lynch, JP Morgan, UBS, Morgan Stanley, Macquarie, and Daiwa Securities.
The bank has been employing an international auditing company since earlier this year to prepare for the process.
With 137 branches and 500 transaction points nationwide, the bank reported its total assets rose by 19% to VND138.26 trillion ($8.6 billion) at the end of last year, when deposits reached VND124 trillion.
Incombank has funded several projects in the telecom, energy and construction sectors, such as the project to launch Vietnam's first telecoms satellite and four power plant projects.
Last year's gross profit totaled VND780 billion, while Incombank only targeted VND650 billion in pre-tax profit.
Its bad debt ratio reportedly stands at 1.38%, the lowest level among existing state owned banks.
Source: Thanh Nien equity mekong capital vinacapital
The commercial bank, known as Bank for Industry and Commerce, is one of the four state-run banks ordered by the government to undertake partial share sales in 2007.
It wants to sell 49% stakes to strategic partners, foreign financial institutions, private investors and senior staff.
However, the government allows it, as well as the three other banks, to sell a 30% to outsiders.
The state is supposed to retain control of the remaining 70% of the banks.
The Hanoi-based bank, which has registered capital of VND10 trillion (US$625 million) is also expected to list its shares on the country’s stock market later this year.
Incombank is now in the process of finding a foreign consultant to manage its initial public offering (IPO), planned for October.
The lender is expected to pick up an advisor by May.
A banking expert who chose to remain anonymous said seven international banks will take part in the tendering process - Lehman Brothers, Merrill Lynch, JP Morgan, UBS, Morgan Stanley, Macquarie, and Daiwa Securities.
The bank has been employing an international auditing company since earlier this year to prepare for the process.
With 137 branches and 500 transaction points nationwide, the bank reported its total assets rose by 19% to VND138.26 trillion ($8.6 billion) at the end of last year, when deposits reached VND124 trillion.
Incombank has funded several projects in the telecom, energy and construction sectors, such as the project to launch Vietnam's first telecoms satellite and four power plant projects.
Last year's gross profit totaled VND780 billion, while Incombank only targeted VND650 billion in pre-tax profit.
Its bad debt ratio reportedly stands at 1.38%, the lowest level among existing state owned banks.
Source: Thanh Nien equity mekong capital vinacapital
Bourse hounded by poor disclosure
Listed enterprises, in order to strengthen their stock prices and consumer confidence, are strongly advised to make information more accessible to the public and be subject to legal regulations on auditing and accountancy, said Vu Thi Kim Lien, vice chairwoman of State Securities Commission.
According to the Ha Noi Securities Trading Centre (HASTC), most listed companies have failed to meet the criteria of publicising information in a timely and standardised manner.
HASTC assesses enterprises' information dissemination based on three levels of information which are quarterly reports, specific indicators and information upon request.
HASTC figures show that, 20% of the 86 listed enterprises were late in submitting their financial report of last year's fourth quarter.
The quality of financial reports has also been called into question with incorrect figures common place.
As for publicising information that relates to specific events within a company that can determine share price, some enterprises have been found to not adhere to the regulations.
In some cases, the HASTC was only informed of enterprises' insider trading long after the fraud had occured, said a HASTC's representative.
Information on resolutions of the management board and shareholders meetings, which are required to be released within 24 hours, were also not provided within the allotted time frame.
A company worker responsible for supplying data in Viet Nam is often the chairman of the management board or general director, which causes difficulties for investors in verifying facts and figures.
"We have urged listed enterprises to invest more in transparency. We strongly suggest that the person in charge of information supply should be the chief accountant, a senior officer of someone that is not at the highest position, making it easier for investors and shareholders," said Nguyen Vu Quang Trung, HASTC's deputy director.
The HASTC has also urged those charged with the release of company information to the public to keep up with the needed regulations.
Source: VNA
According to the Ha Noi Securities Trading Centre (HASTC), most listed companies have failed to meet the criteria of publicising information in a timely and standardised manner.
HASTC assesses enterprises' information dissemination based on three levels of information which are quarterly reports, specific indicators and information upon request.
HASTC figures show that, 20% of the 86 listed enterprises were late in submitting their financial report of last year's fourth quarter.
The quality of financial reports has also been called into question with incorrect figures common place.
As for publicising information that relates to specific events within a company that can determine share price, some enterprises have been found to not adhere to the regulations.
In some cases, the HASTC was only informed of enterprises' insider trading long after the fraud had occured, said a HASTC's representative.
Information on resolutions of the management board and shareholders meetings, which are required to be released within 24 hours, were also not provided within the allotted time frame.
A company worker responsible for supplying data in Viet Nam is often the chairman of the management board or general director, which causes difficulties for investors in verifying facts and figures.
"We have urged listed enterprises to invest more in transparency. We strongly suggest that the person in charge of information supply should be the chief accountant, a senior officer of someone that is not at the highest position, making it easier for investors and shareholders," said Nguyen Vu Quang Trung, HASTC's deputy director.
The HASTC has also urged those charged with the release of company information to the public to keep up with the needed regulations.
Source: VNA
Ca Mau Power Plant comes on stream
Located in the southernmost province of Vietnam, Ca Mau Power Plant No 1 began operation Wednesday, helping the country overcome electricity shortages during the dry season.
The $360mil Ca Mau Power Plant 1 – one of two power plants within the US$1.2 billion Ca Mau Gas-Power-Fertilizer complex project, targets to provide 182 million kWh by this May.
When Ca Mau Power Plant 2 comes on stream in March of 2008, the two plants will combine to provide the national power grid with 10 billion kWh of power per year – or 18 percent of the country’s power production.
The 1,500 MW Ca Mau gas-power project invested by PetroVietnam includes gas pipe system from oil and gas blocks jointly exploited by Vietnam and Malaysia.
Scores of enterprises in the central region have complained that the repeated blackouts are cutting into production and profits.
The National Load Dispatch Center said power cuts in the central region would continue at regular intervals between 9 and 11 pm in residential areas.
Since last month’s heat wave began in the start of the summer season, scores of customers have also complained about the increasing frequency of power cuts in Ho Chi Minh City.
Source: Thanh Nien
The $360mil Ca Mau Power Plant 1 – one of two power plants within the US$1.2 billion Ca Mau Gas-Power-Fertilizer complex project, targets to provide 182 million kWh by this May.
When Ca Mau Power Plant 2 comes on stream in March of 2008, the two plants will combine to provide the national power grid with 10 billion kWh of power per year – or 18 percent of the country’s power production.
The 1,500 MW Ca Mau gas-power project invested by PetroVietnam includes gas pipe system from oil and gas blocks jointly exploited by Vietnam and Malaysia.
Scores of enterprises in the central region have complained that the repeated blackouts are cutting into production and profits.
The National Load Dispatch Center said power cuts in the central region would continue at regular intervals between 9 and 11 pm in residential areas.
Since last month’s heat wave began in the start of the summer season, scores of customers have also complained about the increasing frequency of power cuts in Ho Chi Minh City.
Source: Thanh Nien
Wednesday, April 04, 2007
Cooperation between Hanoian and Singaporanian Stock exchanges
The Ha Noi Securities Trading Centre (HASTC) and Singapore Exchange Limited (SGX) yesterday signed a memorandum of understanding (MoU) outlining co-operation between market regulators.
"This is the first MoU of its kind," said Nguyen Vu Quang Trung, HASTC deputy director, "marking a significant milestone in the co-operation between the HASTC with other foreign exchanges."
The signing ceremony was witnessed by Lim Hng Kiang, Singapore’s minister for trade and industry and Vu Van Ninh, Viet Nam’s finance minister.
Under the MoU, the exchanges will share regulatory and enforcement information aimed at enhancing market development.
The SGX will provide educational assistance through seminars for Vietnamese companies seeking to raise capital through the Singapore exchange.
The HASTC will guide companies through legal and regulatory issues for issuing shares abroad and co-operate with the SGX in supervising Vietnamese companies listed in Singapore.
"This co-operation is very timely, as financial reform in Viet Nam is underway and consumer and investor sentiment is very positive," said Lawrence Wong, executive vice president and head of listings at the SGX.
He added that the collaboration would give the SGX insights into Ha Noi’s financial and corporate landscape, while helping Vietnamese companies address capital needs.
On the sideline of the event, a seminar on holding dual listings in Viet Nam and Singapore was held. The seminar was the first phase of the Viet Nam–Singapore Listing Preparatory Programme jointly launched by the Monetary Authority of Singapore and Viet Nam’s Ministry of Finance.
The second phase of the programme, scheduled for September in Singapore, will put Vietnamese executives in direct contact with Singaporean strategic investors.
Source: VNS
Vietnamese insurers must increase capital
With an eye to strengthening competitiveness and better protect customers, state-owned insurance companies must now increase legal capital under a recent decree issued by the government.
Decree 46/2007/ND-CP issued March 27 specifies that legal capital for non-life insurers is now VND70 billion, up from VND30 billion previously and for a life insurer from VND140 billion to VND600 billion.
Meanwhile the capital for an insurance broker remains unchanged at VND4 billion.
Those businesses with a lower registered capital established before the new decree comes into effect April 10 must meet the new requirement within three years.
Sixty days after receiving an operating license, insurers have to deposit a sum equivalent to 2% (down from 5%) of their new legal capital at a commercial bank in Vietnam.
Insurance companies are also permitted to use reserve funds to invest in Vietnam directly or through authorized investment institutions, but cannot exceed 35% of reserve volume.
The Ministry of Finance will require insurers to send financial reports and statistics periodically, do an internal audit, and open up their books to the public.
The government has also issued Decree 45/2007-ND-CP requiring overseas insurance company that establishes a wholly-foreign insurance company in Vietnam or form a joint venture must receive a permit from relevant authorities in their home country to operate in Vietnam.
Foreign insurers must also have been operating profitably in their home country for three years, and legally for at least 10 years, with assets of at least US$2 billion. And the capital for an insurance broker remains unchanged at VND4 billion.
The Ministry of Finance will be responsible for licensing insurers, insurance brokerages and reinsures.
Within 30 days from obtaining permission, foreign-invested insurers must publicly disclose information for five consecutive days in national and local daily newspapers.
The published information must include the license number, address of headquarters, branches and rep-offices; type of insurance services and products offered.
Vietnam’s insurance premium revenues are targeted to reach $4 billion, or 4.2% of the country's gross domestic product (GDP) in 2010, up from VND15 trillion ($943.4 million), or 2.03% of the GDP in 2005.
A fast-growing economy, low insurance penetration, and sound legal framework have resulted in an influx of new players in the sector, said the Vietnam Insurance Association, adding competition for clients was bound to increase significantly.
According to a foreign insurance company in Vietnam, the new capital requirements are easy to manage for overseas businesses and should serve to better protect customers.
Source: Thanh Nien equity fund vietnam
Decree 46/2007/ND-CP issued March 27 specifies that legal capital for non-life insurers is now VND70 billion, up from VND30 billion previously and for a life insurer from VND140 billion to VND600 billion.
Meanwhile the capital for an insurance broker remains unchanged at VND4 billion.
Those businesses with a lower registered capital established before the new decree comes into effect April 10 must meet the new requirement within three years.
Sixty days after receiving an operating license, insurers have to deposit a sum equivalent to 2% (down from 5%) of their new legal capital at a commercial bank in Vietnam.
Insurance companies are also permitted to use reserve funds to invest in Vietnam directly or through authorized investment institutions, but cannot exceed 35% of reserve volume.
The Ministry of Finance will require insurers to send financial reports and statistics periodically, do an internal audit, and open up their books to the public.
The government has also issued Decree 45/2007-ND-CP requiring overseas insurance company that establishes a wholly-foreign insurance company in Vietnam or form a joint venture must receive a permit from relevant authorities in their home country to operate in Vietnam.
Foreign insurers must also have been operating profitably in their home country for three years, and legally for at least 10 years, with assets of at least US$2 billion. And the capital for an insurance broker remains unchanged at VND4 billion.
The Ministry of Finance will be responsible for licensing insurers, insurance brokerages and reinsures.
Within 30 days from obtaining permission, foreign-invested insurers must publicly disclose information for five consecutive days in national and local daily newspapers.
The published information must include the license number, address of headquarters, branches and rep-offices; type of insurance services and products offered.
Vietnam’s insurance premium revenues are targeted to reach $4 billion, or 4.2% of the country's gross domestic product (GDP) in 2010, up from VND15 trillion ($943.4 million), or 2.03% of the GDP in 2005.
A fast-growing economy, low insurance penetration, and sound legal framework have resulted in an influx of new players in the sector, said the Vietnam Insurance Association, adding competition for clients was bound to increase significantly.
According to a foreign insurance company in Vietnam, the new capital requirements are easy to manage for overseas businesses and should serve to better protect customers.
Source: Thanh Nien equity fund vietnam
EVN can go public next year
State-run monopoly Electricity of Vietnam, or EVN has obtained the central government’s approval for a recently-submitted plan to go public with all affiliates by the end of 2008, two years earlier than scheduled.
Under the decision Tuesday signed by Prime Minister Nguyen Tan Dung, EVN’s twenty-four subsidiaries are set to go public by the end of this year, focusing on major players like the Ba Ria and Uong Bi thermo-electricity plants, and the Da Nhim – Ham Thuan – Da My Hydropower Plant in the central highlands region.
The remaining six subsidiaries are scheduled to go public by the end of 2008, comprising the Nghi Son and Mong Duong thermopower plants in the central and the north; Telecom Co, Hanoi and Ho Chi Minh Electric companies, Electric Finance Co.
Dinh Quang Tri, deputy general director of EVN, said recent successful share auctions of select EVN subsidies on the local securities market resulted in a quickened pace for other shares sales involving the utility.
The rapid growth of the stock exchange is a positive signal for the power group’s move to mobilize funds by going public.
Twenty-one subsidiaries had already auctioned off shares, with total assets of over VND19 trillion (US$1.2 billion), EVN’s board reported.
Some 14 enterprises had moved to go public starting last year.
The unlisted-EVN also recently obtained the nod in-principle from the government to sell corporate bonds overseas next year, expecting to raise US$300 million to $500 million off the first phase.
The bonds would be sold on international markets to raise funds for giant power plants, Tri said, but refused to unveil a timeframe for the issue.
The Hanoi-based utility, which dominates the electricity industry in booming Vietnam was in the process of choosing a foreign consultant to audit and establish a credit rating for the company.
If the process runs as scheduled, EVN would be the country’s first issuer of overseas corporate bonds.
Along with preparation for the forthcoming issue of overseas corporate bonds, the group planned to issue VND8 trillion ($502 million) in bonds for Q2 this year for infrastructure development.
EVN had raised VND6 trillion ($377 million) from domestic bonds last year, saying the proceeds went to the construction of major power plants, such as the $2.3 billion Son La hydro power plant.
The group needs VND250 trillion ($15.6 billion) in the 2006-2010 period to complete all planned power plant projects.
Power demand in Vietnam's economy, the world's fastest growing one after China, is forecast to grow by up to 17% per year, prompting the government to plan 60 additional plants by 2020.
Source: Thanh Nien Equity fund
Under the decision Tuesday signed by Prime Minister Nguyen Tan Dung, EVN’s twenty-four subsidiaries are set to go public by the end of this year, focusing on major players like the Ba Ria and Uong Bi thermo-electricity plants, and the Da Nhim – Ham Thuan – Da My Hydropower Plant in the central highlands region.
The remaining six subsidiaries are scheduled to go public by the end of 2008, comprising the Nghi Son and Mong Duong thermopower plants in the central and the north; Telecom Co, Hanoi and Ho Chi Minh Electric companies, Electric Finance Co.
Dinh Quang Tri, deputy general director of EVN, said recent successful share auctions of select EVN subsidies on the local securities market resulted in a quickened pace for other shares sales involving the utility.
The rapid growth of the stock exchange is a positive signal for the power group’s move to mobilize funds by going public.
Twenty-one subsidiaries had already auctioned off shares, with total assets of over VND19 trillion (US$1.2 billion), EVN’s board reported.
Some 14 enterprises had moved to go public starting last year.
The unlisted-EVN also recently obtained the nod in-principle from the government to sell corporate bonds overseas next year, expecting to raise US$300 million to $500 million off the first phase.
The bonds would be sold on international markets to raise funds for giant power plants, Tri said, but refused to unveil a timeframe for the issue.
The Hanoi-based utility, which dominates the electricity industry in booming Vietnam was in the process of choosing a foreign consultant to audit and establish a credit rating for the company.
If the process runs as scheduled, EVN would be the country’s first issuer of overseas corporate bonds.
Along with preparation for the forthcoming issue of overseas corporate bonds, the group planned to issue VND8 trillion ($502 million) in bonds for Q2 this year for infrastructure development.
EVN had raised VND6 trillion ($377 million) from domestic bonds last year, saying the proceeds went to the construction of major power plants, such as the $2.3 billion Son La hydro power plant.
The group needs VND250 trillion ($15.6 billion) in the 2006-2010 period to complete all planned power plant projects.
Power demand in Vietnam's economy, the world's fastest growing one after China, is forecast to grow by up to 17% per year, prompting the government to plan 60 additional plants by 2020.
Source: Thanh Nien Equity fund
PPC raises 180mio US$ in shares sale
Pha Lai Thermal Power Company (PPC), Vietnam's third-largest listed company, has raised 2.9 trillion dong ($180 million) by selling nearly 41.7 million state shares to the public, the stock exchange said on Tuesday.
Pha Lai sold all 41,664,870 shares on offer to more than 1,460 investors at an auction on Monday at an average price of 69,710 dong ($4.30), the Ho Chi Minh City Securities Trading Center said in a statement.
Foreign investors bought 34% of the shares, the statement said, without giving any buyers' names.
The auction was part of a plan to sell more than 85 million shares to reduce the state utility Vietnam Electricity's (EVN) ownership in Pha Lai to 51% from 78.4%.
Pha Lai shares eased 3,500 dong to close at 74,500 dong ($4.6).
The money raised from Pha Lai share auction is much higher than $111 million the company had initially expected to raise, reflecting investor's interest in betting on the rapid expansion of Vietnam's energy sector.
Power demand is expected to grow 18% this year in Vietnam, which has set a target of 8.5% economic growth this year after 8.17% growth in 2006.
Source: Reuters
Pha Lai sold all 41,664,870 shares on offer to more than 1,460 investors at an auction on Monday at an average price of 69,710 dong ($4.30), the Ho Chi Minh City Securities Trading Center said in a statement.
Foreign investors bought 34% of the shares, the statement said, without giving any buyers' names.
The auction was part of a plan to sell more than 85 million shares to reduce the state utility Vietnam Electricity's (EVN) ownership in Pha Lai to 51% from 78.4%.
Pha Lai shares eased 3,500 dong to close at 74,500 dong ($4.6).
The money raised from Pha Lai share auction is much higher than $111 million the company had initially expected to raise, reflecting investor's interest in betting on the rapid expansion of Vietnam's energy sector.
Power demand is expected to grow 18% this year in Vietnam, which has set a target of 8.5% economic growth this year after 8.17% growth in 2006.
Source: Reuters
Danang Rubber Co. expects profit increase by 14% this year
Vietnamese tyre maker Danang Rubber Company (DRC, listed at VSE) said on Tuesday it expected a 14% rise in net profit this year to 63 billion dong ($3.9 million).
Revenues of the firm, which produces tyres for bicycles, motorbikes and cars, were expected to rise 15.5% from last year to 1.07 trillion dong ($66.5 million), company president Nguyen Quoc Tuan said in a statement.
The rises in revenues and profit would come from expanded production capacity and robust export demand, especially for made-to-order special tyres, Tuan said in the statement published by the Ho Chi Minh City Securities Center.
Exports were expected to rise 13% from last year to $5 million, the statement said.
On Tuesday, shares in the Danang-based firm fell 3.4% to 199,000 dong ($12.4).
Source: Reuters
Revenues of the firm, which produces tyres for bicycles, motorbikes and cars, were expected to rise 15.5% from last year to 1.07 trillion dong ($66.5 million), company president Nguyen Quoc Tuan said in a statement.
The rises in revenues and profit would come from expanded production capacity and robust export demand, especially for made-to-order special tyres, Tuan said in the statement published by the Ho Chi Minh City Securities Center.
Exports were expected to rise 13% from last year to $5 million, the statement said.
On Tuesday, shares in the Danang-based firm fell 3.4% to 199,000 dong ($12.4).
Source: Reuters
Security holes found on securities companies’ websites
Twelve of the existing 22 websites run by securities companies have been found as containing serious security holes, which can be targets for hackers.
In March 2007, Bach Khoa Internetwork Security Centre (Bkis) conducted the network security examination of several websites run by securities companies. The examination has shown that 12 of the operational websites, or 54% of total websites, contain serious security holes, through which hackers can take control over the websites at any time.
“Through the holes, hackers can access the websites and change the results of securities transactions, change the securities indexes and insert false information,” said Nguyen Tu Quang, Bkis Director.
Mr Quang has warned that if the holes weren’t fixed soon, hackers could take advantage of the holes to earn profit in the hot stock market, which would hurt investors.
Security experts have advised securities companies to pay appropriate attention to security factors when designing websites. Securities companies would be better to hire professional consultants and apply standards on information security management in accordance with ISO 27001.
Bkis’ representative said that the centre had sent documents to the 12 securities companies to give warnings about the security holes. Prior to that, Bkis also gave warnings about serious security holes on the websites run by eight domestic commercial banks.
In March, 104 websites in Vietnam were reportedly hacked, three of which were attacked by domestic hackers.
In the last month, 227 kinds of computer viruses reportedly appeared (11.35 new viruses a day). It is estimated that 2,668,000 computers in Vietnam are infected with viruses, especially W32.CTFMonF.Worm, which has spread out to 80,850 computers.
Source: VEN mekong capital equity vinacapital
In March 2007, Bach Khoa Internetwork Security Centre (Bkis) conducted the network security examination of several websites run by securities companies. The examination has shown that 12 of the operational websites, or 54% of total websites, contain serious security holes, through which hackers can take control over the websites at any time.
“Through the holes, hackers can access the websites and change the results of securities transactions, change the securities indexes and insert false information,” said Nguyen Tu Quang, Bkis Director.
Mr Quang has warned that if the holes weren’t fixed soon, hackers could take advantage of the holes to earn profit in the hot stock market, which would hurt investors.
Security experts have advised securities companies to pay appropriate attention to security factors when designing websites. Securities companies would be better to hire professional consultants and apply standards on information security management in accordance with ISO 27001.
Bkis’ representative said that the centre had sent documents to the 12 securities companies to give warnings about the security holes. Prior to that, Bkis also gave warnings about serious security holes on the websites run by eight domestic commercial banks.
In March, 104 websites in Vietnam were reportedly hacked, three of which were attacked by domestic hackers.
In the last month, 227 kinds of computer viruses reportedly appeared (11.35 new viruses a day). It is estimated that 2,668,000 computers in Vietnam are infected with viruses, especially W32.CTFMonF.Worm, which has spread out to 80,850 computers.
Source: VEN mekong capital equity vinacapital
Pinaco to build battery plant
The Dry Cell and Storage Battery Joint Stock Company (Pinaco) has said that it will invest 208 billion VND (13 million USD) in building a battery plant with an annual capacity of 900,000 kWh in southern Dong Nai province.
Pinaco - Viet Nam's largest dry cell and battery producer - had signed a deal with the Tan Tao Investment Joint Stock Company to lease more than 60,000 sq.m in the Nhon Trach Industrial Zone for the purpose.
The company expects that the plant, once fully operational in 2015, will help double its current battery output.
The business set a target of producing 315 million dry cells and nearly 1 million kWh of batteries this year
Source: VNA mekong capital equity vinacapital
Pinaco - Viet Nam's largest dry cell and battery producer - had signed a deal with the Tan Tao Investment Joint Stock Company to lease more than 60,000 sq.m in the Nhon Trach Industrial Zone for the purpose.
The company expects that the plant, once fully operational in 2015, will help double its current battery output.
The business set a target of producing 315 million dry cells and nearly 1 million kWh of batteries this year
Source: VNA mekong capital equity vinacapital
Nation’s consumer spending up 16% in 2006
Viet Nam tied Thailand for the fourth fastest growth rate in commercial consumption expenditure (CCE) in Asia Pacific last year, according to a recently released Visa International report.
Viet Nam’s total CCE was US$78.1 billion, up 16% compared to 2005.
Other top growers in the region include Indonesia at 25%, the Philippines at 18% and Sri Lanka at 17%.
The top Asia Pacific markets in terms of total value were Japan at 5.3 trillion US$, China at 4.2 trillion US$, and India and South Korea tied at 1.9 trillion US$ each.
Global CCE is measured using four key data elements: the amount of business-to-business purchases to acquire goods and services used in production; wholesale and retail purchases of final goods; certain business capital expenditures, and government spending on goods and services.
The CCE index provides the global payment industry a consistent way to monitor global expenditures. The index includes all commercial spending with the exception of payroll and other select expenditures.
Visa calculates global CCE in 2006 to be $66.7 trillion, which represents an increase of 8% over 2005. Asia Pacific represented $17.0 trillion of the total, a 7% year-on-year increase.
"The Asia Pacific region’s growth is understandable given the strength of the economies in our part of the world: China, India and South Korea experienced double-digit growth in 2006, which helped the region grow slightly faster than either Europe or the United States," said Michael Cannon, senior VP for commercial solutions in Asia-Pacific.
Source: VNS mekong capital equity vinacapital
Viet Nam’s total CCE was US$78.1 billion, up 16% compared to 2005.
Other top growers in the region include Indonesia at 25%, the Philippines at 18% and Sri Lanka at 17%.
The top Asia Pacific markets in terms of total value were Japan at 5.3 trillion US$, China at 4.2 trillion US$, and India and South Korea tied at 1.9 trillion US$ each.
Global CCE is measured using four key data elements: the amount of business-to-business purchases to acquire goods and services used in production; wholesale and retail purchases of final goods; certain business capital expenditures, and government spending on goods and services.
The CCE index provides the global payment industry a consistent way to monitor global expenditures. The index includes all commercial spending with the exception of payroll and other select expenditures.
Visa calculates global CCE in 2006 to be $66.7 trillion, which represents an increase of 8% over 2005. Asia Pacific represented $17.0 trillion of the total, a 7% year-on-year increase.
"The Asia Pacific region’s growth is understandable given the strength of the economies in our part of the world: China, India and South Korea experienced double-digit growth in 2006, which helped the region grow slightly faster than either Europe or the United States," said Michael Cannon, senior VP for commercial solutions in Asia-Pacific.
Source: VNS mekong capital equity vinacapital
Vietcombank and UBS sign strategic partnership
The Bank for Foreign Trade of Viet Nam (Vietcombank) has joined a strategic partnership with UBS Global Asset Management of Switzerland.
The agreement on cooperation in asset management, inked in Ha Noi on April 2, is expected to facilitate Vietnamese investment abroad.
UBS Global Asset Management President and CEO John Fraser said that Vietnamese individuals, businesses and organisations will be able to make investment in other markets through Vietcombank in various forms of bonds, shares or mandatory investment.
He also said Viet Nam is the 25th country that his company has chosen for cooperation in asset management, citing reasons for its choice as Viet Nam's improved role in the Asia-Pacific region as well as the country's more open and transparent policies.
Vietcombank will become an exclusive agent of UBS Asset Management in Viet Nam and will be assisted in personnel training and technology transfer related to asset management field.
An official from the Ministry of Planning and Investment (MPI) also said the cooperation will help boost services related to property management in Viet Nam. According to Phan Huu Thang, head of the MPI's Foreign Investment Department, with the surging of the economy and the stock market, a "golden chance" for the service will come in near future.
Source: VNA mekong capital equity vinacapital
The agreement on cooperation in asset management, inked in Ha Noi on April 2, is expected to facilitate Vietnamese investment abroad.
UBS Global Asset Management President and CEO John Fraser said that Vietnamese individuals, businesses and organisations will be able to make investment in other markets through Vietcombank in various forms of bonds, shares or mandatory investment.
He also said Viet Nam is the 25th country that his company has chosen for cooperation in asset management, citing reasons for its choice as Viet Nam's improved role in the Asia-Pacific region as well as the country's more open and transparent policies.
Vietcombank will become an exclusive agent of UBS Asset Management in Viet Nam and will be assisted in personnel training and technology transfer related to asset management field.
An official from the Ministry of Planning and Investment (MPI) also said the cooperation will help boost services related to property management in Viet Nam. According to Phan Huu Thang, head of the MPI's Foreign Investment Department, with the surging of the economy and the stock market, a "golden chance" for the service will come in near future.
Source: VNA mekong capital equity vinacapital
Government wishesrequests measures for stable stock market
Prime Minister Nguyen Tan Dung has asked relevant agencies to increase their management and take appropriate measures to ensure a stable and sustainable development for the Vietnamese stock market.
"State management agencies, especially the Ministry of Finance (MoF), the State Bank of Viet Nam (SBV) and the Viet Nam Securities Commission (SSC), are required to strengthen their management and take appropriate measures for every specific period of time in order to provide stability for the stock market and prevent speculation activities from affecting the national economy," the PM said on Mar. 10 while working with the SSC.
The government leader also stressed the need to increase the stock market's transparency and to thwart the overheated increase of share prices which, he said, will cause losses for investors and make adverse impacts on the national economy.
He asked the SSC to closely monitor the stock exchange to make sound analyses and assessments and learn regional countries' management and market rules to help minimise risks for the country's stock exchange.
The SSC is also required to quickly upgrade information technology facilities, boost training for its staff and provide training on securities for the public, he said.
There are 193 listed firms, 55 securities brokerage companies and 18 fund management businesses operating on the stock exchanges.
Source: VNA mekong capital equity vinacapital
"State management agencies, especially the Ministry of Finance (MoF), the State Bank of Viet Nam (SBV) and the Viet Nam Securities Commission (SSC), are required to strengthen their management and take appropriate measures for every specific period of time in order to provide stability for the stock market and prevent speculation activities from affecting the national economy," the PM said on Mar. 10 while working with the SSC.
The government leader also stressed the need to increase the stock market's transparency and to thwart the overheated increase of share prices which, he said, will cause losses for investors and make adverse impacts on the national economy.
He asked the SSC to closely monitor the stock exchange to make sound analyses and assessments and learn regional countries' management and market rules to help minimise risks for the country's stock exchange.
The SSC is also required to quickly upgrade information technology facilities, boost training for its staff and provide training on securities for the public, he said.
There are 193 listed firms, 55 securities brokerage companies and 18 fund management businesses operating on the stock exchanges.
Source: VNA mekong capital equity vinacapital
Inflation in April may exceed expectations
The increase in the consumer price index this month may exceed earlier predictions of 0.2 percent, according to the Ministry of Trade.
The ministry said that inflation in April would be affected by both domestic and international factors. Global oil prices have risen by 7.4%. The price of food and other basic commodities like rice, coffee, rubber, and steel were also following fuel's upward trend, placing strong pressures on the domestic market.
Severe weather conditions have affected agricultural production, and electricity shortages have affected the productivity and quality of some industries. These and other factors were likely to drive up the prices of some products on the domestic market including rice, food products and building materials.
Looking at CPI trends for the year, experts have expressed diverging opinions.
Some believe that inflation will be stabilised by the lower prices of many imported goods brought about by the nation's accession to the WTO.
Others say that CPI will continue to go up as raw materials' prices increase.
The emerging facts have tended to support the latter view. While the import duty on many imported goods, including cosmetics, garments, household goods and confectionery has been reduced 20-30%, the costs of energy and raw materials on the international market have been outstripping any savings to consumers.
In the first quarter of this year, inflation rose 3.02%, compared to 2.8% in the first quarter of last year.
Costs of housing and building materials in the first quarter increased 4.89%, while food costs rose 4.56%. Other categories of goods increased from 0.45% to 3.46%.
The first quarter saw the CPI in urban areas fall 0.51%while the CPI in rural areas rose 0.02 %.
Source: VNA mekong capital equity vinacapital
The ministry said that inflation in April would be affected by both domestic and international factors. Global oil prices have risen by 7.4%. The price of food and other basic commodities like rice, coffee, rubber, and steel were also following fuel's upward trend, placing strong pressures on the domestic market.
Severe weather conditions have affected agricultural production, and electricity shortages have affected the productivity and quality of some industries. These and other factors were likely to drive up the prices of some products on the domestic market including rice, food products and building materials.
Looking at CPI trends for the year, experts have expressed diverging opinions.
Some believe that inflation will be stabilised by the lower prices of many imported goods brought about by the nation's accession to the WTO.
Others say that CPI will continue to go up as raw materials' prices increase.
The emerging facts have tended to support the latter view. While the import duty on many imported goods, including cosmetics, garments, household goods and confectionery has been reduced 20-30%, the costs of energy and raw materials on the international market have been outstripping any savings to consumers.
In the first quarter of this year, inflation rose 3.02%, compared to 2.8% in the first quarter of last year.
Costs of housing and building materials in the first quarter increased 4.89%, while food costs rose 4.56%. Other categories of goods increased from 0.45% to 3.46%.
The first quarter saw the CPI in urban areas fall 0.51%while the CPI in rural areas rose 0.02 %.
Source: VNA mekong capital equity vinacapital
2006’s gloomy April will not repeat say experts
April has come and investors fear that 2006’s gloomy April will repeat itself with share prices down and market freezing. However, they have been assured that history will not repeat itself in this case.
Securities expert Huy Nam said that the periodic April fall would not happen again this year as the market was always timely intervened with to prevent sudden falls and increases.
In fact, share prices fell down considerably in past weeks, but the market has recovered slightly with the VN Index hovering at 1,000-1,100 points.
Big investors in the market, both domestic and foreign, do not always follow the crowd: they buy shares when others sell, and sell when others try to buy.
On April 2, 2007, for example, foreign investors bought 2.3mil shares, but just sold a little more than 1mil units. Blue chips all decreased in prices, but the traded volume of these shares items was still big.
Bui Viet, Director General of the EAB Securities Company, asserted that this April would not be as gloomy as last April. He said that the market would see slight fluctuations instead of sharp increases and decreases.
The statements made recently by State, National Assembly and Government leaders that the stock market must be kept in normal operation have made experts believe that there would be no big falls in the market. Recently, rumours about the tightening of foreign capital flow have been denied by state management authorities.
Dang Ngoc Thang, a securities analyst, said: “No one can know for sure what the market will be like, but I’m sure that when the market goes down dramatically, it will be intervened with to recover soon.”
Foreign investors also share the same view that the stock market will not witness falls in April as it did last year. The director of a foreign based investment fund said that many funds had finished the holiday term and returned to transactions. These funds are waiting for prices drop to buy shares in large quantities; therefore, there would not be any sharp price decreases.
Meanwhile, Nguyen Hung Nam, an investor on the ACBS trading floor in HCM City, said that some big investors, who left the stock market for the real estate market, have returned to inject money in securities as the real estate market turns out to be ‘overly hot’, where the prices are abnormally high.
Analysts said that a lot of big accounts with account balances of more than VND500mil have been opened in the last few days at SSI, ACBS, VCBS and SBS.
Securities prices may fall, but very slightly
Dr of Economics Nguyen Quang Hung, a Viet Kieu in the US, who is a lecturer at several universities in HCM City, said that the VN Index might fall to below 1,000 points in June, when there are more commodities on the market. By that time, many big groups will make IPO (initial public offering) while the state will sell parts of its shares in companies in order to reduce state ownership proportion.
As a matter of course, investors will wait for some more time to buy valuable commodities, like Vietcombank, Incombank or Mobifone shares. Bringing more choices proves to be the best remedy to cool down the market.
Meanwhile, the hot real estate market, which promises bigger profit than the stock market, will lure securities investors as well, thus cooling the stock market down.
Vo Huu Tuan, Deputy Director of Bao Viet Securities Company, on one hand, admitted the factors that can lead to the price decrease, and on the other hand, asserted that the sharp falls in the market would not happen.
In the last month, any time the VN Index has gone down to below 1,000 points, share prices increased again, he said.
Big investors and state management authorities will not let the market plunge sharply and for a long time. If so, the public will lose confidence in the stock market, which will make it hard to recover the stock market and cause bad consequences.
“I do not believe that Vietnam’s stock market will see the gloomy April once again,” Mr Tuan said.
Source: VNE mekong capital equity vinacapital
Securities expert Huy Nam said that the periodic April fall would not happen again this year as the market was always timely intervened with to prevent sudden falls and increases.
In fact, share prices fell down considerably in past weeks, but the market has recovered slightly with the VN Index hovering at 1,000-1,100 points.
Big investors in the market, both domestic and foreign, do not always follow the crowd: they buy shares when others sell, and sell when others try to buy.
On April 2, 2007, for example, foreign investors bought 2.3mil shares, but just sold a little more than 1mil units. Blue chips all decreased in prices, but the traded volume of these shares items was still big.
Bui Viet, Director General of the EAB Securities Company, asserted that this April would not be as gloomy as last April. He said that the market would see slight fluctuations instead of sharp increases and decreases.
The statements made recently by State, National Assembly and Government leaders that the stock market must be kept in normal operation have made experts believe that there would be no big falls in the market. Recently, rumours about the tightening of foreign capital flow have been denied by state management authorities.
Dang Ngoc Thang, a securities analyst, said: “No one can know for sure what the market will be like, but I’m sure that when the market goes down dramatically, it will be intervened with to recover soon.”
Foreign investors also share the same view that the stock market will not witness falls in April as it did last year. The director of a foreign based investment fund said that many funds had finished the holiday term and returned to transactions. These funds are waiting for prices drop to buy shares in large quantities; therefore, there would not be any sharp price decreases.
Meanwhile, Nguyen Hung Nam, an investor on the ACBS trading floor in HCM City, said that some big investors, who left the stock market for the real estate market, have returned to inject money in securities as the real estate market turns out to be ‘overly hot’, where the prices are abnormally high.
Analysts said that a lot of big accounts with account balances of more than VND500mil have been opened in the last few days at SSI, ACBS, VCBS and SBS.
Securities prices may fall, but very slightly
Dr of Economics Nguyen Quang Hung, a Viet Kieu in the US, who is a lecturer at several universities in HCM City, said that the VN Index might fall to below 1,000 points in June, when there are more commodities on the market. By that time, many big groups will make IPO (initial public offering) while the state will sell parts of its shares in companies in order to reduce state ownership proportion.
As a matter of course, investors will wait for some more time to buy valuable commodities, like Vietcombank, Incombank or Mobifone shares. Bringing more choices proves to be the best remedy to cool down the market.
Meanwhile, the hot real estate market, which promises bigger profit than the stock market, will lure securities investors as well, thus cooling the stock market down.
Vo Huu Tuan, Deputy Director of Bao Viet Securities Company, on one hand, admitted the factors that can lead to the price decrease, and on the other hand, asserted that the sharp falls in the market would not happen.
In the last month, any time the VN Index has gone down to below 1,000 points, share prices increased again, he said.
Big investors and state management authorities will not let the market plunge sharply and for a long time. If so, the public will lose confidence in the stock market, which will make it hard to recover the stock market and cause bad consequences.
“I do not believe that Vietnam’s stock market will see the gloomy April once again,” Mr Tuan said.
Source: VNE mekong capital equity vinacapital
VPBank to double chartered capital
VPBank announced, on April 3, its doubling in chartered capital to 1.5 trillion VND and that the plan on capital expansion will be completed by May.
All of the bank's current shareholders will be allowed to buy new shares, with the purchase volume being equivalent to the number of shares they are keeping and at face value price, VPBank said.
In the first quarter of this year, VPBank was listed by the Navigos Group and AC Nielsen of the US as one of the two Vietnamese banks among the top 50 businesses in the country in terms of working environment and personnel management.
It was regarded by the State Bank of Viet Nam to be the best bank among all commercial joint stock banks in northern Viet Nam.
Source: VNA mekong capital equity vinacapital
All of the bank's current shareholders will be allowed to buy new shares, with the purchase volume being equivalent to the number of shares they are keeping and at face value price, VPBank said.
In the first quarter of this year, VPBank was listed by the Navigos Group and AC Nielsen of the US as one of the two Vietnamese banks among the top 50 businesses in the country in terms of working environment and personnel management.
It was regarded by the State Bank of Viet Nam to be the best bank among all commercial joint stock banks in northern Viet Nam.
Source: VNA mekong capital equity vinacapital
Monday, April 02, 2007
Standard Chartered Bank evaluates market entry
Standard Chartered Bank is exploring the possibility of setting up a fully-owned local subsidiary in Viet Nam.
"We want to incorporate 100 percent as soon as possible, as soon as the paper work is ready," said Melvyn Davies, SCB chairman, at a press briefing in Ha Noi on March 30.
"As the market opens up and the Government liberalises financial services, we at Standard Chartered intend to take advantage of the many opportunities that will become available here.
"I think the most important thing is the Government is doing an excellent job in gradually opening up the market, gradually managing reserves and developing the market. That is why foreign investors are attracted to this market."
As part of Viet Nam's World Trade Organisation (WTO) commitments, foreign banks can set up their own subsidiaries in Viet Nam as of April 1.
However, there are certain criteria, such as the parent company must have at least 10 billion USD in assets.
Standard Chartered will also build on its existing partnership with Asia Commercial Bank (ACB) and may well increase its stake in the local bank, said Davies.
Standard Chartered currently holds an 8.56 percent stake in ACB, the only bank listed on Ha Noi bourse.
Davies said the country's WTO membership would ultimately benefit Viet Nam's economy by increasing its access to foreign markets and strengthening the country's corporate governance.
"This, together with its rapidly growing economic base and position in the heart of Southeast Asia, means Viet Nam is well positioned to take advantage of emerging new global trade flows across Asia, Africa and the Middle East.
"We want to be a partner for the banks and companies that could expand internationally.. This is one of the most exciting markets I've seen in the 56 countries that we operate in."
Davies said Standard Chartered will continue building its wholesale banking presence and grow its consumer banking business over the next year.
Standard Chartered Bank now has two branches in Viet Nam. Last month it launched retail banking service in HCM City and expects to bring the service to Ha Noi soon. The bank has invested 100 million USD into Viet Nam, and employs more than 100 people.
On his trip, Davies also met with senior officials from the State Bank of Viet Nam, Ministry of Finance and the Ministry of Planning and Investment.
Source: VNA
"We want to incorporate 100 percent as soon as possible, as soon as the paper work is ready," said Melvyn Davies, SCB chairman, at a press briefing in Ha Noi on March 30.
"As the market opens up and the Government liberalises financial services, we at Standard Chartered intend to take advantage of the many opportunities that will become available here.
"I think the most important thing is the Government is doing an excellent job in gradually opening up the market, gradually managing reserves and developing the market. That is why foreign investors are attracted to this market."
As part of Viet Nam's World Trade Organisation (WTO) commitments, foreign banks can set up their own subsidiaries in Viet Nam as of April 1.
However, there are certain criteria, such as the parent company must have at least 10 billion USD in assets.
Standard Chartered will also build on its existing partnership with Asia Commercial Bank (ACB) and may well increase its stake in the local bank, said Davies.
Standard Chartered currently holds an 8.56 percent stake in ACB, the only bank listed on Ha Noi bourse.
Davies said the country's WTO membership would ultimately benefit Viet Nam's economy by increasing its access to foreign markets and strengthening the country's corporate governance.
"This, together with its rapidly growing economic base and position in the heart of Southeast Asia, means Viet Nam is well positioned to take advantage of emerging new global trade flows across Asia, Africa and the Middle East.
"We want to be a partner for the banks and companies that could expand internationally.. This is one of the most exciting markets I've seen in the 56 countries that we operate in."
Davies said Standard Chartered will continue building its wholesale banking presence and grow its consumer banking business over the next year.
Standard Chartered Bank now has two branches in Viet Nam. Last month it launched retail banking service in HCM City and expects to bring the service to Ha Noi soon. The bank has invested 100 million USD into Viet Nam, and employs more than 100 people.
On his trip, Davies also met with senior officials from the State Bank of Viet Nam, Ministry of Finance and the Ministry of Planning and Investment.
Source: VNA
Industrial production increases by 16.6%
Viet Nam's industrial production value in the first quarter of this year was estimated to reach 129,800 billion VND (8.1 billion USD), a 16.6% year-on-year increase, according to the Ministry of Planning and Investment.
In March alone, the country's production value reached 45,200 billion VND .
Particularly, products that posted high growth rates included floor tiles (30.9%), vehicles (29.8%), rolled steel and paper (22.3%) and motorcyclebike (21%).
In March alone, the country's production value reached 45,200 billion VND .
Particularly, products that posted high growth rates included floor tiles (30.9%), vehicles (29.8%), rolled steel and paper (22.3%) and motorcyclebike (21%).
Foreign banks bet on Vietnam
Foreign banks are putting their bets on Vietnam, attracted by its booming economy and a large youthful population eager to have all the consumer goods and services the modern world has to offer.
On Sunday, Vietnam formally opens its doors wider to a queue of banks from around the world under market liberalisation pledges it made on its accession to the World Trade Organisation (WTO) in January.
These banks will now be allowed to set up wholly-owned units here, making it easier to open branches and so build a client base in a communist country where banking services are in their infancy and cash is still the favoured medium.
Only six million people, out of a population of 84 million, have a bank account.
"Retail banking services, consumer credit, life insurance, these are all only just beginning (in Vietnam)," said Jean-Pierre Bernard, regional officer for Southeast Asia and India with BNP-Paribas of France.
If the market is small now, the prospects are good -- the economy is growing at more than 8.0% and 60% of the population is under 30 years old.
This new generation is demanding a higher standard of living as the country at last emerges from the shadow of the devastating war against the United States and doctrinaire communist central planning.
"Before, our parents tried to save for the bad days. (Now) a new generation has come, of people born after the war, after 1975," said Ly Xuan Hai, president of Asia Commercial Bank.
"Their behavior is quite different. They are ready to spend more for luxury -- they want to be independent, to have a separate house, separate apartments, to live far from their parents," he said.
Foreign banks have been gradually building a presence here for some time, finding local partners so that they could hit the road running when Vietnam joined the WTO and opened up its economy.
BNP Paribas has tied up with Orient Commercial Bank, ANZ of Australia joined with Sacombank, while regional giants Standard Chartered and HSBC partnered Asia Commercial Bank and Techcombank.
For the moment, foreign investors can only take up to a 10% stake in a local bank but they are hopeful that that limit could be raised, possibly this year, to 20%.
"Everyone who took 10% (in their partners) did so with a view to increasing that level to 20% or even more," said Bernard of BNP-Paribas.
Foreign investors are also looking forward to the privatisation of several of the top state-owned banks such as Vietcombank, which handles trade finance and could be divested this year.
For the foreign partner, a tie-up with locals gives them access to the market while the home banks get much needed expertise in products, management and technology.
"Shops have to be equipped with credit card facilities and these facilities have to be linked to the bank. This infrastructure is at an early stage of development," said Noritaka Akamatsu, a financial sector expert with the World Bank in Vietnam.
"Some banks, after (getting experience) with the local banks, their name may be better recognised locally, they may feel more confident that they can do the business on their own," Akamatsu noted.
That prospect is likely to be of some concern to the local banks who will have to up their game or risk being left behind as their foreign peers get greater access to the market.
"The local banks will find it very difficult to compete if they don't improve their practices and their technology and management," said Jonathan Pincus, economist with the United Nations Development Programme in Vietnam.
"Local banks have one really important advantage: they have local contacts and knowledge. They have the knowledge of what Vietnamese need and want, and banking is about relationships," Pincus said.
"They've got a breathing space but they need to act quickly."
Source: AFP
On Sunday, Vietnam formally opens its doors wider to a queue of banks from around the world under market liberalisation pledges it made on its accession to the World Trade Organisation (WTO) in January.
These banks will now be allowed to set up wholly-owned units here, making it easier to open branches and so build a client base in a communist country where banking services are in their infancy and cash is still the favoured medium.
Only six million people, out of a population of 84 million, have a bank account.
"Retail banking services, consumer credit, life insurance, these are all only just beginning (in Vietnam)," said Jean-Pierre Bernard, regional officer for Southeast Asia and India with BNP-Paribas of France.
If the market is small now, the prospects are good -- the economy is growing at more than 8.0% and 60% of the population is under 30 years old.
This new generation is demanding a higher standard of living as the country at last emerges from the shadow of the devastating war against the United States and doctrinaire communist central planning.
"Before, our parents tried to save for the bad days. (Now) a new generation has come, of people born after the war, after 1975," said Ly Xuan Hai, president of Asia Commercial Bank.
"Their behavior is quite different. They are ready to spend more for luxury -- they want to be independent, to have a separate house, separate apartments, to live far from their parents," he said.
Foreign banks have been gradually building a presence here for some time, finding local partners so that they could hit the road running when Vietnam joined the WTO and opened up its economy.
BNP Paribas has tied up with Orient Commercial Bank, ANZ of Australia joined with Sacombank, while regional giants Standard Chartered and HSBC partnered Asia Commercial Bank and Techcombank.
For the moment, foreign investors can only take up to a 10% stake in a local bank but they are hopeful that that limit could be raised, possibly this year, to 20%.
"Everyone who took 10% (in their partners) did so with a view to increasing that level to 20% or even more," said Bernard of BNP-Paribas.
Foreign investors are also looking forward to the privatisation of several of the top state-owned banks such as Vietcombank, which handles trade finance and could be divested this year.
For the foreign partner, a tie-up with locals gives them access to the market while the home banks get much needed expertise in products, management and technology.
"Shops have to be equipped with credit card facilities and these facilities have to be linked to the bank. This infrastructure is at an early stage of development," said Noritaka Akamatsu, a financial sector expert with the World Bank in Vietnam.
"Some banks, after (getting experience) with the local banks, their name may be better recognised locally, they may feel more confident that they can do the business on their own," Akamatsu noted.
That prospect is likely to be of some concern to the local banks who will have to up their game or risk being left behind as their foreign peers get greater access to the market.
"The local banks will find it very difficult to compete if they don't improve their practices and their technology and management," said Jonathan Pincus, economist with the United Nations Development Programme in Vietnam.
"Local banks have one really important advantage: they have local contacts and knowledge. They have the knowledge of what Vietnamese need and want, and banking is about relationships," Pincus said.
"They've got a breathing space but they need to act quickly."
Source: AFP
Vietnam's seafood export increased by 12%
Vietnam seafood’s exports are estimated at US$678 million in the first quarter of this year, a year-on-year rise of 11.9%, the industry association said.
The Vietnam Association of Seafood Exporters for the entire year was $3.6 billion, 7.1% higher than last year.
To achieve the figure, the country was boosting exports of various items to traditional markets like China, the US, the EU, Japan, Canada, and South Korea, and some new ones like the Middle East, East Europe, Africa, and South America.
It was also focusing on quality, intensifying trade promotion, building more brand names, and enhancing the capacity to forecast global prices and demand.
The Ministry of Fisheries has instructed the National Fisheries Quality Assurance and Veterinary Directorate (Nafiqaved) to keep a close watch on quality, safety, and hygiene of marine products, especially those destined for major markets.
It has also called for measures to prevent contamination of seafood by chemicals and antibiotics.
Nafiqaved has been asked to work closely with foreign counselors and commercial attachés to address other related problems.
Source: Thanh Nien
The Vietnam Association of Seafood Exporters for the entire year was $3.6 billion, 7.1% higher than last year.
To achieve the figure, the country was boosting exports of various items to traditional markets like China, the US, the EU, Japan, Canada, and South Korea, and some new ones like the Middle East, East Europe, Africa, and South America.
It was also focusing on quality, intensifying trade promotion, building more brand names, and enhancing the capacity to forecast global prices and demand.
The Ministry of Fisheries has instructed the National Fisheries Quality Assurance and Veterinary Directorate (Nafiqaved) to keep a close watch on quality, safety, and hygiene of marine products, especially those destined for major markets.
It has also called for measures to prevent contamination of seafood by chemicals and antibiotics.
Nafiqaved has been asked to work closely with foreign counselors and commercial attachés to address other related problems.
Source: Thanh Nien
Fertilizer giant plans April IPO
State-run oil and gas group affiliate PetroVietnam Fertilizer and Chemical Co (PVFC Co) is set to sell 33.85% of its capital in an IPO on April 21.
The company, with a chartered capital of VND3.8 trillion (US$237 million) will sell over 128.6 million shares to outsiders at a starting price of VND50,000 per share.
Trinh Thanh Binh, general director of the company said the IPO, involving the sale of over 128 million shares, represents the largest such share auction ever in the country.
Between April 2 and April 12, the deadline for auction registration investors are advised to register their purchases and attend a briefing on the firm at 14 securities companies in the Ho Chi Minh City and Hanoi.
The IPO is to be held at the HCMC Securities Trading Center.
PVFC Co, Vietnam’s largest nitro-fertilizer producer with a factory at the Phu My Power-Fertilizer-Gas Complex in the Ba Ria- Vung Tau Province, mainly produces urea, ammonia liquid, industrial gas, and other gas-originated products.
It posted a turnover last year of VND2.9 trillion from selling urea and ammonia products, a year-on-year increase of 10%.
The firm, which churns out 800,000 tons of urea per year, meets 40% of the nation’s urea demand and up to 60% in the southern region.
The Phu My factory started production in 2004 with a total investment capital of $380 million, contributing to lessen agricultural reliance on imported urea.
The country has two state-run fertilizer factories in operation, the other being the northern Bac Giang-based Ha Bac factory, which has a smaller annual output of 150,000 tons of urea.
Source: Thanh Nien
The company, with a chartered capital of VND3.8 trillion (US$237 million) will sell over 128.6 million shares to outsiders at a starting price of VND50,000 per share.
Trinh Thanh Binh, general director of the company said the IPO, involving the sale of over 128 million shares, represents the largest such share auction ever in the country.
Between April 2 and April 12, the deadline for auction registration investors are advised to register their purchases and attend a briefing on the firm at 14 securities companies in the Ho Chi Minh City and Hanoi.
The IPO is to be held at the HCMC Securities Trading Center.
PVFC Co, Vietnam’s largest nitro-fertilizer producer with a factory at the Phu My Power-Fertilizer-Gas Complex in the Ba Ria- Vung Tau Province, mainly produces urea, ammonia liquid, industrial gas, and other gas-originated products.
It posted a turnover last year of VND2.9 trillion from selling urea and ammonia products, a year-on-year increase of 10%.
The firm, which churns out 800,000 tons of urea per year, meets 40% of the nation’s urea demand and up to 60% in the southern region.
The Phu My factory started production in 2004 with a total investment capital of $380 million, contributing to lessen agricultural reliance on imported urea.
The country has two state-run fertilizer factories in operation, the other being the northern Bac Giang-based Ha Bac factory, which has a smaller annual output of 150,000 tons of urea.
Source: Thanh Nien
Sunday, April 01, 2007
Vietnamese companies aim for overseas stock markets
A number of Vietnamese businesses are making ambitious plans to list their shares on overseas stock exchanges, which is forecast as a new trend of business in 2007.
The first shot was fired in mid-March when the Indochina Capital Vietnam Holdings Limited fund managed by the Indochina Capital Advisors Ltd. Co under the Indochina Capital Group made its initial public offering (IPO) successfully on the London Stock Exchange (LSE).
Earlier, three other Vietnamese funds, including Vietnam Opportunity Fund, VinaLand and Vietnam Holdings, listed on LSE's Alternative Investment Market for smaller and growing companies.
On May 2006, Cavico, a construction and investment company, became the first Vietnamese company to have its shares traded on the OTC Prink Sheets of the US by merging with a Prink Sheets listed company, Agent155 Media Group.
Following these companies, the Viet Nam Dairy Products Joint Stock Corporation (Vinamilk) has presented to the Ho Chi Minh City Securities Trading Centre (HSTC) its plan to issue 8.85 million shares worth 88.52 billion VND (5.53 million USD) on Singapore's stock exchange in June. The plan is expected to be approved at the shareholders' meeting late this month.
The Finance Promoting Technology (FPT) Corporation, another blue-chip listed at the HSTC, is also considering a plan to post up its shares abroad and the Singaporean market is a likely choice.
About 50 other companies, including big names such as the Sai Gon Securities Incorporation (SSI), the Refrigeration Electronic Engineering Company (REE), the Bank for Foreign Trade of Viet Nam (Vietcombank), the Asia Commercial Bank (ACB) and the Trung Nguyen Coffee Company, are also studying conditions for listing abroad.
However, according to HSTC Vice Director Le Hai Tra, there are a lot of difficulties for many Vietnamese businesses to be listed on overseas markets. He cited the fees for listing and finance to maintain presence on listing boards as two big barriers.
The fee for listing on LSE is 30,000 USD per year, said an official from the market.
Another barrier is high requirements by overseas stock exchange. For example, to be eligible to list on Singapore's stock market a business must have at least 1,000 shareholders, earn an annual post-tax profit of at least 7.5 million USD for the most recent three years, and meet auditing standards of Singapore or the US.
Source: VNA
The first shot was fired in mid-March when the Indochina Capital Vietnam Holdings Limited fund managed by the Indochina Capital Advisors Ltd. Co under the Indochina Capital Group made its initial public offering (IPO) successfully on the London Stock Exchange (LSE).
Earlier, three other Vietnamese funds, including Vietnam Opportunity Fund, VinaLand and Vietnam Holdings, listed on LSE's Alternative Investment Market for smaller and growing companies.
On May 2006, Cavico, a construction and investment company, became the first Vietnamese company to have its shares traded on the OTC Prink Sheets of the US by merging with a Prink Sheets listed company, Agent155 Media Group.
Following these companies, the Viet Nam Dairy Products Joint Stock Corporation (Vinamilk) has presented to the Ho Chi Minh City Securities Trading Centre (HSTC) its plan to issue 8.85 million shares worth 88.52 billion VND (5.53 million USD) on Singapore's stock exchange in June. The plan is expected to be approved at the shareholders' meeting late this month.
The Finance Promoting Technology (FPT) Corporation, another blue-chip listed at the HSTC, is also considering a plan to post up its shares abroad and the Singaporean market is a likely choice.
About 50 other companies, including big names such as the Sai Gon Securities Incorporation (SSI), the Refrigeration Electronic Engineering Company (REE), the Bank for Foreign Trade of Viet Nam (Vietcombank), the Asia Commercial Bank (ACB) and the Trung Nguyen Coffee Company, are also studying conditions for listing abroad.
However, according to HSTC Vice Director Le Hai Tra, there are a lot of difficulties for many Vietnamese businesses to be listed on overseas markets. He cited the fees for listing and finance to maintain presence on listing boards as two big barriers.
The fee for listing on LSE is 30,000 USD per year, said an official from the market.
Another barrier is high requirements by overseas stock exchange. For example, to be eligible to list on Singapore's stock market a business must have at least 1,000 shareholders, earn an annual post-tax profit of at least 7.5 million USD for the most recent three years, and meet auditing standards of Singapore or the US.
Source: VNA
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