The Viet Nam Infrastructure Investment Fund (VNI) on July 5 made its debut at the Alternative Investment Market (AIM) on the London Stock Exchange (LSE).
The listing marks the first time that a Vietnamese infrastructure fund will see transactions on the AIM and will focus on the areas of energy, transportation, water and telecommunications.
Market experts have predicted that from now until 2020, Viet Nam will require close to 140 billion USD for the development of needed infrastructure projects. The VNI will focus on strategic projects in Ha Noi, Ho Chi Minh City and key economic zones nationwide, including highways, ports, airports, and power plants.
At the AIM, the VNI did earn 402,1 million USD through the issue of 402,1 million one-dollar shares.
Source: VNA
Friday, July 06, 2007
Equitisation of oil and gas firms nearly complete
The oil and gas industry has virtually completed its entire equitisation process under a plan to form the Viet Nam Oil and Gas Group (PetroVietnam).
To date, 11 subsidiaries of PetroVietnam have been equitised with more than 289.5 million shares sold, or 94.2 percent of the total offered, close to 2,895 billion VND at face value. It raked in 14,960 billion VND.
The group also restructured the proportion of capital held by the State at its 11 equitised enterprises. As a result the State now holds 61.2 percent, or 4,611 billion VND, of their registered capital with the remaining shares being sold to staff and shareholders to bring in 16,345 billion VND for further business development.
Source: VNA
To date, 11 subsidiaries of PetroVietnam have been equitised with more than 289.5 million shares sold, or 94.2 percent of the total offered, close to 2,895 billion VND at face value. It raked in 14,960 billion VND.
The group also restructured the proportion of capital held by the State at its 11 equitised enterprises. As a result the State now holds 61.2 percent, or 4,611 billion VND, of their registered capital with the remaining shares being sold to staff and shareholders to bring in 16,345 billion VND for further business development.
Source: VNA
Garment exports reach $3.4bil in first half
Textile and garment exports reached US$680mil in June, lifting the industry’s total earnings in the first six months of the year to $3.4bil, according to the Viet Nam Textile and Apparel Association (Vitas).
Though the six-month figure was up 25.9% over the same period last year, it met only 47% of the industry’s annual export target of $7bil, Vitas said.
Vitas attributed the slightly disappointing result to US monitoring of garment imports from Vietnam. The US Department of Commerce (DoC) began monitoring imports of textile and apparel products after Vietnam joined the WTO in January and quotas were lifted.
The DOC is expected to announced the results of its first biannual review in August.
Meanwhile, Vitas explained, many US companies have postponed new contracts with Vietnamese textile and garment exporters for fear of dumping actions by the DOC or US garment makers.
Vitas’s statistics showed that textile and garment exports to the US market in June rose only 30% year-on-year, while the figure was often much higher in previous years.
To deal with the reduction in orders from US importers, Vitas chairman Le Quoc An said Vitas was taking several courses of action to prevent further cancellations of orders from US businesses.
"We have appealed to the US Government to stop applying the monitoring system on Vietnamese garments and have requested international organisations to lobby on our behalf. The association has also met with US businesses to persuade them to continue importing our products."
An said the association has also requested Vietnamese businesses to make their accounts clear and transparent in line with international regulations, and to limit low-price exports to the US market.
Vitas also recommended its members expand their exports to other markets and make direct sales to overseas markets instead of acting as a sub-contractor as currently.
The Association of Garment and Textile Embroidery and Knitting (Agtex) recently asked the Government to set up a national fashion centre designed to support the nation’s garment industry in designing products and building trademarks, said Agtex vice chairman Diep Thanh Kiet.
Thanks to efforts in building trademarks and design, domestic textile and garment producers including Viet Tien have made significant successes in directly exporting their products to overseas markets.
Following successes in Australia and New Zealand, Viet Tien is working with partners to distribute products bearing its Vee Sendy mark to the US, Malaysia, Singapore and Canada.
Some domestic garment makers expected to increase their shipments to the EU market thanks to a trade promotion programme planned by the Holland Centre on Import Promotion from Developing Countries, according to the Trade Promotion Agency under the Ministry of Trade.
According to the agency, the programme would give domestic textile producers opportunities to receive consultation and training from foreign experts as well as have timely access to EU market information.
Participants might also receive foreign support to improve their products, management, marketing and market penetration.
To qualify for the programme, domestic textile firms would be required not to join with foreign partners from developed countries and have at least 51% of capital owned by Vietnamese. The rules were designed to ensure benefits of the programme don’t flow to foreign-controlled joint ventures.
Quality, price and production capacity would also have to be in line with EU market demands and firms selected for the programme would be required to comply with EU standards.
Source: VNE
Though the six-month figure was up 25.9% over the same period last year, it met only 47% of the industry’s annual export target of $7bil, Vitas said.
Vitas attributed the slightly disappointing result to US monitoring of garment imports from Vietnam. The US Department of Commerce (DoC) began monitoring imports of textile and apparel products after Vietnam joined the WTO in January and quotas were lifted.
The DOC is expected to announced the results of its first biannual review in August.
Meanwhile, Vitas explained, many US companies have postponed new contracts with Vietnamese textile and garment exporters for fear of dumping actions by the DOC or US garment makers.
Vitas’s statistics showed that textile and garment exports to the US market in June rose only 30% year-on-year, while the figure was often much higher in previous years.
To deal with the reduction in orders from US importers, Vitas chairman Le Quoc An said Vitas was taking several courses of action to prevent further cancellations of orders from US businesses.
"We have appealed to the US Government to stop applying the monitoring system on Vietnamese garments and have requested international organisations to lobby on our behalf. The association has also met with US businesses to persuade them to continue importing our products."
An said the association has also requested Vietnamese businesses to make their accounts clear and transparent in line with international regulations, and to limit low-price exports to the US market.
Vitas also recommended its members expand their exports to other markets and make direct sales to overseas markets instead of acting as a sub-contractor as currently.
The Association of Garment and Textile Embroidery and Knitting (Agtex) recently asked the Government to set up a national fashion centre designed to support the nation’s garment industry in designing products and building trademarks, said Agtex vice chairman Diep Thanh Kiet.
Thanks to efforts in building trademarks and design, domestic textile and garment producers including Viet Tien have made significant successes in directly exporting their products to overseas markets.
Following successes in Australia and New Zealand, Viet Tien is working with partners to distribute products bearing its Vee Sendy mark to the US, Malaysia, Singapore and Canada.
Some domestic garment makers expected to increase their shipments to the EU market thanks to a trade promotion programme planned by the Holland Centre on Import Promotion from Developing Countries, according to the Trade Promotion Agency under the Ministry of Trade.
According to the agency, the programme would give domestic textile producers opportunities to receive consultation and training from foreign experts as well as have timely access to EU market information.
Participants might also receive foreign support to improve their products, management, marketing and market penetration.
To qualify for the programme, domestic textile firms would be required not to join with foreign partners from developed countries and have at least 51% of capital owned by Vietnamese. The rules were designed to ensure benefits of the programme don’t flow to foreign-controlled joint ventures.
Quality, price and production capacity would also have to be in line with EU market demands and firms selected for the programme would be required to comply with EU standards.
Source: VNE
FPT to cooperate with India's Aptech
India's Aptech Ltd. said on Thursday it had signed a preliminary agreement with Vietnam's FPT for setting up 20 new training centres by 2008, as it seeks to tap growing demand for software services skills.
The Indian computer training firm said it expected revenues in Vietnam to top $30 million by the end of 2009, more than double the $12 million it expects in 2007.
Aptech and FPT struck an alliance in 1999 for training in Vietnam, starting with two centres. Aptech now has 31 centres, it said in a statement after the agreement was signed at an India-Vietnam business forum in Mumbai.
Source: Reuters
The Indian computer training firm said it expected revenues in Vietnam to top $30 million by the end of 2009, more than double the $12 million it expects in 2007.
Aptech and FPT struck an alliance in 1999 for training in Vietnam, starting with two centres. Aptech now has 31 centres, it said in a statement after the agreement was signed at an India-Vietnam business forum in Mumbai.
Source: Reuters
Thursday, July 05, 2007
25% tax on securities investments too high
The plan to impose a tax of 25% on income from securities investments has been facing strong opposition from experts, who say the taxation should be re-considered or it will badly affect the fledgling stock market.
Nguyen Hoang Hai, Secretary General of the Vietnam Association of Financial Investors (VAFI), said that the suggested 25% tax rate proved to be overly high. The taxation body, according to Mr Hai, does not have the necessary legal basis to build up the method to calculate the expenses for the work that creates income from capital assignment deals.
Let’s take the expenses investors have to pay for brokerage as example. Investors can show the bills to prove the expenses, while they do not have regular vouchers if they make transactions on the OTC market. Investors also cannot claim other expenses, including ones for getting information, training, getting loans and travelling as they cannot get bills.
Moreover, taxation agencies will find it difficult to define the selling and purchasing prices in transactions on the OTC market as the trading deals are not carried out through securities companies, and investors do not have transaction accounts at the companies.
According to Mr Hai, other countries in the region, including Hong Kong, Singapore, and Thailand, do not tax securities assignment deals, while China imposes a very low tax rate. As for the official market, it would be better to tax transactions based on the selling prices (for example, 0.05-0.1% of the selling prices). As for the OTC market, as it is difficult to define the purchasing and selling prices, it would be better to base a tax on the face value of securities, and the tax rate should be higher, at 0.5%.
Economist Nguyen Van Tu also shared the same view, saying that the 25% tax rate proved to be unfeasible. In fact, taxation bodies seem to be targeting the investors who became rich rapidly when the market was hot and brought fat profit to investors.
Tran Dinh Thien, Deputy Director of the Vietnam Economics Institute, agreed that a lot of investors got fat profit, but taxation bodies should consider setting tax rates under the normal operation conditions of the market, not under any other special conditions. Moreover, Mr Thien said that tax policies should be built up in a way that helps stimulate the fledgling market.
Dr Nguyen Van Tuyen has asked for the reconsideration of the income tax on the income from dividends and the income from capital contribution profit. Before giving dividends or profit to shareholders or capital contributors, economic institutions have to pay corporate income tax already.
If the income from dividends or profit from capital contributions were still subject to the personal income tax, it would violate the principle of not taxing twice on the same income.
Lawyer Cao Ba Khoat also said that taxing dividends would create an overlap in taxation, or double taxation, since dividends are post-tax income.
Source: VNE
Nguyen Hoang Hai, Secretary General of the Vietnam Association of Financial Investors (VAFI), said that the suggested 25% tax rate proved to be overly high. The taxation body, according to Mr Hai, does not have the necessary legal basis to build up the method to calculate the expenses for the work that creates income from capital assignment deals.
Let’s take the expenses investors have to pay for brokerage as example. Investors can show the bills to prove the expenses, while they do not have regular vouchers if they make transactions on the OTC market. Investors also cannot claim other expenses, including ones for getting information, training, getting loans and travelling as they cannot get bills.
Moreover, taxation agencies will find it difficult to define the selling and purchasing prices in transactions on the OTC market as the trading deals are not carried out through securities companies, and investors do not have transaction accounts at the companies.
According to Mr Hai, other countries in the region, including Hong Kong, Singapore, and Thailand, do not tax securities assignment deals, while China imposes a very low tax rate. As for the official market, it would be better to tax transactions based on the selling prices (for example, 0.05-0.1% of the selling prices). As for the OTC market, as it is difficult to define the purchasing and selling prices, it would be better to base a tax on the face value of securities, and the tax rate should be higher, at 0.5%.
Economist Nguyen Van Tu also shared the same view, saying that the 25% tax rate proved to be unfeasible. In fact, taxation bodies seem to be targeting the investors who became rich rapidly when the market was hot and brought fat profit to investors.
Tran Dinh Thien, Deputy Director of the Vietnam Economics Institute, agreed that a lot of investors got fat profit, but taxation bodies should consider setting tax rates under the normal operation conditions of the market, not under any other special conditions. Moreover, Mr Thien said that tax policies should be built up in a way that helps stimulate the fledgling market.
Dr Nguyen Van Tuyen has asked for the reconsideration of the income tax on the income from dividends and the income from capital contribution profit. Before giving dividends or profit to shareholders or capital contributors, economic institutions have to pay corporate income tax already.
If the income from dividends or profit from capital contributions were still subject to the personal income tax, it would violate the principle of not taxing twice on the same income.
Lawyer Cao Ba Khoat also said that taxing dividends would create an overlap in taxation, or double taxation, since dividends are post-tax income.
Source: VNE
Misleading and conflicting information confusing investors
The biggest problem with the stock market now is the lack of information. Investors still have to make investment decisions when they do not have necessary information, and in many cases, they incur losses.
Investors who did not sell shares on July 3 breathed a sigh of relief as both the VN Index and HASTC Index recovered the next day, July 4. Meanwhile, a lot of investors who tried to sell shares on that day following the warning by HSBC and other analysts that the VN Index would fall to below the 900 point level felt unhappy as the warnings turned out to have been unfounded.
Dang Vu Hai, an investor in HCM City, said that investors had to pay a high price for the confusing information.
According to Nguyen Diem Thuy Nga, an investor on ACBS trading floor, in fact, investors can get information from official channels, including the websites of listing companies, Hanoi and HCM City Securities Trading Centres, and from the State Securities Commission (SSC). However, the official information always comes late, so investors cannot rely on it to make investment decisions.
Mrs Nga said that investors always had to get information through their own channels, and false information, like the warning released by HSBC, has made investors suffer.
Tran Hoang Thang, a securities analyst, said that SSC should take action to prevent the release of false information and investigate to see what stands behind the false information.
Phan Vu Tuan, Deputy Director General of International Securities Company, said that many investors had complained about the scheme on information providing. They have been shocked by the information, sometimes too optimistic, and sometimes too pessimistic. “If believing the information, one would think the stock market would either triumph or collapse immediately.”
Dominic Scriven, Director of Dragon Capital, frankly said that information about Vietnam’s stock market was seriously lacking, while there was no in-depth analysis from learned experts.
Le Nhi Nang, Deputy Director of the HCM City Securities Trading Centre, has also acknowledged that the information provided by the stock market watchdog remains insufficient to meet the demand of investors.
Meanwhile, the director of a big securities company said he felt that false information was being released on purpose. Since last year, foreign institutions have five times at least been warned that the market would fall sharply, but foreign investors still kept buying shares, indicating they did not believe the reports.
Source: VNE
Investors who did not sell shares on July 3 breathed a sigh of relief as both the VN Index and HASTC Index recovered the next day, July 4. Meanwhile, a lot of investors who tried to sell shares on that day following the warning by HSBC and other analysts that the VN Index would fall to below the 900 point level felt unhappy as the warnings turned out to have been unfounded.
Dang Vu Hai, an investor in HCM City, said that investors had to pay a high price for the confusing information.
According to Nguyen Diem Thuy Nga, an investor on ACBS trading floor, in fact, investors can get information from official channels, including the websites of listing companies, Hanoi and HCM City Securities Trading Centres, and from the State Securities Commission (SSC). However, the official information always comes late, so investors cannot rely on it to make investment decisions.
Mrs Nga said that investors always had to get information through their own channels, and false information, like the warning released by HSBC, has made investors suffer.
Tran Hoang Thang, a securities analyst, said that SSC should take action to prevent the release of false information and investigate to see what stands behind the false information.
Phan Vu Tuan, Deputy Director General of International Securities Company, said that many investors had complained about the scheme on information providing. They have been shocked by the information, sometimes too optimistic, and sometimes too pessimistic. “If believing the information, one would think the stock market would either triumph or collapse immediately.”
Dominic Scriven, Director of Dragon Capital, frankly said that information about Vietnam’s stock market was seriously lacking, while there was no in-depth analysis from learned experts.
Le Nhi Nang, Deputy Director of the HCM City Securities Trading Centre, has also acknowledged that the information provided by the stock market watchdog remains insufficient to meet the demand of investors.
Meanwhile, the director of a big securities company said he felt that false information was being released on purpose. Since last year, foreign institutions have five times at least been warned that the market would fall sharply, but foreign investors still kept buying shares, indicating they did not believe the reports.
Source: VNE
VN-Index, HaSTC-Index dip slightly
Both the Ho Chi Minh City’s bourse and its Ha Noi-based counterpart reported slight drops by the end of the day’s trading on July 5.
By closing, the VN-Index at the HCM City Securities Trading Centre had dropped 0.74 points to finish at 1,012.82 points.
More than 8.64 million shares, worth close to 872.3 billion VND changed hands. The market saw 35 stocks gain, 11 shares remain unchanged and 50 fall.
Blue chip share of the Tay Ninh Cable Car Tour (TCT) was the biggest loser of the day, tumbling by 18,000 VND to finish at 372,000 VND per unit, followed by Binh Dinh Mining (BMC) (down 13,000 VND per unit) and Saigon Hotel (SGH) and the Song Da Urban and Industrial Zone Investment and Development (SJS) (down 7,000 per unit).
Hoa Binh Construction and Real Estate ( HBC ) topped the list of big movers by increasing 5,000 VND to close at 123,000 VND and were closely followed by Viet Nam Dairy Products ( VNM), Tuong An Vegetable Oil ( TAC), the HCM City-based confectioner Kinh Do Corp (KDC) and electric equipment and installation firm Full Power ( FPC ).
Blue-chipper Sai Gon Thuong Tin Commercial Bank (STB) continued to lead the market in terms of transaction volume with 737,430 shares being traded on the day although it fell by 1,500 VND to 62,500 VND per unit. P etroleum Drilling and Services (PVD), VNM and Pha Lai Power Co (PPC) also saw heavy trading.
Foreign investors at the HCM City's bourse bought 54 shares with a volume of 2,161,130, worth 322.7 billion VND, accounting for 54.75 percent of the market's transactions. They also sold 46 shares with a volume of 200,940, worth 31.8 billion VND, or 5.40 percent of the bourse's total transactions.
The HaSTC-Index at the Ha Noi Securities Trading Centre fell 4.39 points to close at 263.53 points with 34 stocks gaining and 47 falling.
To day's trading volume fell with 979,700 shares, worth more than 91.8 billion VND changing hands.
For the gains, it was Ho Chi Minh City Securities Corporation (HSC) that led the charge up the ladder by tacking on 10,700 VND to its listed price of 118,300 VND. Song Da 10 Joint Stock Company (SDT) was also among the top five gainers at the bourse.
The newly listed Cho Lon Real Estate (CRL) was among the biggest losers of the day by having 10,700 VND wiped off its listed price.
Foreign investors at the Ha Noi's bourse bought 25 shares and sold three shares with a total volume of 104,300 worth almost 10 billion VND.
Small investors expressed their concerns on the wildly fluctuating stock prices that they said is being caused by a lack of professionalism amid claims of insider trading.
Source: VNA
By closing, the VN-Index at the HCM City Securities Trading Centre had dropped 0.74 points to finish at 1,012.82 points.
More than 8.64 million shares, worth close to 872.3 billion VND changed hands. The market saw 35 stocks gain, 11 shares remain unchanged and 50 fall.
Blue chip share of the Tay Ninh Cable Car Tour (TCT) was the biggest loser of the day, tumbling by 18,000 VND to finish at 372,000 VND per unit, followed by Binh Dinh Mining (BMC) (down 13,000 VND per unit) and Saigon Hotel (SGH) and the Song Da Urban and Industrial Zone Investment and Development (SJS) (down 7,000 per unit).
Hoa Binh Construction and Real Estate ( HBC ) topped the list of big movers by increasing 5,000 VND to close at 123,000 VND and were closely followed by Viet Nam Dairy Products ( VNM), Tuong An Vegetable Oil ( TAC), the HCM City-based confectioner Kinh Do Corp (KDC) and electric equipment and installation firm Full Power ( FPC ).
Blue-chipper Sai Gon Thuong Tin Commercial Bank (STB) continued to lead the market in terms of transaction volume with 737,430 shares being traded on the day although it fell by 1,500 VND to 62,500 VND per unit. P etroleum Drilling and Services (PVD), VNM and Pha Lai Power Co (PPC) also saw heavy trading.
Foreign investors at the HCM City's bourse bought 54 shares with a volume of 2,161,130, worth 322.7 billion VND, accounting for 54.75 percent of the market's transactions. They also sold 46 shares with a volume of 200,940, worth 31.8 billion VND, or 5.40 percent of the bourse's total transactions.
The HaSTC-Index at the Ha Noi Securities Trading Centre fell 4.39 points to close at 263.53 points with 34 stocks gaining and 47 falling.
To day's trading volume fell with 979,700 shares, worth more than 91.8 billion VND changing hands.
For the gains, it was Ho Chi Minh City Securities Corporation (HSC) that led the charge up the ladder by tacking on 10,700 VND to its listed price of 118,300 VND. Song Da 10 Joint Stock Company (SDT) was also among the top five gainers at the bourse.
The newly listed Cho Lon Real Estate (CRL) was among the biggest losers of the day by having 10,700 VND wiped off its listed price.
Foreign investors at the Ha Noi's bourse bought 25 shares and sold three shares with a total volume of 104,300 worth almost 10 billion VND.
Small investors expressed their concerns on the wildly fluctuating stock prices that they said is being caused by a lack of professionalism amid claims of insider trading.
Source: VNA
HSBC to issue Vietnam bonds worth $496 mln
HSBC has become the first foreign bank in Vietnam to receive permission to issue long-term bonds this year.
The bond issue will be equivalent to 8 trillion dong ($496 million).
"The coupon on the long-term paper issued in 2007 by HSBC in Vietnam should match market interest rates," the central bank said in a directive seen on Thursday.
HSBC officials in Hanoi said details of the bond issue had not been finalised.
The bank, which has two retail branches in the capital Hanoi and trade hub Ho Chi Minh City, was also the first foreign bank in the country to offer dollar-denominated certificates of deposit two years ago, with interest now ranging from 4.1 to 4.85 percent.
Bankers in Hanoi said dong-denominated corporate bonds are much sought after by foreign investors for their attractive annual yields of 9 percent to 10 percent.
Source: Reuters
The bond issue will be equivalent to 8 trillion dong ($496 million).
"The coupon on the long-term paper issued in 2007 by HSBC in Vietnam should match market interest rates," the central bank said in a directive seen on Thursday.
HSBC officials in Hanoi said details of the bond issue had not been finalised.
The bank, which has two retail branches in the capital Hanoi and trade hub Ho Chi Minh City, was also the first foreign bank in the country to offer dollar-denominated certificates of deposit two years ago, with interest now ranging from 4.1 to 4.85 percent.
Bankers in Hanoi said dong-denominated corporate bonds are much sought after by foreign investors for their attractive annual yields of 9 percent to 10 percent.
Source: Reuters
Vincom sells out at IPO
Property developer Vincom Joint Stock Company sold all 5 million listed shares during its initial public offering (IPO) on the Ho Chi Minh City Securities Trading Centre on July 3, said Vincom board chairman Le Khac Hiep.
Prices per share ranged between 117,000 VND (10.31 USD) and 171,000 VND ( USD) and averaged at 120,000 VND, 40,000 VND more than the company’s initial bid of 80,000 VND a piece.
Market analysts described the auction as quite an achievement, due in part because investors registered to purchase 18.5 million shares, more than therefold what Vincom offered.
The company plans to officially list shares on the stock market in early August, said Hiep.
Source: VNA
Prices per share ranged between 117,000 VND (10.31 USD) and 171,000 VND ( USD) and averaged at 120,000 VND, 40,000 VND more than the company’s initial bid of 80,000 VND a piece.
Market analysts described the auction as quite an achievement, due in part because investors registered to purchase 18.5 million shares, more than therefold what Vincom offered.
The company plans to officially list shares on the stock market in early August, said Hiep.
Source: VNA
Investment firm CII to sell $31 mln of bonds
Ho Chi Minh City Infrastructure Investment Co. (CII) will sell 7-year bonds worth 500 trillion dong ($31 million) next week to help finance water supply and bridge construction projects, state media said on Thursday.
The bonds would carry an annual coupon of 10.3 percent, the Vietnam Economic Times newspaper said, and the partly private Vietnam International Bank and Vietnam International Securities Co. would underwrite the issue.
The proceeds would help finance the $108-million Phu My bridge, a Kenh Dong water supply project costing $74.4 million and the $93-million Thu Duc Water Treatment Plant.
CII did not say if it planned to list the bonds on Vietnam's stock market.
Shares in the firm had risen 2,000 dong to 64,000 dong ($3.97) at 0137 GMT on Thursday, valuing CII at $119 million.
CII invests in urban projects such as roads, bridges, and residential areas. It also provides consultation on financial investment and collects road tolls.
Source: Reuters
The bonds would carry an annual coupon of 10.3 percent, the Vietnam Economic Times newspaper said, and the partly private Vietnam International Bank and Vietnam International Securities Co. would underwrite the issue.
The proceeds would help finance the $108-million Phu My bridge, a Kenh Dong water supply project costing $74.4 million and the $93-million Thu Duc Water Treatment Plant.
CII did not say if it planned to list the bonds on Vietnam's stock market.
Shares in the firm had risen 2,000 dong to 64,000 dong ($3.97) at 0137 GMT on Thursday, valuing CII at $119 million.
CII invests in urban projects such as roads, bridges, and residential areas. It also provides consultation on financial investment and collects road tolls.
Source: Reuters
Wednesday, July 04, 2007
VN-Index, HaSTC-Index record strong rises
Both the Ho Chi Minh City’s bourse and its Ha Noi-based counterpart reported strong increases by the end of the day’s trading on July 4.
The VN-Index at the country's largest exchange in Ho Chi Minh City climbed by 36.26 points or 3.71 percent from the previous session to close at 1013.56 points with 5,102,090 shares worth more than 500.2 billion VND changing hands.
Binh Dinh Mining (BMC) was among blue chip shares that recorded big gains by tacking 22,000 VND onto its listed price of 481,000 VND per share. It was followed by the Tay Ninh Cable Car Tour (TCT) (up 13,000 VND per unit) and the HCM City-based confectioner Kinh Do Corp ( KDC ) and the Corporation for Financing and Promoting Technology (FPT) up 9,000 VND.
Sai Gon Thuong Tin Commercial Bank (STB) led the market in terms of transaction volume with 1,052,300 shares being traded on the day. It was followed by Song Da Urban and Industrial Zone Investment and Development ( SJS ) , Imexpharm Pharmaceutical Joint Stock Company ( IMP) and the Bach Tuyet Cotton Company ( BBT ).
Both Tan Binh Culture Joint Stock Company (ALT) and Mechanical Company Lu Gia ( LGC ) dropped 3,000 VND per share to be listed among the five biggest losers at the session.
The Telecom Equipment Company VTC will issue an additional 193,187 shares, coded VTC, at the HCM City’s bourse on July 5. The issuance is to be used for dividend payout for 2006 of 8 percent per share.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by 15.31 points after posting almost two weeks of consecutive losses to finish at 267.92 points.
More than 1.48 million shares, worth 156.92 billion VND in total, changed hands on the day.
Blue-chippers Saigon Securities (SSI), Asian Commercial Bank (ACB) and Bao Viet Securities (BVS) were among the top five gainers out of the 63 shares that added value to their stock. SSI added 11,700 VND to finish at 157,700 VND, followed by ACB with 9,800 VND to close at 120,700 VND and BVS 5,900 VND to wind up on 415,000 VND.
Source: VNA
The VN-Index at the country's largest exchange in Ho Chi Minh City climbed by 36.26 points or 3.71 percent from the previous session to close at 1013.56 points with 5,102,090 shares worth more than 500.2 billion VND changing hands.
Binh Dinh Mining (BMC) was among blue chip shares that recorded big gains by tacking 22,000 VND onto its listed price of 481,000 VND per share. It was followed by the Tay Ninh Cable Car Tour (TCT) (up 13,000 VND per unit) and the HCM City-based confectioner Kinh Do Corp ( KDC ) and the Corporation for Financing and Promoting Technology (FPT) up 9,000 VND.
Sai Gon Thuong Tin Commercial Bank (STB) led the market in terms of transaction volume with 1,052,300 shares being traded on the day. It was followed by Song Da Urban and Industrial Zone Investment and Development ( SJS ) , Imexpharm Pharmaceutical Joint Stock Company ( IMP) and the Bach Tuyet Cotton Company ( BBT ).
Both Tan Binh Culture Joint Stock Company (ALT) and Mechanical Company Lu Gia ( LGC ) dropped 3,000 VND per share to be listed among the five biggest losers at the session.
The Telecom Equipment Company VTC will issue an additional 193,187 shares, coded VTC, at the HCM City’s bourse on July 5. The issuance is to be used for dividend payout for 2006 of 8 percent per share.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by 15.31 points after posting almost two weeks of consecutive losses to finish at 267.92 points.
More than 1.48 million shares, worth 156.92 billion VND in total, changed hands on the day.
Blue-chippers Saigon Securities (SSI), Asian Commercial Bank (ACB) and Bao Viet Securities (BVS) were among the top five gainers out of the 63 shares that added value to their stock. SSI added 11,700 VND to finish at 157,700 VND, followed by ACB with 9,800 VND to close at 120,700 VND and BVS 5,900 VND to wind up on 415,000 VND.
Source: VNA
Is HSBC’s warning trustworthy?
The stock market has been stirred up by the prediction of HSBC’s securities expert Garry Evans who said that the VN Index would fall to the 900 point level by the end of this year. However, analysts have said that the warning is not reliable.
The Hong Kong and Shanghai Banking Corporation (HSBC) has relied on the P/E indexes of listing companies as the main basis for the warning.
HSBC concluded that the P/E indexes of many share items were too high though they had been adjusted recently.
It is not understandable why HSBC just refers to the P/E indexes to give such a conclusion. Both foreign and domestic securities experts think that it is a correct method, but ultimately insufficient.
Huy Nam, a securities expert, said: “If only looking at the P/E Index, no one would dare inject money in blue chips like FPT, VNM, STB, ITA, TDH, and VHS. I think it is necessary to consider other indexes as well, including profit, prospects and demand and supply basis.”
The director of a securities company said that HSBC was presumptuous to give such a conclusion. Investors should still buy share items which have a high P/E index as long as they have good prospects and profitability. If the profit is big next year, the P/E will decrease, he said.
Securities expert Tran Ngoc Nam also questioned if HSBC wasn’t too hasty giving the warning at a very sensitive moment. He recalled that in May 2007, HSBC cited false information about the P/E indexes of SSI, PVD, BVS, BTS and VNR, creating bad impacts on the market. The banking corporation had to correct the information but the share items suffered before the correction.
In fact, the warning has not caused havoc because investors are wise enough to question: why are foreign investors still buying shares despite HSBC’s warning?
In the six consecutive trading sessions from June 26 to July 3, foreign investors bought more than they sold, while they bought more than at any other time during the trading sessions just before and after HSBC’s warning was released.
On July 2, when the VN Index fell down to below 1,000 points and disappointment pervaded the trading floors, foreign investors bought shares in large quantities. The purchasing volume was 2.5-fold higher and the purchasing value was 3-fold higher than the sales (bought: 1.673mil units, VND252bil; sold: 633,000 units, VND71bil).
On July 3, 2007, a lot of share items that, according to HSBC report, had high P/E indexes like FPT, SJS, TAC, HRC, and PVD, were hunted by foreign investors, and many of the items have run out of room for foreign investors.
Huynh Anh Tuan, Head of the Brokerage Division under ACB Securities Company, said that in most cases, domestic investors should not follow foreign investors, but they should analyse the recent moves by foreign investors.
Vu Ngoc Huy, a Viet Kieu investor on SBS trading floor, noted: “If foreign investors believed the warning of HSBC, they would not buy shares in such large quantities. Having 20 years of experience as an investor in the US, I dare say that foreign investors do not pay any attention to the warning.”
Director of an investment fund also said that foreign investors all had their own sources of information and analysis, and they knew what to do at a given time. Domestic investors prove to be too hasty when selling shares for fear that the VN Index will fall to below the 1,000 point level.
Analysts have reminded the public that the scenario has occurred at least three times so far this year. Domestic investors, believing warnings of foreign experts, tried to sell shares while foreign investors tried to buy. And domestic investors have since had to buy shares from foreign investors at high prices.
Source: VNE
The Hong Kong and Shanghai Banking Corporation (HSBC) has relied on the P/E indexes of listing companies as the main basis for the warning.
HSBC concluded that the P/E indexes of many share items were too high though they had been adjusted recently.
It is not understandable why HSBC just refers to the P/E indexes to give such a conclusion. Both foreign and domestic securities experts think that it is a correct method, but ultimately insufficient.
Huy Nam, a securities expert, said: “If only looking at the P/E Index, no one would dare inject money in blue chips like FPT, VNM, STB, ITA, TDH, and VHS. I think it is necessary to consider other indexes as well, including profit, prospects and demand and supply basis.”
The director of a securities company said that HSBC was presumptuous to give such a conclusion. Investors should still buy share items which have a high P/E index as long as they have good prospects and profitability. If the profit is big next year, the P/E will decrease, he said.
Securities expert Tran Ngoc Nam also questioned if HSBC wasn’t too hasty giving the warning at a very sensitive moment. He recalled that in May 2007, HSBC cited false information about the P/E indexes of SSI, PVD, BVS, BTS and VNR, creating bad impacts on the market. The banking corporation had to correct the information but the share items suffered before the correction.
In fact, the warning has not caused havoc because investors are wise enough to question: why are foreign investors still buying shares despite HSBC’s warning?
In the six consecutive trading sessions from June 26 to July 3, foreign investors bought more than they sold, while they bought more than at any other time during the trading sessions just before and after HSBC’s warning was released.
On July 2, when the VN Index fell down to below 1,000 points and disappointment pervaded the trading floors, foreign investors bought shares in large quantities. The purchasing volume was 2.5-fold higher and the purchasing value was 3-fold higher than the sales (bought: 1.673mil units, VND252bil; sold: 633,000 units, VND71bil).
On July 3, 2007, a lot of share items that, according to HSBC report, had high P/E indexes like FPT, SJS, TAC, HRC, and PVD, were hunted by foreign investors, and many of the items have run out of room for foreign investors.
Huynh Anh Tuan, Head of the Brokerage Division under ACB Securities Company, said that in most cases, domestic investors should not follow foreign investors, but they should analyse the recent moves by foreign investors.
Vu Ngoc Huy, a Viet Kieu investor on SBS trading floor, noted: “If foreign investors believed the warning of HSBC, they would not buy shares in such large quantities. Having 20 years of experience as an investor in the US, I dare say that foreign investors do not pay any attention to the warning.”
Director of an investment fund also said that foreign investors all had their own sources of information and analysis, and they knew what to do at a given time. Domestic investors prove to be too hasty when selling shares for fear that the VN Index will fall to below the 1,000 point level.
Analysts have reminded the public that the scenario has occurred at least three times so far this year. Domestic investors, believing warnings of foreign experts, tried to sell shares while foreign investors tried to buy. And domestic investors have since had to buy shares from foreign investors at high prices.
Source: VNE
How are listed companies’ financial investments performing?
Of the 107 companies listing at the HCM City Securities Trading Centre, only five do not make financial investments, namely CYC, MCP, SAF, VGP and VPK. The other 102 companies have financial investment deals totalling several trillion VND.
Buying shares or bonds proves to be a suitable way to make temporarily idle capital produce profit, and companies always make short-term investments this way.
As for REE Corp, the Refrigeration Electrical Engineering Corporation, for example, financial investment has become a key business. As of March 31, 2007, the corporation had financial investment deals worth VND1,312bil ($82mil) comprising the investment of VND503bil ($31.43mil) in securities and VND814bil ($50.87mil) in deposits.
In 2006, the financial investments of REE brought about the profit of VND150bil ($9.37mil), and the figure was VND125bil ($7.81mil) in the first quarter of 2007.
Normally, there are three ways for a company to begin its financial investment: 1. build a division in charge of financial investment 2. cooperate with another company 3. set up a subsidiary.
The first and the second ways prove to be suitable for small companies, which do not have much capital and do not have financial experts. The third way is only for big corporations and groups.
Currently, many companies are trying to raise funds from existing shareholders and the public in order to raise their chartered capital. A part of the raised capital would be injected in production, while the remaining would be reserved for financial investments. Some companies even borrow money from banks to inject in financial investment deals though they lack capital for production activities.
Companies’ investments in each other often create links which can have impacts on share prices. For example, REE Corp now holds shares of Sacombank, and vice versa, the bank holds shares of REE (REE has 11mil Sacombank shares). Therefore, if Sacombank’s share price increased from VND60,000/share to VND100,000 and VND160,000/share, it would lead to the increase of REE shares.
In some cases, enterprises are too busy with their financial investments, ignoring their main business and production, leading to bad business performances and danger. And concerns have been raised that the danger of a company may have bad impacts on other companies that invest in this company, and become a danger for the whole system.
Analysts have said that making financial investments has become a tendency that many companies are following. In the near future, with the national economy performing well with the growth rate of more than 8% per annum, and when commodities are profuse (a lot of IPOs are to be conducted in some days), it is expected that more and more companies will be lured by financial investment deals.
Source: VNE
Buying shares or bonds proves to be a suitable way to make temporarily idle capital produce profit, and companies always make short-term investments this way.
As for REE Corp, the Refrigeration Electrical Engineering Corporation, for example, financial investment has become a key business. As of March 31, 2007, the corporation had financial investment deals worth VND1,312bil ($82mil) comprising the investment of VND503bil ($31.43mil) in securities and VND814bil ($50.87mil) in deposits.
In 2006, the financial investments of REE brought about the profit of VND150bil ($9.37mil), and the figure was VND125bil ($7.81mil) in the first quarter of 2007.
Normally, there are three ways for a company to begin its financial investment: 1. build a division in charge of financial investment 2. cooperate with another company 3. set up a subsidiary.
The first and the second ways prove to be suitable for small companies, which do not have much capital and do not have financial experts. The third way is only for big corporations and groups.
Currently, many companies are trying to raise funds from existing shareholders and the public in order to raise their chartered capital. A part of the raised capital would be injected in production, while the remaining would be reserved for financial investments. Some companies even borrow money from banks to inject in financial investment deals though they lack capital for production activities.
Companies’ investments in each other often create links which can have impacts on share prices. For example, REE Corp now holds shares of Sacombank, and vice versa, the bank holds shares of REE (REE has 11mil Sacombank shares). Therefore, if Sacombank’s share price increased from VND60,000/share to VND100,000 and VND160,000/share, it would lead to the increase of REE shares.
In some cases, enterprises are too busy with their financial investments, ignoring their main business and production, leading to bad business performances and danger. And concerns have been raised that the danger of a company may have bad impacts on other companies that invest in this company, and become a danger for the whole system.
Analysts have said that making financial investments has become a tendency that many companies are following. In the near future, with the national economy performing well with the growth rate of more than 8% per annum, and when commodities are profuse (a lot of IPOs are to be conducted in some days), it is expected that more and more companies will be lured by financial investment deals.
Source: VNE
Draft decree takes stab at fulfilling WTO commitments
Vietnam's accession to the WTO on January 11, 2007, was viewed as a significant step towards strengthening and stabilising the nation's business climate. However, concerns have been raised that these expectations have not been met in the five months since accession.
A draft decree being circulated to the public by the Viet Nam Business Forum would go some way toward erasing this perception by formally regulating the nation's compliance with many of its commitments made to the WTO and WTO trading partners.
The draft is still rough, however. Many of the detailed provisions for implementing WTO commitments to be spelled out in an annex to the decree has yet to be drafted or circulated.
Some WTO commitments are also not fully and or correctly expressed in the draft. For instance, trading rights and the ENT (Economic Needs Test) are expressed differently between the WTO Accession Report and the draft decree.
Phrases such as "Vietnamese enterprise" and "foreign-invested enterprise" are not used consistently between the two. Definitions of the latter in the draft decree includes a domestic Vietnamese company with only a minority foreign shareholding.
Under the unified Enterprise Law, both foreign-invested and domestic companies are organised under the same business forms. Over time, the controlling stake in a company could shift between foreign and domestic shareholders as stocks change hands.
The draft decree also needs to make clear that full trading rights include the right to sell imported products to any individual or enterprise having the right to distribute such products in Vietnam. This is in order to avoid local officials restricting trading rights on the basis of the wording of the draft decree.
Conflicts with the WTO Accession Report, the Schedule for Commitments on Services and other provisions of Vietnamese law regarding implementation of WTO commitments abound.
For example, if a service is "unbound" according to the Schedule, it means that there is no commitment by Vietnam to an agreed level of restriction. In the draft decree, however, "unbound" is defined as "the application of market access restriction measures and national treatment in accordance with Vietnamese law (if any) with respect to the establishment or operations of a commercial presence in service sectors/sub-sectors stipulated in the Schedule."
If Vietnamese law is silent on an "unbound" service sector, i.e., there are no domestic regulations concerning market access and national treatment for that sector, the authorities are obliged to allow business registration or to issue a certificate of investment.
This is because, without restrictions applying to the registration or certification of an enterprise in that service sector, there is no basis for the authorities to deny registration or certification.
In reality, though, the authorities may well refuse to issue registration or a licence on the basis that there are no requirements set forth in the Schedule, the draft decree or other Vietnamese laws. Ideally, the draft decree should be worded to forestall such confusion.
The draft decree should also make it clear that a company licensed before January 1, 2007, that applies to adjust its investment licence to take into account the Schedule for Commitments on Services, the Ministry of Planning and Investment must not treat this as an application for a separate investment licence.
Another example of a potential conflict between domestic laws implementing WTO commitment and the original WTO commitment documents arises where the draft decree purports to import by reference certain paragraphs of the Accession Report and Schedule.
The draft Decree does not interpret those provisions but attempts to summarise them and thus runs the risk of Inadvertently changing the meaning of certain provisions.
Despite the draft Decree containing a provision stating that the original WTO commitment takes precedence over such summaries, this could lead to unnecessary confusion.
Another concern arising out of such incorporation by reference is that Vietnam's commitments contained in the report and schedule are quite general and require more specific implementation for them to be realised.
Source: VNE
A draft decree being circulated to the public by the Viet Nam Business Forum would go some way toward erasing this perception by formally regulating the nation's compliance with many of its commitments made to the WTO and WTO trading partners.
The draft is still rough, however. Many of the detailed provisions for implementing WTO commitments to be spelled out in an annex to the decree has yet to be drafted or circulated.
Some WTO commitments are also not fully and or correctly expressed in the draft. For instance, trading rights and the ENT (Economic Needs Test) are expressed differently between the WTO Accession Report and the draft decree.
Phrases such as "Vietnamese enterprise" and "foreign-invested enterprise" are not used consistently between the two. Definitions of the latter in the draft decree includes a domestic Vietnamese company with only a minority foreign shareholding.
Under the unified Enterprise Law, both foreign-invested and domestic companies are organised under the same business forms. Over time, the controlling stake in a company could shift between foreign and domestic shareholders as stocks change hands.
The draft decree also needs to make clear that full trading rights include the right to sell imported products to any individual or enterprise having the right to distribute such products in Vietnam. This is in order to avoid local officials restricting trading rights on the basis of the wording of the draft decree.
Conflicts with the WTO Accession Report, the Schedule for Commitments on Services and other provisions of Vietnamese law regarding implementation of WTO commitments abound.
For example, if a service is "unbound" according to the Schedule, it means that there is no commitment by Vietnam to an agreed level of restriction. In the draft decree, however, "unbound" is defined as "the application of market access restriction measures and national treatment in accordance with Vietnamese law (if any) with respect to the establishment or operations of a commercial presence in service sectors/sub-sectors stipulated in the Schedule."
If Vietnamese law is silent on an "unbound" service sector, i.e., there are no domestic regulations concerning market access and national treatment for that sector, the authorities are obliged to allow business registration or to issue a certificate of investment.
This is because, without restrictions applying to the registration or certification of an enterprise in that service sector, there is no basis for the authorities to deny registration or certification.
In reality, though, the authorities may well refuse to issue registration or a licence on the basis that there are no requirements set forth in the Schedule, the draft decree or other Vietnamese laws. Ideally, the draft decree should be worded to forestall such confusion.
The draft decree should also make it clear that a company licensed before January 1, 2007, that applies to adjust its investment licence to take into account the Schedule for Commitments on Services, the Ministry of Planning and Investment must not treat this as an application for a separate investment licence.
Another example of a potential conflict between domestic laws implementing WTO commitment and the original WTO commitment documents arises where the draft decree purports to import by reference certain paragraphs of the Accession Report and Schedule.
The draft Decree does not interpret those provisions but attempts to summarise them and thus runs the risk of Inadvertently changing the meaning of certain provisions.
Despite the draft Decree containing a provision stating that the original WTO commitment takes precedence over such summaries, this could lead to unnecessary confusion.
Another concern arising out of such incorporation by reference is that Vietnam's commitments contained in the report and schedule are quite general and require more specific implementation for them to be realised.
Source: VNE
HSBC forecast rocks investor confidence
A HSBC report predicting the VN-Index will drop to 900 points by the end of the year caused havoc on the exchange on July 3.
The index, the country’s primary stock indicator, on July 3 closed at 977.3 points with the HCM City Securities Trading Centre trading at a price-earnings (P/E) ratio of around 33 times on 2006 earnings.
“Assuming 25 percent EPS (earnings per share) growth this year and 15 percent next (roughly the rate of nominal GDP growth), this equates to a P/E of 25 on 2007 earnings and 21 on 2008,” the report said, indicating the market is currently grossly overvalued.
Most investment funds are not hurrying to pump more money into the stock market, wrote HSBC analysts, and are expected to use their cash positions during initial public offerings of large State-owned enterprises during the second half of the year.
HSBC indicated it would not be aggressive buyer at this time, though “the fundamental long-term story for Viet Nam is very much intact.” The leading global bank predicts the index to move sideways over the next few months.
The HSBC forecast shocked Vietnamese investors given local analysts have been predicting the index would rebound to as high as 1,300 points by the end of the year.
However, foreign fund managers were seemingly unfazed by the HSBC news.
Juerg Vontobel, chairman of the Viet Nam Holding Asset Management, said foreign investors have been very cautious before deciding to invest in the local stock market.
Fund managers worry that share prices in an emerging market like Viet Nam were too high and the market was not as attractive as it had been six months ago.
Vontobel suggested that retail investors should avoid taking out loans to invest in stock and if already exposed to debt should consider selling shares as soon as possible.
Vo Ngoc Huy, deputy investment manager at Sacombank Securities, did not agree with HSBC’s assessment, saying the market is still largely based on local supply and demand.
“Local investors now seem to be more confident in making decisions. They are well-informed about the stock market and do not depend too much on foreign investors’ lead,” he said.
Having already gone through a few market fluctuations, investors have also become more patient, he added, and would not be affected by the negative forecast.
Analysts also argue that any market declines over the short term should be limited by positive mid-year earning reports.
Vu Hoai Chang, a SME Securities analyst, said it was impossible for the market to fall so sharply due to solid macro-economic factors and positive business performance.
He also stressed “ HSBC made the prediction based on an unsuitable P/E ratio”. By only looking at the P/E of shares, investors would not buy any stock, he said.
Do Thuy Anh Phuc, an investor at SSI, remains optimistic and does not foresee the market dropping below 950 points. She predicts the HCM City bourse will recover in the next few days as local investors go bargain hunting and become net buyers.
Source: VNA
The index, the country’s primary stock indicator, on July 3 closed at 977.3 points with the HCM City Securities Trading Centre trading at a price-earnings (P/E) ratio of around 33 times on 2006 earnings.
“Assuming 25 percent EPS (earnings per share) growth this year and 15 percent next (roughly the rate of nominal GDP growth), this equates to a P/E of 25 on 2007 earnings and 21 on 2008,” the report said, indicating the market is currently grossly overvalued.
Most investment funds are not hurrying to pump more money into the stock market, wrote HSBC analysts, and are expected to use their cash positions during initial public offerings of large State-owned enterprises during the second half of the year.
HSBC indicated it would not be aggressive buyer at this time, though “the fundamental long-term story for Viet Nam is very much intact.” The leading global bank predicts the index to move sideways over the next few months.
The HSBC forecast shocked Vietnamese investors given local analysts have been predicting the index would rebound to as high as 1,300 points by the end of the year.
However, foreign fund managers were seemingly unfazed by the HSBC news.
Juerg Vontobel, chairman of the Viet Nam Holding Asset Management, said foreign investors have been very cautious before deciding to invest in the local stock market.
Fund managers worry that share prices in an emerging market like Viet Nam were too high and the market was not as attractive as it had been six months ago.
Vontobel suggested that retail investors should avoid taking out loans to invest in stock and if already exposed to debt should consider selling shares as soon as possible.
Vo Ngoc Huy, deputy investment manager at Sacombank Securities, did not agree with HSBC’s assessment, saying the market is still largely based on local supply and demand.
“Local investors now seem to be more confident in making decisions. They are well-informed about the stock market and do not depend too much on foreign investors’ lead,” he said.
Having already gone through a few market fluctuations, investors have also become more patient, he added, and would not be affected by the negative forecast.
Analysts also argue that any market declines over the short term should be limited by positive mid-year earning reports.
Vu Hoai Chang, a SME Securities analyst, said it was impossible for the market to fall so sharply due to solid macro-economic factors and positive business performance.
He also stressed “ HSBC made the prediction based on an unsuitable P/E ratio”. By only looking at the P/E of shares, investors would not buy any stock, he said.
Do Thuy Anh Phuc, an investor at SSI, remains optimistic and does not foresee the market dropping below 950 points. She predicts the HCM City bourse will recover in the next few days as local investors go bargain hunting and become net buyers.
Source: VNA
New method of assessing industrial growth comes into use
A new method in assessing the index of industrial production (IIP) has been officially adopted by the General Statistics office (GSO) to better assess Viet Nam’s economic growth.
The GSO made the announcement at a conference held in Ha Noi on July 3 to review trial implementation of the new method in the first half of 2007.
Under the new standard, the index of industrial production (IIP) will be measured in terms of the volume of industrial products instead of basing on the 1994’ prices and will be released every month, together with the index production of key industrial commodities and their volume.
The GSO have applied the new method in cooperation with the Japanese International Cooperation Agency (JICA) to assess industrial growth in 25 provinces and cities nationwide over the past six months. The move is part of a joint initiative between Viet Nam and Japan geared to bring the Southeast Asian country’s statistics work in line with international standards.
The IIP method is already applied by many countries around the world such as India and Japan.
Source: VNA
The GSO made the announcement at a conference held in Ha Noi on July 3 to review trial implementation of the new method in the first half of 2007.
Under the new standard, the index of industrial production (IIP) will be measured in terms of the volume of industrial products instead of basing on the 1994’ prices and will be released every month, together with the index production of key industrial commodities and their volume.
The GSO have applied the new method in cooperation with the Japanese International Cooperation Agency (JICA) to assess industrial growth in 25 provinces and cities nationwide over the past six months. The move is part of a joint initiative between Viet Nam and Japan geared to bring the Southeast Asian country’s statistics work in line with international standards.
The IIP method is already applied by many countries around the world such as India and Japan.
Source: VNA
Solid growth cements profits of $21 million
Solid growth for Viet Nam Cement Corporation (VNCC) has resulted in profits of VND342 billion (US$21 million).
VNCC produced 7.05 million tonnes of cement in the first two quarters and achieved 49 per cent of the company’s 2007 target. These impressive results have been achieved despite the increasing cost of oil, gas, plaster and transport.
In the last two quarters, VNCC plans to produce 14.2 million tonnes of cement to meet market demands. By modernising its internal structure, VNCC is paving the way for future strength.
Transforming the company’s distribution system is reported to be the biggest change within the organisation during the last six months.
In an attempt to save management costs and increase the company’s competitiveness, VNCC changed from commissioning agent into the purchaser-distributor for the four production companies in northern provinces.
The corporation contributes VND270 billion ($16.8 million) to the State Budget.
VNCC has actively guided its members in developing their production, financial management and cost-saving capabilities.
The corporation plans to complete the equitisation of three member companies which are the Ha Tien 2 Cement Company, Hoang Mai Cement Company and Hai Van Cement Company by the end of this year.
Up to now, seven member companies of VNCC have been equitised, others will begin the process in 2008.
Source: VNS
VNCC produced 7.05 million tonnes of cement in the first two quarters and achieved 49 per cent of the company’s 2007 target. These impressive results have been achieved despite the increasing cost of oil, gas, plaster and transport.
In the last two quarters, VNCC plans to produce 14.2 million tonnes of cement to meet market demands. By modernising its internal structure, VNCC is paving the way for future strength.
Transforming the company’s distribution system is reported to be the biggest change within the organisation during the last six months.
In an attempt to save management costs and increase the company’s competitiveness, VNCC changed from commissioning agent into the purchaser-distributor for the four production companies in northern provinces.
The corporation contributes VND270 billion ($16.8 million) to the State Budget.
VNCC has actively guided its members in developing their production, financial management and cost-saving capabilities.
The corporation plans to complete the equitisation of three member companies which are the Ha Tien 2 Cement Company, Hoang Mai Cement Company and Hai Van Cement Company by the end of this year.
Up to now, seven member companies of VNCC have been equitised, others will begin the process in 2008.
Source: VNS
Warehouses to help stabilise gold prices
Last week saw the country’s first two bonded warehouses open, a move that is expected to help stabilise the domestic gold market and drive prices closer to global levels.
Agribank Jewelry Co (AJC) opened a bonded warehouse on June 25 in Ha Noi. Four days later, Sai Gon Jewelry Co (SJC) followed suit in HCM City.
"We expect to reduce processing times for gold imports from two to three days to less than a day, and cut transportation costs from US$1.00-1.10 a tael to $0.60-0.70," says AJC Director Nguyen Thanh Truc.
The gold depositories will also help consumers cut costs by eliminating much of the transportation, customs, and airport storage fees, and reduce interest rate payments on bank loans, says Nguyen Huu Thuan, SJC deputy general director.
In addition, companies will no longer have to transport gold via intermediaries in Hong Kong, Singapore, Switzerland or Japan. Janet Leung, director of Hong Kong-based Securicor, says the bonded warehouses will make gold imports easier to handle and more secure.
Going through intermediaries also requires the use of high cost insurance programmes, which can run as much as $1,500 to ship 100 kilograms of gold.
The warehouses are also expected to stabilise domestic gold prices by adequately managing supply levels. Previously, shortages often caused local prices to trade VND500,000-700,000 ($31.25-43.75) a tael higher compared to global levels, says SJC general director cum chairman of the Viet Nam Gold Association, Nguyen Thanh Long.
The International Gold Council this year estimates that demand for gold in Viet Nam could reach 70-80 tonnes. A Brink’s Viet Nam representative, Ben Van Kerkwijk predicts in the short run demand will accelerate.
Companies are already showing interest in storing gold and other precious metals at the two depositories.
Truc says that Switzerland’s PB Bank and Japan’s Mutsui Group were finalising paperwork to store gold in AJC’s warehouse, while Securicor has already made a deposit.
SJC’s bonded warehouse has drawn interest from international banks including HSBC, Mutsui Corp, Bipelle Group, DBS Bank Ltd and the Bank of Scotia Mocatta, said Thuan. Bipelle, an arm of Banca Popolare Italiana Group, has already finalised paperwork to deposit 1-2 tonnes of gold with SJC.
As importing gold becomes easier, SJC expects to process up to 12,000 taels of gold every five days against the current rate of 8,000 taels in seven days.
A problem, though, is finding adequate insurance coverage. Foreign partners often do not want to use a local insurer.
AJC has solved the problem by allowing Securicor to cover insurance issues by signing contracts with foreign policy providers. This set up limits AJC’s access to foreign partners, says Truc.
The State Bank of Viet Nam approved the creation of bonded warehouses to generate profits for both the private sector and central bank. The difference, though, is depositories have to spend more time concentrating on consumer demands and needs, says Nguyen Dong Tien, deputy central bank governor.
Tien also says the central bank wants to have only a few bonded warehouses instead of creating multiple players, which would be harder to control.
Source: VNS
Agribank Jewelry Co (AJC) opened a bonded warehouse on June 25 in Ha Noi. Four days later, Sai Gon Jewelry Co (SJC) followed suit in HCM City.
"We expect to reduce processing times for gold imports from two to three days to less than a day, and cut transportation costs from US$1.00-1.10 a tael to $0.60-0.70," says AJC Director Nguyen Thanh Truc.
The gold depositories will also help consumers cut costs by eliminating much of the transportation, customs, and airport storage fees, and reduce interest rate payments on bank loans, says Nguyen Huu Thuan, SJC deputy general director.
In addition, companies will no longer have to transport gold via intermediaries in Hong Kong, Singapore, Switzerland or Japan. Janet Leung, director of Hong Kong-based Securicor, says the bonded warehouses will make gold imports easier to handle and more secure.
Going through intermediaries also requires the use of high cost insurance programmes, which can run as much as $1,500 to ship 100 kilograms of gold.
The warehouses are also expected to stabilise domestic gold prices by adequately managing supply levels. Previously, shortages often caused local prices to trade VND500,000-700,000 ($31.25-43.75) a tael higher compared to global levels, says SJC general director cum chairman of the Viet Nam Gold Association, Nguyen Thanh Long.
The International Gold Council this year estimates that demand for gold in Viet Nam could reach 70-80 tonnes. A Brink’s Viet Nam representative, Ben Van Kerkwijk predicts in the short run demand will accelerate.
Companies are already showing interest in storing gold and other precious metals at the two depositories.
Truc says that Switzerland’s PB Bank and Japan’s Mutsui Group were finalising paperwork to store gold in AJC’s warehouse, while Securicor has already made a deposit.
SJC’s bonded warehouse has drawn interest from international banks including HSBC, Mutsui Corp, Bipelle Group, DBS Bank Ltd and the Bank of Scotia Mocatta, said Thuan. Bipelle, an arm of Banca Popolare Italiana Group, has already finalised paperwork to deposit 1-2 tonnes of gold with SJC.
As importing gold becomes easier, SJC expects to process up to 12,000 taels of gold every five days against the current rate of 8,000 taels in seven days.
A problem, though, is finding adequate insurance coverage. Foreign partners often do not want to use a local insurer.
AJC has solved the problem by allowing Securicor to cover insurance issues by signing contracts with foreign policy providers. This set up limits AJC’s access to foreign partners, says Truc.
The State Bank of Viet Nam approved the creation of bonded warehouses to generate profits for both the private sector and central bank. The difference, though, is depositories have to spend more time concentrating on consumer demands and needs, says Nguyen Dong Tien, deputy central bank governor.
Tien also says the central bank wants to have only a few bonded warehouses instead of creating multiple players, which would be harder to control.
Source: VNS
Bao Viet avoids holding second auction
Insurance giant Bao Viet, the May 31st IPO of which fell short of expectations, will not have to hold a second share auction since the number of shares purchased in the initial auction has exceeded 70 per cent of the total shares offered, according to Bao Viet chairman Le Quang Binh.
A preliminary calculation, made three days following the June 26 deadline for winning investors to pay for the shares they had won, had indicated that unsold shares were less than 30 per cent of the issue.
Binh announced at that time that, if the proportion of unsold shares was more than 30 per cent, Bao Viet would be forced to conduct a second auction to sell the remaining shares.
Having escaped that fate, Binh said, the corporation would submit to the Ministry of Finance a specific plan for selling the abandoned stake, pursuant to regulations in Circular No 95/2006/TT-BTC dated October 12, 2006.
Under the plan, investors could negotiate to buy the remaining shares at a minimum price of VND73,910 (US$4.59) per share, the average winning price in the IPO.
If the shares fail to sell, Bao Viet would seek the ministry’s permission to adjust its charter capital and the proportion of State holdings.
The next sale would be conducted after Bao Viet has the official results of the initial auction and would not be delayed until foreign strategic partners are selected, Binh noted.
Selection of foreign strategic partners was expected this month, with many foreign financial and insurance institutions having expressed interest in investing in Bao Viet.
The criteria for selection would be partners who can offer high bids and large technical support, Binh said.
"We can lower the price at which shares will be sold for strategic partners if they can commit to give us great technical support," Binh said. "The target of Bao Viet’s equitisation is not only to enhance financial capacity but also improve management skills, technology application and operational experience."
It was likely that Bao Viet would choose only one or two foreign strategic investors, Binh stressed.
Bao Viet has chosen three domestic strategic investors so far: VNPT, which holds 3.25 per cent of shares; Vinashin, which holds 3 per cent; and the Southern Airports Services Co (Sasco), which holds 0.75 per cent.
Source: VNS
A preliminary calculation, made three days following the June 26 deadline for winning investors to pay for the shares they had won, had indicated that unsold shares were less than 30 per cent of the issue.
Binh announced at that time that, if the proportion of unsold shares was more than 30 per cent, Bao Viet would be forced to conduct a second auction to sell the remaining shares.
Having escaped that fate, Binh said, the corporation would submit to the Ministry of Finance a specific plan for selling the abandoned stake, pursuant to regulations in Circular No 95/2006/TT-BTC dated October 12, 2006.
Under the plan, investors could negotiate to buy the remaining shares at a minimum price of VND73,910 (US$4.59) per share, the average winning price in the IPO.
If the shares fail to sell, Bao Viet would seek the ministry’s permission to adjust its charter capital and the proportion of State holdings.
The next sale would be conducted after Bao Viet has the official results of the initial auction and would not be delayed until foreign strategic partners are selected, Binh noted.
Selection of foreign strategic partners was expected this month, with many foreign financial and insurance institutions having expressed interest in investing in Bao Viet.
The criteria for selection would be partners who can offer high bids and large technical support, Binh said.
"We can lower the price at which shares will be sold for strategic partners if they can commit to give us great technical support," Binh said. "The target of Bao Viet’s equitisation is not only to enhance financial capacity but also improve management skills, technology application and operational experience."
It was likely that Bao Viet would choose only one or two foreign strategic investors, Binh stressed.
Bao Viet has chosen three domestic strategic investors so far: VNPT, which holds 3.25 per cent of shares; Vinashin, which holds 3 per cent; and the Southern Airports Services Co (Sasco), which holds 0.75 per cent.
Source: VNS
Industrial park developer to invest $74 mln in rice, water
The industrial park developer ITACO (ITA) has said it will invest US$74 million to establish two new firms, a rice exporter and a water supplier.
The Tan Tao Industrial Park Developer Group (ITA, formerly Itaco) will hold majority stakes in the two new companies, ITA-Rice Joint Stock Company and ITA-Water Joint Stock Company.
Both firms will be established in southern Vietnam’s Long An Province, which borders Ho Chi Minh City, Vietnam’s business center.
The developer has yet to disclose the percentage stakes it will maintain in each.
For the rice entity, ITA plans to shell out $43 million to acquire 10,000 ha for export rice cultivation, as well as land for a warehouse, rice mills and a 200h urban area.
ITA rice will be shipped to the US and EU markets. ITA and the local government are in land allocation talks.
The developer has also planned a $31 million investment in ITA-Water Joint Stock Company to build a facility that could supply the province with 300,00 cu.m. of water daily.
Last month, the group unveiled that it would pay $32 million for a 51-percent stake in the Long An-based ITA-Power Company and $15 million for a 50-percent stake in North-West Power Joint Stock Company in the northern Lai Chau province.
The group is developing Tan Duc city – an industrial-residential complex covering 1,160 ha in Long An – at a total investment of $320 million.
ITA, which is the first industrial park developer listed in Vietnam, has been operating the Tan Tao industrial park in Ho Chi Minh City since 1997.
In addition the company is also branching out into highway and residential property development projects.
Last year, the company earned VND374 billion in revenue and an after-tax profit of over VND148 billion.
It set to earn VND816 billion in revenue and VND300 billion in profits this year.
Source: Thanh Nien
The Tan Tao Industrial Park Developer Group (ITA, formerly Itaco) will hold majority stakes in the two new companies, ITA-Rice Joint Stock Company and ITA-Water Joint Stock Company.
Both firms will be established in southern Vietnam’s Long An Province, which borders Ho Chi Minh City, Vietnam’s business center.
The developer has yet to disclose the percentage stakes it will maintain in each.
For the rice entity, ITA plans to shell out $43 million to acquire 10,000 ha for export rice cultivation, as well as land for a warehouse, rice mills and a 200h urban area.
ITA rice will be shipped to the US and EU markets. ITA and the local government are in land allocation talks.
The developer has also planned a $31 million investment in ITA-Water Joint Stock Company to build a facility that could supply the province with 300,00 cu.m. of water daily.
Last month, the group unveiled that it would pay $32 million for a 51-percent stake in the Long An-based ITA-Power Company and $15 million for a 50-percent stake in North-West Power Joint Stock Company in the northern Lai Chau province.
The group is developing Tan Duc city – an industrial-residential complex covering 1,160 ha in Long An – at a total investment of $320 million.
ITA, which is the first industrial park developer listed in Vietnam, has been operating the Tan Tao industrial park in Ho Chi Minh City since 1997.
In addition the company is also branching out into highway and residential property development projects.
Last year, the company earned VND374 billion in revenue and an after-tax profit of over VND148 billion.
It set to earn VND816 billion in revenue and VND300 billion in profits this year.
Source: Thanh Nien
Investor fined $1,859 for stock rigging
The Vietnamese securities watchdog has slapped a fine of VND30 million (US$1,859) on an investor for manipulating stock prices.
The State Securities Commission (SSC) found Nguyen Diem Khanh, a director of of the Ho Chi Minh City-based LiLi Joint Stock Company which specializes in financial investment, guilty of “illegal cooperation in securities trading” to create fake demand and rig stock prices.
But it did not disclose any further information like whom she was in collusion with and which stock prices they manipulated.
This has raised protests from investors who are also indignant that the SSC took nearly one month to make the charges and fine public after making the decision on May 30.
Khanh is the first investor to be fined for stock rigging.
The fine amount is the lowest provided for under the law, with the maximum being VND50 million.
An employee of a Hanoi-based fund said even the maximum penalty was not enough deterrent to stop rigging. He added that the most important issue was for the watchdog to come clean on the matter and not give the appearance of hiding something.
Source: Thanh Nien
The State Securities Commission (SSC) found Nguyen Diem Khanh, a director of of the Ho Chi Minh City-based LiLi Joint Stock Company which specializes in financial investment, guilty of “illegal cooperation in securities trading” to create fake demand and rig stock prices.
But it did not disclose any further information like whom she was in collusion with and which stock prices they manipulated.
This has raised protests from investors who are also indignant that the SSC took nearly one month to make the charges and fine public after making the decision on May 30.
Khanh is the first investor to be fined for stock rigging.
The fine amount is the lowest provided for under the law, with the maximum being VND50 million.
An employee of a Hanoi-based fund said even the maximum penalty was not enough deterrent to stop rigging. He added that the most important issue was for the watchdog to come clean on the matter and not give the appearance of hiding something.
Source: Thanh Nien
Vincom raises $37 million in IPO
Vietnam property developer Vincom has raised $37 million from a maiden auction of 5 million shares, or 8.33 percent of the company, the Ho Chi Minh Stock Exchange said Wednesday.
The average winning price at the auction on Tuesday was 119,479 dong ($7.4), or 49 percent higher than Vincom's starting offer of 80,000 dong, the exchange said in a statement.
Foreign investors bought nearly 30,000 of the shares offered, the statement said.
Hanoi-based Vincom, which owns a large office and shopping complex in the capital and a five-star resort in the central city of Nha Trang, is now valued at about $444 million.
Vincom Chairman Le Khac Hiep has said the firm would float its shares on the Ho Chi Minh market next month.
Hiep said in June the firm had won permission from the Ho Chi Minh City government to build a $250 million office complex in the city's District 1 commercial center.
Despite fast economic growth of around 8 percent, Vietnam still suffers from a shortage of quality office buildings and commercial centers.
Vacancy rates at top office buildings in Hanoi and Ho Chi Minh City are at record lows and monthly rents have surged about 20 percent in the last two years to average $30-$35 per square meter, double the rates in Bangkok.
Vincom has forecast its net profit would rise 9 percent next year from 2007 to $8.6 million on revenues of $15.2 million due to strong property demand.
Source: Thanh Nien
The average winning price at the auction on Tuesday was 119,479 dong ($7.4), or 49 percent higher than Vincom's starting offer of 80,000 dong, the exchange said in a statement.
Foreign investors bought nearly 30,000 of the shares offered, the statement said.
Hanoi-based Vincom, which owns a large office and shopping complex in the capital and a five-star resort in the central city of Nha Trang, is now valued at about $444 million.
Vincom Chairman Le Khac Hiep has said the firm would float its shares on the Ho Chi Minh market next month.
Hiep said in June the firm had won permission from the Ho Chi Minh City government to build a $250 million office complex in the city's District 1 commercial center.
Despite fast economic growth of around 8 percent, Vietnam still suffers from a shortage of quality office buildings and commercial centers.
Vacancy rates at top office buildings in Hanoi and Ho Chi Minh City are at record lows and monthly rents have surged about 20 percent in the last two years to average $30-$35 per square meter, double the rates in Bangkok.
Vincom has forecast its net profit would rise 9 percent next year from 2007 to $8.6 million on revenues of $15.2 million due to strong property demand.
Source: Thanh Nien
Vietnam Development Bank bonds raise less than expected
State-run Vietnam Development Bank has raised 175 billion dong ($10.8 million) from auctioning its July 2017 bonds, or just a quarter of its total debt on offer, the Hanoi over-the-counter stock market said on Wednesday.
The exchange's bulletin said it sold the 10-year bond with a yield of 7.95 percent -- only 25 percent of the total 700 billion dong debt on offer -- after four bidders sought yields between 7.65 percent and 8.5 percent at the auction on Tuesday.
The bond, to be issued on July 5, will mature on July 5, 2017. Buyers of the debt were not identified by the market.
Last month, the lender, one of Vietnam's two policy banks, sold 500 billion dong worth of its 15-year bonds with a yield of 8 percent.
The Hanoi market said it would auction the State Treasury's five-year bond on July 9 to raise 700 billion dong ($43.4 million).
Source: Reuters
The exchange's bulletin said it sold the 10-year bond with a yield of 7.95 percent -- only 25 percent of the total 700 billion dong debt on offer -- after four bidders sought yields between 7.65 percent and 8.5 percent at the auction on Tuesday.
The bond, to be issued on July 5, will mature on July 5, 2017. Buyers of the debt were not identified by the market.
Last month, the lender, one of Vietnam's two policy banks, sold 500 billion dong worth of its 15-year bonds with a yield of 8 percent.
The Hanoi market said it would auction the State Treasury's five-year bond on July 9 to raise 700 billion dong ($43.4 million).
Source: Reuters
Tuesday, July 03, 2007
VN-Index, HaSTC continue slides
Both the Ho Chi Minh City and Ha Noi bourses continued their recent downward trends with both bourses on the decline by the end of the July 3 trading session.
The VN-Index at the Ho Chi Minh City Trading Centre dropped by 16.87 points, or 1.7 percent, to close at 977.3 points.
Up to 85 shares lost value on their listed prices with the biggest losers being Hau Giang Pharmaceutical (DHG), Binh Dinh Minerals (BMC), Saigon Hotel Corp. (SGH), Cable and Telecom Materials (SAM) and Kinh Do Corp. (KDC).
Meanwhile, Tan Tao Industrial Park Corp. (ITA), Tuong An Oil (TAC), Interfood Holding (IFS), Song Da Urban and Industrial Zone Investment and Development (SJS) and Vietnam Petroleum Transport (VIP) topped the list of 12 stocks rallying for gains.
Nearly 6.4 million shares worth 593.8 billion VND (37.1 million USD) changed hands, with Saigon Thuong Tin Commercial Joint Stock Bank (STB), Vietnam Investment Fund (VFMVF1), Bach Tuyet Cotton Corp. (BBT), Prudential Balance Fund (PRUBF1) and Refrigeration Electrical Engineering leading the market in terms of traded volumes.
The Ha Noi Securities Trading Centre (HaSTC) also suffered decline as 67 of the 87 listed shares on the exchange recorded dropping. Only eight stocks increased, while 12 others saw no transactions.
By closing, the HaSTC slid by 3.69 points to finish at 252.61 points with 1.35 million shares worth 134.73 billion VND (8.4 million USD) traded.
Source: VNA
The VN-Index at the Ho Chi Minh City Trading Centre dropped by 16.87 points, or 1.7 percent, to close at 977.3 points.
Up to 85 shares lost value on their listed prices with the biggest losers being Hau Giang Pharmaceutical (DHG), Binh Dinh Minerals (BMC), Saigon Hotel Corp. (SGH), Cable and Telecom Materials (SAM) and Kinh Do Corp. (KDC).
Meanwhile, Tan Tao Industrial Park Corp. (ITA), Tuong An Oil (TAC), Interfood Holding (IFS), Song Da Urban and Industrial Zone Investment and Development (SJS) and Vietnam Petroleum Transport (VIP) topped the list of 12 stocks rallying for gains.
Nearly 6.4 million shares worth 593.8 billion VND (37.1 million USD) changed hands, with Saigon Thuong Tin Commercial Joint Stock Bank (STB), Vietnam Investment Fund (VFMVF1), Bach Tuyet Cotton Corp. (BBT), Prudential Balance Fund (PRUBF1) and Refrigeration Electrical Engineering leading the market in terms of traded volumes.
The Ha Noi Securities Trading Centre (HaSTC) also suffered decline as 67 of the 87 listed shares on the exchange recorded dropping. Only eight stocks increased, while 12 others saw no transactions.
By closing, the HaSTC slid by 3.69 points to finish at 252.61 points with 1.35 million shares worth 134.73 billion VND (8.4 million USD) traded.
Source: VNA
Rubber firm wins listing approval
A small Vietnamese rubber firm won preliminary approval on Tuesday to list on the country's main stock market, the exchange said in a statement.
When licensed, Tay Ninh Rubber Company, or Taniruco, would be the first to debut on the Ho Chi Minh Stock Exchange this year and only the country's second after small builder Cholonres (RCL) made its debut on the Hanoi market on June 14.
Taniruco needed to complete more paperwork before receiving a listing licence, the Ho Chi Minh Stock Exchange statement said without elaboration.
It would be the third rubber firm to list after Hoa Binh Rubber Co. (HRC) and Danang Rubber Co. (DRC).
Based in the southern province of Tay Ninh, Taniruco is a small rubber exporter, shipping 14,000 tonnes of the 708,000 tonnes exported from Vietnam in 2006.
Taniruco shares traded at 128,000 dong to 130,000 dong ($7.9-$8) on the unregulated, unofficial markets late last week, up from 110,000-112,000 dong in May before it applied for a listing. The firm was therefore valued at $240 million.
Its net profit jumped 50.5 percent last year from 2005 to 143 billion dong ($8.8 million).
In December, the firm raised about $36 million in an initial public offering of nearly 8.4 million shares held by the state which sold at an average price of 68,341 dong ($4.2).
Last month, a company official said Taniruco was finalising plans to growing rubber trees on 10,000 hectares (24,700 acres) of land in Cambodia next year.
Source: Reuters
When licensed, Tay Ninh Rubber Company, or Taniruco, would be the first to debut on the Ho Chi Minh Stock Exchange this year and only the country's second after small builder Cholonres (RCL) made its debut on the Hanoi market on June 14.
Taniruco needed to complete more paperwork before receiving a listing licence, the Ho Chi Minh Stock Exchange statement said without elaboration.
It would be the third rubber firm to list after Hoa Binh Rubber Co. (HRC) and Danang Rubber Co. (DRC).
Based in the southern province of Tay Ninh, Taniruco is a small rubber exporter, shipping 14,000 tonnes of the 708,000 tonnes exported from Vietnam in 2006.
Taniruco shares traded at 128,000 dong to 130,000 dong ($7.9-$8) on the unregulated, unofficial markets late last week, up from 110,000-112,000 dong in May before it applied for a listing. The firm was therefore valued at $240 million.
Its net profit jumped 50.5 percent last year from 2005 to 143 billion dong ($8.8 million).
In December, the firm raised about $36 million in an initial public offering of nearly 8.4 million shares held by the state which sold at an average price of 68,341 dong ($4.2).
Last month, a company official said Taniruco was finalising plans to growing rubber trees on 10,000 hectares (24,700 acres) of land in Cambodia next year.
Source: Reuters
Bank share prices will recover
The sharp decreases of bank share prices have been giving investors insomnia. However, experts have said that bank share prices will recover, and that the fall is just in the short term.
The sharp decreases of bank share prices have not surprised experienced investors, but worried many investors who hold bank shares. The stock market is now in its periodic downturn; therefore, it is understandable why bank share prices are also decreasing.
Meanwhile, the massive share issuance has also led to the oversupply of bank shares on the market. A lot of banks have been and are planning to issue shares in order to raise their chartered capital in 2007. It is estimated that some VND100,000bil ($6.25bil) worth of shares will be issued this year to raise more funds from the public and from existing shareholders. A series of big banks plan to make IPO (initial public offering) in the second half of the year, which means that a big volume of commodities will be available on the market.
However, experts said that it would be wise if investors still put high hopes on investments in bank shares. This is because of several reasons.
First, in the long term, bank shares prove to be the most secure and lucrative kind of securities. According to Bien Viet Securities Company, the CBV index for the banking sector remains at a high level, the second highest level, just after the CBV index for the real estate sector. The CBV-banking index has increased by 43.84 points so far this year.
Second, the operation of commercial banks proves to be very satisfactory. The growth rate of Vietnam’s banks is 50% on average. The figure proves to be very impressive if compared to the growth rates obtained by other regional banks.
Third, if someone is worried about the stability of bank shares, he should feel assured about this. The Government and the State Bank of Vietnam always play a very important role in supervising and maintaining the normal operation of the banking system, especially since Vietnam has joined the WTO.
Experts, including foreign ones, all are optimistic about the performance of the banking sector. The presence of foreign banks in Vietnam under WTO commitments will act as the impetus for the development of local banks.
Fourth, the prediction about the oversupply of commodity on the market proves to be not worrying. It would be good if the market was full of commodities; this would make the market more bustling.
As such, the freezing of bank shares should be seen as only a short-term problem. In the long term, bank shares will prove to be a good choice for investors.
Source: VNE
The sharp decreases of bank share prices have not surprised experienced investors, but worried many investors who hold bank shares. The stock market is now in its periodic downturn; therefore, it is understandable why bank share prices are also decreasing.
Meanwhile, the massive share issuance has also led to the oversupply of bank shares on the market. A lot of banks have been and are planning to issue shares in order to raise their chartered capital in 2007. It is estimated that some VND100,000bil ($6.25bil) worth of shares will be issued this year to raise more funds from the public and from existing shareholders. A series of big banks plan to make IPO (initial public offering) in the second half of the year, which means that a big volume of commodities will be available on the market.
However, experts said that it would be wise if investors still put high hopes on investments in bank shares. This is because of several reasons.
First, in the long term, bank shares prove to be the most secure and lucrative kind of securities. According to Bien Viet Securities Company, the CBV index for the banking sector remains at a high level, the second highest level, just after the CBV index for the real estate sector. The CBV-banking index has increased by 43.84 points so far this year.
Second, the operation of commercial banks proves to be very satisfactory. The growth rate of Vietnam’s banks is 50% on average. The figure proves to be very impressive if compared to the growth rates obtained by other regional banks.
Third, if someone is worried about the stability of bank shares, he should feel assured about this. The Government and the State Bank of Vietnam always play a very important role in supervising and maintaining the normal operation of the banking system, especially since Vietnam has joined the WTO.
Experts, including foreign ones, all are optimistic about the performance of the banking sector. The presence of foreign banks in Vietnam under WTO commitments will act as the impetus for the development of local banks.
Fourth, the prediction about the oversupply of commodity on the market proves to be not worrying. It would be good if the market was full of commodities; this would make the market more bustling.
As such, the freezing of bank shares should be seen as only a short-term problem. In the long term, bank shares will prove to be a good choice for investors.
Source: VNE
Can banks attract capital by raising interest rates?
Banks have to raise US$ deposit interest rates in order to attract more capital. However, the move has not brought the desired effect as the capital flowing into banks remains low.
Some ten commercial banks have decided to raise the interest rates on US$ deposits by 0.05% per annum on average for short-term deposits, and 0.2% for longer-term ones. The rates offered by some banks for 12-month term deposits have soared to 5.05% per annum and for 24-month term deposits to 5.25% per annum.
With the new interest rates, the big gap between the interest rates of US$ and VND deposits has been narrowed. However, the US$ deposit interest rate increase seems to remain unattractive to depositors.
On the afternoon of June 30, a reporter learned from a bank that after receiving remitted money from abroad many people changed received dollars into VND and then made VND deposits at the bank. Despite the increased US$ deposit interest rate, the profit that the US$ deposits can bring is just equal to half of what can be brought about by VND deposits.
If you have $1,000 and deposit this sum at banks, you will get VND800,000 after one year, while if you sell this sum to get VND and deposit in VND, the profit you will get after one year is double.
That explains why the growth rate of mobilised US$ capital in HCM City in the last time was still lower than the VND capital. According to the HCM City Branch of the State Bank of Vietnam, in the first six months of the year, VND mobilised capital increased by 42% while US$ capital increased by 17.5% only. Meanwhile, US$ outstanding loans grew more (27%) than VND loans (24.7%).
An expert said that several bankers were now attempting to push US$ deposit interest rates closer to the VND deposit interest rates. He said that with the CPI growth rate of 5.2% in the first six months of the year, it was unprofitable to make deposits with the current interest rates.
Several reasons can be cited to explain the increase of US$ deposit interest rates. The central bank, in an effort to raise foreign currency reserves, has bought some $7bil worth of foreign currencies in the first six months of the year. The move has helped withdraw a big volume of foreign currencies from the market, thus making the VND revaluate by 0.15% against the greenback.
Meanwhile, the supply of foreign currencies on the inter-bank market is not sufficient to meet the demand from enterprises. Commercial banks, which want to mobilise more capital in foreign currencies, have to raise the offered interest rates.
However, the interest rate increase has put banks in a bind. As the cost of capital mobilisation increases by 0.2%, banks will have to raise lending interest rates. An official from a bank said that it was very difficult to persuade enterprises to accept higher lending interest rates.
The official said that his bank dare not impose higher interest rates on traditional and VIP clients.
Source: VNE
Some ten commercial banks have decided to raise the interest rates on US$ deposits by 0.05% per annum on average for short-term deposits, and 0.2% for longer-term ones. The rates offered by some banks for 12-month term deposits have soared to 5.05% per annum and for 24-month term deposits to 5.25% per annum.
With the new interest rates, the big gap between the interest rates of US$ and VND deposits has been narrowed. However, the US$ deposit interest rate increase seems to remain unattractive to depositors.
On the afternoon of June 30, a reporter learned from a bank that after receiving remitted money from abroad many people changed received dollars into VND and then made VND deposits at the bank. Despite the increased US$ deposit interest rate, the profit that the US$ deposits can bring is just equal to half of what can be brought about by VND deposits.
If you have $1,000 and deposit this sum at banks, you will get VND800,000 after one year, while if you sell this sum to get VND and deposit in VND, the profit you will get after one year is double.
That explains why the growth rate of mobilised US$ capital in HCM City in the last time was still lower than the VND capital. According to the HCM City Branch of the State Bank of Vietnam, in the first six months of the year, VND mobilised capital increased by 42% while US$ capital increased by 17.5% only. Meanwhile, US$ outstanding loans grew more (27%) than VND loans (24.7%).
An expert said that several bankers were now attempting to push US$ deposit interest rates closer to the VND deposit interest rates. He said that with the CPI growth rate of 5.2% in the first six months of the year, it was unprofitable to make deposits with the current interest rates.
Several reasons can be cited to explain the increase of US$ deposit interest rates. The central bank, in an effort to raise foreign currency reserves, has bought some $7bil worth of foreign currencies in the first six months of the year. The move has helped withdraw a big volume of foreign currencies from the market, thus making the VND revaluate by 0.15% against the greenback.
Meanwhile, the supply of foreign currencies on the inter-bank market is not sufficient to meet the demand from enterprises. Commercial banks, which want to mobilise more capital in foreign currencies, have to raise the offered interest rates.
However, the interest rate increase has put banks in a bind. As the cost of capital mobilisation increases by 0.2%, banks will have to raise lending interest rates. An official from a bank said that it was very difficult to persuade enterprises to accept higher lending interest rates.
The official said that his bank dare not impose higher interest rates on traditional and VIP clients.
Source: VNE
Hoa Phat Corporation to list on bourse
Hoa Phat Corporation, the nation’s one of leading wood products firms, has filed to list shares with the Ho Chi Minh Stock Exchange in September.
The corporation has increased its charter capital from 1.1 trillion VND (68.8 million USD) to 1.3 trillion VND (81.3 million USD) and issued 20 million shares this year, earning 1.2 trillion VND (75 million USD).
Hoa Phat posted profits of 200 billion VND (12.5 million USD) in the first five months of this year, a year-on-year increase of 63 percent.
Source: VNA
The corporation has increased its charter capital from 1.1 trillion VND (68.8 million USD) to 1.3 trillion VND (81.3 million USD) and issued 20 million shares this year, earning 1.2 trillion VND (75 million USD).
Hoa Phat posted profits of 200 billion VND (12.5 million USD) in the first five months of this year, a year-on-year increase of 63 percent.
Source: VNA
Fat profits set off race to open stock brokerages in Vietnam
Applications to set up securities brokerages continue to pour in, with even state firms in unrelated businesses joining the scramble, all attracted by the profitability of the business.
The State Securities Commission (SSC) said in the first half of this year some 15 new firms were licensed, taking the total number to 65 from 14 last year.
Over 80 more applications were awaiting approval.
Last year mostly banks, financial institutions, and insurance companies set up securities companies.
But recently several state-owned firms operating in unrelated sectors have filed applications with an eye on the profits brokerages make in Vietnam’s underserved stock market.
Most brokers reported a sharp rise in first quarter net profit.
Saigon Securities Inc., one of the biggest, said its profit rose fourfold year-on-year to VND465 billion (US$29 million) on revenues of VND573 billion.
Bao Viet Securities Company, an arm of Bao Viet Insurance Corp., and brokerages run by commercial banks Asia Commercial Joint Stock Bank (ACB), Bank for Foreign Trade of Vietnam (Vietcombank), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), and Eastern Asia Bank (EAB) all reported quarterly profits of over VND100 billion.
They all charge commissions of 0.2 to 0.5 percent on transactions.
The Ho Chi Minh and Hanoi bourses together report trades of around VND1 trillion a day, meaning commissions of VND2 – VND5 billion for the brokerages.
With the explosion in the stock market and securities business, insiders are concerned about the shortage of experienced brokerage staff and the fierce competition for personnel.
A firm needs at least 60 brokers to handle just the securities business.
Nguyen Ngoc Tuoi, general director of Danang Securities Company, said there was huge demand for experienced staff which was running well ahead of supply.
The SSC recently approved the setting up of five more centers to provide securities training. But their trainees will only join the job market next year.
Source: Thanh Nien
The State Securities Commission (SSC) said in the first half of this year some 15 new firms were licensed, taking the total number to 65 from 14 last year.
Over 80 more applications were awaiting approval.
Last year mostly banks, financial institutions, and insurance companies set up securities companies.
But recently several state-owned firms operating in unrelated sectors have filed applications with an eye on the profits brokerages make in Vietnam’s underserved stock market.
Most brokers reported a sharp rise in first quarter net profit.
Saigon Securities Inc., one of the biggest, said its profit rose fourfold year-on-year to VND465 billion (US$29 million) on revenues of VND573 billion.
Bao Viet Securities Company, an arm of Bao Viet Insurance Corp., and brokerages run by commercial banks Asia Commercial Joint Stock Bank (ACB), Bank for Foreign Trade of Vietnam (Vietcombank), Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), and Eastern Asia Bank (EAB) all reported quarterly profits of over VND100 billion.
They all charge commissions of 0.2 to 0.5 percent on transactions.
The Ho Chi Minh and Hanoi bourses together report trades of around VND1 trillion a day, meaning commissions of VND2 – VND5 billion for the brokerages.
With the explosion in the stock market and securities business, insiders are concerned about the shortage of experienced brokerage staff and the fierce competition for personnel.
A firm needs at least 60 brokers to handle just the securities business.
Nguyen Ngoc Tuoi, general director of Danang Securities Company, said there was huge demand for experienced staff which was running well ahead of supply.
The SSC recently approved the setting up of five more centers to provide securities training. But their trainees will only join the job market next year.
Source: Thanh Nien
Vietnam's Military Bank sees 2007 assets up 59%
Military Bank, the only bank run by Vietnam's army, expects its total assets to jump 59 percent this year from 2006 to VND21.5 trillion (US$1.3 billion), a bank executive said.
The unlisted bank also hopes to boost its 2007 net profit by 52 percent to VND320 billion ($19.8 million), Chief Executive Le Van Be said in a prospectus seen on Tuesday ahead of a two-stage share sale.
Military Bank will sell 50.2 million new shares to existing shareholders and staff who register by July 16 under the first phase of the issue, Be said.
It will sell a further 45.28 million new shares to strategic foreign and domestic investors in the last quarter of this year, he said, without giving any names of potential buyers. The bank has no foreign investors now.
The Hanoi-based lender reported gross profit for January to May was VND260 billion ($16 million), more than the VND253 billion in gross profit posted for the all of 2006 and 62 percent of this year's annual plan.
Last month it won a license to issue 95.48 million new shares to nearly double its registered capital to VND2 trillion ($124 million), part of which would be sold to foreign investors. It has not announced any plans for an initial public offering (IPO).
Military Bank has more than 4,000 institutional and individual investors, among them the military firm Fly Service Corporation, which owns 14.6 percent. State-run Vietcombank has a 6.5 percent stake.
Its shares fell to VND75,000-76,000 ($4.6-$4.7) each on Monday on the unregulated, unofficial market, from VND86,000-88,000 on June 12 before it secured the license on the new share issue. The latest price valued the bank at $490 million.
Source: Thanh Nien
The unlisted bank also hopes to boost its 2007 net profit by 52 percent to VND320 billion ($19.8 million), Chief Executive Le Van Be said in a prospectus seen on Tuesday ahead of a two-stage share sale.
Military Bank will sell 50.2 million new shares to existing shareholders and staff who register by July 16 under the first phase of the issue, Be said.
It will sell a further 45.28 million new shares to strategic foreign and domestic investors in the last quarter of this year, he said, without giving any names of potential buyers. The bank has no foreign investors now.
The Hanoi-based lender reported gross profit for January to May was VND260 billion ($16 million), more than the VND253 billion in gross profit posted for the all of 2006 and 62 percent of this year's annual plan.
Last month it won a license to issue 95.48 million new shares to nearly double its registered capital to VND2 trillion ($124 million), part of which would be sold to foreign investors. It has not announced any plans for an initial public offering (IPO).
Military Bank has more than 4,000 institutional and individual investors, among them the military firm Fly Service Corporation, which owns 14.6 percent. State-run Vietcombank has a 6.5 percent stake.
Its shares fell to VND75,000-76,000 ($4.6-$4.7) each on Monday on the unregulated, unofficial market, from VND86,000-88,000 on June 12 before it secured the license on the new share issue. The latest price valued the bank at $490 million.
Source: Thanh Nien
New regulations could help speed up equitisation drives
The Government last week approved a decision clarifying regulations on the equitisation of State-owned enterprises (SOEs) that could ultimately help accelerate the process and limit certain financial risks.
Under Decision No 109/2007/ND-CP issued on June 26, the definition for equitising enterprises was widened to include independent State companies under ministerial or municipal authority, national corporations, parent companies, subsidiaries that conduct account practices independently from their parent, and State-owned limited companies.
These SOEs can now also appoint underwriters for their initial public offerings or carry out direct negotiations with investors.
Decision 109 overrules Decision No 187/2004/ND-CP that was issued in November 2004, and is in line with the Enterprise Law and Securities Law.
A key point in Decision 109 is that companies with over VND 30 billion (1.87 million USD) in assets, over 10 billion VND (625,000 USD) in State capital or own favourable real estate are now required to have their assets appraised by a foreign or local company.
“Under Decision 187, many enterprises had the opportunity to steal State assets by manipulating asset values (especially when it came to property) in order to generate profits for individuals after equitisation,” says Nguyen Son, deputy director of the State Securities Commission’s Market Development Department.
The Ministry of Finance must be informed over which appraisal company is employed.
Companies that do not fall under the criteria are allowed to conduct appraisals independently and then report to authorities.
Another key aspect to Decision 109 is that executives are given greater autonomy to resolve issues arising during the equitisation process, including measures to sell shares and greater flinancial management authority.
“This creates favourable conditions for enterprises to hasten equitisation,” says Dinh Quang Tri, deputy general director at Electricity of Viet Nam.
The decision also addresses specific issues relating to initial public offerings (IPO).
Companies must announce the bookbuilding date 10 days before the auction. If the company plans to list right after the equitisation, authorities must determine the minimum and maximum volume of shares to be issued.
SOEs are no longer allowed to offer strategic investors shares at preferential prices below that set during the bookbuilding phase.
Removing preferential pricing is good for EVN as it helps attract more foreign shareholders, says the company’s deputy general director.
Strategic investors are not allowed to sell their shares for three years after the IPO without first receiving majority shareholder approval, and must offer financial management, training and technology expertise.
Top officials at Vietcombank and BIDV agreed with the strategic investor criteria, saying the requirements will help SOEs develop in the long run,
Local banks are trying to access new technology and expertise, and thus strategic shareholders should be of a high calibre, says Nguyen Hoa Binh, Vietcombank chairman.
SOEs must sell shares within three months after receiving approval of their equitisation plan. Total shares sold to strategic partners and other investors must exceed 25 percent of charter capital.
Companies with over 500 billion VND (31.25 million USD) in State capital or operate in special sectors such as insurance, banking, telecommunications, airlines and mining, will be subject to Government approval over the volume of shares to be issued.
Source: VNA
Under Decision No 109/2007/ND-CP issued on June 26, the definition for equitising enterprises was widened to include independent State companies under ministerial or municipal authority, national corporations, parent companies, subsidiaries that conduct account practices independently from their parent, and State-owned limited companies.
These SOEs can now also appoint underwriters for their initial public offerings or carry out direct negotiations with investors.
Decision 109 overrules Decision No 187/2004/ND-CP that was issued in November 2004, and is in line with the Enterprise Law and Securities Law.
A key point in Decision 109 is that companies with over VND 30 billion (1.87 million USD) in assets, over 10 billion VND (625,000 USD) in State capital or own favourable real estate are now required to have their assets appraised by a foreign or local company.
“Under Decision 187, many enterprises had the opportunity to steal State assets by manipulating asset values (especially when it came to property) in order to generate profits for individuals after equitisation,” says Nguyen Son, deputy director of the State Securities Commission’s Market Development Department.
The Ministry of Finance must be informed over which appraisal company is employed.
Companies that do not fall under the criteria are allowed to conduct appraisals independently and then report to authorities.
Another key aspect to Decision 109 is that executives are given greater autonomy to resolve issues arising during the equitisation process, including measures to sell shares and greater flinancial management authority.
“This creates favourable conditions for enterprises to hasten equitisation,” says Dinh Quang Tri, deputy general director at Electricity of Viet Nam.
The decision also addresses specific issues relating to initial public offerings (IPO).
Companies must announce the bookbuilding date 10 days before the auction. If the company plans to list right after the equitisation, authorities must determine the minimum and maximum volume of shares to be issued.
SOEs are no longer allowed to offer strategic investors shares at preferential prices below that set during the bookbuilding phase.
Removing preferential pricing is good for EVN as it helps attract more foreign shareholders, says the company’s deputy general director.
Strategic investors are not allowed to sell their shares for three years after the IPO without first receiving majority shareholder approval, and must offer financial management, training and technology expertise.
Top officials at Vietcombank and BIDV agreed with the strategic investor criteria, saying the requirements will help SOEs develop in the long run,
Local banks are trying to access new technology and expertise, and thus strategic shareholders should be of a high calibre, says Nguyen Hoa Binh, Vietcombank chairman.
SOEs must sell shares within three months after receiving approval of their equitisation plan. Total shares sold to strategic partners and other investors must exceed 25 percent of charter capital.
Companies with over 500 billion VND (31.25 million USD) in State capital or operate in special sectors such as insurance, banking, telecommunications, airlines and mining, will be subject to Government approval over the volume of shares to be issued.
Source: VNA
Monday, July 02, 2007
Vietnam International Bank to raise $93 mln in share issue
Partly private Vietnam International Bank (VIB) said on Monday it would raise 1.5 trillion dong ($93 million) in a share issue to expand its business.
The Hanoi-based unlisted bank would issue 150 million new shares, of which 13.6 million would be given as dividend payment to shareholders registered by July 18 and the remaining 136.4 million would be sold in two phases.
In the first phase, VIB would sell 35.4 million shares to existing shareholders and issue one million shares to employees.
The bank would also issue 98 million shares to shareholders and sell two million shares to bank staff by September in the second phase, it said.
The proceeds would go to upgrading VIB's infrastructure, funding lending and investing in joint ventures as well as expanding the brand name, VIB said without detailing each investment.
The bank plans to raise its registered capital to 2.5 trillion dong ($155 million) by the end of 2007 from 1 trillion dong now.
Last year, it won central bank permission to apply to list on Vietnam's stock markets.
But VIB withdrew its application for a listing licence as it decided to boost finances before floating shares in order to raise the bank's value, sources familiar with the plan said.
VIB shares fell to 86,000-88,000 dong ($5.33-$5.45) on the unregulated, unofficial markets late last week after it won a State Securities Commission licence for the share issue on June 25, from 100,000 dong prior to the licence.
The latest prices valued the bank at $540 million.
VIB had assets of 18 trillion dong ($1.12 billion) at the end of March, up 8.7 percent from the end of 2006.
Source: Reuters
The Hanoi-based unlisted bank would issue 150 million new shares, of which 13.6 million would be given as dividend payment to shareholders registered by July 18 and the remaining 136.4 million would be sold in two phases.
In the first phase, VIB would sell 35.4 million shares to existing shareholders and issue one million shares to employees.
The bank would also issue 98 million shares to shareholders and sell two million shares to bank staff by September in the second phase, it said.
The proceeds would go to upgrading VIB's infrastructure, funding lending and investing in joint ventures as well as expanding the brand name, VIB said without detailing each investment.
The bank plans to raise its registered capital to 2.5 trillion dong ($155 million) by the end of 2007 from 1 trillion dong now.
Last year, it won central bank permission to apply to list on Vietnam's stock markets.
But VIB withdrew its application for a listing licence as it decided to boost finances before floating shares in order to raise the bank's value, sources familiar with the plan said.
VIB shares fell to 86,000-88,000 dong ($5.33-$5.45) on the unregulated, unofficial markets late last week after it won a State Securities Commission licence for the share issue on June 25, from 100,000 dong prior to the licence.
The latest prices valued the bank at $540 million.
VIB had assets of 18 trillion dong ($1.12 billion) at the end of March, up 8.7 percent from the end of 2006.
Source: Reuters
VN-Index drops below 1,000-point level
Both southern and northern securities trading centres opened the new trading week with sharp falls. The VN-Index lost up to 30.51 points (2.98%) to close down at 994.17 while the HaSTC-Index also dropped 28.40 points (9.97%) to 256.3.
In Ho Chi Minh City, of the 109 listed stocks, only four gained while 98 others down and seven stayed still. Both traded volume and value were down. Only 5.9 million shares were changed hands at a total value of VND 587 billion.
BMC, TCT, SJS, VIS and SFI were the top five losers, losing VND 23,000, 20,000, 15,000,. 14,500 and 9,000 each respectively.
The only four winners were IMP, TAC, RHC and SFN. IMP gained 4.84% (VND 6,000) while the other three saw slight increase of 2,27% (VND 1,500), 1,09% (VND 500) and 0.61% (VND 200) respectively.
STB topped the list of five stocks with most traded volume. Investors traded a total of 845,440 STB shares at VND 63,500 a piece, down VND 2,500 compared to the previous trading session. The other four stocks were BBT (677,440 shares traded), IMP (295,270), FPT (294,210) and REE (251,550).
In Hanoi, the HaSTC-Index lost 28.40 points to end down at 256.3. This was the tenth consecutive fall of the index, losing a total of 58.9 points. However, both the traded volume and value did not dropped. Nearly 1.24 million shares were traded for VND 127.6 billion.
Source: VNE
In Ho Chi Minh City, of the 109 listed stocks, only four gained while 98 others down and seven stayed still. Both traded volume and value were down. Only 5.9 million shares were changed hands at a total value of VND 587 billion.
BMC, TCT, SJS, VIS and SFI were the top five losers, losing VND 23,000, 20,000, 15,000,. 14,500 and 9,000 each respectively.
The only four winners were IMP, TAC, RHC and SFN. IMP gained 4.84% (VND 6,000) while the other three saw slight increase of 2,27% (VND 1,500), 1,09% (VND 500) and 0.61% (VND 200) respectively.
STB topped the list of five stocks with most traded volume. Investors traded a total of 845,440 STB shares at VND 63,500 a piece, down VND 2,500 compared to the previous trading session. The other four stocks were BBT (677,440 shares traded), IMP (295,270), FPT (294,210) and REE (251,550).
In Hanoi, the HaSTC-Index lost 28.40 points to end down at 256.3. This was the tenth consecutive fall of the index, losing a total of 58.9 points. However, both the traded volume and value did not dropped. Nearly 1.24 million shares were traded for VND 127.6 billion.
Source: VNE
Prices increase, depositors depressed
With the currently offered deposit interest rates and the CPI (consumer price index) growth rate of 5.2% by the end of June 2007, depositors are currently struggling to make a profit.
Mrs Van, a staff of a financial company, said that she made a deposit at a bank in January 2007 with the interest rate of 0.75% per month. She estimated that she could get the profit of 4.75% of the deposit sum. However, as the CPI grew by 5.2% in the first six months, Mrs Van, in fact, could not make any profit.
In this case, the interest rate offered by the bank is called ‘the minus (-) interest rate’.
Commenting about the minus interest rate, an economist said that in principle banks must ensure real profit for depositors with the ‘plus (+) interest rate’ policy in order to attract more capital to the banking system (the offered interest rate should take the CPI growth rate into consideration).
The economist said that banks were now paying special attention to mobilising more capital in foreign currencies in order to meet the increased demand from enterprises. Banks have to raise the offered interest rates for foreign currencies deposits by 0.08% per annum (short-term deposits), and 0.1% per annum (long-term deposits) on average, compared to those in March 2007.
In June alone, at least four banks announced interest rate increases. Vietcombank (HCM City branch) led the movement, announcing a new interest rate commencing on June 8 (5% for 12-month term and 4.75% for 9-month term deposits). On June 20, EAB also raised the interest rates on deposits of all terms (5.25% for 12-month, 5.1% for 9-month term deposits). Just five days later, Sacombank announced it would raise offered interest rates by 0.05-0.2% per annum. Eximbank also jumped onto the bandwagon by announcing on June 29 that it would raise interest rates on US$ deposits by 0.05-0.2%.
Though the interest rates for US$ deposits are increasing, experts don’t think that people will begin making deposits in US$ instead of VND.
“One should not think that he can avoid exchange rate risks by selling VND and depositing in US$. Once he needs to spend money, he will still have to sell US$ to get VND, which means he will still be subject to the exchange rate fluctuation,” an analyst said.
In fact, the members of the Vietnam Banking Association in April reached an agreement on lowering deposit interest rates. However, many banks have ignored the agreement, saying that they still needed to consider the issue thoroughly, especially as the inflation rate remained high, and that banks should ensure real profit for depositors.
Sacombank has just announced it will lower interest rates on all terms of deposits, commencing from June 26 (0.76% per month for 12-month term, and 0.745% for 9-month term deposits). However, in a different move, Eximbank on June 29 announced it would raise deposit interest rates with the sharpest increases for 18-month term deposits and longer.
The director of a bank reiterated that the central bank had initiated the double compulsory reserve rate in an effort to reduce bank’s usable capital and control credit growth.
The move by the central bank will put a lot of pressure on banks, forcing them to reduce deposit interest rates and raise lending interest rates, he said.
Source: VNE
Mrs Van, a staff of a financial company, said that she made a deposit at a bank in January 2007 with the interest rate of 0.75% per month. She estimated that she could get the profit of 4.75% of the deposit sum. However, as the CPI grew by 5.2% in the first six months, Mrs Van, in fact, could not make any profit.
In this case, the interest rate offered by the bank is called ‘the minus (-) interest rate’.
Commenting about the minus interest rate, an economist said that in principle banks must ensure real profit for depositors with the ‘plus (+) interest rate’ policy in order to attract more capital to the banking system (the offered interest rate should take the CPI growth rate into consideration).
The economist said that banks were now paying special attention to mobilising more capital in foreign currencies in order to meet the increased demand from enterprises. Banks have to raise the offered interest rates for foreign currencies deposits by 0.08% per annum (short-term deposits), and 0.1% per annum (long-term deposits) on average, compared to those in March 2007.
In June alone, at least four banks announced interest rate increases. Vietcombank (HCM City branch) led the movement, announcing a new interest rate commencing on June 8 (5% for 12-month term and 4.75% for 9-month term deposits). On June 20, EAB also raised the interest rates on deposits of all terms (5.25% for 12-month, 5.1% for 9-month term deposits). Just five days later, Sacombank announced it would raise offered interest rates by 0.05-0.2% per annum. Eximbank also jumped onto the bandwagon by announcing on June 29 that it would raise interest rates on US$ deposits by 0.05-0.2%.
Though the interest rates for US$ deposits are increasing, experts don’t think that people will begin making deposits in US$ instead of VND.
“One should not think that he can avoid exchange rate risks by selling VND and depositing in US$. Once he needs to spend money, he will still have to sell US$ to get VND, which means he will still be subject to the exchange rate fluctuation,” an analyst said.
In fact, the members of the Vietnam Banking Association in April reached an agreement on lowering deposit interest rates. However, many banks have ignored the agreement, saying that they still needed to consider the issue thoroughly, especially as the inflation rate remained high, and that banks should ensure real profit for depositors.
Sacombank has just announced it will lower interest rates on all terms of deposits, commencing from June 26 (0.76% per month for 12-month term, and 0.745% for 9-month term deposits). However, in a different move, Eximbank on June 29 announced it would raise deposit interest rates with the sharpest increases for 18-month term deposits and longer.
The director of a bank reiterated that the central bank had initiated the double compulsory reserve rate in an effort to reduce bank’s usable capital and control credit growth.
The move by the central bank will put a lot of pressure on banks, forcing them to reduce deposit interest rates and raise lending interest rates, he said.
Source: VNE
US inspects Chinese farmed seafood, Vietnam worried
The news that the US Food and Drug Administration (FDA) will detain all farmed seafood products sourced from China for examination before granting customs clearance is worrying Vietnamese enterprises.
Seafood processing companies plan to meet early this week to discuss the possible impacts of the FDA’s decision on Vietnam’s seafood exports to the US and solutions to the problem.
As FDA has announced, all consignments of farmed seafood sourced from China, including shrimp, catfish, eel, red-eyed carp, will be strictly examined. The imports will be detained at border gates for examination to find out if there are residues of prohibited substances not allowed to be used in aquaculture in the US.
Explaining its decision, FDA said that it had abundant evidence showing that Chinese farmed seafood products contained prohibited substances. David Acheson, Assistant Commissioner for Food Protection at FDA, said that the agency would only allow the admittance of imports that could meet the food hygiene requirements set by the US.
According to Fis.com, the Deputy Director of International Marketing Specialists, which specialises in providing shrimp and seafood products, has accused the FDA of acting late in preventing unsafe products from entering the US market. He said that his company had been facing the problem of unsafe seafood for the last 3-4 years. It is very likely that China has been doing this for many years, and it now does the same thing with many kinds of food. The fact that China has ordered the closure of several thousand food processing establishments confirms this.
International Marketing Specialists do not import shrimp from China any more.
7% of shrimp and 10% of catfish consumed in the US are sourced from China.
From October 2006 to May 2007, FDA routinely discovered farmed seafood products sourced from China containing prohibited antibiotics, including nitrofuran, malachite green, dye, and fluoroquinolone.
Mr Acheson said that the strict control over Chinese imports would last until FDA found it unnecessary any longer to keep control. He said that exporters must provide information to show that they had done everything to ensure products were safe.
The move by FDA has worried Vietnamese seafood processors as Vietnam is among the big seafood exporters to the US. The Vietnam Association of Seafood Exporters and Producers (VASEP) plans to gather its members on July 3 in HCM City.
At the meeting, members will discuss issues that may affect seafood exports, including the shrimp anti-dumping lawsuit, the problems with the Japanese market relating to anti-biotic residues, the inspection by Russian authorities of farming and processing establishments, and the inspection by the USFDA of Chinese products. The US now is the 4th biggest export market for Vietnam, consuming nearly 20% of Vietnam’s seafood exports. Shrimp, tra and basa are the main items exported to the market.
Source: VNE
Seafood processing companies plan to meet early this week to discuss the possible impacts of the FDA’s decision on Vietnam’s seafood exports to the US and solutions to the problem.
As FDA has announced, all consignments of farmed seafood sourced from China, including shrimp, catfish, eel, red-eyed carp, will be strictly examined. The imports will be detained at border gates for examination to find out if there are residues of prohibited substances not allowed to be used in aquaculture in the US.
Explaining its decision, FDA said that it had abundant evidence showing that Chinese farmed seafood products contained prohibited substances. David Acheson, Assistant Commissioner for Food Protection at FDA, said that the agency would only allow the admittance of imports that could meet the food hygiene requirements set by the US.
According to Fis.com, the Deputy Director of International Marketing Specialists, which specialises in providing shrimp and seafood products, has accused the FDA of acting late in preventing unsafe products from entering the US market. He said that his company had been facing the problem of unsafe seafood for the last 3-4 years. It is very likely that China has been doing this for many years, and it now does the same thing with many kinds of food. The fact that China has ordered the closure of several thousand food processing establishments confirms this.
International Marketing Specialists do not import shrimp from China any more.
7% of shrimp and 10% of catfish consumed in the US are sourced from China.
From October 2006 to May 2007, FDA routinely discovered farmed seafood products sourced from China containing prohibited antibiotics, including nitrofuran, malachite green, dye, and fluoroquinolone.
Mr Acheson said that the strict control over Chinese imports would last until FDA found it unnecessary any longer to keep control. He said that exporters must provide information to show that they had done everything to ensure products were safe.
The move by FDA has worried Vietnamese seafood processors as Vietnam is among the big seafood exporters to the US. The Vietnam Association of Seafood Exporters and Producers (VASEP) plans to gather its members on July 3 in HCM City.
At the meeting, members will discuss issues that may affect seafood exports, including the shrimp anti-dumping lawsuit, the problems with the Japanese market relating to anti-biotic residues, the inspection by Russian authorities of farming and processing establishments, and the inspection by the USFDA of Chinese products. The US now is the 4th biggest export market for Vietnam, consuming nearly 20% of Vietnam’s seafood exports. Shrimp, tra and basa are the main items exported to the market.
Source: VNE
New decree on equitisation enacted
The Prime Minister has promulgated Decree 109 on shifting 100% state owned enterprises into joint stock companies, which will replace Decree 187 dated November 16, 2004 on the same issue.
Under the new decree, the entities to be equitised are expanded, and include state owned independent companies, holding companies in economic groups, state owned general corporations, holding companies in parent-and-son companies, independent companies belonging to state owned general corporations, dependent units of state owned independent companies, economic groups, state owned general corporations, and state owned limited companies in which the state holds 100% of chartered capital.
Enterprises to be equitised will not include enterprises in which the state must hold 100% of capital.
Moreover, the enterprises will retain state capital after financial restructuring and corporate re-assessment.
The decree also stipulates the various methods of the initial selling of stakes, including: 1. auctioning 2. guaranteeing for issuance 3. making direct deals. The agency which releases the decision on equitisation will consider the situation to determine the methods of stake sales to be applied.
Regarding capital ownership ratio after the initial public offering, the decree says that the ratio of shares to be sold to strategic and other shareholders must not be lower than 25% of chartered capital. Competent agencies will determine the capital ownership ratios in special cases, when enterprises have the state owned capital of more than VND500bil, and operate in special fields.
The stake ratio to be sold to trade unions in enterprises must not be higher than 3% of chartered capital. Staffs in equitising companies will be allowed to buy 100 shares at maximum for every year of service in the companies.
The state owned enterprises which got approval for their equitisation plans before the day the new decree becomes effective will be equitised in accordance with the approved plan. The equitisation of the state owned commercial banks will be undertaken in accordance with the new decree.
Source: VNE
Under the new decree, the entities to be equitised are expanded, and include state owned independent companies, holding companies in economic groups, state owned general corporations, holding companies in parent-and-son companies, independent companies belonging to state owned general corporations, dependent units of state owned independent companies, economic groups, state owned general corporations, and state owned limited companies in which the state holds 100% of chartered capital.
Enterprises to be equitised will not include enterprises in which the state must hold 100% of capital.
Moreover, the enterprises will retain state capital after financial restructuring and corporate re-assessment.
The decree also stipulates the various methods of the initial selling of stakes, including: 1. auctioning 2. guaranteeing for issuance 3. making direct deals. The agency which releases the decision on equitisation will consider the situation to determine the methods of stake sales to be applied.
Regarding capital ownership ratio after the initial public offering, the decree says that the ratio of shares to be sold to strategic and other shareholders must not be lower than 25% of chartered capital. Competent agencies will determine the capital ownership ratios in special cases, when enterprises have the state owned capital of more than VND500bil, and operate in special fields.
The stake ratio to be sold to trade unions in enterprises must not be higher than 3% of chartered capital. Staffs in equitising companies will be allowed to buy 100 shares at maximum for every year of service in the companies.
The state owned enterprises which got approval for their equitisation plans before the day the new decree becomes effective will be equitised in accordance with the approved plan. The equitisation of the state owned commercial banks will be undertaken in accordance with the new decree.
Source: VNE
Long-term mortgages open property market
Banks are beginning to widen the time frame on home loan deals from 10-15 years to as long as 30 years as the market matures and consumer incomes rise.
Phu My Hung JSC, a real estate developer, has for example recently signed agreements with nine banks to help provide consumers with 20-30 year home loans, including market leaders like Techcombank and Sacombank.
Housing agreements, over 25-30 year time frames are already popular in many other countries, says Nguyen Huu Dang, head of marketing at the Housing Development Bank (HDB), and finally Vietnam is catching on to the trend.
The HDB, another of the nine banks partnering with Phu My Hung, is even allowing clients to take out mortgages worth the full value of the property.
"These new services would offer people with stable incomes more opportunities to buy homes," says Dang.
HSBC is even delving into the home loan market, offering clients 25-year deals on 80% of property values.
Tran Xuan Huy, a Sacombank deputy director, indicated the bank has just begun its long term home loan programme this month, so it is still too early to determine its success, but foresees huge potential in the market.
Sacombank on Wednesday sealed a VND500mil (US$31,250) deal in which the International Finance Corporation, the World Bank's private investment arm, will lend financial support to consumers wanting to buy, build or repair homes.
Many other property developers are now searching or have already joined forces with banks to offer loan packages including the Khanh Hoi Import-Export Co in HCM City, which has jumped in bed with Incombank.
The two are offering a 20 year loans on 50% of a property's value.
Many consumers, though, still struggle with interest rates, which for the time being has curbed the number of financing deals inked.
Khanh Hoi reports that 90% of units sold in its latest apartment block have not used long term loan agreements or mortgages.
Even at an interest rate of 1% over 20 years, the monthly payments are still high for many consumers, said a Khanh Hoi representative in a recent interview.
On a 57sq.m apartment, the monthly fee could be as much as VND6mil (US$375) on a 20-year deal, said the representative. News reports put the average wage of a Vietnamese white collar worker in HCM City at around US$400-1,000.
Huy, though, remains confident that the property market will continue to grow this year, which will only encourage more banks to offer new and different home financing products.
"This is good for our co-operation [with developers and consumers] and for the domestic real estate market as a whole," says Huy.
Source: VNE
Phu My Hung JSC, a real estate developer, has for example recently signed agreements with nine banks to help provide consumers with 20-30 year home loans, including market leaders like Techcombank and Sacombank.
Housing agreements, over 25-30 year time frames are already popular in many other countries, says Nguyen Huu Dang, head of marketing at the Housing Development Bank (HDB), and finally Vietnam is catching on to the trend.
The HDB, another of the nine banks partnering with Phu My Hung, is even allowing clients to take out mortgages worth the full value of the property.
"These new services would offer people with stable incomes more opportunities to buy homes," says Dang.
HSBC is even delving into the home loan market, offering clients 25-year deals on 80% of property values.
Tran Xuan Huy, a Sacombank deputy director, indicated the bank has just begun its long term home loan programme this month, so it is still too early to determine its success, but foresees huge potential in the market.
Sacombank on Wednesday sealed a VND500mil (US$31,250) deal in which the International Finance Corporation, the World Bank's private investment arm, will lend financial support to consumers wanting to buy, build or repair homes.
Many other property developers are now searching or have already joined forces with banks to offer loan packages including the Khanh Hoi Import-Export Co in HCM City, which has jumped in bed with Incombank.
The two are offering a 20 year loans on 50% of a property's value.
Many consumers, though, still struggle with interest rates, which for the time being has curbed the number of financing deals inked.
Khanh Hoi reports that 90% of units sold in its latest apartment block have not used long term loan agreements or mortgages.
Even at an interest rate of 1% over 20 years, the monthly payments are still high for many consumers, said a Khanh Hoi representative in a recent interview.
On a 57sq.m apartment, the monthly fee could be as much as VND6mil (US$375) on a 20-year deal, said the representative. News reports put the average wage of a Vietnamese white collar worker in HCM City at around US$400-1,000.
Huy, though, remains confident that the property market will continue to grow this year, which will only encourage more banks to offer new and different home financing products.
"This is good for our co-operation [with developers and consumers] and for the domestic real estate market as a whole," says Huy.
Source: VNE
Stocks in first 6 months: lots of sweet and bitter
The first six months of the year saw more ups and downs than any other period since the stock market was established: sometimes it was too bustling, other times, too quiet.
On March 12, the VN Index reached its peak: 1,170.67 points. Several days before, on March 9, the HASTC Index also hit a record when it closed at 454.81 points. These were higher figures than even the most optimistic could have hoped for.
At that time, the stock market was immersed in what was described by media and analysts as a ‘securities fever’. Experts talked much about the skyrocketing securities prices and predicted the bubble, which would cause the collapse of the stock market.
The collapse did not occur, but just one month later, on April 24, the VN Index fell to the bottom, 905.53 points, while the HASTC dropped to 284.7 points in June 2007.
Meanwhile, the OTC market has been gloomy since April 2007, and there is no sign of recovery. Most OTC share items have dropped by 20-50% in price compared to early March 2007. The bustling market once propelled investors high into the sky, and then the gloomy market eventually made them disillusioned.
However, Tran Ngoc Nam, a securities analyst, said that what happened was a good scenario, because the collapse did not occur, while both management authorities and investors have learned from the so-called ‘securities fever’.
Dr of Economics Nguyen Quang Hung shares the same view, saying that with the VN Index recovering and hovering at the 1,000-1,100 point level, the stock market shows signs of stabilising.
The stock market has been witnessing many paradoxes of share prices. A lot of questions have been raised, like “why did BMC, TCT, SGH, LBM, HAX and SFI, little known stocks, once see their prices skyrocket, while blue chips like FPT, GMD, SSI, ACB, SAM, VNM, REE, or ITA , just see their prices remain stabile or decrease?”
One time, issuing more shares was favoured by many companies as the move could help ‘kill two birds with one stone’: the issuance both could bring more capital, while companies did not have to pay interest on the capital.
However, share issuance has lately become not a good choice for companies as investors have become “full” of shares. Now, giant companies are planning to launch big sums of shares into the market: ACB with 143mil more, FPT 30mil, STB 19mil, VNM 8mil, REE 4.7mil, GMD 2.8mil. These shares seem to be being issued at an inauspicious time, as the market is presently quiet.
The first six months of the year was also the time that witnessed the trading volume reaching the highest peak in the last seven years since the market was established.
Analysts have been talking about the huge capital of several billion dollars that foreign investors are injecting in Vietnam. However, the huge capital has not been disbursed yet as there is no more room for foreign investors and the foreign ownership in many local companies has nearly hit the allowed ceiling level. In the last month, the market became quiet and the VN Index continuously fell down, leaving the market shrouded in stillness.
Many analysts have predicted the recovery of the market in the second half of the year. However, they said that the recovery would still largely depend on many issues, including the IPOs of big corporations, and improvement in the management work of state agencies.
Source: VNE
On March 12, the VN Index reached its peak: 1,170.67 points. Several days before, on March 9, the HASTC Index also hit a record when it closed at 454.81 points. These were higher figures than even the most optimistic could have hoped for.
At that time, the stock market was immersed in what was described by media and analysts as a ‘securities fever’. Experts talked much about the skyrocketing securities prices and predicted the bubble, which would cause the collapse of the stock market.
The collapse did not occur, but just one month later, on April 24, the VN Index fell to the bottom, 905.53 points, while the HASTC dropped to 284.7 points in June 2007.
Meanwhile, the OTC market has been gloomy since April 2007, and there is no sign of recovery. Most OTC share items have dropped by 20-50% in price compared to early March 2007. The bustling market once propelled investors high into the sky, and then the gloomy market eventually made them disillusioned.
However, Tran Ngoc Nam, a securities analyst, said that what happened was a good scenario, because the collapse did not occur, while both management authorities and investors have learned from the so-called ‘securities fever’.
Dr of Economics Nguyen Quang Hung shares the same view, saying that with the VN Index recovering and hovering at the 1,000-1,100 point level, the stock market shows signs of stabilising.
The stock market has been witnessing many paradoxes of share prices. A lot of questions have been raised, like “why did BMC, TCT, SGH, LBM, HAX and SFI, little known stocks, once see their prices skyrocket, while blue chips like FPT, GMD, SSI, ACB, SAM, VNM, REE, or ITA , just see their prices remain stabile or decrease?”
One time, issuing more shares was favoured by many companies as the move could help ‘kill two birds with one stone’: the issuance both could bring more capital, while companies did not have to pay interest on the capital.
However, share issuance has lately become not a good choice for companies as investors have become “full” of shares. Now, giant companies are planning to launch big sums of shares into the market: ACB with 143mil more, FPT 30mil, STB 19mil, VNM 8mil, REE 4.7mil, GMD 2.8mil. These shares seem to be being issued at an inauspicious time, as the market is presently quiet.
The first six months of the year was also the time that witnessed the trading volume reaching the highest peak in the last seven years since the market was established.
Analysts have been talking about the huge capital of several billion dollars that foreign investors are injecting in Vietnam. However, the huge capital has not been disbursed yet as there is no more room for foreign investors and the foreign ownership in many local companies has nearly hit the allowed ceiling level. In the last month, the market became quiet and the VN Index continuously fell down, leaving the market shrouded in stillness.
Many analysts have predicted the recovery of the market in the second half of the year. However, they said that the recovery would still largely depend on many issues, including the IPOs of big corporations, and improvement in the management work of state agencies.
Source: VNE
June 25-29: VN Index down for 5th consecutive week
The HCM City Securities Trading Centre (HSTC) saw the fifth consecutive week of falling prices last week, when share prices decreased dramatically.
The VN Index reduced to 1,024.68 points, down by 9.01 points, or 0.9% over the previous week. As such, the VN Index lost 145.99 points in total, or 13.5%, if compared to the peak seen on March 12.
The VN Index fell in all the last weeks of June by 56.8 points, or 5.3%.
The market last week witnessed the prices of 76 share items decrease, 24 share items increase, and 7 share items stabilized in prices.
The total trading volume of the last week reached 23.7mil, or 4.7mil for every trading session. The total trading value reached VND2,616bil, or VND523bil for every trading session, a sharp decrease compared to the level of VND1tril/trading session seen earlier this year.
In the last week, BF1 fund certificates were excluded out from the list of top five securities items that saw the biggest trading volume.
Sacombank’s shares (STB) was the share item that led the market in terms of trading volume with 2.8mil traded shares, followed by VF1 (1.2mil fund certificates), FPT (the Corporation for Financing and Promoting Technologies) (1.2mil shares); SJS (the Song Da Industrial Zone and Urban Development – Sudico) (1.1mil shares), and REE (over 1mil shares).
HAX of the transport service company was the item that saw the biggest price decrease (-15.3%), followed by BMC (-21.1%), HMC (-10.5%). SJD (Can Don Hydropower), GMC (Saigon Garment), and SFI (a transport company) also saw the sharp price decreases of more than 9%, while TAC (Tuong An Vegetable Oil Company), CYC (Chang Yih) both saw the price decrease of over 8%.
Meanwhile, BBT (Bach Tuyet Cotton Company) was the item that saw the biggest and very impressive increase in price, by 26.5%, while VTA saw the increase of 18.8%, and DHG (Hau Giang Pharmaceutical) by 15.1%. Other share items just saw slight increases, including TS4, a seafood company, increased by only 6.8%.
Explaining the sharp price decreases in the last consecutive weeks, analysts said that the market was in the periodic time of falling after it was too hot several months ago. However, the situation has been worsened by the Decision No 03 by the State Bank of Vietnam, which aims to limit the loaning to securities investment. Besides, the oversupply of commodities, when a series of IPO were made in the last time (Bao Viet and PetroVietnam Insurance), has cooled the market down.
The two reasons explained why the falls have been not only seen at HSTC, but at HASTC as well.
Most of blue chips at HSTC decreased sharply in prices, namely VNM (-2.17%), STB (-1.49%), PPC (-0.78%), GMD (-3.29%), and REE (-3.85%)
The HASTC Index decreased by 15.07% in total last week, or 5.03%, to 284.7 points, the deepest low of the VN Index since January 10, 2007.
Securities information providers all said that the stock market is now in good condition. Most listing companies are performing well, the national economy remains high and maintains a stable growth rate. More importantly, Vietnam’s stock market has caught the special attention of the international investors and media. Many international financial institutions are planning to inject money in the burgeoning market.
However, the above mentioned good signs prove to be not enough to help recover the stock market, where the demand is very low. While domestic investors remain reluctant to return to the market, foreign investors are still facing limitations in investment. Foreign investors seem to have no more opportunities to buy blue chips as the foreign ownership in these companies has nearly hit the ceiling level.
An analyst from atpvietnam.com, the securities information provider, said that domestic investors still keep the wait-and-see attitude after the central bank released the Decision No 3, limiting the loans funding securities investment.
Investors do not make transactions at this moment. They do not buy shares after hearing that the final prices of the share auction were relatively low, and do not sell the shares as they would make losses with the deals, when the prices are decreasing.
Predictions about the stock market performance for the coming time vary. However, most analysts think that the market would be quiet for several more months.
Source: VNE
The VN Index reduced to 1,024.68 points, down by 9.01 points, or 0.9% over the previous week. As such, the VN Index lost 145.99 points in total, or 13.5%, if compared to the peak seen on March 12.
The VN Index fell in all the last weeks of June by 56.8 points, or 5.3%.
The market last week witnessed the prices of 76 share items decrease, 24 share items increase, and 7 share items stabilized in prices.
The total trading volume of the last week reached 23.7mil, or 4.7mil for every trading session. The total trading value reached VND2,616bil, or VND523bil for every trading session, a sharp decrease compared to the level of VND1tril/trading session seen earlier this year.
In the last week, BF1 fund certificates were excluded out from the list of top five securities items that saw the biggest trading volume.
Sacombank’s shares (STB) was the share item that led the market in terms of trading volume with 2.8mil traded shares, followed by VF1 (1.2mil fund certificates), FPT (the Corporation for Financing and Promoting Technologies) (1.2mil shares); SJS (the Song Da Industrial Zone and Urban Development – Sudico) (1.1mil shares), and REE (over 1mil shares).
HAX of the transport service company was the item that saw the biggest price decrease (-15.3%), followed by BMC (-21.1%), HMC (-10.5%). SJD (Can Don Hydropower), GMC (Saigon Garment), and SFI (a transport company) also saw the sharp price decreases of more than 9%, while TAC (Tuong An Vegetable Oil Company), CYC (Chang Yih) both saw the price decrease of over 8%.
Meanwhile, BBT (Bach Tuyet Cotton Company) was the item that saw the biggest and very impressive increase in price, by 26.5%, while VTA saw the increase of 18.8%, and DHG (Hau Giang Pharmaceutical) by 15.1%. Other share items just saw slight increases, including TS4, a seafood company, increased by only 6.8%.
Explaining the sharp price decreases in the last consecutive weeks, analysts said that the market was in the periodic time of falling after it was too hot several months ago. However, the situation has been worsened by the Decision No 03 by the State Bank of Vietnam, which aims to limit the loaning to securities investment. Besides, the oversupply of commodities, when a series of IPO were made in the last time (Bao Viet and PetroVietnam Insurance), has cooled the market down.
The two reasons explained why the falls have been not only seen at HSTC, but at HASTC as well.
Most of blue chips at HSTC decreased sharply in prices, namely VNM (-2.17%), STB (-1.49%), PPC (-0.78%), GMD (-3.29%), and REE (-3.85%)
The HASTC Index decreased by 15.07% in total last week, or 5.03%, to 284.7 points, the deepest low of the VN Index since January 10, 2007.
Securities information providers all said that the stock market is now in good condition. Most listing companies are performing well, the national economy remains high and maintains a stable growth rate. More importantly, Vietnam’s stock market has caught the special attention of the international investors and media. Many international financial institutions are planning to inject money in the burgeoning market.
However, the above mentioned good signs prove to be not enough to help recover the stock market, where the demand is very low. While domestic investors remain reluctant to return to the market, foreign investors are still facing limitations in investment. Foreign investors seem to have no more opportunities to buy blue chips as the foreign ownership in these companies has nearly hit the ceiling level.
An analyst from atpvietnam.com, the securities information provider, said that domestic investors still keep the wait-and-see attitude after the central bank released the Decision No 3, limiting the loans funding securities investment.
Investors do not make transactions at this moment. They do not buy shares after hearing that the final prices of the share auction were relatively low, and do not sell the shares as they would make losses with the deals, when the prices are decreasing.
Predictions about the stock market performance for the coming time vary. However, most analysts think that the market would be quiet for several more months.
Source: VNE
CPI to be calculated by new method
As of 2008, the consumer price index (CPI) will no longer be calculated on a monthly basis, but on a quarterly average or the yearly average basis, said Head of the General Statistics Office Le Manh Hung.
According to Mr Hung, the current method to calculate CPI has been used since 1985. At that time, inflation was very high and managers had to calculate CPI on a monthly basis to have timely reactions.
However, this way of calculation, according to Mr Hung, is not suitable to international practice and sometimes causes difficulties for management. He said that in many cases, if CPI is defined on a monthly basis, it would be difficult to evaluate the impacts of factors to prices.
For example, if petrol price increases in mid-May, CPI of May is announced in mid-June. This period of time is too short to assess the impacts of petrol prices on other goods. In addition, there are many factors that do not immediately show their impacts, but they need time. As a result, calculating CPI on a quarterly basis would be more precise.
To make acquaintance with this change, as of June 2007, the General Statistics Office has introduced the average CPI of the first half of 2007 to compare with that of the first half of 2006. Specifically, compared to the first half of last year, the average CPI of the same period of time increased by 7%.
Source: VNE
According to Mr Hung, the current method to calculate CPI has been used since 1985. At that time, inflation was very high and managers had to calculate CPI on a monthly basis to have timely reactions.
However, this way of calculation, according to Mr Hung, is not suitable to international practice and sometimes causes difficulties for management. He said that in many cases, if CPI is defined on a monthly basis, it would be difficult to evaluate the impacts of factors to prices.
For example, if petrol price increases in mid-May, CPI of May is announced in mid-June. This period of time is too short to assess the impacts of petrol prices on other goods. In addition, there are many factors that do not immediately show their impacts, but they need time. As a result, calculating CPI on a quarterly basis would be more precise.
To make acquaintance with this change, as of June 2007, the General Statistics Office has introduced the average CPI of the first half of 2007 to compare with that of the first half of 2006. Specifically, compared to the first half of last year, the average CPI of the same period of time increased by 7%.
Source: VNE
Bridge Sec to buy Vietnam HASECO stake for $13 mln
South Korean brokerage Bridge Securities Co. Ltd. said on Monday it will buy a 20 percent stake in Vietnam's Hai Phong Securities Co. (HASECO, HPC) for $13 million.
"We signed a contract for the strategic investment on June 30 and will buy 4 million shares out of 15 million new shares to be issued by Hai Phong Securities Joint Stock Company," Bridge said in a filing with the Financial Supervisory Commission.
The share purchase will cost 12 billion won ($13.01 million), it added.
The Vietnamese securities firm said on June 19 that it aimed to raise up to 350 billion dong ($21.7 million) by selling new shares in July. It has a chartered capital of 50 billion dong.Bridge Securities, led by Chief Executive Ly Sang-jun, who has said he had a royal Vietnamese ancestor, has been setting its sights on Vietnam to strike deals related to the privatisation of state-owned companies.
Its parent firm, Golden Bridge Finance Group, planned to raise $300 million in project funds to invest in Vietnam this year, Ly told Reuters in an interview in March.
HASECO shares were quoted at 72,400 dong, down 7.9 percent.
Source: Reuters
"We signed a contract for the strategic investment on June 30 and will buy 4 million shares out of 15 million new shares to be issued by Hai Phong Securities Joint Stock Company," Bridge said in a filing with the Financial Supervisory Commission.
The share purchase will cost 12 billion won ($13.01 million), it added.
The Vietnamese securities firm said on June 19 that it aimed to raise up to 350 billion dong ($21.7 million) by selling new shares in July. It has a chartered capital of 50 billion dong.Bridge Securities, led by Chief Executive Ly Sang-jun, who has said he had a royal Vietnamese ancestor, has been setting its sights on Vietnam to strike deals related to the privatisation of state-owned companies.
Its parent firm, Golden Bridge Finance Group, planned to raise $300 million in project funds to invest in Vietnam this year, Ly told Reuters in an interview in March.
HASECO shares were quoted at 72,400 dong, down 7.9 percent.
Source: Reuters
Investors impatient for telecom equitisation
The equitisation of some telecom firms in Vietnam was announced by state agencies in 2005, but so far none of the telecom firms have been equitised. In the eyes of investors, the equitisation process of Vietnamese telecom companies is going at a snail’s pace.
According to sources from MobiFone, this company is completing formalities for equitisation this year, and in early 2008 it will perform IPO.
Around five partners have expressed their desire to buy MobiFone stocks to become the firm’s strategic investors. However, as it is currently selecting a consultant only, MobiFone isn’t considering this issue yet.
Le Ngoc Minh, MobiFone’s director, said that he didn’t know what the value of MobiFone was at this moment.
Once MobiFone finds its consultant, tasks related to equitisation will be quickly fulfilled within 2007 to prepare for the IPO early next year.
Also a subsidiary of the Vietnam Post and Telecommunications Group (VNPT), VinaPhone can’t immediately conduct equitisation like MobiFone. VinaPhone director Hoang Trung Hai said that there was no detailed plan about VinaPhone’s equitisation yet. VNPT is focusing on the equitisation of MobiFone and VinaPhone will be equitised after MobiFone’s equitisation is completed.
Other mobile information companies that will be equitised after MobiFone and VinaPhone are Viettel Telecom and EVN Telecom. However, they have made any moves for this task. Perhaps they want to learn something from MobiFone and VinaPhone.
Deputy Minister of Post and Telematics Tran Duc Lai doesn’t agree with the idea that mobile information firms are doing business well so they don’t want to equitisate, which is responsible for the tardiness in equitisation.
“Implementation of equitisation is different for each company and this task will be conducted suitably to their ability. Viettel Telecom and EVN Telecom are new businesses and they are designing equitisation plans that are appropriate to their actual situations,” Mr. Lai said.
While MobiFone is urgently promoting its equitisation process, equitisation seems to be not a priority of Viettel Telecom. Perhaps this company is afraid that its equitisation will attract small shareholders who will focus on short-term benefits and this will influence its strategy to build a big corporation in the long run.
Viettel Telecom’s plan in the near future is developing strongly in rural and remote areas, where benefit doesn’t come in immediately, so shareholders will not like this. The firm, thus, will equitise its subsidies firstly.
Viettel Deputy General Director Nguyen Manh Hung said that Viettel had established a joint stock company on value added services for mobile phones and this company would be equitised first. EVN Telecom has also chosen the same path of equitisation as Viettel.
The Vietnam Association of Financial Investors (VAFI) has sent many documents urging telecom companies to quickly perform equitisation, which shows how impatient investors are and how great their interest is in shares of mobile information service companies.
At the Vietnam Enterprise Forum, under the framework of the mid-term Consultative Group Meeting 2007, held on May 30 in Hanoi, Alain Cany, Chairman of the European Chamber of Commerce (Eurocham), said that foreign investors were anxious to take part in the equitisation process of a significant field like telecom.
“To help foreign investors have the best preparation for their participation into the telecom sector, Eurocham and its members hope that the Vietnamese Government will introduce an itinerary for the participation of foreign investors soon,” he said.
The Financial manager of Norway’s Telenor group said that when Telenor conducted equitisation the group faced a lot of problems. This group was afraid that it would lose control over the firm. Some said that as Telenor was known in many countries and it was a strong brand equitisation was unnecessary.
However, with his experience, the Telenor official said that Vietnamese telecom firms should speed up the equitisation process and bring their stocks to the stock market as soon as possible. However, he agreed that appraising the value of shares of telecom firms is often very complicated.
Mark Shuper, Morgan Stanley Bank’s Managing Director, said that value appraisal for telecom companies is best when they are in the development phase, so they should choose the best time for doing this task.
However, he commented that Vietnamese telecom companies would not be equitised this year. “This process will take place strongly next year or the following years and of course, we are always ready to participate in this process,” he said.
Source: VNE
According to sources from MobiFone, this company is completing formalities for equitisation this year, and in early 2008 it will perform IPO.
Around five partners have expressed their desire to buy MobiFone stocks to become the firm’s strategic investors. However, as it is currently selecting a consultant only, MobiFone isn’t considering this issue yet.
Le Ngoc Minh, MobiFone’s director, said that he didn’t know what the value of MobiFone was at this moment.
Once MobiFone finds its consultant, tasks related to equitisation will be quickly fulfilled within 2007 to prepare for the IPO early next year.
Also a subsidiary of the Vietnam Post and Telecommunications Group (VNPT), VinaPhone can’t immediately conduct equitisation like MobiFone. VinaPhone director Hoang Trung Hai said that there was no detailed plan about VinaPhone’s equitisation yet. VNPT is focusing on the equitisation of MobiFone and VinaPhone will be equitised after MobiFone’s equitisation is completed.
Other mobile information companies that will be equitised after MobiFone and VinaPhone are Viettel Telecom and EVN Telecom. However, they have made any moves for this task. Perhaps they want to learn something from MobiFone and VinaPhone.
Deputy Minister of Post and Telematics Tran Duc Lai doesn’t agree with the idea that mobile information firms are doing business well so they don’t want to equitisate, which is responsible for the tardiness in equitisation.
“Implementation of equitisation is different for each company and this task will be conducted suitably to their ability. Viettel Telecom and EVN Telecom are new businesses and they are designing equitisation plans that are appropriate to their actual situations,” Mr. Lai said.
While MobiFone is urgently promoting its equitisation process, equitisation seems to be not a priority of Viettel Telecom. Perhaps this company is afraid that its equitisation will attract small shareholders who will focus on short-term benefits and this will influence its strategy to build a big corporation in the long run.
Viettel Telecom’s plan in the near future is developing strongly in rural and remote areas, where benefit doesn’t come in immediately, so shareholders will not like this. The firm, thus, will equitise its subsidies firstly.
Viettel Deputy General Director Nguyen Manh Hung said that Viettel had established a joint stock company on value added services for mobile phones and this company would be equitised first. EVN Telecom has also chosen the same path of equitisation as Viettel.
The Vietnam Association of Financial Investors (VAFI) has sent many documents urging telecom companies to quickly perform equitisation, which shows how impatient investors are and how great their interest is in shares of mobile information service companies.
At the Vietnam Enterprise Forum, under the framework of the mid-term Consultative Group Meeting 2007, held on May 30 in Hanoi, Alain Cany, Chairman of the European Chamber of Commerce (Eurocham), said that foreign investors were anxious to take part in the equitisation process of a significant field like telecom.
“To help foreign investors have the best preparation for their participation into the telecom sector, Eurocham and its members hope that the Vietnamese Government will introduce an itinerary for the participation of foreign investors soon,” he said.
The Financial manager of Norway’s Telenor group said that when Telenor conducted equitisation the group faced a lot of problems. This group was afraid that it would lose control over the firm. Some said that as Telenor was known in many countries and it was a strong brand equitisation was unnecessary.
However, with his experience, the Telenor official said that Vietnamese telecom firms should speed up the equitisation process and bring their stocks to the stock market as soon as possible. However, he agreed that appraising the value of shares of telecom firms is often very complicated.
Mark Shuper, Morgan Stanley Bank’s Managing Director, said that value appraisal for telecom companies is best when they are in the development phase, so they should choose the best time for doing this task.
However, he commented that Vietnamese telecom companies would not be equitised this year. “This process will take place strongly next year or the following years and of course, we are always ready to participate in this process,” he said.
Source: VNE
Foreign currency reserves at record high
Vietnam has seen record increases in foreign currency reserves in the first half of 2007, due to rising indirect investment in the stock market and a stabilised domestic exchange rate.
State Bank governor Le Duc Thuy said the increases in foreign currency reserves had tripled those of 2006 in the first five months of this year.
“The central bank of Vietnam will continue to invest in foreign currencies in the next few months to meet the target level equal to 20 weeks of imports,” said Thuy.
According to the IMF, Vietnam’s total foreign currency reserves were equal to 12 weeks of imports at the end of last year, reaching the minimum international standard for foreign currency reserves.
The reserve increase helps stabilise the exchange rate between the Vietnamese dong and the US dollar with a fluctuation rate of around one per cent by the end of this year. While the Vietnamese dong fell against the US dollar at the end of 2006 and in the beginning of this year, the interbank nominal effective exchange rate was higher than the real exchange rate for the first time in Vietnam’s history due to the surplus of foreign currency supply.
“Recently, the increase in the national forex reserve has stabilised the exchange rate, narrowing the gap between the interbank nominal effective exchange rate and the rate on the market,” Thuy added.
In January, the State Bank doubled the trading band for the dong-dollar rate. In the first two months of this year, the dong appreciated by about 0.3 per cent against the dollar after declining around 0.9 per cent in 2006.
“One reason for the surplus stems from indirect foreign investment capital which is expected to keep increasing in the last half of this year,” said Thuy.
According to the World Bank’s assessment of Vietnam’s economic development released in June, rising capital inflows complicated the implementation of monetary policy. Vietnam was confronted with what is called an ‘impossible trinity’: simultaneously maintaining a fixed or nearly fixed exchange rate, independent monetary policy and an open capital account.
In addition, increasing capital inflows have put pressure on the exchange rate to appreciate. However, the authorities have been unwilling to allow a greater appreciation as it may harm the competitiveness of exports and slow down growth.Officials have thus intervened in the market by purchasing foreign currency.
The dong has, as a result, returned to a slow depreciation. This type of intervention in the foreign exchange market has resulted in a build-up of reserves.
Source: VNE
State Bank governor Le Duc Thuy said the increases in foreign currency reserves had tripled those of 2006 in the first five months of this year.
“The central bank of Vietnam will continue to invest in foreign currencies in the next few months to meet the target level equal to 20 weeks of imports,” said Thuy.
According to the IMF, Vietnam’s total foreign currency reserves were equal to 12 weeks of imports at the end of last year, reaching the minimum international standard for foreign currency reserves.
The reserve increase helps stabilise the exchange rate between the Vietnamese dong and the US dollar with a fluctuation rate of around one per cent by the end of this year. While the Vietnamese dong fell against the US dollar at the end of 2006 and in the beginning of this year, the interbank nominal effective exchange rate was higher than the real exchange rate for the first time in Vietnam’s history due to the surplus of foreign currency supply.
“Recently, the increase in the national forex reserve has stabilised the exchange rate, narrowing the gap between the interbank nominal effective exchange rate and the rate on the market,” Thuy added.
In January, the State Bank doubled the trading band for the dong-dollar rate. In the first two months of this year, the dong appreciated by about 0.3 per cent against the dollar after declining around 0.9 per cent in 2006.
“One reason for the surplus stems from indirect foreign investment capital which is expected to keep increasing in the last half of this year,” said Thuy.
According to the World Bank’s assessment of Vietnam’s economic development released in June, rising capital inflows complicated the implementation of monetary policy. Vietnam was confronted with what is called an ‘impossible trinity’: simultaneously maintaining a fixed or nearly fixed exchange rate, independent monetary policy and an open capital account.
In addition, increasing capital inflows have put pressure on the exchange rate to appreciate. However, the authorities have been unwilling to allow a greater appreciation as it may harm the competitiveness of exports and slow down growth.Officials have thus intervened in the market by purchasing foreign currency.
The dong has, as a result, returned to a slow depreciation. This type of intervention in the foreign exchange market has resulted in a build-up of reserves.
Source: VNE
Sunday, July 01, 2007
FPT to ease IT troubles for textile company
FPT Information System (FPT-IS) has signed a contract with the Thanh Cong Textile and Garment Company to provide an overall IT solution for its securities business.
It will supply hardware and software for stock management, on-line transactions and the company's website.
The package will allow Thanh Cong Securities' customers to place their order and confirm its execution through the internet.
The system comes with a guarantee of high security and the ability to switch a stand-by system within one minute in case of a crash.
Thanh Cong, which has been in the textile and garment industry for more than 30 years, recently expanded into real estate, and now the securities market.
Source: VNA
It will supply hardware and software for stock management, on-line transactions and the company's website.
The package will allow Thanh Cong Securities' customers to place their order and confirm its execution through the internet.
The system comes with a guarantee of high security and the ability to switch a stand-by system within one minute in case of a crash.
Thanh Cong, which has been in the textile and garment industry for more than 30 years, recently expanded into real estate, and now the securities market.
Source: VNA
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