In early August 2007, breaking news was announced: Eximbank had chosen Japanese Sumitomo Mitsui Banking Corporation (SMBC), one of the leading banks in the world, as its strategic partner. There are many more things that can be said about the cooperation.
The announcement about the cooperation between Vietnam’s Eximbank and Japan’s Sumitomo Mitsui was the fully satisfactory result of the quiet negotiations between the two sides.
It is clear that Eximbank has made a good deal, since Japanese banks are well known for their cautiousness and conservatism, always taking skeptical steps in doing business, and having perfect risk management skills. Japan is the country with the biggest number of banks in the world. This is the first time a Japanese bank has bought shares of a Vietnamese bank.
If comparing the Eximbank-SMBC deal with the deals of selling shares by other Vietnamese banks to foreign partners, one should see that the selling price of Eximbank proves to be the highest and most beneficial to the local bank in the context of share price slides and decreasing VN Index.
The deal of selling 15% of shares to the Japanese partner can bring Eximbank the huge sum of money of $225mil. The issuance price was 6.42 times higher than the share face value, and 10% lower than the market price at the issuance moment.
Money is not the only thing SMBC can bring to Eximbank. The Japanese bank will also bring support in technologies, and bank governance. In order to bring the support, SMBC will assign a representative to Eximbank, who will join the bank’s management board.
The move by Eximbank of choosing a leading Japanese bank as a strategic shareholder has been highly praised by other local banks, as it was a double move.
The move will allow Eximbank to improve its financial capability and upgrade its management skills. Moreover, it will help the bank better satisfy clients, and Vietnamese enterprises which do business and have relations with Japanese partners. Every one knows that Japan is one of Vietnam’s leading export markets, and one of its biggest trade, investment and tourism partners.
At this moment, Eximbank is also nearly wrapping up the deal on selling 10% of its shares to two foreign investment funds. The said deals would help Eximbank raise its chartered capital from VND2,800bil ($175mil) to VND3,733bil ($233.31mil) in 2007.
The capital surplus Eximbank can get after selling shares to foreign partners may reach VND5,600bil ($350mil). If counting the capital surplus the bank got when selling shares to 17 local partners, estimated at VND3,500bil ($218.75mil), Eximbank would get more than VND9tril ($568mil), enough to become the joint stock bank which has the biggest ownership capital and the bank which has the second biggest chartered capital in Vietnam.
It is expected that in 2008-2010, Eximbank will give dividends to shareholders and divide the fund of capital surplus with the minimum proportion of 35% per annum. By 2010, Eximbank’s chartered capital will reach VND13tril ($812.5mil) at minimum, the level that other banks will find it hard to reach.
With the big ownership and chartered capital, Eximbank will be able to follow its strategy on modernising technologies and initiating other investment plans.
More than one month ago, on June 20, 2007, Eximbank announced it reached an agreement to sell VND500bil of chartered capital to 17 domestic strategic shareholders, which are big economic groups. The selling price was 8-fold higher than the face value, worth VND4tril ($250mil).
The 17 strategic shareholders included big names like Generalexim 1, Asia Commercial Bank, Kinh Do Group and Saigon Trading Corporation.
The said move has also been praised by analysts: while other joint stock banks just have one or two domestic partners, Eximbank has chosen 17 big ones.
Source: VNE
Wednesday, August 08, 2007
Paradox exists on corporate bond market
In developed economies, when the share market falls, investors tend to turn their investments to the bond market, which is less risky. However, it is quite different in Vietnam: when the VN Index falls, the bond market also becomes quiet.
At the Hanoi Securities Trading Centre, the daily value of bond transactions accounts for 70% of the total value of transactions on the market, worth VND170-180bil ($10.62mil).
However, Vietnam’s bond market is still considered underdeveloped for many reasons.
First, the scale of the market remains small, equivalent to 3-6% of GDP. In a developed stock market like the US’, the value of the bond market is equivalent to 80% of the country’s GDP.
Second, the main commodity of the market is the government bond, accounting for 80% of total issued bonds. Meanwhile, the corporate bond, not the government bond, plays the decisive role in creating the attractiveness of the market.
According to a recent report by the Hong Kong and Shanghai Banking Corporation (HSBC), the issued corporate bonds had the value of more than VND4tril ($250mil). The biggest bond issuers are the Bank for Investment and Development of Vietnam (BIDV), Electricity of Vietnam (EVN), the Vietnam Shipbuilding Industry Corporation (Vinashin). Most recently, the HCM City Infrastructure Investment and Development Company (CII) has successfully issued VND500bil worth of corporate bonds. Meanwhile, Vinashin has been well known for its successful bond issuance, raising VND3tril ($187.5mil) in capital.
The bonds’ interest rates proved to be attractive to investors. EVN’s 10-year interest rate was 8.9%, while BIDV’s 15-year interest rate was 8.4%, higher than the government bond’s rate, at nearly 8%.
According to HSBC, an estimated VND12tril ($750mil) worth of corporate bonds will be issued from now to the end of the year, raising the total value of bonds to be issued this year to VND16tril ($1bil), higher than the volume of VND15tril ($937.5mil) in 2006.
Enterprises well understand that issuing bonds is a good way to raise funds. This is a source of long-term capital with stable interest rates. The bond issuers only have to pay interest to bond holders every year, 8-10% on average. The interest rate proves to be much lower than that which the dividend companies have to pay their shareholders, thus helping make the costs of raising capital lower.
However, in fact, not many enterprises want to issue bonds. The government still has to come forward and issue bonds, then re-lend raised capital to enterprises. The process proves to waste time and money.
The biggest problem lies in bond issuance techniques. Many Vietnamese enterprises cannot meet the standardised requirements in accountancy (having financial reports audited and having no credit rating).
Source: VNE
At the Hanoi Securities Trading Centre, the daily value of bond transactions accounts for 70% of the total value of transactions on the market, worth VND170-180bil ($10.62mil).
However, Vietnam’s bond market is still considered underdeveloped for many reasons.
First, the scale of the market remains small, equivalent to 3-6% of GDP. In a developed stock market like the US’, the value of the bond market is equivalent to 80% of the country’s GDP.
Second, the main commodity of the market is the government bond, accounting for 80% of total issued bonds. Meanwhile, the corporate bond, not the government bond, plays the decisive role in creating the attractiveness of the market.
According to a recent report by the Hong Kong and Shanghai Banking Corporation (HSBC), the issued corporate bonds had the value of more than VND4tril ($250mil). The biggest bond issuers are the Bank for Investment and Development of Vietnam (BIDV), Electricity of Vietnam (EVN), the Vietnam Shipbuilding Industry Corporation (Vinashin). Most recently, the HCM City Infrastructure Investment and Development Company (CII) has successfully issued VND500bil worth of corporate bonds. Meanwhile, Vinashin has been well known for its successful bond issuance, raising VND3tril ($187.5mil) in capital.
The bonds’ interest rates proved to be attractive to investors. EVN’s 10-year interest rate was 8.9%, while BIDV’s 15-year interest rate was 8.4%, higher than the government bond’s rate, at nearly 8%.
According to HSBC, an estimated VND12tril ($750mil) worth of corporate bonds will be issued from now to the end of the year, raising the total value of bonds to be issued this year to VND16tril ($1bil), higher than the volume of VND15tril ($937.5mil) in 2006.
Enterprises well understand that issuing bonds is a good way to raise funds. This is a source of long-term capital with stable interest rates. The bond issuers only have to pay interest to bond holders every year, 8-10% on average. The interest rate proves to be much lower than that which the dividend companies have to pay their shareholders, thus helping make the costs of raising capital lower.
However, in fact, not many enterprises want to issue bonds. The government still has to come forward and issue bonds, then re-lend raised capital to enterprises. The process proves to waste time and money.
The biggest problem lies in bond issuance techniques. Many Vietnamese enterprises cannot meet the standardised requirements in accountancy (having financial reports audited and having no credit rating).
Source: VNE
Foreigners snap up shares as market eases off
A few financial institutions are not optimistic about the Vietnamese stock market’s near-term future, but that hasn’t deterred droves of foreigners from opening trading accounts with a stockbroker. Right now, when the market is trending gently down, foreign retail and institutional investors have been busy buying up shares at what they consider bargain prices.
These days in Ho Chi Minh City there are lots of foreigners, some of them tourists, mingling with the locals at the offices of Saigon Securities, HCMC Securities, ACB Securities Co. and other stockbrokers.
Usually the tourists are there as part of an organized tour party, something that the travel companies only began doing recently.
Mr. Hieu is a regular tour guide who likes to take visitors to one or more of the city’s stockbrokers. “They want to familiarize themselves with the atmosphere of Vietnamese trading floors. Before coming to Viet Nam, they study our stock market thoroughly,” Hieu said.
“Some visitors even schedule a time to buy and sell shares, and some return to Viet Nam alone or with friends for a longer stay so that they can open a trading account and do lots of buying and selling,” he added.
“It would be hard to recognize them as tourists were it not for the presence of a tour guide accompanying them,” the broker said. “The way they study the market and trades, all the questions they ask, show that they really know their stuff.”
Vietnamese stockbrokers reckon that investors from countries with long-established stock markets can make more than enough money to pay for their trip if they just spend a short time speculating with Vietnamese shares, sort of straight in and straight out again.
Foreigners who interrupt their travels for a few quick trades are just one of the three groups that get involved in the Vietnamese stock market, the others being institutions and individuals who buy and hold with a view to making capital gains over time.
According to the State Securities Commission, there were 243,809 stock-trading accounts as of June 30, of which 5,568 holding shares, bonds and cash of US$5 billion were held by foreigners.
Retail investors accounted for nearly the entire lot - 5,353 to be precise - and Japanese people held 70 percent of these individual accounts.
If you visit a stockbroker on Ho Chi Minh City’s “Wall Street” (Nguyen Cong Tru) in District 1, places like Dong A (East Asia), Dai Viet, Phuong Dong, or Sai Gon Securities, on any weekday morning you’ll see large numbers of Japanese people talking shares, contemplating and quietly jotting down tidbits of information.
Akzumi from Japan is one such investor. “I learned about the Vietnamese stock market through Tokyo TV and other media in Japan. I flew here to study the market and decided to invest in Vietnamese shares for the long-term, at least five years," he said.
“I don’t care about the daily ups and downs of share prices or what the VN-Index is doing at any one point in time. What matters to me is the potential of Vietnamese companies.”
Why do foreigners choose Viet Nam even though some major institutions are not optimistic about the local stock market in the near or medium term?
Economist Le Hong Thanh, who teaches about shares and securities in general, gives four reasons why the Vietnamese stock market attracts foreign investors.
“Firstly, it’s a new market and many stocks with potential will be available, like banks and property developers. Secondly, Viet Nam joined the World Trade Organization, which demonstrates that the country is politically and economically stable. Thirdly, the country’s gross domestic product reached eight percent in the first half of the year, a rather impressive figure compared to other ASEAN countries. Fourthly, major foreign companies have invested in Viet Nam, making the market more exciting.”
For quite some time Vietnamese investors have watched foreign investors and noted what shares they buy and sell, then duly followed the foreign lead rather than rely on their own judgment.
Mr. Vinh is a local investor who was observing the action at Dai Viet Securities. “Foreign share traders are very experienced, so it’s better to follow them rather than trying to do the research on your own,” he said.
Another fan of shares, Mr. Quan, likes to do his own analysis and rely on his experience. “When I’m trying to decide what to buy, I rarely heed what foreign investors are doing. Still, when local investors follow them and rush to buy the same stocks, I too feel agitated,” Quan confessed.
Economist Thanh thinks it is essential to learn from foreign investors and what they practice but warns his compatriots to tread carefully.
“If local investors refuse to think for themselves, they can fall into a trap. Foreign investors have loads of money to play with and can move the market easily, and in a direction that can cost the naïve locals dearly,” he said.
“Therefore, when Vietnamese people decide to invest in shares long-term, they must take the initiative and analyze everything, become masters of price change, and make the most of the available information,” Thanh added.
Analysts say that having many foreign elements investing in the country’s stock market makes it more exciting, diversified and global in nature – like any true any stock market needs to be.
However, the biggest worry is that, in addition to the foreign investment funds, institutions and retail investors who seem to have long-term intentions and strategies, there are an increasing number of foreign speculators whose actions could destabilize and even wreak havoc on Viet Nam’s young stock market.
Source: VNE
These days in Ho Chi Minh City there are lots of foreigners, some of them tourists, mingling with the locals at the offices of Saigon Securities, HCMC Securities, ACB Securities Co. and other stockbrokers.
Usually the tourists are there as part of an organized tour party, something that the travel companies only began doing recently.
Mr. Hieu is a regular tour guide who likes to take visitors to one or more of the city’s stockbrokers. “They want to familiarize themselves with the atmosphere of Vietnamese trading floors. Before coming to Viet Nam, they study our stock market thoroughly,” Hieu said.
“Some visitors even schedule a time to buy and sell shares, and some return to Viet Nam alone or with friends for a longer stay so that they can open a trading account and do lots of buying and selling,” he added.
“It would be hard to recognize them as tourists were it not for the presence of a tour guide accompanying them,” the broker said. “The way they study the market and trades, all the questions they ask, show that they really know their stuff.”
Vietnamese stockbrokers reckon that investors from countries with long-established stock markets can make more than enough money to pay for their trip if they just spend a short time speculating with Vietnamese shares, sort of straight in and straight out again.
Foreigners who interrupt their travels for a few quick trades are just one of the three groups that get involved in the Vietnamese stock market, the others being institutions and individuals who buy and hold with a view to making capital gains over time.
According to the State Securities Commission, there were 243,809 stock-trading accounts as of June 30, of which 5,568 holding shares, bonds and cash of US$5 billion were held by foreigners.
Retail investors accounted for nearly the entire lot - 5,353 to be precise - and Japanese people held 70 percent of these individual accounts.
If you visit a stockbroker on Ho Chi Minh City’s “Wall Street” (Nguyen Cong Tru) in District 1, places like Dong A (East Asia), Dai Viet, Phuong Dong, or Sai Gon Securities, on any weekday morning you’ll see large numbers of Japanese people talking shares, contemplating and quietly jotting down tidbits of information.
Akzumi from Japan is one such investor. “I learned about the Vietnamese stock market through Tokyo TV and other media in Japan. I flew here to study the market and decided to invest in Vietnamese shares for the long-term, at least five years," he said.
“I don’t care about the daily ups and downs of share prices or what the VN-Index is doing at any one point in time. What matters to me is the potential of Vietnamese companies.”
Why do foreigners choose Viet Nam even though some major institutions are not optimistic about the local stock market in the near or medium term?
Economist Le Hong Thanh, who teaches about shares and securities in general, gives four reasons why the Vietnamese stock market attracts foreign investors.
“Firstly, it’s a new market and many stocks with potential will be available, like banks and property developers. Secondly, Viet Nam joined the World Trade Organization, which demonstrates that the country is politically and economically stable. Thirdly, the country’s gross domestic product reached eight percent in the first half of the year, a rather impressive figure compared to other ASEAN countries. Fourthly, major foreign companies have invested in Viet Nam, making the market more exciting.”
For quite some time Vietnamese investors have watched foreign investors and noted what shares they buy and sell, then duly followed the foreign lead rather than rely on their own judgment.
Mr. Vinh is a local investor who was observing the action at Dai Viet Securities. “Foreign share traders are very experienced, so it’s better to follow them rather than trying to do the research on your own,” he said.
Another fan of shares, Mr. Quan, likes to do his own analysis and rely on his experience. “When I’m trying to decide what to buy, I rarely heed what foreign investors are doing. Still, when local investors follow them and rush to buy the same stocks, I too feel agitated,” Quan confessed.
Economist Thanh thinks it is essential to learn from foreign investors and what they practice but warns his compatriots to tread carefully.
“If local investors refuse to think for themselves, they can fall into a trap. Foreign investors have loads of money to play with and can move the market easily, and in a direction that can cost the naïve locals dearly,” he said.
“Therefore, when Vietnamese people decide to invest in shares long-term, they must take the initiative and analyze everything, become masters of price change, and make the most of the available information,” Thanh added.
Analysts say that having many foreign elements investing in the country’s stock market makes it more exciting, diversified and global in nature – like any true any stock market needs to be.
However, the biggest worry is that, in addition to the foreign investment funds, institutions and retail investors who seem to have long-term intentions and strategies, there are an increasing number of foreign speculators whose actions could destabilize and even wreak havoc on Viet Nam’s young stock market.
Source: VNE
VN-Index exceeds 900-point mark again
The Ho Chi Minh City bourse continued its mild recover as it broke through the 900-point mark while its Ha Noi-based counterpart lost value again by the end of the August 8 morning trading session.
The VN-Index at the Ho Chi Minh City Securities Trading Centre jumped 13.14 points to finish at 910.05 points.
By closing, nearly 4.5 million shares, worth close to 483 billion VND, were traded during the day. 48 shares rallied for gains, 41 remained unchanged and 23 fell.
Blue-chip shares like the Corporation for Financing and Promoting Technology (FPT), Saigon Thuong Tin Commercial Bank (STB), Pha Lai Thermal Power Co. (PPC) and Song Da Urban and Industrial Zone Investment and Development (SJS) were among stocks to lead the market in trading volume.
Binh Dinh Minerals (BMC) topped the list of gainers by tacking 16,000 VND onto its listed prices, followed by Kinh Do Corp. (KDC), Tay Ninh Cable Tour (TCT), FPT and SJS.
Meanwhile, Viettronics Tanbinh Joint Stock Company (VTB), Lugia Mechanical Electric Joint Stock Company (LGC), Saigon Fuel Company (SFC) and Tan Tien Plastic Packaging Joint Stock Company (TTP) were among the biggest losers on the day.
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 1.36 points to finish at 254.75 points. More than 603,000 shares, worth over 57 billion VND, changed hands.
Saigon Securities Inc. (SSI) topped the market in terms of transaction volume with 142,400 shares being traded during the day.
Source: VNA
The VN-Index at the Ho Chi Minh City Securities Trading Centre jumped 13.14 points to finish at 910.05 points.
By closing, nearly 4.5 million shares, worth close to 483 billion VND, were traded during the day. 48 shares rallied for gains, 41 remained unchanged and 23 fell.
Blue-chip shares like the Corporation for Financing and Promoting Technology (FPT), Saigon Thuong Tin Commercial Bank (STB), Pha Lai Thermal Power Co. (PPC) and Song Da Urban and Industrial Zone Investment and Development (SJS) were among stocks to lead the market in trading volume.
Binh Dinh Minerals (BMC) topped the list of gainers by tacking 16,000 VND onto its listed prices, followed by Kinh Do Corp. (KDC), Tay Ninh Cable Tour (TCT), FPT and SJS.
Meanwhile, Viettronics Tanbinh Joint Stock Company (VTB), Lugia Mechanical Electric Joint Stock Company (LGC), Saigon Fuel Company (SFC) and Tan Tien Plastic Packaging Joint Stock Company (TTP) were among the biggest losers on the day.
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 1.36 points to finish at 254.75 points. More than 603,000 shares, worth over 57 billion VND, changed hands.
Saigon Securities Inc. (SSI) topped the market in terms of transaction volume with 142,400 shares being traded during the day.
Source: VNA
Stock indexes bounce back
The Ho Chi Minh City bourse rose by 15.19 points on the August 1 trading session to finish at 923.14.
As many as 5.25 million shares worth 508.38 billion VND changed hands with Binh Dinh Mining topped the list of 90 shares as it recorded gains by adding 14,000 VND onto its listed price. Next were infrastructure developer Song Da's 12,000 VND spike and Tay Ninh Cable Tour with an 11,000 VND rise.
The Saigon Thuong Tin Commercial joint stock bank and the Financial Promotion Technology Corp. led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw some light at the end of the tunnel as it increased by 6.43 points to finish at 260 points and end 10 consecutive sessions of losses.
Among the more than 1.08 million shares traded at a total cost of 109.09 billion VND, Saigon Securities Inc. accounted for 31 percent of total trade volume with 339.100 shares being brought or sold.
Source: VNA
As many as 5.25 million shares worth 508.38 billion VND changed hands with Binh Dinh Mining topped the list of 90 shares as it recorded gains by adding 14,000 VND onto its listed price. Next were infrastructure developer Song Da's 12,000 VND spike and Tay Ninh Cable Tour with an 11,000 VND rise.
The Saigon Thuong Tin Commercial joint stock bank and the Financial Promotion Technology Corp. led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw some light at the end of the tunnel as it increased by 6.43 points to finish at 260 points and end 10 consecutive sessions of losses.
Among the more than 1.08 million shares traded at a total cost of 109.09 billion VND, Saigon Securities Inc. accounted for 31 percent of total trade volume with 339.100 shares being brought or sold.
Source: VNA
Tuesday, August 07, 2007
VN should sacrifice growth to stabilise prices
The inflation rate may be two digits for 2007, according to Dr Tran Dinh Thien, Deputy Head of the Vietnam Economics Institute. In order to stabilise prices in this context, the government should reconsider the targeted 9% economic growth rate.
All countries in the world bear the same pressure from the price increases. How can they all successfully control the prices in their domestic markets?
The structure of the basket of goods which is used for calculating consumer price index (CPI) in Vietnam is different from those in other countries. In our ‘basket’, food and foodstuff products account for more than 40% of total product and service items, while the proportion is smaller in other countries’ baskets. In poor and developing countries with low development levels, more raw products are listed in the ‘basket’. Therefore, in controlling prices, the government should draw up solutions considering the specific characteristics of Vietnam.
What are solutions then?
The government is now focusing on lowering taxes in order to stabilise the prices of key products, like oil and petrol, and steel, which can help stimulate growth. Meanwhile, the prices of food and foodstuffs will not see big increases.
Do you think tax reductions will help stop the price increase wave?
It is necessary not only to lower taxes but also to issue government bonds to withdraw cash from circulation. It is necessary to lower government spending. Reality shows that when the inflation rate is too high, the most important thing to do is to urgently cut government spending and raise interest rates in order to attract idle capital from the public. Currently, the budget overspending remains within control. But I have to say that the government still has to cut expenditures in the context of overly high price increases, causing the inflation. The expenditure cuts will help reduce the inflation rate.
Experts have forecast that prices will keep rising towards the year’s end due to many factors. Could you please give other reasons behind the price increases?
In the first six months of the year, the government disbursed less than 50% of investment capital, while it is striving to reach the growth rate of 9% this year. Therefore, the government has to pump more money in the economy from now until the year’s end.
Factors that may cause price increases in the last months of 2007 prove to be very strong, while the volume of cash in circulation remains very big. I think that the price increase will be two digits.
However, I do not think that inflation has reached the chaotic level. We can control the situation if the inflation rate is less than 10%, and it would be fine if we could not gain the targeted economic growth rate of 9% this year.
Source: VNE
All countries in the world bear the same pressure from the price increases. How can they all successfully control the prices in their domestic markets?
The structure of the basket of goods which is used for calculating consumer price index (CPI) in Vietnam is different from those in other countries. In our ‘basket’, food and foodstuff products account for more than 40% of total product and service items, while the proportion is smaller in other countries’ baskets. In poor and developing countries with low development levels, more raw products are listed in the ‘basket’. Therefore, in controlling prices, the government should draw up solutions considering the specific characteristics of Vietnam.
What are solutions then?
The government is now focusing on lowering taxes in order to stabilise the prices of key products, like oil and petrol, and steel, which can help stimulate growth. Meanwhile, the prices of food and foodstuffs will not see big increases.
Do you think tax reductions will help stop the price increase wave?
It is necessary not only to lower taxes but also to issue government bonds to withdraw cash from circulation. It is necessary to lower government spending. Reality shows that when the inflation rate is too high, the most important thing to do is to urgently cut government spending and raise interest rates in order to attract idle capital from the public. Currently, the budget overspending remains within control. But I have to say that the government still has to cut expenditures in the context of overly high price increases, causing the inflation. The expenditure cuts will help reduce the inflation rate.
Experts have forecast that prices will keep rising towards the year’s end due to many factors. Could you please give other reasons behind the price increases?
In the first six months of the year, the government disbursed less than 50% of investment capital, while it is striving to reach the growth rate of 9% this year. Therefore, the government has to pump more money in the economy from now until the year’s end.
Factors that may cause price increases in the last months of 2007 prove to be very strong, while the volume of cash in circulation remains very big. I think that the price increase will be two digits.
However, I do not think that inflation has reached the chaotic level. We can control the situation if the inflation rate is less than 10%, and it would be fine if we could not gain the targeted economic growth rate of 9% this year.
Source: VNE
Slackening IPOs to harmonise the market
The number of new accounts at securities companies has been increasing rapidly, while foreign investment funds are queuing to enter Vietnam. Meanwhile, the stock market remains gloomy, why? Vu Thanh Tu Anh, Director of Research at the Fulbright Economics Teaching Programme in Vietnam, talked about this.
What would you say about the two contradictory factors, which may be called a paradox?
In fact, the two factors do not conflict. People can make investment when the market rises and make investment when the market falls as well.
You may see that many foreign investors, though having entered Vietnam, have just made initial preparatory works, while they have not made big investment deals. The right time for them to make investment activities remains in their thoughts.
I think that one of the reasons that have prompted investors to come to Vietnam at this moment is that they are awaiting upcoming share issuances. As you may know, a lot of big Vietnamese enterprises will make IPOs in the coming months, while several hundred other enterprises will complete equitisation with the total capital of up to several hundred thousand billion dong.
It is very difficult to estimate the total amount of capital foreign investors are going to inject in Vietnam, but I know for sure that the volume is not small. Investors have opportunities and are thinking of how to grasp the opportunities. They act rationally, not by feeling.
There are two contradictory opinions about the IPOs by big general corporations scheduled for the end of the year. What is your opinion about this?
Some experts have said that the market is now in ‘indigestion’. However, in order to know if the market is oversupplied, we should measure its capability of absorbing capital from the market.
With the high capability of foreign investors that we have mentioned before, and the big capital sums of domestic investors, I think that the market still can absorb the capital to be brought about by the big IPOs and the equitisations in the last months of the year.
I think what we see now on the market is ‘expectation’ rather than ‘indigestion’.
An important issue we should discuss is at what prices the market will absorb the IPOs.
If the state aims to optimise the turnover from equitisation, it should re-time the dates and the roadmaps for equitisation and IPOs.
In this case, I think, it is quite normal to make changes suitable to the market’s circumstances, since IPOs and equitisations themselves are kinds of market activities.
Could you please tell us more about this?
A couple of weeks ago, the government and the State Securities Commission suggested that companies and banks reconsider the timing of their IPOs. The move showed that the government was trying to make an adjustment to harmonise the roadmap of big corporations’ IPOs.
If the IPOs are still be carried out as they were previously planned, the scenario will be as follows. Foreign investors now seem to be delaying their investment deals to wait for the IPOs. If the state still follows the planned roadmap, supply will sharply increase, thus dropping prices, which can help the investors successfully buy shares at prices lower than the levels they should have.
If this happens, the money the state will collect from IPOs will be lower. If the market still cannot absorb the securities to be issued even with the low prices of shares, the state may have to reconsider raising the maximum foreign ownership ratio in local joint stock companies. And this is exactly what foreign investors want. They have even put pressure on the government. (The maximum foreign ownership is 49% of total shares in listed companies and 30% in banks).
In general, if the state tries to maintain the previous IPO plan, it would still bear hard pressure which may force it to make further adjustments. I mean that if it does not re-time the IPOs now, it will still have to do that later. Because so, it would be better to make the adjustment right now.
Source: VNE
What would you say about the two contradictory factors, which may be called a paradox?
In fact, the two factors do not conflict. People can make investment when the market rises and make investment when the market falls as well.
You may see that many foreign investors, though having entered Vietnam, have just made initial preparatory works, while they have not made big investment deals. The right time for them to make investment activities remains in their thoughts.
I think that one of the reasons that have prompted investors to come to Vietnam at this moment is that they are awaiting upcoming share issuances. As you may know, a lot of big Vietnamese enterprises will make IPOs in the coming months, while several hundred other enterprises will complete equitisation with the total capital of up to several hundred thousand billion dong.
It is very difficult to estimate the total amount of capital foreign investors are going to inject in Vietnam, but I know for sure that the volume is not small. Investors have opportunities and are thinking of how to grasp the opportunities. They act rationally, not by feeling.
There are two contradictory opinions about the IPOs by big general corporations scheduled for the end of the year. What is your opinion about this?
Some experts have said that the market is now in ‘indigestion’. However, in order to know if the market is oversupplied, we should measure its capability of absorbing capital from the market.
With the high capability of foreign investors that we have mentioned before, and the big capital sums of domestic investors, I think that the market still can absorb the capital to be brought about by the big IPOs and the equitisations in the last months of the year.
I think what we see now on the market is ‘expectation’ rather than ‘indigestion’.
An important issue we should discuss is at what prices the market will absorb the IPOs.
If the state aims to optimise the turnover from equitisation, it should re-time the dates and the roadmaps for equitisation and IPOs.
In this case, I think, it is quite normal to make changes suitable to the market’s circumstances, since IPOs and equitisations themselves are kinds of market activities.
Could you please tell us more about this?
A couple of weeks ago, the government and the State Securities Commission suggested that companies and banks reconsider the timing of their IPOs. The move showed that the government was trying to make an adjustment to harmonise the roadmap of big corporations’ IPOs.
If the IPOs are still be carried out as they were previously planned, the scenario will be as follows. Foreign investors now seem to be delaying their investment deals to wait for the IPOs. If the state still follows the planned roadmap, supply will sharply increase, thus dropping prices, which can help the investors successfully buy shares at prices lower than the levels they should have.
If this happens, the money the state will collect from IPOs will be lower. If the market still cannot absorb the securities to be issued even with the low prices of shares, the state may have to reconsider raising the maximum foreign ownership ratio in local joint stock companies. And this is exactly what foreign investors want. They have even put pressure on the government. (The maximum foreign ownership is 49% of total shares in listed companies and 30% in banks).
In general, if the state tries to maintain the previous IPO plan, it would still bear hard pressure which may force it to make further adjustments. I mean that if it does not re-time the IPOs now, it will still have to do that later. Because so, it would be better to make the adjustment right now.
Source: VNE
Stock capitalisation value to reach 70% of GDP by 2020
The stock market capitalisation value will reach 50% of GDP by 2010 and 70% of GDP by 2020, according to the project on capital market development.
Prime Minister Nguyen Tan Dung has approved the project on developing Vietnam’s capital market by 2010 with the vision towards 2020, under which the stock capitalisation value will reach 70% by 2020.
The aim is to develop a diversified capital market in order to meet the demand for capital of the national economy.
Under the newly approved project, the stock market will play the decisive role in making the capital market become an important part of Vietnam’s financial market. By 2020, Vietnam’s capital market needs to have a development level equal to other markets in the region.
The capital market needs to be fully worked-out in structure, comprising the share market, bond market, derivatives markets, official and OTC markets, and operate under the best internationally standardised rules. Vietnam’s capital market, as a developed market, will also have the capability to link with regional and international markets.
In the immediate time, Vietnam will gather forces on developing the scale and perfecting the structure of the capital market, improve the quality of and diversify commodities of the market, including types of bonds. Moreover, Vietnam will also focus on developing derivative products like options or forward contracts.
The government will push up the equitisation of state-owned big general corporations, economic groups, and state-owned banks, associate the equitisation with IPO and listing on the bourse. The state will sell more shares in enterprises in which the state does not need to hold controlling stakes. Foreign invested enterprises, which are now operating as limited companies, will shift to operate as joint stock companies which list their shares on the stock market.
The intermediary institutions and market service providers will see considerable development in the number and quality of services (securities companies, investment fund management companies), while a market of credit rating will gradually take shape in Vietnam.
Vietnam plans to allow the establishment of credit rating firms that can meet requirements, and allow several prestigious foreign institutions to operate in Vietnam.
Vietnam will fulfill its commitments on market opening by allowing professional investors to enter Vietnam under the committed roadmap. In the future, Vietnam Social Insurance and Post Savings will be allowed to make investment in the capital market. Vietnam encourages foreign based investment funds to make long-term investment in Vietnam.
Source: VNE
Prime Minister Nguyen Tan Dung has approved the project on developing Vietnam’s capital market by 2010 with the vision towards 2020, under which the stock capitalisation value will reach 70% by 2020.
The aim is to develop a diversified capital market in order to meet the demand for capital of the national economy.
Under the newly approved project, the stock market will play the decisive role in making the capital market become an important part of Vietnam’s financial market. By 2020, Vietnam’s capital market needs to have a development level equal to other markets in the region.
The capital market needs to be fully worked-out in structure, comprising the share market, bond market, derivatives markets, official and OTC markets, and operate under the best internationally standardised rules. Vietnam’s capital market, as a developed market, will also have the capability to link with regional and international markets.
In the immediate time, Vietnam will gather forces on developing the scale and perfecting the structure of the capital market, improve the quality of and diversify commodities of the market, including types of bonds. Moreover, Vietnam will also focus on developing derivative products like options or forward contracts.
The government will push up the equitisation of state-owned big general corporations, economic groups, and state-owned banks, associate the equitisation with IPO and listing on the bourse. The state will sell more shares in enterprises in which the state does not need to hold controlling stakes. Foreign invested enterprises, which are now operating as limited companies, will shift to operate as joint stock companies which list their shares on the stock market.
The intermediary institutions and market service providers will see considerable development in the number and quality of services (securities companies, investment fund management companies), while a market of credit rating will gradually take shape in Vietnam.
Vietnam plans to allow the establishment of credit rating firms that can meet requirements, and allow several prestigious foreign institutions to operate in Vietnam.
Vietnam will fulfill its commitments on market opening by allowing professional investors to enter Vietnam under the committed roadmap. In the future, Vietnam Social Insurance and Post Savings will be allowed to make investment in the capital market. Vietnam encourages foreign based investment funds to make long-term investment in Vietnam.
Source: VNE
Real estate attracts securities investors
While the stock market remains quiet, the real estate market is warming up as securities investors have decided to withdraw money from stocks to inject in real estate trading deals.
Previously, the rising stock market once attracted real estate investors, but now, with the market in a decline, investors have come back to the property market. It is simply because it is less risky to invest in real estate than in stocks, while the investment can bring more profit than deposits at banks.
Le Khac Tien, an investor on Bao Viet Trading Floor, said that if they sold shares at this moment, investors would incur losses of 30%. As there is no sign of the recovery of the market, it is wiser to inject money in property trading.
Real estate trading floors now are bustling these days. HUT’s floor, for example, receives 10 people a day who come to seek information about real estate projects, and all of them are securities investors. A staff here said that the number of successful transactions had increased by several times in the last one month.
Sacomreal’s trading floor also said that houses and apartments traded in the last month all had high value. Most of the buyers have been stock investors, who make decisions quickly.
Experts have said that the HCM City property market has been warming up since the beginning of the year. Buyers now tend to buy houses and apartments in areas which are expected to become the central areas of the city in the near future.
Meanwhile, house prices prove to be reasonable at this moment, which helps create many successful transactions. Only apartments in central areas or near the city centre like district 1, Binh Thanh and district 4 have seen slight increases in prices, while the prices remain stationary in other areas. The 70 sq m, 100 sq m apartments at HUT, Nguyen Ngoc Phuong and Ngo Tat To residential quarters in Binh Thanh district and H3 in district 4 have increased by 10% in price in the last two months, while the prices in other areas remain ‘soft’. Therefore, investors believe that it is the right time to buy houses and apartments, anticipating that the prices will increase rapidly at the year’s end.
While the demand of stock investors for buying houses and apartments is increasing, the supply seems to be short, especially the supply of high-grade apartments.
Nguyen Hoang Minh, Director General of Khang Viet Real Estate Joint Stock Company, the owner of The Mansion project, said that the company had announced the sale of the apartments in B area of the project at a price 10% higher than in A area. The apartments in A area in two 15-storey buildings have been sold out, which shows that high-grade apartments are very attractive.
Source: VNE
Previously, the rising stock market once attracted real estate investors, but now, with the market in a decline, investors have come back to the property market. It is simply because it is less risky to invest in real estate than in stocks, while the investment can bring more profit than deposits at banks.
Le Khac Tien, an investor on Bao Viet Trading Floor, said that if they sold shares at this moment, investors would incur losses of 30%. As there is no sign of the recovery of the market, it is wiser to inject money in property trading.
Real estate trading floors now are bustling these days. HUT’s floor, for example, receives 10 people a day who come to seek information about real estate projects, and all of them are securities investors. A staff here said that the number of successful transactions had increased by several times in the last one month.
Sacomreal’s trading floor also said that houses and apartments traded in the last month all had high value. Most of the buyers have been stock investors, who make decisions quickly.
Experts have said that the HCM City property market has been warming up since the beginning of the year. Buyers now tend to buy houses and apartments in areas which are expected to become the central areas of the city in the near future.
Meanwhile, house prices prove to be reasonable at this moment, which helps create many successful transactions. Only apartments in central areas or near the city centre like district 1, Binh Thanh and district 4 have seen slight increases in prices, while the prices remain stationary in other areas. The 70 sq m, 100 sq m apartments at HUT, Nguyen Ngoc Phuong and Ngo Tat To residential quarters in Binh Thanh district and H3 in district 4 have increased by 10% in price in the last two months, while the prices in other areas remain ‘soft’. Therefore, investors believe that it is the right time to buy houses and apartments, anticipating that the prices will increase rapidly at the year’s end.
While the demand of stock investors for buying houses and apartments is increasing, the supply seems to be short, especially the supply of high-grade apartments.
Nguyen Hoang Minh, Director General of Khang Viet Real Estate Joint Stock Company, the owner of The Mansion project, said that the company had announced the sale of the apartments in B area of the project at a price 10% higher than in A area. The apartments in A area in two 15-storey buildings have been sold out, which shows that high-grade apartments are very attractive.
Source: VNE
Rubber group targets multi-sector development
Multi-sector development is the new way forward for the Vietnam Rubber Group (VRG) as it becomes a pioneer in the agricultural sector changing its operation under the agro-industry and service structure.
In addition to latex processing, VRG is striving to raise annual outputs to 3 million sets of auto tyres and to 700 km of conveyer belts as well as step up production of rubber materials for other industries, said Tran Kien Quyet, the group’s CEO.
Last year, the group invested over 400 billion VND (25 million USD) in the Ben Thanh Rubber Conveyer Belt Factory in Ho Chi Minh City’s Cu Chi district and a wood processing factory in central Quang Tri province. Their products will be used for cement and coal sectors with prices two or three times cheaper than imported materials.
Quyet said that his group is promoting cooperation with the Da Nang Rubber Company, the Southern Rubber Company and India’s Aboll Company to invest in tyre production and raise the capacity of its four existing wood processing factories.
The group also plans to build a new 50,000 cu.m wood processing plant in the southern province of Binh Phuoc, he added.
VRG has also injected 300 million USD into other sectors such as engineering production, seaport management, transportation, construction materials, real estate, hotel services and tourism.
In order to address the problem that land available for domestic rubber plantation has been reduced, several VRG affiliates have intended to develop rubber growing and processing in Vietnam's neighbouring countries Laos and Cambodia.
Huynh Van Khiet, Director of the Dac Lac Rubber Company, an affiliate of VRG, said his company decided to build rubber processing plants in Laos and Cambodia because the two countries offer more agreeable land and climate conditions for the development of rubber trees.
Over the past few decades, rubber has been a valuable industrial tree in Vietnam. Latex is one of the country’s key export items with a turnover of nearly 1.3 billion USD in 2006 and the tree has made remarkable contributions to forest coverage, land erosion prevention and poverty reduction in many localities.
Vietnam is now the world’s sixth largest rubber producer and fourth exporter (after Thailand, Indonesia and Malaysia), with a total area of 450,000 ha and an annual output of 400,000 tonnes. China is the largest importer of Vietnam's rubber.
Vietnam’s rubber area and output are predicted to continue increasing in the coming years and may reach 700,000 ha and 600,000 tonnes respectively in 2010. Export turnover of this product is expected to remain at over 1 billion USD per year.
Source: VNE
In addition to latex processing, VRG is striving to raise annual outputs to 3 million sets of auto tyres and to 700 km of conveyer belts as well as step up production of rubber materials for other industries, said Tran Kien Quyet, the group’s CEO.
Last year, the group invested over 400 billion VND (25 million USD) in the Ben Thanh Rubber Conveyer Belt Factory in Ho Chi Minh City’s Cu Chi district and a wood processing factory in central Quang Tri province. Their products will be used for cement and coal sectors with prices two or three times cheaper than imported materials.
Quyet said that his group is promoting cooperation with the Da Nang Rubber Company, the Southern Rubber Company and India’s Aboll Company to invest in tyre production and raise the capacity of its four existing wood processing factories.
The group also plans to build a new 50,000 cu.m wood processing plant in the southern province of Binh Phuoc, he added.
VRG has also injected 300 million USD into other sectors such as engineering production, seaport management, transportation, construction materials, real estate, hotel services and tourism.
In order to address the problem that land available for domestic rubber plantation has been reduced, several VRG affiliates have intended to develop rubber growing and processing in Vietnam's neighbouring countries Laos and Cambodia.
Huynh Van Khiet, Director of the Dac Lac Rubber Company, an affiliate of VRG, said his company decided to build rubber processing plants in Laos and Cambodia because the two countries offer more agreeable land and climate conditions for the development of rubber trees.
Over the past few decades, rubber has been a valuable industrial tree in Vietnam. Latex is one of the country’s key export items with a turnover of nearly 1.3 billion USD in 2006 and the tree has made remarkable contributions to forest coverage, land erosion prevention and poverty reduction in many localities.
Vietnam is now the world’s sixth largest rubber producer and fourth exporter (after Thailand, Indonesia and Malaysia), with a total area of 450,000 ha and an annual output of 400,000 tonnes. China is the largest importer of Vietnam's rubber.
Vietnam’s rubber area and output are predicted to continue increasing in the coming years and may reach 700,000 ha and 600,000 tonnes respectively in 2010. Export turnover of this product is expected to remain at over 1 billion USD per year.
Source: VNE
Vietnam gamblers arrested at foreigners-only casino
Twenty-eight Vietnamese nationals were arrested for illegal gambling after a police raid on a foreigners-only casino, officials and state media said on Monday.
Royal International Corp, operator of the Casino Hoang Gia (RIC), said that guards had taken bribes from locals to let them play there.
The communist-run country allows foreigners to play in local casinos to attract tourists, mainly Chinese and Koreans. Vietnamese citizens face up to seven years in jail for illegal gambling.
"The guards who let the Vietnamese play will be punished according to the law, but the casino is still open as usual," said a Royal International Corp official.
Taiwan-invested Royal International Corp became the country's only listed casino last Tuesday when it floated its shares on the main board Ho Chi Minh Stock Exchange.
Shares of the company were trading down 4.43 percent at 151,000 dong ($9.4) each at 0217 GMT on Monday.
Source: Reuters
Royal International Corp, operator of the Casino Hoang Gia (RIC), said that guards had taken bribes from locals to let them play there.
The communist-run country allows foreigners to play in local casinos to attract tourists, mainly Chinese and Koreans. Vietnamese citizens face up to seven years in jail for illegal gambling.
"The guards who let the Vietnamese play will be punished according to the law, but the casino is still open as usual," said a Royal International Corp official.
Taiwan-invested Royal International Corp became the country's only listed casino last Tuesday when it floated its shares on the main board Ho Chi Minh Stock Exchange.
Shares of the company were trading down 4.43 percent at 151,000 dong ($9.4) each at 0217 GMT on Monday.
Source: Reuters
Further increasing, gold price bounces back to VND13mil/tael
Investors have given up the ‘wait-and-see’ attitude, and are beginning to buy gold, pushing the price up.
The gold price on August 6 unexpectedly bounced back to the VND13mil/tael ($812.5) level. Prior to that, analysts still reported that investors were maintaining the wait-and-see attitude, because they were still wavering between injecting money in the stock market and buying gold. The gloomy stock market has prompted investors to withdraw money from the stock market to invest in gold; however, investors remain hesitant to do that.
On August 2, PNJ, Bao Tin and SJC announced the purchasing price of VND12,910,000/tael, while AAA bar gold had the lower price at VND12,890,000/tael. Meanwhile, the selling price was VND10-40,000/tael higher than the purchasing price. PNJ, for example, had the selling price at VND12,950/tael, and SJC at VND12,960,000/tael.
In the world’s market, the gold price has recovered after one week of staying at low levels. At 10.30 am on August 6, gold was traded at $672.5/oz, an increase of $6.5/oz over the last trading session of the previous week.
The gold price in New York has also increased by $6.5/oz (delivery in September) to $683.8/oz.
On the domestic market, PNJ gold was sold at VND13,060,000/tael in HCM City this morning.
Analysts said that the gold price would increase further this week as the result of the world’s increased gold price. International press agencies reported that 17 out of 27 strategists and analysts said in a poll conducted by Bloomberg that they thought the gold price would increase further in the next trading sessions. Only one believes that the gold price could decrease this week, while the other nine said that there would be no big fluctuations.
The devaluation of the greenback occurred after the US made public figures about job creation, which was lower than expected. The number of jobs created in July was the lowest since February.
However, experts from big investment funds in the world have said that the gold price will likely come back to the $650/oz level in August before witnessing new increases at the year’s end.
Source: VNE
The gold price on August 6 unexpectedly bounced back to the VND13mil/tael ($812.5) level. Prior to that, analysts still reported that investors were maintaining the wait-and-see attitude, because they were still wavering between injecting money in the stock market and buying gold. The gloomy stock market has prompted investors to withdraw money from the stock market to invest in gold; however, investors remain hesitant to do that.
On August 2, PNJ, Bao Tin and SJC announced the purchasing price of VND12,910,000/tael, while AAA bar gold had the lower price at VND12,890,000/tael. Meanwhile, the selling price was VND10-40,000/tael higher than the purchasing price. PNJ, for example, had the selling price at VND12,950/tael, and SJC at VND12,960,000/tael.
In the world’s market, the gold price has recovered after one week of staying at low levels. At 10.30 am on August 6, gold was traded at $672.5/oz, an increase of $6.5/oz over the last trading session of the previous week.
The gold price in New York has also increased by $6.5/oz (delivery in September) to $683.8/oz.
On the domestic market, PNJ gold was sold at VND13,060,000/tael in HCM City this morning.
Analysts said that the gold price would increase further this week as the result of the world’s increased gold price. International press agencies reported that 17 out of 27 strategists and analysts said in a poll conducted by Bloomberg that they thought the gold price would increase further in the next trading sessions. Only one believes that the gold price could decrease this week, while the other nine said that there would be no big fluctuations.
The devaluation of the greenback occurred after the US made public figures about job creation, which was lower than expected. The number of jobs created in July was the lowest since February.
However, experts from big investment funds in the world have said that the gold price will likely come back to the $650/oz level in August before witnessing new increases at the year’s end.
Source: VNE
Banks focus on services to improve competitiveness
Vietnam’s commercial banks have given top priority to the development of services in an effort to sharpen their competitive edge.
In line with this, many banks in collaboration with their own partners have introduced their typical services based on advantages in customers, trading network and modern technology.
Experts said cooperating with potential partners is an appropriate way for domestic banks’ development and the method is considered to be better than concentrating only on savings mobilisation, lending, card issuance and trade finance that are strong points of foreign banks.
Recently, the Vietnam Export Import Commercial Joint Stock Bank (Vietnam Eximbank) signed agreements with 16 strategic partners through which the bank can develop services such as money collection, payment, co-signed loan provision, project finance and card issuance.
The strategic partners include the Bien Viet Securities Company, the Saigon Trade Corporation, the PetroVietnam Finance Company, the Saigon Post and Telecommunications Service Corporation and the Kinh Do Group.
The Technological and Commercial Joint Stock Bank (Techcombank) has signed a series of cooperation agreements with local corporations to offer different modes of payment services. For example, is has joined hands with the Corporation for Financing and Promoting Technology (FPT) to supply payment services for Internet ADSL fees.
It also works with the VTC Intecom to supply mobile phone banking services, allowing handset users to make payments for games and goods by sending short messages to the bank after opening an account, and cooperates with the Ho Chi Minh City Insurance Corporation to provide insurance payment services.
Earlier, Techcombank has become the first financial institution in Vietnam to introduce the Internet Banking to the market, enabling the bank's clients to make transactions and check accounts via the Internet.
Meanwhile, the Vietnam Joint Stock Commercial Bank for Private Enterprises (VP Bank) has improved its competitive edge by entering an ATM card alliance with 18 other local commercial banks, which is presided over by the Bank for Foreign Trade of Vietnam (Vietcombank). Accounting for more than 70 percent of the market share, this card alliance is considered the most effective model among the four alliances currently operating in Vietnam.
For its part, the East Asia Bank - the leading card provider in Vietnam - has launched payment services for electricity and running water through its ATM system or branches in Ho Chi Minh City and southern Binh Duong province.
Other commercial banks like the Saigon Thuong Tin Commercial Bank (Sacombank), the An Binh Commercial Bank (AB Bank), the Asia Commercial Bank (ACB) meanwhile have established companies specialising in finance leasing services, gold and securities trading or offered a series of high interest rate services in a move to improve their competitive edge.
Source: VNE
In line with this, many banks in collaboration with their own partners have introduced their typical services based on advantages in customers, trading network and modern technology.
Experts said cooperating with potential partners is an appropriate way for domestic banks’ development and the method is considered to be better than concentrating only on savings mobilisation, lending, card issuance and trade finance that are strong points of foreign banks.
Recently, the Vietnam Export Import Commercial Joint Stock Bank (Vietnam Eximbank) signed agreements with 16 strategic partners through which the bank can develop services such as money collection, payment, co-signed loan provision, project finance and card issuance.
The strategic partners include the Bien Viet Securities Company, the Saigon Trade Corporation, the PetroVietnam Finance Company, the Saigon Post and Telecommunications Service Corporation and the Kinh Do Group.
The Technological and Commercial Joint Stock Bank (Techcombank) has signed a series of cooperation agreements with local corporations to offer different modes of payment services. For example, is has joined hands with the Corporation for Financing and Promoting Technology (FPT) to supply payment services for Internet ADSL fees.
It also works with the VTC Intecom to supply mobile phone banking services, allowing handset users to make payments for games and goods by sending short messages to the bank after opening an account, and cooperates with the Ho Chi Minh City Insurance Corporation to provide insurance payment services.
Earlier, Techcombank has become the first financial institution in Vietnam to introduce the Internet Banking to the market, enabling the bank's clients to make transactions and check accounts via the Internet.
Meanwhile, the Vietnam Joint Stock Commercial Bank for Private Enterprises (VP Bank) has improved its competitive edge by entering an ATM card alliance with 18 other local commercial banks, which is presided over by the Bank for Foreign Trade of Vietnam (Vietcombank). Accounting for more than 70 percent of the market share, this card alliance is considered the most effective model among the four alliances currently operating in Vietnam.
For its part, the East Asia Bank - the leading card provider in Vietnam - has launched payment services for electricity and running water through its ATM system or branches in Ho Chi Minh City and southern Binh Duong province.
Other commercial banks like the Saigon Thuong Tin Commercial Bank (Sacombank), the An Binh Commercial Bank (AB Bank), the Asia Commercial Bank (ACB) meanwhile have established companies specialising in finance leasing services, gold and securities trading or offered a series of high interest rate services in a move to improve their competitive edge.
Source: VNE
Rising inflation undermines growth
The consumer price index (CPI) has increased continuously for the last seven months. The figure rose 6.19% in comparison with late last year.
The increase has caused a "price fever" and threatened economic growth.
People on low incomes, such as farmers and workers, have suffered greatly and their daily life has become more difficult.
Earlier this month, the Prime Minister has asked relevant agencies to take measures to reduce the CPI. In response, the Ministry of Finance has suggested a temporary reduction in import taxes on more than 20 essential commodities in food, fodder, material for construction, cosmetics, electronics and automobiles starting on August 8.
In particular, food prices would be cut by more than 50%.
Local prices have increased in line with international prices. The ministry believes that the lower tax cut would significantly reduce CPI in local market soon and force local producers providing cheaper products.
In addition, some local products' taxation level will be considered.
Furthermore, the ministry will allow enterprises extended time to pay value added taxes for imported agricultural products to help them cut their expenses.
Price supervision for import, production, circulation and retail sales will be tightened to avoid speculation.
Initially, five businesses in the steel industry and four enterprises in the gas industry will soon be checked to find out why they have sharply increased their prices in the last two months.
Last week, the Central Institute for Economic Management (CIEM) caused a "shock" in public opinion as they announced their survey results that the average Vietnamese business spent 1,959 employee-hour per year non tax formalities.
The news was astounding in light of the government having implemented administrative reform for years with significant results.
With so much time and human resources lost on tax compliance, a local business has less to focus on other needs, thus it cannot be as competitive. This is especially true for small-and-medium size businesses.
Another survey from the World Bank pointed out that small and medium sized enterprises need additional time to do paperwork regarding value added taxes, enterprise income taxes and social insurance. Altogether, this requires approximately 1,050 hours per year.
Therefore, the fact that enterprises spend a great deal of time and energy on tax compliance is a reality.
Lower end car manufacturers are staking out a larger piece of the pie as they build factories and assemble car parts right here in Vietnam.
After Malaysian JRD Vietnam completed their factory in the central province of Phu Yen, they starting coming out with nine automobile models ranging from sedan to pick-up trucks priced under US$20,000.
Duc Phuong Limited released a five-seat sedan similar to a popular Korean Matiz, but with a competitive price sticker two thirds that of Matiz. Their seven-seat automobile is being offered for around $17,000.
Truong Hai Automobile Join stock company has also joined the market by importing the Kia sedan from South Korea. After selling 400 Kia's, the company began construction on its second factory to assemble the model in Vietnam.
These companies offer a good alternative to automobiles sold at high prices by world famous automobile companies with well-known brand names doing business in Vietnam.
The latest players in the automobile industry here are attracting customers keen on prices, but it will take time to see how their quality holds up. In the meantime, local consumers looking for a car will have more to choose from.
Source: VNS
The increase has caused a "price fever" and threatened economic growth.
People on low incomes, such as farmers and workers, have suffered greatly and their daily life has become more difficult.
Earlier this month, the Prime Minister has asked relevant agencies to take measures to reduce the CPI. In response, the Ministry of Finance has suggested a temporary reduction in import taxes on more than 20 essential commodities in food, fodder, material for construction, cosmetics, electronics and automobiles starting on August 8.
In particular, food prices would be cut by more than 50%.
Local prices have increased in line with international prices. The ministry believes that the lower tax cut would significantly reduce CPI in local market soon and force local producers providing cheaper products.
In addition, some local products' taxation level will be considered.
Furthermore, the ministry will allow enterprises extended time to pay value added taxes for imported agricultural products to help them cut their expenses.
Price supervision for import, production, circulation and retail sales will be tightened to avoid speculation.
Initially, five businesses in the steel industry and four enterprises in the gas industry will soon be checked to find out why they have sharply increased their prices in the last two months.
Last week, the Central Institute for Economic Management (CIEM) caused a "shock" in public opinion as they announced their survey results that the average Vietnamese business spent 1,959 employee-hour per year non tax formalities.
The news was astounding in light of the government having implemented administrative reform for years with significant results.
With so much time and human resources lost on tax compliance, a local business has less to focus on other needs, thus it cannot be as competitive. This is especially true for small-and-medium size businesses.
Another survey from the World Bank pointed out that small and medium sized enterprises need additional time to do paperwork regarding value added taxes, enterprise income taxes and social insurance. Altogether, this requires approximately 1,050 hours per year.
Therefore, the fact that enterprises spend a great deal of time and energy on tax compliance is a reality.
Lower end car manufacturers are staking out a larger piece of the pie as they build factories and assemble car parts right here in Vietnam.
After Malaysian JRD Vietnam completed their factory in the central province of Phu Yen, they starting coming out with nine automobile models ranging from sedan to pick-up trucks priced under US$20,000.
Duc Phuong Limited released a five-seat sedan similar to a popular Korean Matiz, but with a competitive price sticker two thirds that of Matiz. Their seven-seat automobile is being offered for around $17,000.
Truong Hai Automobile Join stock company has also joined the market by importing the Kia sedan from South Korea. After selling 400 Kia's, the company began construction on its second factory to assemble the model in Vietnam.
These companies offer a good alternative to automobiles sold at high prices by world famous automobile companies with well-known brand names doing business in Vietnam.
The latest players in the automobile industry here are attracting customers keen on prices, but it will take time to see how their quality holds up. In the meantime, local consumers looking for a car will have more to choose from.
Source: VNS
Monday, August 06, 2007
VN-Index, HaSTC-Index continue falls
Both the Ho Chi Minh City's bourse and its Ha Noi-based counterpart reported losses by the end of the August 6 trading session.
By closing, HCM City's VN-Index dipped by 8.98 points, or 1 percent, to close at 883.9 points.
Only 3.69 million shares, worth over 328 billion VND, changed hands during the course of the trading session.
Song Da Urban & Industrial Zone Investment and Development (SJS), Royal International (RIC), Khanh Hoi Import Export (KHA), Hau Giang Pharmaceutical (DHG) and Saigon Hotel Corporation (SGH) were among the biggest losers.
The HaSTC-Index at the Ha Noi Securities Trading Centre also fell as 42 listed shares recorded drops, 26 saw no trades and 17 rallied for gains.
By closing, the HaSTC slid by 1.48 points to finish at 254.47 points with 993,400 shares, worth over 89 billion VND, traded.
Big movers on the day included Saigon Securities Inc. (SSI), Minh Phu Seafood Corp. (MPC), Bim Son Cement JSC (BCC), Asia Commercial Bank (ACB) and Nui Beo Coal JSC (NBC).
Source: VNA
By closing, HCM City's VN-Index dipped by 8.98 points, or 1 percent, to close at 883.9 points.
Only 3.69 million shares, worth over 328 billion VND, changed hands during the course of the trading session.
Song Da Urban & Industrial Zone Investment and Development (SJS), Royal International (RIC), Khanh Hoi Import Export (KHA), Hau Giang Pharmaceutical (DHG) and Saigon Hotel Corporation (SGH) were among the biggest losers.
The HaSTC-Index at the Ha Noi Securities Trading Centre also fell as 42 listed shares recorded drops, 26 saw no trades and 17 rallied for gains.
By closing, the HaSTC slid by 1.48 points to finish at 254.47 points with 993,400 shares, worth over 89 billion VND, traded.
Big movers on the day included Saigon Securities Inc. (SSI), Minh Phu Seafood Corp. (MPC), Bim Son Cement JSC (BCC), Asia Commercial Bank (ACB) and Nui Beo Coal JSC (NBC).
Source: VNA
Vinashin nets 2.6 million USD in profit in first half
The national shipbuilding group Vinashin reported after-tax profits of 42.3 billion VND (2.6 million USD) for the first six months of the year.
Vinashin plans to increase its charter capital from 40 billion VND to 138 billion VND and issue 9.8 million additional shares.
It will pay its 2006 dividend in additional shares to existing stockholders at a ratio of 10.3, offer 6.4 million shares for sale to strategic shareholders, and award 200,000 shares to employees.
Source: VNA
Vinashin plans to increase its charter capital from 40 billion VND to 138 billion VND and issue 9.8 million additional shares.
It will pay its 2006 dividend in additional shares to existing stockholders at a ratio of 10.3, offer 6.4 million shares for sale to strategic shareholders, and award 200,000 shares to employees.
Source: VNA
Sunday, August 05, 2007
Foreign investors continue share purchases
Foreign investors continued to purchase shares on the country's bourses unabated despite a declining VN-Index, that sank to a seven-month low on August 3.
The Ho Chi Minh City exchange closed on August 3 with foreigners buying almost 950,000 shares at a cost of 124 billion VND while selling off just 346,210 shares for close to 37.8 billion VND.
The trend has been particularly evident over the last three sessions, on August 1 investors from abroad purchased 216 billion VND in stocks while selling off units for a combined total of 101 billion VND. The following day, on August 2, 154 billion VND in shares were snapped up.
The Ha Noi bourse saw 27 billion VND going out of foreigners’ pockets while just 4.7 billion VND returned to their coffers on August 3.
Shares of national giants were the biggest movers as the Viet Nam Milk Company (VNM) led in sales output followed by the Tan Tien Plastic Bag Company, the Pha Lai Thermo-Electricity Company and the Petroleum Drilling and Service Company.
Deputy Director of the Vietcombank Joint Stock Company Mai Trung Dung attributed the interest to the great opportunities that these giants may bring in for foreign investors to explore the purchasing power of the 84 million-plus market.
Underscoring the trend, the State Securities Commission reported that foreign investors now hold up to 30 percent of all of the country's listed shares.
Bui Trong Nghia, a financial expert from the Asia Development Bank, said the trend reflects foreign investors’ confidence in the Vietnamese stock market as well as the bright potential of the Vietnamese economy.
Source: VNE
The Ho Chi Minh City exchange closed on August 3 with foreigners buying almost 950,000 shares at a cost of 124 billion VND while selling off just 346,210 shares for close to 37.8 billion VND.
The trend has been particularly evident over the last three sessions, on August 1 investors from abroad purchased 216 billion VND in stocks while selling off units for a combined total of 101 billion VND. The following day, on August 2, 154 billion VND in shares were snapped up.
The Ha Noi bourse saw 27 billion VND going out of foreigners’ pockets while just 4.7 billion VND returned to their coffers on August 3.
Shares of national giants were the biggest movers as the Viet Nam Milk Company (VNM) led in sales output followed by the Tan Tien Plastic Bag Company, the Pha Lai Thermo-Electricity Company and the Petroleum Drilling and Service Company.
Deputy Director of the Vietcombank Joint Stock Company Mai Trung Dung attributed the interest to the great opportunities that these giants may bring in for foreign investors to explore the purchasing power of the 84 million-plus market.
Underscoring the trend, the State Securities Commission reported that foreign investors now hold up to 30 percent of all of the country's listed shares.
Bui Trong Nghia, a financial expert from the Asia Development Bank, said the trend reflects foreign investors’ confidence in the Vietnamese stock market as well as the bright potential of the Vietnamese economy.
Source: VNE
Eximbank to sell 15% stake to Japanese Bank
The Viet Nam Export Import Commercial Joint Stock Bank (Eximbank) plans to sell its 15 percent stake worth 225 million USD to Japanese strategic partner Sumitomo Mitsui Banking Corporation (SMBC).
The sell off is part of an Eximbank’s plan to raise its chartered capital by 25 percent to more than 3.7 trillion VND (233.3 million USD) from its current 2.8 trillion VND (175 million USD).
Under the plan, the bank will sell an additional 10 percent stake to foreign investment funds.
Eximbank General Director Pham Van Thiet said the bank will receive risk management and technical assistance from large banking and financial group SMBC.
Source: VNA
The sell off is part of an Eximbank’s plan to raise its chartered capital by 25 percent to more than 3.7 trillion VND (233.3 million USD) from its current 2.8 trillion VND (175 million USD).
Under the plan, the bank will sell an additional 10 percent stake to foreign investment funds.
Eximbank General Director Pham Van Thiet said the bank will receive risk management and technical assistance from large banking and financial group SMBC.
Source: VNA
Friday, August 03, 2007
Five factors in the fall of Vietnam’s stocks
The Hong Kong and Shanghai Banking Corporation (HSBC) has released the latest report in its series of reports about Vietnam’s stock market.
According to HSBC, there are five factors that contributed to the fall of the market in the last few months with the VN index down by 8% in May and 20% from its peak gained in March.
First, it was because of the overly high prices of shares. Despite the adjustments, the PE (price/earning) index of the listing shares remains relatively high at 31 (the highest level was 37), which means the PE would be 21 for 12 months (supposing that the EPS – earning per share – would be 25% for this year and 15% for the next year).
As such, the stock prices prove to be too high for an emerging market like Vietnam, though the market proves to have high growth potentials.
Based on the PE forecast for the year’s end at 18, HSBC’s experts have confirmed the prediction that the VN Index would be at 900 points by the end of the year.
Second, it was because of the possibility of the tightening of the monetary policy. With the CPI rising by 8.4% in July compared to the same period of last year, and exceeding the GDP growth rate of 8.1% in the first quarter, HSBC predicted that the central bank would require higher compulsory reserve ratio in order to control inflation. The possible move has been worrying many investors.
At the end of June, the central bank released a decision, asking commercial banks to lower the amount of loans for securities investments from the current level of 7% of total outstanding loans to 3% by the year’s end. The decision means that small investors will have to sell shares to pay debts to banks.
Third, the possible delays in equitisation process. BIDV, one of the biggest state owned banks, has asked for permission to delay its IPO. The Prime Minister has asked for a rescheduling of IPOs from now until the year’s end in order to avoid the oversupply of stocks on the market. The equitisation of four state owned banks may be delayed until strategic partners of the banks are selected.
HSBC does not think that the IPO delays would be good for the market. The IPOs themselves would help generate demand on the market as they would attract new investors, while they would help restore the confidence of investors. The delays may cause concerns that the government has become less engaged in the reform process.
According to HSBC, it is very likely that there will be no big IPOs from now to the end of the year, even in the next year.
Fourth, the unsatisfactory IPOs in the last time. Bao Viet’s share prices declined sharply after its IPO in May 2007. The prices of Thuan An Wooden Furniture and Tay Ninh Rubber Companies decreased by 17% and 13%, respectively, one week after their IPOs. These unsuccessful IPOs may foretell the lack of success of the coming IPOs.
Fifth, the disappointment of individual investors. The boom of the stock market earlier this year once made them believe that they could earn big money with stock investment. Meanwhile, the gloomy market in the last four months has disappointed them.
Foreign investors keep buying shares, but just in small quantities: they bought $54mil worth of shares in July, while the figure was $345mil in January. The daily trading volume declined sharply to $33mil in July, a half of the highest peak seen earlier this year.
However, according to HSBC, the stock market is still in good condition. Nearly all listing companies have satisfactory business results. Vinamilk, for example, has net income rising by 36% over the same period last year. Vietnam is still successfully attracting foreign investors and the national economy is growing well, though there is concern about the high inflation rate.
HSBC retains its viewpoint about Vietnam’s stock market, and it wants to accumulate Vietnamese stocks for long-term investment in the context of the VN Index coming closer to the 900 point threshold.
Source: VNE
According to HSBC, there are five factors that contributed to the fall of the market in the last few months with the VN index down by 8% in May and 20% from its peak gained in March.
First, it was because of the overly high prices of shares. Despite the adjustments, the PE (price/earning) index of the listing shares remains relatively high at 31 (the highest level was 37), which means the PE would be 21 for 12 months (supposing that the EPS – earning per share – would be 25% for this year and 15% for the next year).
As such, the stock prices prove to be too high for an emerging market like Vietnam, though the market proves to have high growth potentials.
Based on the PE forecast for the year’s end at 18, HSBC’s experts have confirmed the prediction that the VN Index would be at 900 points by the end of the year.
Second, it was because of the possibility of the tightening of the monetary policy. With the CPI rising by 8.4% in July compared to the same period of last year, and exceeding the GDP growth rate of 8.1% in the first quarter, HSBC predicted that the central bank would require higher compulsory reserve ratio in order to control inflation. The possible move has been worrying many investors.
At the end of June, the central bank released a decision, asking commercial banks to lower the amount of loans for securities investments from the current level of 7% of total outstanding loans to 3% by the year’s end. The decision means that small investors will have to sell shares to pay debts to banks.
Third, the possible delays in equitisation process. BIDV, one of the biggest state owned banks, has asked for permission to delay its IPO. The Prime Minister has asked for a rescheduling of IPOs from now until the year’s end in order to avoid the oversupply of stocks on the market. The equitisation of four state owned banks may be delayed until strategic partners of the banks are selected.
HSBC does not think that the IPO delays would be good for the market. The IPOs themselves would help generate demand on the market as they would attract new investors, while they would help restore the confidence of investors. The delays may cause concerns that the government has become less engaged in the reform process.
According to HSBC, it is very likely that there will be no big IPOs from now to the end of the year, even in the next year.
Fourth, the unsatisfactory IPOs in the last time. Bao Viet’s share prices declined sharply after its IPO in May 2007. The prices of Thuan An Wooden Furniture and Tay Ninh Rubber Companies decreased by 17% and 13%, respectively, one week after their IPOs. These unsuccessful IPOs may foretell the lack of success of the coming IPOs.
Fifth, the disappointment of individual investors. The boom of the stock market earlier this year once made them believe that they could earn big money with stock investment. Meanwhile, the gloomy market in the last four months has disappointed them.
Foreign investors keep buying shares, but just in small quantities: they bought $54mil worth of shares in July, while the figure was $345mil in January. The daily trading volume declined sharply to $33mil in July, a half of the highest peak seen earlier this year.
However, according to HSBC, the stock market is still in good condition. Nearly all listing companies have satisfactory business results. Vinamilk, for example, has net income rising by 36% over the same period last year. Vietnam is still successfully attracting foreign investors and the national economy is growing well, though there is concern about the high inflation rate.
HSBC retains its viewpoint about Vietnam’s stock market, and it wants to accumulate Vietnamese stocks for long-term investment in the context of the VN Index coming closer to the 900 point threshold.
Source: VNE
Higher ingot steel price bringing fat profit to steel producers
Steel mills have got fat profit as they have been able to buy ingot steel at low prices and sell at high prices. A source said the profit the mills earned in June and July reached several tens of billion dong.
In the first six months of the year, ingot steel imports reached 1,083mil tonnes, and in May alone, the import volume was 375,000 tonnes. Currently, steel mills mainly use ingot steel imported in May at lower prices to make finished products.
Considering that the steel mills bought ingot steel at $485/tonne (VND7.8mil/tonne) and sold at VND10.2mil/tonne, they would make the profit of VND1mil/tonne. If an enterprise sells 10,000 tonnes of steel at that price the profit it reaps is VND10bil ($0.625mil).
Meanwhile, the escalating price of steel has caused losses for the national economy. According to Nguyen Tien Thoa, Head of the Pricing Department under the Ministry of Finance, the government has to spend VND1,800bil ($112.5mil) more on the projects using state budget sourced capital due to the increased steel price. A lot of construction works have been halted as they need more capital to cover the steel price increases.
In its latest move, the government has asked the Ministry of Finance to set up an inter-ministerial team in charge of inspecting steel mills. Nguyen Tien Thoa, Head of the Price Control Department under the Ministry of Finance, said that the inspection was necessary in this context, as the government has been applying drastic measures to curb inflation but failed to force the steel price down.
Mr Thoa said that when material prices increase, steel producers raise the selling prices of finished steel immediately, but when material prices decrease, steel producers do not reduce their selling prices.
According to the Vietnam Steel Association, the ingot steel imported in July 2007 from China fell by $10/tonne to $510-518 CFR; however, the prices of finished steel remain unchanged.
Now steel mills are selling construction bar steel at VND9,800-10,200/kg (not including discounts and VAT), and rolled steel at VND9,200-10,000/kg, which are equal to that in June 2007.
In June 2007, when the ingot steel price began increasing to over $500/tonne, steel producers immediately raised the selling prices to over VND10mil/tonne.
Analysts have pointed out that steel mills did not make steel with expensive ingot steel, because the ingot steel volume imported in June and July, when the price increased, was low. In June, for example, ingot steel imports were 121,000 tonnes only, while the figure was 100,000 tonnes in July.
It is expected that ingot steel will decrease further in August thanks to stable supplies. However, there are no signs of finished steel price decreases.
Source: VNE
In the first six months of the year, ingot steel imports reached 1,083mil tonnes, and in May alone, the import volume was 375,000 tonnes. Currently, steel mills mainly use ingot steel imported in May at lower prices to make finished products.
Considering that the steel mills bought ingot steel at $485/tonne (VND7.8mil/tonne) and sold at VND10.2mil/tonne, they would make the profit of VND1mil/tonne. If an enterprise sells 10,000 tonnes of steel at that price the profit it reaps is VND10bil ($0.625mil).
Meanwhile, the escalating price of steel has caused losses for the national economy. According to Nguyen Tien Thoa, Head of the Pricing Department under the Ministry of Finance, the government has to spend VND1,800bil ($112.5mil) more on the projects using state budget sourced capital due to the increased steel price. A lot of construction works have been halted as they need more capital to cover the steel price increases.
In its latest move, the government has asked the Ministry of Finance to set up an inter-ministerial team in charge of inspecting steel mills. Nguyen Tien Thoa, Head of the Price Control Department under the Ministry of Finance, said that the inspection was necessary in this context, as the government has been applying drastic measures to curb inflation but failed to force the steel price down.
Mr Thoa said that when material prices increase, steel producers raise the selling prices of finished steel immediately, but when material prices decrease, steel producers do not reduce their selling prices.
According to the Vietnam Steel Association, the ingot steel imported in July 2007 from China fell by $10/tonne to $510-518 CFR; however, the prices of finished steel remain unchanged.
Now steel mills are selling construction bar steel at VND9,800-10,200/kg (not including discounts and VAT), and rolled steel at VND9,200-10,000/kg, which are equal to that in June 2007.
In June 2007, when the ingot steel price began increasing to over $500/tonne, steel producers immediately raised the selling prices to over VND10mil/tonne.
Analysts have pointed out that steel mills did not make steel with expensive ingot steel, because the ingot steel volume imported in June and July, when the price increased, was low. In June, for example, ingot steel imports were 121,000 tonnes only, while the figure was 100,000 tonnes in July.
It is expected that ingot steel will decrease further in August thanks to stable supplies. However, there are no signs of finished steel price decreases.
Source: VNE
Prices up, salaries remain stationary
While the CPI has increased dramatically by 6.19% in the last seven months, the incomes of employees have stood still, thus lightening consumers’ pockets.
Dairy products have increased by 10-15% in price so far this year. Oil, vegetables, pork, the main foods of Vietnamese people, all have seen sharp price increases: the price of oil has risen by VND3,000/litre, vegetables and fruits by VND2,000/kg, and pork by VND4,000/kg.
Mrs Tam, who has a stand at Hom market in Hanoi, said she previously spent VND40-50,000 on a meal for three persons, but now she had to pay VND100,000 for the same meal.
Meanwhile, the incomes of most consumers have remained unchanged. According to the Ministry of Labour, War Invalids and Social Affairs (MoLISA), there are 11mil wage earners, including 0.5mil people working in foreign invested enterprises, which means that 10.5mil are eligible for salary adjustments.
MoLISA said that under the roadmap on salary reform for 2003-2007, the new turn of adjusting the minimum salary level will only come after October 1, 2007 (the minimum salary levels are now different for different economic sectors, but there will be only one level for all economic sectors by 2010). This means that those 10.5mil workers still have to wait until the end of 2007 to get raises.
A recent survey of employees’ salaries in 2007 conducted by Navigos Group showed that the average salary of domestic enterprises (both private owned and state owned) is much lower than that of foreign invested enterprises. However, it is not easy to make adjustments in salary schemes in foreign invested enterprises.
Experts have said that every foreign invested enterprise has its own policy on wage control, and the policy cannot be affected by the CPI or any outside impacts.
Curbing the price increases proves to be a headache for the newly set up Government. The Prime Minister has released a lot of instructions in order to control the market and avoid further price increases, and people hope the drastic measures will be effective.
Source: VNE
Dairy products have increased by 10-15% in price so far this year. Oil, vegetables, pork, the main foods of Vietnamese people, all have seen sharp price increases: the price of oil has risen by VND3,000/litre, vegetables and fruits by VND2,000/kg, and pork by VND4,000/kg.
Mrs Tam, who has a stand at Hom market in Hanoi, said she previously spent VND40-50,000 on a meal for three persons, but now she had to pay VND100,000 for the same meal.
Meanwhile, the incomes of most consumers have remained unchanged. According to the Ministry of Labour, War Invalids and Social Affairs (MoLISA), there are 11mil wage earners, including 0.5mil people working in foreign invested enterprises, which means that 10.5mil are eligible for salary adjustments.
MoLISA said that under the roadmap on salary reform for 2003-2007, the new turn of adjusting the minimum salary level will only come after October 1, 2007 (the minimum salary levels are now different for different economic sectors, but there will be only one level for all economic sectors by 2010). This means that those 10.5mil workers still have to wait until the end of 2007 to get raises.
A recent survey of employees’ salaries in 2007 conducted by Navigos Group showed that the average salary of domestic enterprises (both private owned and state owned) is much lower than that of foreign invested enterprises. However, it is not easy to make adjustments in salary schemes in foreign invested enterprises.
Experts have said that every foreign invested enterprise has its own policy on wage control, and the policy cannot be affected by the CPI or any outside impacts.
Curbing the price increases proves to be a headache for the newly set up Government. The Prime Minister has released a lot of instructions in order to control the market and avoid further price increases, and people hope the drastic measures will be effective.
Source: VNE
Bank shares: not appealing now, but attractive in long term
Bank shares seem to be unappealing to investors at this moment as there are few transactions of bank shares. However, experts believe that they will become attractive in the long term.
Southern Bank shares are selling at VND37,000/share, down by VND40,000/share from the highest level. The share price could not bounce back even when mass media reported good news related to the bank: groups from Hong Kong, Singapore and the US had meetings with the bank’s leaders, expressing their desire to cooperate; and the bank plans to raise its chartered capital to VND3tril this year.
Eximbank, OCB, Dong A and VP Bank have also reported good business results for the first six months of the year, but their share prices still slid in the last time and there are no signs of the imminent recovery of these share items.
In fact, Eximbank’s shares slightly increased in mid July 2007 to VND7.8mil/share, but dropped again later to the VND7mil/share level. The price of OCB shares also dropped to VND4.1-4.3mil from VND12.5mil/share. Dong A shares are now trading at nearly VND7mil, down by a half compared to the beginning of the year.
On the official market, ACB shares are trading at VND118,000/share, and STB, VND57,000. Technical factors (issuing bonus shares, and the right to buy preferential shares) were thought to have brought the price decreases of these items. However, experts have said that price decreases are common to all bank shares.
Johan Nyvene, Director General of HSC Securities Company, said that bank shares had dropped by 60-70% in the last four months, and this should be seen as a problem worthy of attention. However, Mr Nyvene still thinks that it is the right time for long-term investors to buy in.
Vietnam’s banks remain young if compared to banks in other countries in the world, but they are promising. Only 5-6mil Vietnamese people ((6-7% of population) have accounts at banks, the total outstanding loans remain low, at 66% of GDP. Therefore, the banking sector will develop further together with the fast-growing national economy.
In a recent survey conducted by Deutsche Bank, Vietnam’s banking sector is attractive in the eyes of foreign banks.
Dang Quang Gia, Lecturer at the HCM City Banking University, also said that it was the right time for investors with long-term vision to buy bank shares. Mr Gia said that bank shares would become hot in the last months of the year when banks reported satisfactory business results.
Source: VNE
Southern Bank shares are selling at VND37,000/share, down by VND40,000/share from the highest level. The share price could not bounce back even when mass media reported good news related to the bank: groups from Hong Kong, Singapore and the US had meetings with the bank’s leaders, expressing their desire to cooperate; and the bank plans to raise its chartered capital to VND3tril this year.
Eximbank, OCB, Dong A and VP Bank have also reported good business results for the first six months of the year, but their share prices still slid in the last time and there are no signs of the imminent recovery of these share items.
In fact, Eximbank’s shares slightly increased in mid July 2007 to VND7.8mil/share, but dropped again later to the VND7mil/share level. The price of OCB shares also dropped to VND4.1-4.3mil from VND12.5mil/share. Dong A shares are now trading at nearly VND7mil, down by a half compared to the beginning of the year.
On the official market, ACB shares are trading at VND118,000/share, and STB, VND57,000. Technical factors (issuing bonus shares, and the right to buy preferential shares) were thought to have brought the price decreases of these items. However, experts have said that price decreases are common to all bank shares.
Johan Nyvene, Director General of HSC Securities Company, said that bank shares had dropped by 60-70% in the last four months, and this should be seen as a problem worthy of attention. However, Mr Nyvene still thinks that it is the right time for long-term investors to buy in.
Vietnam’s banks remain young if compared to banks in other countries in the world, but they are promising. Only 5-6mil Vietnamese people ((6-7% of population) have accounts at banks, the total outstanding loans remain low, at 66% of GDP. Therefore, the banking sector will develop further together with the fast-growing national economy.
In a recent survey conducted by Deutsche Bank, Vietnam’s banking sector is attractive in the eyes of foreign banks.
Dang Quang Gia, Lecturer at the HCM City Banking University, also said that it was the right time for investors with long-term vision to buy bank shares. Mr Gia said that bank shares would become hot in the last months of the year when banks reported satisfactory business results.
Source: VNE
Indexes slide at both bourses
Both the Ho Chi Minh City and Ha Noi bourses recorded drops by the end of the August 3 trading session.
By closing, the VN-Index at the HCM City Securities Trading Centre had decreased 18.3 points or two percent to finish at 892.88 points.
Despite the sharp fall in VN-Index, the total transaction volume and value at the HCM City bourse increased with more than 5.7 million shares, worth over 610.7 billion VND, were traded.
Among 83 shares that recorded losses were the most sought-after stocks such as Binh Dinh Mining (BMC), Financing and Promoting Technology (FPT) and Tay Ninh Cable Car Tour (TCT) which had 11,000-12,000 VND wiped off their listed prices.
Although the fall in price, FPT led the market in terms of transaction volume with 59,195 shares being traded, followed by Vietnam Investment Fund (VF1), Sai Gon Thuong Tin Commercial Bank (STB) and Song Da Urban and Industrial Zone Investment and Development (SJS).
Tuong An oil (TAC) topped the list of big movers, up 4,000 VND to close at 114,000 VND per share, followed by Da Nang Rubber (DRC) and Saigon Garment Manufacturing (GMC).
The HaSTC-Index at the Ha Noi Securities Trading Centre fell 2.57 points to close at 255.95 points with 13 stocks gaining, 52 stocks falling and 22 remained unchanged.
Today's trading volume and value fell slightly with 825,200 shares, worth 81.1 billion VND, changing hands.
Source: VNA
By closing, the VN-Index at the HCM City Securities Trading Centre had decreased 18.3 points or two percent to finish at 892.88 points.
Despite the sharp fall in VN-Index, the total transaction volume and value at the HCM City bourse increased with more than 5.7 million shares, worth over 610.7 billion VND, were traded.
Among 83 shares that recorded losses were the most sought-after stocks such as Binh Dinh Mining (BMC), Financing and Promoting Technology (FPT) and Tay Ninh Cable Car Tour (TCT) which had 11,000-12,000 VND wiped off their listed prices.
Although the fall in price, FPT led the market in terms of transaction volume with 59,195 shares being traded, followed by Vietnam Investment Fund (VF1), Sai Gon Thuong Tin Commercial Bank (STB) and Song Da Urban and Industrial Zone Investment and Development (SJS).
Tuong An oil (TAC) topped the list of big movers, up 4,000 VND to close at 114,000 VND per share, followed by Da Nang Rubber (DRC) and Saigon Garment Manufacturing (GMC).
The HaSTC-Index at the Ha Noi Securities Trading Centre fell 2.57 points to close at 255.95 points with 13 stocks gaining, 52 stocks falling and 22 remained unchanged.
Today's trading volume and value fell slightly with 825,200 shares, worth 81.1 billion VND, changing hands.
Source: VNA
Vinatex to sell $62 mln bond
The investment arm of Vietnam National Textile and Garment Group (Vinatex) will sell bonds worth 1 trillion dong ($62 million) this year to finance an expansion, a state-run newspaper reported on Friday.
Vietnam's largest textile firm would issue the bonds in two tranches and the proceeds should help it and subsidiaries boost production more cheaply than bank loans, Vinatex chairman Le Quoc An was quoted by the Saigon Times Daily as saying.
France's BNP Paribas would underwrite the bonds and the Empower Securities Co., 22 percent owned by Vinatex, would be the adviser on the issue.
An gave no further details, but financial sources close to the deal said the first tranche would be sold in the next few weeks.
Textile and garment products are Vietnam's second-largest foreign exchange earner after crude oil, bringin in $4.24 billion in the first seven months of this year, a rise of 28.6 percent from a year earlier, government figures showed.
Vinatex, which accounted for 22 percent of Vietnam's textile and garment exports in 2006, will undergo privatisation next year following a government approval granted in June.
The group has been partially privatising its subsidiaries, planning the IPOs of two units, Phong Phu Fabric Textile Factory and Phong Phu Towel Textile Factory, late this month on the Ho Chi Minh Stock Exchange.
Source: Reuters
Vietnam's largest textile firm would issue the bonds in two tranches and the proceeds should help it and subsidiaries boost production more cheaply than bank loans, Vinatex chairman Le Quoc An was quoted by the Saigon Times Daily as saying.
France's BNP Paribas would underwrite the bonds and the Empower Securities Co., 22 percent owned by Vinatex, would be the adviser on the issue.
An gave no further details, but financial sources close to the deal said the first tranche would be sold in the next few weeks.
Textile and garment products are Vietnam's second-largest foreign exchange earner after crude oil, bringin in $4.24 billion in the first seven months of this year, a rise of 28.6 percent from a year earlier, government figures showed.
Vinatex, which accounted for 22 percent of Vietnam's textile and garment exports in 2006, will undergo privatisation next year following a government approval granted in June.
The group has been partially privatising its subsidiaries, planning the IPOs of two units, Phong Phu Fabric Textile Factory and Phong Phu Towel Textile Factory, late this month on the Ho Chi Minh Stock Exchange.
Source: Reuters
Vinasun ups charter capital
Vinasun will increase its charter capital from 100 billion VND (6.2 million USD) to 170 billion VND (10.6 million USD) and offer an additional seven million shares to the public, according to the Sai Gon Securities Incorporation (SSI)
The company expects to list its shares on the Ho Chi Minh City Stock Exchange before the end of next month, with SSI as its consultant for the listing.
Vinasun is planning to expand into real estate development with projects like the 48 billion VND (3 million USD) Tan Da shopping centre, 200 billion VND (12.4 million USD) Vinasun Tower and 594 billion VND (37 million USD) Vinasun Dong Thap new urban zone.
Source: VNA
The company expects to list its shares on the Ho Chi Minh City Stock Exchange before the end of next month, with SSI as its consultant for the listing.
Vinasun is planning to expand into real estate development with projects like the 48 billion VND (3 million USD) Tan Da shopping centre, 200 billion VND (12.4 million USD) Vinasun Tower and 594 billion VND (37 million USD) Vinasun Dong Thap new urban zone.
Source: VNA
HCM City bourse puts two more IPOs on calendar
The Da Nang Food Industry Joint Stock Co. will make an IPO of 100,000 shares on Aug. 22, according to the Ho Chi Minh City stock exchange.
The company, with charter capital of 43 billion VND (2.7 million USD), said that the shares, with a face value of 10,000 VND, would be offered at an intial price of 190,000 VND (11,875 USD) per share.
The Bao Loc water plant will also auction 796,800 shares on Aug. 21.
Source: VNA
The company, with charter capital of 43 billion VND (2.7 million USD), said that the shares, with a face value of 10,000 VND, would be offered at an intial price of 190,000 VND (11,875 USD) per share.
The Bao Loc water plant will also auction 796,800 shares on Aug. 21.
Source: VNA
SeA-Bank to issue $124 mln convertible bond
Vietnam's central bank has given partly private Dong Nam A Bank permission to sell convertible bonds worth 2 trillion dong ($124 million) on domestic markets.
The central bank, announcing the approval on its Web site (http://www.sbv.gov.vn/) on Friday, did not say what the Hanoi-based bank, also known as SeA Bank, would use the proceeds for.
SeA Bank, which has seen its assets rise 27 percent over the first six months of 2007 to more than 13 trillion dong, has not published details of the debt issue.
The bank, one of more than 30 partly private banks in Vietnam, expects to double its registered capital to 3 trillion dong by the end of this year.
The central bank has said it would take more dong out of the economy in the coming months through open market transactions to curb inflation, which accelerated to 8.39 percent last month from July 2006.
It has also allowed three Vietnamese banks, Vietcombank, ACB and Techcombank, to raise a combined 17.5 trillion dong in long-term debt.
Last month, HSBC's branch in Vietnam secured central bank permission to issue bonds equivalent to 8 trillion dong by the end of 2007.
Source: Reuters
The central bank, announcing the approval on its Web site (http://www.sbv.gov.vn/) on Friday, did not say what the Hanoi-based bank, also known as SeA Bank, would use the proceeds for.
SeA Bank, which has seen its assets rise 27 percent over the first six months of 2007 to more than 13 trillion dong, has not published details of the debt issue.
The bank, one of more than 30 partly private banks in Vietnam, expects to double its registered capital to 3 trillion dong by the end of this year.
The central bank has said it would take more dong out of the economy in the coming months through open market transactions to curb inflation, which accelerated to 8.39 percent last month from July 2006.
It has also allowed three Vietnamese banks, Vietcombank, ACB and Techcombank, to raise a combined 17.5 trillion dong in long-term debt.
Last month, HSBC's branch in Vietnam secured central bank permission to issue bonds equivalent to 8 trillion dong by the end of 2007.
Source: Reuters
VinaCapital’s $325-mln Danang urban complex gets go-ahead
London-listed fund manager VinaCapital received Thursday approval for building a US$325-million commercial-residential complex in Vietnam’s central Danang city. To be built in Son Tra district, the 9-ha VinaCapital Square complex will have two trade centers, two deluxe hotels with 600 rooms, a 25,000-sq.m exhibition and conference center, and a 42-story office block.
The largest-ever property project in the city will also have around 1,300 luxury apartments and a villa area.
But its date of commencement is not known.
With $500 million in its kitty, VinaCapital, which manages the Vietnam Opportunity Fund, is expected to invest in offices, trade centers, residential areas, industrial parks, and entertainment areas in key Vietnamese areas like HCMC, Hanoi, Nha Trang, Hoi An, and Danang.
VinaCapital also operates two other funds – the $205 million real estate fund VinaLand, and the newly set up $50 million DFJ VinaCapital L.P. which invests in information-communication technology firms.
Source: Thanh Nien
The largest-ever property project in the city will also have around 1,300 luxury apartments and a villa area.
But its date of commencement is not known.
With $500 million in its kitty, VinaCapital, which manages the Vietnam Opportunity Fund, is expected to invest in offices, trade centers, residential areas, industrial parks, and entertainment areas in key Vietnamese areas like HCMC, Hanoi, Nha Trang, Hoi An, and Danang.
VinaCapital also operates two other funds – the $205 million real estate fund VinaLand, and the newly set up $50 million DFJ VinaCapital L.P. which invests in information-communication technology firms.
Source: Thanh Nien
Petrovietnam Insurance gets initial listing permit
Petrovietnam Insurance Corporation (PVI), Vietnam's third-largest insurer, has won initial approval to list on the over-the-counter Hanoi stock market (HASTCI), the exchange said on Thursday.
Hanoi-based PVI, the insurance arm of state oil and gas Petrovietnam group, was given approval to list all its 50 million shares, exchange director Tran Van Dung said in a statement.
Dung did not say when PVI would make its share debut.
Shares in PVI fell to 75,000-77,000 dong ($4.65-$4.77) on the unofficial markets this week from 80,000-82,000 dong early last month, valuing the firm at $235 million.
Vietnam's insurance sector has grown rapidly in recent years as domestic economic growth was more than 8 percent in 2005 and 2006. The government expects 9 percent growth in the second half of this year, up from 7.87 percent in the first half.
The Hanoi market said in another statement that PVI had raised 36.8 billion dong ($2.3 million) from selling 483,400 shares on Tuesday at an average price of 76,190 dong.
The shares sold were left from an auction in June in which investors bid but then refused to buy the stocks, the Hanoi market said without giving a reason for the refusal.
The share sale was part of PVI's plan to issue more than 35 million shares, with proceeds going to building three oil tankers, buying stakes in two financial firms and a power plant construction firm in Laos.
Last year, PVI had an 18.09 percent market share of Vietnam's non-life insurance market, making it the third biggest after Bao Viet, which had a 34.94 percent share, and Bao Minh (BMI) with 21.29 percent, industry reports said.
The Hanoi market's index, now with 88 listed firms, fell 0.57 percent to close at 258.52 points on Thursday.
Source: Reuters
Hanoi-based PVI, the insurance arm of state oil and gas Petrovietnam group, was given approval to list all its 50 million shares, exchange director Tran Van Dung said in a statement.
Dung did not say when PVI would make its share debut.
Shares in PVI fell to 75,000-77,000 dong ($4.65-$4.77) on the unofficial markets this week from 80,000-82,000 dong early last month, valuing the firm at $235 million.
Vietnam's insurance sector has grown rapidly in recent years as domestic economic growth was more than 8 percent in 2005 and 2006. The government expects 9 percent growth in the second half of this year, up from 7.87 percent in the first half.
The Hanoi market said in another statement that PVI had raised 36.8 billion dong ($2.3 million) from selling 483,400 shares on Tuesday at an average price of 76,190 dong.
The shares sold were left from an auction in June in which investors bid but then refused to buy the stocks, the Hanoi market said without giving a reason for the refusal.
The share sale was part of PVI's plan to issue more than 35 million shares, with proceeds going to building three oil tankers, buying stakes in two financial firms and a power plant construction firm in Laos.
Last year, PVI had an 18.09 percent market share of Vietnam's non-life insurance market, making it the third biggest after Bao Viet, which had a 34.94 percent share, and Bao Minh (BMI) with 21.29 percent, industry reports said.
The Hanoi market's index, now with 88 listed firms, fell 0.57 percent to close at 258.52 points on Thursday.
Source: Reuters
Sacombank ups capital to boost finances
Saigon Thuong Tin Commercial Bank (STB, Sacombank), Vietnam's sixth-largest lender by assets, said it had raised its registered capital by 12 percent as it seeks to grow its business at home and elsewhere in Asia.
The new funds were proceeds from a first share issue as part of a plan to more than double Sacombank's registered capital to 4.45 trillion dong ($276 million) by the end of the year, the Ho Chi Minh City-based bank said in a statement on Thursday.
Sacombank said it had added $15.5 million to its registed capital, which now totalled 2.34 trillion dong from the sale of 25 million shares.
The registered capital determines the size of a bank's loans and deposits.
A total of more than 236 million shares will be sold as part of the bank's capital raising, with proceeds also going to building Sacombank's offices in Ho Chi Minh City, upgrading information technology, opening a credit card business and investing in existing subsidiaries and new subsidiaries.
Listing of the new shares is scheduled for Aug. 23.
Shares in Sacombank, the first listed bank in communist Vietnam, closed flat at 57,000 dong ($3.5) on Thursday, valuing the lender at $738 million, based on the 209 million shares currently on issue.
The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 26.3 percent of Sacombank, which is fifth-largest listed firm on the Ho Chi Minh Stock Exchange.
Sacombank said last month that strong demand for mortgages helped more than double its pre-tax first half profit from a year earlier to 610 billion dong ($37.8 million).
Sacombank has planned to form a credit card venture with ANZ Bank, open 14 branches in Vietnam this year and also establish offices in China, Laos and Cambodia.
Source: Reuters
The new funds were proceeds from a first share issue as part of a plan to more than double Sacombank's registered capital to 4.45 trillion dong ($276 million) by the end of the year, the Ho Chi Minh City-based bank said in a statement on Thursday.
Sacombank said it had added $15.5 million to its registed capital, which now totalled 2.34 trillion dong from the sale of 25 million shares.
The registered capital determines the size of a bank's loans and deposits.
A total of more than 236 million shares will be sold as part of the bank's capital raising, with proceeds also going to building Sacombank's offices in Ho Chi Minh City, upgrading information technology, opening a credit card business and investing in existing subsidiaries and new subsidiaries.
Listing of the new shares is scheduled for Aug. 23.
Shares in Sacombank, the first listed bank in communist Vietnam, closed flat at 57,000 dong ($3.5) on Thursday, valuing the lender at $738 million, based on the 209 million shares currently on issue.
The World Bank's International Finance Corp., Dragon Capital and ANZ Bank together own 26.3 percent of Sacombank, which is fifth-largest listed firm on the Ho Chi Minh Stock Exchange.
Sacombank said last month that strong demand for mortgages helped more than double its pre-tax first half profit from a year earlier to 610 billion dong ($37.8 million).
Sacombank has planned to form a credit card venture with ANZ Bank, open 14 branches in Vietnam this year and also establish offices in China, Laos and Cambodia.
Source: Reuters
Thursday, August 02, 2007
Country’s stock exchanges fall again
Both the Ho Chi Minh City and Ha Noi stock exchanges reported losses by the end of the August 2 trading session after rallying for gains on the previous day.
The VN-Index at the Ho Chi Minh City Securities Trading Centre dropped by 11.96 points or 1.3 percent to close at 911.18 points.
Close to 5.33 million shares worth 495.6 billion VND (31 million USD) were traded during the course of the session.
The capital’s HaSTC-Index at the Ha Noi Securities Trading Centre saw a slight decrease of 1.48 points to finish at 258.52 points, with 1.26 million stocks worth 111.8 billion VND (7 million USD) changing hands on the day.
Thirty-three shares rose, 30 declined, 16 recorded no transactions and eight remained unchanged.
But Son Cement Company (BTS), Saigon Securities Inc. (SSI), Asia Commercial Bank (ACB), Bim Son Cement Company (BCC), Minh Phu Seafood Company (MPC) and Tien Phong Plastic Company (NTP) led the market in terms of transaction volume.
Source: VNA
The VN-Index at the Ho Chi Minh City Securities Trading Centre dropped by 11.96 points or 1.3 percent to close at 911.18 points.
Close to 5.33 million shares worth 495.6 billion VND (31 million USD) were traded during the course of the session.
The capital’s HaSTC-Index at the Ha Noi Securities Trading Centre saw a slight decrease of 1.48 points to finish at 258.52 points, with 1.26 million stocks worth 111.8 billion VND (7 million USD) changing hands on the day.
Thirty-three shares rose, 30 declined, 16 recorded no transactions and eight remained unchanged.
But Son Cement Company (BTS), Saigon Securities Inc. (SSI), Asia Commercial Bank (ACB), Bim Son Cement Company (BCC), Minh Phu Seafood Company (MPC) and Tien Phong Plastic Company (NTP) led the market in terms of transaction volume.
Source: VNA
OTC transactions to be put under control in early 2008
OTC share transactions will be put under control once the project on organizing and managing the transactions of public companies’ unlisted securities is completed.
The State Securities Commission (SSC) said that it has consulted with relevant ministries over the project and will open the draft for collecting opinions from securities investors in early August before bringing the project into effect.
If everything goes smoothly, transactions of OTC securities under the new scheme will be carried out in the trial basis in October, and officially applied in early 2008.
According to SSC, the securities to be put under the new scheme are the shares of public companies which have registered at state management agencies as stipulated by the current laws. These shares items will be granted codes. Investors will carry out transactions through securities companies based on their accounts to be opened at securities companies.
Under the new transaction scheme, investors will have more opportunities to access official information sources, make payment under favourable methods and minimize risks.
Currently, the preparatory works for the new transaction scheme have been kicked off at the Hanoi Securities Trading Centre. The main principle of the new scheme is to ensure the simplicity in making transaction, while allowing remote transactions which aims to create more favourable conditions for investors.
According to SSC, more than 600 companies have sent files for registering public companies. However, the number of companies completing the registration procedures remains modest.
The problem lies in the fact that the documents guiding the registration were just promulgated in April, which did not give enough time to companies to have their financial reports audited. SSC has to apply a flexible policy, which allows companies to make registration first, and then expose information to investors. The auditing results will be announced later.
June 30, 2007 was the deadline for public companies to make registration at SSC.
Source: VNE
The State Securities Commission (SSC) said that it has consulted with relevant ministries over the project and will open the draft for collecting opinions from securities investors in early August before bringing the project into effect.
If everything goes smoothly, transactions of OTC securities under the new scheme will be carried out in the trial basis in October, and officially applied in early 2008.
According to SSC, the securities to be put under the new scheme are the shares of public companies which have registered at state management agencies as stipulated by the current laws. These shares items will be granted codes. Investors will carry out transactions through securities companies based on their accounts to be opened at securities companies.
Under the new transaction scheme, investors will have more opportunities to access official information sources, make payment under favourable methods and minimize risks.
Currently, the preparatory works for the new transaction scheme have been kicked off at the Hanoi Securities Trading Centre. The main principle of the new scheme is to ensure the simplicity in making transaction, while allowing remote transactions which aims to create more favourable conditions for investors.
According to SSC, more than 600 companies have sent files for registering public companies. However, the number of companies completing the registration procedures remains modest.
The problem lies in the fact that the documents guiding the registration were just promulgated in April, which did not give enough time to companies to have their financial reports audited. SSC has to apply a flexible policy, which allows companies to make registration first, and then expose information to investors. The auditing results will be announced later.
June 30, 2007 was the deadline for public companies to make registration at SSC.
Source: VNE
Investors make investments with their own money
Securities investors use their own capital, not loans, for securities investment deals, a recent survey conducted by Thoi bao kinh te Vietnam found.
Thoi bao kinh te Vietnam decided to make the poll after the State Bank of Vietnam released Instruction No 03, limiting loaning for securities investments, which raised the fear that it would make the stock market gloomy by blocking capital flow into the market.
After asking: “Where does the capital for your securities investment deals come from?” the newspaper received 3,200 answers from investors. 40.90% of readers (1,302) said that they made investments with their own savings. 13.89% (442) said that they had accumulated money from their own businesses.
Only 14.92% of investors said that they used bank loans for their securities investments. 10.40% (331) said that they could get profit from securities trading deals and use the money for reinvestment in stocks. 8.36% of investors said that the capital had been transferred from other investment channels. Meanwhile, 11.53% (367) of the capital for securities investments comes from other sources.
The figures showed that most of the capital which has been injected in stocks by individual investors in the last time comes from the investors’ savings.
Nearly 14% of investors said that their money came from their own business. These might be the households and owners of private establishments who have high accumulated capital. In this case, the stock market serves as the place where they can make profit, and also acts as the channel where they can raise funds for their business projects.
The high profitability of the stock market can be confirmed once again as 10.4% of investors said that they can hoard capital from the profit securities investment deals brought about. If investing in gold, bank deposits or real estate, investors need more capital and time to get profit.
Meanwhile, investors can get fat profit just after a short time and become rich quickly. The market has witnessed billionaires who started their businesses with just several tens of million dong.
A lot of readers said that their capital for stock investments came from other investment channels: bank deposits, real estate, and gold market, which also shows the attractiveness of the stock market.
In fact, many gold and real estate investors have become securities investors who want a new investment channel with higher diversification and liquidity.
The survey has given the answer to the question that both the investors and management authorities are interested in: how many bank loans are invested in stocks?
Nearly 15%, a high percentage of investors, said that their capital for securities investments was sourced from bank loans. The figure shows that the management authorities have every reason to be worried about the market instability since investors have made investments with borrowed money.
Source: VNE
Thoi bao kinh te Vietnam decided to make the poll after the State Bank of Vietnam released Instruction No 03, limiting loaning for securities investments, which raised the fear that it would make the stock market gloomy by blocking capital flow into the market.
After asking: “Where does the capital for your securities investment deals come from?” the newspaper received 3,200 answers from investors. 40.90% of readers (1,302) said that they made investments with their own savings. 13.89% (442) said that they had accumulated money from their own businesses.
Only 14.92% of investors said that they used bank loans for their securities investments. 10.40% (331) said that they could get profit from securities trading deals and use the money for reinvestment in stocks. 8.36% of investors said that the capital had been transferred from other investment channels. Meanwhile, 11.53% (367) of the capital for securities investments comes from other sources.
The figures showed that most of the capital which has been injected in stocks by individual investors in the last time comes from the investors’ savings.
Nearly 14% of investors said that their money came from their own business. These might be the households and owners of private establishments who have high accumulated capital. In this case, the stock market serves as the place where they can make profit, and also acts as the channel where they can raise funds for their business projects.
The high profitability of the stock market can be confirmed once again as 10.4% of investors said that they can hoard capital from the profit securities investment deals brought about. If investing in gold, bank deposits or real estate, investors need more capital and time to get profit.
Meanwhile, investors can get fat profit just after a short time and become rich quickly. The market has witnessed billionaires who started their businesses with just several tens of million dong.
A lot of readers said that their capital for stock investments came from other investment channels: bank deposits, real estate, and gold market, which also shows the attractiveness of the stock market.
In fact, many gold and real estate investors have become securities investors who want a new investment channel with higher diversification and liquidity.
The survey has given the answer to the question that both the investors and management authorities are interested in: how many bank loans are invested in stocks?
Nearly 15%, a high percentage of investors, said that their capital for securities investments was sourced from bank loans. The figure shows that the management authorities have every reason to be worried about the market instability since investors have made investments with borrowed money.
Source: VNE
Consultative team for share auction and issuance to be set up
The Ministry of Finance (MoF) is preparing for the setting up of a team which will give advises to the ministry in building up the plans on issuing and auctioning shares of equitised enterprises, Vu Bang, Chairman of the State Securities Commission said yesterday.
All the enterprises, that go to equitisation and make IPO (initial public offering), especially the ones that have impacts on the market, must register to MoF, so that the ministry can have adequate information about the plans. The consultative team will give advises to MoF on the methods of securities issuance and the timing for IPOs, which will help make the plans successful, while not causing negative impacts on the market.
MoF thought of setting up the team after experts expressed the concerns about the massive IPOs of big equitised corporations, which is believed to make the market oversupplied with commodities. The experts have asked to retime the IPOs in order to avoid the oversupply, which may cause to the sharp share price decreases, and loss to the State.
The Prime Minister then released a document, asking the Ministry of Finance, State Bank of Vietnam and other relevant ministries to check the plans on equitising state owned enterprises in 2007.
The work needs to be completed in the second quarter of 2007 with the focus on big corporations, including state owned banks, economic groups and general corporations, which have big equitisation value.
Opinions vary about whether to delay the IPOs of equitised enterprises. Some experts said that the massive IPOs would bring too many commodities to the market, which will result in the dramatic decrease of share prices. Meanwhile, some others said that the delays would slow down the equitisation process, while the Government tries to push up the process.
As planned, in 2007, the State will equitise 26 general corporations. There will be big IPOs of big corporations, including Vietcombank, Incombank, and BIDV from now until the end of the year. The other 71 general corporations will be brought into equitisation by 2010.
Source: VNE
All the enterprises, that go to equitisation and make IPO (initial public offering), especially the ones that have impacts on the market, must register to MoF, so that the ministry can have adequate information about the plans. The consultative team will give advises to MoF on the methods of securities issuance and the timing for IPOs, which will help make the plans successful, while not causing negative impacts on the market.
MoF thought of setting up the team after experts expressed the concerns about the massive IPOs of big equitised corporations, which is believed to make the market oversupplied with commodities. The experts have asked to retime the IPOs in order to avoid the oversupply, which may cause to the sharp share price decreases, and loss to the State.
The Prime Minister then released a document, asking the Ministry of Finance, State Bank of Vietnam and other relevant ministries to check the plans on equitising state owned enterprises in 2007.
The work needs to be completed in the second quarter of 2007 with the focus on big corporations, including state owned banks, economic groups and general corporations, which have big equitisation value.
Opinions vary about whether to delay the IPOs of equitised enterprises. Some experts said that the massive IPOs would bring too many commodities to the market, which will result in the dramatic decrease of share prices. Meanwhile, some others said that the delays would slow down the equitisation process, while the Government tries to push up the process.
As planned, in 2007, the State will equitise 26 general corporations. There will be big IPOs of big corporations, including Vietcombank, Incombank, and BIDV from now until the end of the year. The other 71 general corporations will be brought into equitisation by 2010.
Source: VNE
Banks struggle to scale up charter capital
Banks, especially small-sized ones, are bidding to attract more equity funds to ensure they can survive the stiffer competition in the marketplace.
The Nam Viet Commercial Joint-Stock Bank, or Navibank, will double its charter capital to VND1tril (US$62.5mil) soon as it has already got the go-ahead from the central bank. Its target for the end of this year, however, is VND1.5tril.
Navibank will channel the new funds to its branches and offices given its plans to expand its network to 70 transaction locations by the year-end from the current 40.
Like Navibank, the Vietnam Bank for Private Enterprises, or VPBank, has almost fulfilled necessary procedures to double its charter capital to VND1.5tril. Still, it is looking to VND2tril in all this year.
VPBank will then pump more money into its securities arm to lift the broker's capital to VND300bil from the current VND50bil.
Smaller in scale the Gia Dinh Bank has registered its new capital at VND320bil-plus, up from the previous VND210bil.
Last month, the central bank's HCMC branch allowed three other lenders to double their charter capital, so the new figure at the An Binh Bank is VND2.3tril, the Viet A Bank VND1.125tril and the HCMC Housing Development Bank VND1tril.
The Asia Commercial Bank (ACB) is now Vietnam's largest join-stock lender with VND2.53tril in charter capital, followed by the Saigon Thuong Tin Commercial Bank (Sacombank) with VND2.34tril.
However, Sacombank will overtake ACB soon as it is finalizing the paperwork to register its new capital at VND4.45tril, although ACB has plans to reach VND2.63tril by the year-end.
Source: VNE
The Nam Viet Commercial Joint-Stock Bank, or Navibank, will double its charter capital to VND1tril (US$62.5mil) soon as it has already got the go-ahead from the central bank. Its target for the end of this year, however, is VND1.5tril.
Navibank will channel the new funds to its branches and offices given its plans to expand its network to 70 transaction locations by the year-end from the current 40.
Like Navibank, the Vietnam Bank for Private Enterprises, or VPBank, has almost fulfilled necessary procedures to double its charter capital to VND1.5tril. Still, it is looking to VND2tril in all this year.
VPBank will then pump more money into its securities arm to lift the broker's capital to VND300bil from the current VND50bil.
Smaller in scale the Gia Dinh Bank has registered its new capital at VND320bil-plus, up from the previous VND210bil.
Last month, the central bank's HCMC branch allowed three other lenders to double their charter capital, so the new figure at the An Binh Bank is VND2.3tril, the Viet A Bank VND1.125tril and the HCMC Housing Development Bank VND1tril.
The Asia Commercial Bank (ACB) is now Vietnam's largest join-stock lender with VND2.53tril in charter capital, followed by the Saigon Thuong Tin Commercial Bank (Sacombank) with VND2.34tril.
However, Sacombank will overtake ACB soon as it is finalizing the paperwork to register its new capital at VND4.45tril, although ACB has plans to reach VND2.63tril by the year-end.
Source: VNE
VNECO sets Aug 9 share debut
Vietnam Electricity Construction Corporation (Vneco) will make its debut on the Ho Chi Minh Stock Exchange <.VNI> next week, chief executive Doan Duc Hong said on Thursday.
Vneco, which will become the market's 111th listed firm, would list all its 32 million shares on Aug. 9 at a starting price of 65,000 dong ($4), valuing the firm at $128 million, he said in a statement.
Based in the central city of Danang, Vneco builds electricity distribution networks, airports and sea ports, trades steel products and real estate and runs tours and hotels.
"The corporation is now speeding investment in hydro-power plants, infrastructure and housing projects, dealing with real estate and invests in tourism and services," Vneco said on its Web site (http://www.vneco.vn/).
Vietnam plans to double power generation capacity to about 28,000 megawatt by 2010 to meet forecast annual demand growth of about 20 percent as the economy continues to expand rapidly at a forecast range of 8.5 percent and 9 percent per year.
The communist government plans to build 60 additional power plants by 2020.
Construction accounted for 77.6 percent of Vneco's revenues in 2006, up from 73 percent in 2005.
Vneco said its net profit soared 317 percent last year from 2005 to 66.72 billion dong ($4 million) as revenues jumped 91 percent to 877.33 billion dong ($54.3 million).
The Ho Chi Minh Stock Exchange's VN Index rose 1.67 percent to 923.14 points on Wednesday, when its market capitalisation was $12.6 billion.
Source: Reuters
Vneco, which will become the market's 111th listed firm, would list all its 32 million shares on Aug. 9 at a starting price of 65,000 dong ($4), valuing the firm at $128 million, he said in a statement.
Based in the central city of Danang, Vneco builds electricity distribution networks, airports and sea ports, trades steel products and real estate and runs tours and hotels.
"The corporation is now speeding investment in hydro-power plants, infrastructure and housing projects, dealing with real estate and invests in tourism and services," Vneco said on its Web site (http://www.vneco.vn/).
Vietnam plans to double power generation capacity to about 28,000 megawatt by 2010 to meet forecast annual demand growth of about 20 percent as the economy continues to expand rapidly at a forecast range of 8.5 percent and 9 percent per year.
The communist government plans to build 60 additional power plants by 2020.
Construction accounted for 77.6 percent of Vneco's revenues in 2006, up from 73 percent in 2005.
Vneco said its net profit soared 317 percent last year from 2005 to 66.72 billion dong ($4 million) as revenues jumped 91 percent to 877.33 billion dong ($54.3 million).
The Ho Chi Minh Stock Exchange's VN Index rose 1.67 percent to 923.14 points on Wednesday, when its market capitalisation was $12.6 billion.
Source: Reuters
Vietnam voids Intimex share sale and orders probe
The Vietnamese government said on Wednesday it has annulled the sale of shares in state-run retailer and exporter Intimex and is investigating whether securities laws were violated.
It is the first reported crackdown on share sales as the communist country speeds up its privatisation plan, which has fuelled one of the world's fastest growing stock markets.
Deputy Prime Minister Nguyen Sinh Hung ordered the Trade Ministry to void the auction of its subsidiary Intimex, which operates supermarket and exports coffee and pepper, a statement on the government's Web site (http://www.chinhphu.vn/) said.
The statement quoted Hung as saying reports from Trade and Finance ministry officials and the police showed Intimex Import Export Corp had violated the Securities Law by publishing distorted financial information and conducting insider trading.
Company officials could not be reached for comment.
On April 12, Intimex sold all 1,682,800 shares on offer, or 33.66 percent of the company, to several domestic investors in an initial public offering, raising 269.3 billion dong ($16.7 million).
The shares were sold at an average price of 160,025 dong ($9.9), way above the 10,200-dong opening price for bids, valuing the company at $49.65 million -- nearly twice the book value of $27.2 million Intimex had assessed.
The large gap -- together with the small number of winning bidders -- raised suspicion among other investors who said the company had undervalued its assets and withheld information, which was then used by a small group of bidders.
Intimex runs a number of supermarkets in Hanoi and the north but is known abroad as an exporter of robusta coffee and pepper. Vietnam is the world's top exporter of the two commodities.
Vietnam has been speeding up privatisations to boost the stock markets and raise funds to fuel the economic growth targeted at 8.5 percent this year.
Source: Reuters
It is the first reported crackdown on share sales as the communist country speeds up its privatisation plan, which has fuelled one of the world's fastest growing stock markets.
Deputy Prime Minister Nguyen Sinh Hung ordered the Trade Ministry to void the auction of its subsidiary Intimex, which operates supermarket and exports coffee and pepper, a statement on the government's Web site (http://www.chinhphu.vn/) said.
The statement quoted Hung as saying reports from Trade and Finance ministry officials and the police showed Intimex Import Export Corp had violated the Securities Law by publishing distorted financial information and conducting insider trading.
Company officials could not be reached for comment.
On April 12, Intimex sold all 1,682,800 shares on offer, or 33.66 percent of the company, to several domestic investors in an initial public offering, raising 269.3 billion dong ($16.7 million).
The shares were sold at an average price of 160,025 dong ($9.9), way above the 10,200-dong opening price for bids, valuing the company at $49.65 million -- nearly twice the book value of $27.2 million Intimex had assessed.
The large gap -- together with the small number of winning bidders -- raised suspicion among other investors who said the company had undervalued its assets and withheld information, which was then used by a small group of bidders.
Intimex runs a number of supermarkets in Hanoi and the north but is known abroad as an exporter of robusta coffee and pepper. Vietnam is the world's top exporter of the two commodities.
Vietnam has been speeding up privatisations to boost the stock markets and raise funds to fuel the economic growth targeted at 8.5 percent this year.
Source: Reuters
First online integrated stock exchange floor opens
Viet Nam’s first online integrated stock exchange floor, Easy Online Trader, officially opened in Ho Chi Minh City on August 1.
The exchange floor is part of the Empower Securities Corporation (EPS)’s strategy to boost online securities trading of high confidentiality which is based on high-tech applications.
“We poured a heavy investment into the technology to provide quick, convenient, accurate and safe services for investors,” said EPS Chief Executive Offer Nguyen Huu Nam. “In the first phase, we will provide online trading training for investors.”
The same day, EPS officially launched a trading floor and representative office in Ho Chi Minh City.
The corporation reached agreements to issue 1 trillion VND worth of bonds for the Viet Nam National Textile and Garment Group (Vinatex), provide consultancy on equitisation to the Hoang Quan Real Estate Company and on initial public offerings for Vinatex’s affiliates.
It also inked business cooperation contracts with the Bank for Foreign Trade of Viet Nam (Vietcombank), the Bank for Investment and Development of Viet Nam and the Dong A Bank.
Source: VNA
The exchange floor is part of the Empower Securities Corporation (EPS)’s strategy to boost online securities trading of high confidentiality which is based on high-tech applications.
“We poured a heavy investment into the technology to provide quick, convenient, accurate and safe services for investors,” said EPS Chief Executive Offer Nguyen Huu Nam. “In the first phase, we will provide online trading training for investors.”
The same day, EPS officially launched a trading floor and representative office in Ho Chi Minh City.
The corporation reached agreements to issue 1 trillion VND worth of bonds for the Viet Nam National Textile and Garment Group (Vinatex), provide consultancy on equitisation to the Hoang Quan Real Estate Company and on initial public offerings for Vinatex’s affiliates.
It also inked business cooperation contracts with the Bank for Foreign Trade of Viet Nam (Vietcombank), the Bank for Investment and Development of Viet Nam and the Dong A Bank.
Source: VNA
Biggest catfish processing firm to listed
In another nod to Viet Nam’s runaway seafood industry, Navifishco, the country’s biggest fillet processing company is gearing up to be listed on the stock exchange by the end of this month.
Located in the Mekong delta province of An Giang, the Nam Viet Corporation has a chartered capital of 660 billion VND (41.2 million USD) and five factories that process around 2,000 tonnes of fish per day.
Expansion plans are underfoot for the company as it in the midst of rolling out a 500-ha aquaculture zone and a 35,000 tonne cold storage facility.
Navifishco’s “tra” and “basa” catfish have been exported to 65 countries and territories worldwide.
According to the latest statistics, the company’s export revenues fetched around 120 million USD in the first six months of the year, making up 30 percent of the total seafood export turnover of An Giang province which boasts the largest catfish output in the Mekong delta.
Chairman of Navifishco’s Management Board Doan Toi said his company plans to build another catfish processing plant with a capacity of processing 750 tonnes of catfish per day and a fish feed factory with a capacity of between 300,000 and 500,000 tonnes per year.
Source: VNA
Located in the Mekong delta province of An Giang, the Nam Viet Corporation has a chartered capital of 660 billion VND (41.2 million USD) and five factories that process around 2,000 tonnes of fish per day.
Expansion plans are underfoot for the company as it in the midst of rolling out a 500-ha aquaculture zone and a 35,000 tonne cold storage facility.
Navifishco’s “tra” and “basa” catfish have been exported to 65 countries and territories worldwide.
According to the latest statistics, the company’s export revenues fetched around 120 million USD in the first six months of the year, making up 30 percent of the total seafood export turnover of An Giang province which boasts the largest catfish output in the Mekong delta.
Chairman of Navifishco’s Management Board Doan Toi said his company plans to build another catfish processing plant with a capacity of processing 750 tonnes of catfish per day and a fish feed factory with a capacity of between 300,000 and 500,000 tonnes per year.
Source: VNA
Wednesday, August 01, 2007
85% of share items decrease in prices in July
The share price did not recover in July after three months of falling down as investors hoped. All share items saw sharp decreases in prices with the average decrease of 11%.
Investors cannot relieve their anxiety about the supply and demand imbalance as many companies are planning their IPO, which means a large volume of commodities will be available on the market in some days.
The statistics showed that among the 100 listing share items at the HCM City Securities Trading Centre, 92 items saw the prices decrease last month, while only 17% of share items saw price increases, and one was stabilized.
As the prices of most of share items fell down, the VN Index dropped by 116.73 points, or 11.4% last month, closing the last trading session of July at 907.95 points. Not only falling below the 1,000 point threshold seen in the previous month, the VN Index seemed to come closer to the 900 point level.
TCT and BMC were the blue chips that once saw the biggest price increases on the market, but they were among the share items that saw the biggest price decreases last month. TCT reduced by 62.2% in prices, while BMC price reduced by 50%, and GIL by 40.4%, becoming the share item that saw the fourth biggest price decrease.
Other share items, which also saw sharp price decreases last month included VIS (- 28%), and LBM (- 41.9%), while PPC, FPT, SAM and SJS by 17-32%.
Meanwhile, TAC of the Tuong An Vegetable Oil Company saw the biggest price increase last month, when its value increased by 84.5% to VND115,000/share. BBC of Bibica, the confectionary company, saw the second biggest price increase, by over 20%.
Four share items, which saw the price increases of more than 10% included MCP, TTP, NKD (North Kinh Do), and IMP (Imexpharm).
In July, the HCM City Securities Trading Centre welcomed three new comers, GTA (Thuan An Wooden Furniture Processing Company), TRC (Tay Ninh Rubber Company) and RIC (Royal International), raising the total listing share items to 110.
In July, the total transaction volume reached 93.4mil shares, or 4.24mil shares per day. The total trading value was VND10.031bil ($626.93mil), or VND446bil ($27.87mil) a day.
July witnessed an important event of Vietnam’s stock market, the application of the real-time order matching scheme on July 30. The transaction volume dropped dramatically on that day (2.2mil shares and 744,460 fund certificates) as investors have not got used to the new scheme, but analysts said that the situation will be improved soon.
Source: VNE
Investors cannot relieve their anxiety about the supply and demand imbalance as many companies are planning their IPO, which means a large volume of commodities will be available on the market in some days.
The statistics showed that among the 100 listing share items at the HCM City Securities Trading Centre, 92 items saw the prices decrease last month, while only 17% of share items saw price increases, and one was stabilized.
As the prices of most of share items fell down, the VN Index dropped by 116.73 points, or 11.4% last month, closing the last trading session of July at 907.95 points. Not only falling below the 1,000 point threshold seen in the previous month, the VN Index seemed to come closer to the 900 point level.
TCT and BMC were the blue chips that once saw the biggest price increases on the market, but they were among the share items that saw the biggest price decreases last month. TCT reduced by 62.2% in prices, while BMC price reduced by 50%, and GIL by 40.4%, becoming the share item that saw the fourth biggest price decrease.
Other share items, which also saw sharp price decreases last month included VIS (- 28%), and LBM (- 41.9%), while PPC, FPT, SAM and SJS by 17-32%.
Meanwhile, TAC of the Tuong An Vegetable Oil Company saw the biggest price increase last month, when its value increased by 84.5% to VND115,000/share. BBC of Bibica, the confectionary company, saw the second biggest price increase, by over 20%.
Four share items, which saw the price increases of more than 10% included MCP, TTP, NKD (North Kinh Do), and IMP (Imexpharm).
In July, the HCM City Securities Trading Centre welcomed three new comers, GTA (Thuan An Wooden Furniture Processing Company), TRC (Tay Ninh Rubber Company) and RIC (Royal International), raising the total listing share items to 110.
In July, the total transaction volume reached 93.4mil shares, or 4.24mil shares per day. The total trading value was VND10.031bil ($626.93mil), or VND446bil ($27.87mil) a day.
July witnessed an important event of Vietnam’s stock market, the application of the real-time order matching scheme on July 30. The transaction volume dropped dramatically on that day (2.2mil shares and 744,460 fund certificates) as investors have not got used to the new scheme, but analysts said that the situation will be improved soon.
Source: VNE
Stock indexes bounce back
The Ho Chi Minh City bourse rose by 15.19 points on the August 1 trading session to finish at 923.14.
As many as 5.25 million shares worth 508.38 billion VND changed hands with Binh Dinh Mining topping the list of 90 shares as it recorded gains by adding 14,000 VND onto its listed price. Next were infrastructure developer Song Da's 12,000 VND spike and Tay Ninh Cable Tour with an 11,000 VND rise.
The Saigon Thuong Tin Commercial joint stock bank and the Financial Promotion Technology Corp. led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw some light at the end of the tunnel as it increased by 6.43 points to finish at 260 points and end 10 consecutive sessions of losses.
Among the more than 1.08 million shares traded at a total cost of 109.09 billion VND, Saigon Securities Inc. accounted for 31 percent of total trade volume with 339.100 shares being brought or sold.
Source: VNA
As many as 5.25 million shares worth 508.38 billion VND changed hands with Binh Dinh Mining topping the list of 90 shares as it recorded gains by adding 14,000 VND onto its listed price. Next were infrastructure developer Song Da's 12,000 VND spike and Tay Ninh Cable Tour with an 11,000 VND rise.
The Saigon Thuong Tin Commercial joint stock bank and the Financial Promotion Technology Corp. led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw some light at the end of the tunnel as it increased by 6.43 points to finish at 260 points and end 10 consecutive sessions of losses.
Among the more than 1.08 million shares traded at a total cost of 109.09 billion VND, Saigon Securities Inc. accounted for 31 percent of total trade volume with 339.100 shares being brought or sold.
Source: VNA
Gambling provider makes debut on southern exchange
The Hoang Gia International Joint Stock Company – one of three businesses providing prize-winning electronic gaming for foreigners in Viet Nam – made its debut at the Ho Chi Minh City Securities Trading Centre, on July 31.
Some 29,000 shares of the company, coded RIC, were traded at a price of 174,000 VND per share at its debut trading session.
Hoang Gia, transformed from a foreign joint venture, has a statutory capital of 332 billion VND (around 21 million USD). The company has also been permitted to exploit more than 20 ha of land and 1,500 m of Ha Long Bay's scenic coastline.
Source: VNA
Some 29,000 shares of the company, coded RIC, were traded at a price of 174,000 VND per share at its debut trading session.
Hoang Gia, transformed from a foreign joint venture, has a statutory capital of 332 billion VND (around 21 million USD). The company has also been permitted to exploit more than 20 ha of land and 1,500 m of Ha Long Bay's scenic coastline.
Source: VNA
VN needs 5-10 years to catch up
Hans-Ulrich Doerig, Vice Chairman of the Board of Directors of Credit Suisse, said in an interview with VietNamNet that changes could not come overnight, and Vietnam would need some five to 10 years to catch up with other countries, becoming more competitive in banking and finance.
What would you say about the potentials of Vietnam’s banking and finance sector, as an expert who has worked in the banking sector for many years, especially in Asian countries?
Vietnam is determined to build a market economy and follow an open-door policy. However, you cannot expect development overnight; you have to go step by step. One should not think of creating changes overnight. All countries have to follow a progressive model. You cannot skip on the way. If you go too fast, you may face crises.
The government of every country has to define goals for every stage of development. It will take Vietnam years to find suitable final solutions.
However, I think that the Government of Vietnam is on the right track and going at a suitable pace. There is no need to go faster or slower. In the time to come, the government will allow the deeper participation of foreign investors in the banking and finance sector. But it needs more time. Vietnam will need five to ten years to catch up with other countries in the world and become more competitive.
What suggestions would you give in order to, as you said, become more competitive, attract investment and catch up with the world in the banking and finance sector?
Firstly, Vietnam should maintain the low-cost scheme for the next five or ten years. Only by doing so can Vietnam maintain its competitiveness. If the inflation rate is high, which means higher costs and higher prices, you will find it hard to attract investment to Vietnam.
The most important thing for Vietnam is the anticipation of the mechanism. Investors should know under which mechanism they make investment.
In order to become successful, one should keep a positive view on the prospects of the country and the behaviour of people towards their work. If you keep a positive attitude, you will be able to work better and more effectively. Vietnam is one of the countries which own such advantageous factors.
Do you have any investment plan in Vietnam?
I studied in Japan in 1975-1976. I went to China 24 years ago, and then returned to the country two times at least every year. I can say I know a lot about Asia. I have had enough time to discover the continent and work with people here. My strategic interest in Vietnam, the promising nation, becomes bigger every day.
We now have a fund for the group’s activities in Vietnam. I myself got a volume of Vietnam’s Government bonds when Vietnam launched the bonds on the international market two years ago.
We think Vietnam is a special case among the burgeoning economies, and it will remain a burgeoning economy for many more years.
Do you have any suggestions about what to do to get success?
Vietnamese people are intelligent and they need to be given opportunities. They need to be well trained, and they need to learn experience from practice as well. Young people sometimes are impatient, they go too fast, and therefore, they can easily make mistakes. Many young people think that they should change their work after six months. In fact, they need to do the same work for at least three years to get more experience. They should work long enough to make mistakes and have enough time to correct mistakes.
What has helped create the success and fame of Credit Suisse?
First, we have a history of 151 years of operation. Second, we have big financial capability. Third, we have a network throughout the world.
150 years ago, we were not a famous group. Our leaders tried to expand our business scope. We brought new ideas into life and experimented with initiatives.
Fifth, we have staffs coming from different nations, and the diversification in nationality can bring creativeness and differentiation.
Now we are one of the 25 biggest banks among 70,000 banks around the world.
Source: VNE
What would you say about the potentials of Vietnam’s banking and finance sector, as an expert who has worked in the banking sector for many years, especially in Asian countries?
Vietnam is determined to build a market economy and follow an open-door policy. However, you cannot expect development overnight; you have to go step by step. One should not think of creating changes overnight. All countries have to follow a progressive model. You cannot skip on the way. If you go too fast, you may face crises.
The government of every country has to define goals for every stage of development. It will take Vietnam years to find suitable final solutions.
However, I think that the Government of Vietnam is on the right track and going at a suitable pace. There is no need to go faster or slower. In the time to come, the government will allow the deeper participation of foreign investors in the banking and finance sector. But it needs more time. Vietnam will need five to ten years to catch up with other countries in the world and become more competitive.
What suggestions would you give in order to, as you said, become more competitive, attract investment and catch up with the world in the banking and finance sector?
Firstly, Vietnam should maintain the low-cost scheme for the next five or ten years. Only by doing so can Vietnam maintain its competitiveness. If the inflation rate is high, which means higher costs and higher prices, you will find it hard to attract investment to Vietnam.
The most important thing for Vietnam is the anticipation of the mechanism. Investors should know under which mechanism they make investment.
In order to become successful, one should keep a positive view on the prospects of the country and the behaviour of people towards their work. If you keep a positive attitude, you will be able to work better and more effectively. Vietnam is one of the countries which own such advantageous factors.
Do you have any investment plan in Vietnam?
I studied in Japan in 1975-1976. I went to China 24 years ago, and then returned to the country two times at least every year. I can say I know a lot about Asia. I have had enough time to discover the continent and work with people here. My strategic interest in Vietnam, the promising nation, becomes bigger every day.
We now have a fund for the group’s activities in Vietnam. I myself got a volume of Vietnam’s Government bonds when Vietnam launched the bonds on the international market two years ago.
We think Vietnam is a special case among the burgeoning economies, and it will remain a burgeoning economy for many more years.
Do you have any suggestions about what to do to get success?
Vietnamese people are intelligent and they need to be given opportunities. They need to be well trained, and they need to learn experience from practice as well. Young people sometimes are impatient, they go too fast, and therefore, they can easily make mistakes. Many young people think that they should change their work after six months. In fact, they need to do the same work for at least three years to get more experience. They should work long enough to make mistakes and have enough time to correct mistakes.
What has helped create the success and fame of Credit Suisse?
First, we have a history of 151 years of operation. Second, we have big financial capability. Third, we have a network throughout the world.
150 years ago, we were not a famous group. Our leaders tried to expand our business scope. We brought new ideas into life and experimented with initiatives.
Fifth, we have staffs coming from different nations, and the diversification in nationality can bring creativeness and differentiation.
Now we are one of the 25 biggest banks among 70,000 banks around the world.
Source: VNE
Labour quality – thorny problem for Vietnam
In its official reports, Vietnam always confirms that it has abundant human resources that can meet the requirements of economic-social development in the future. However, the quality of Vietnam’s human resources is now a thorny problem.
By the end of 2006, Vietnam had a total of 45.3 million workers, three-fourths of whom were rural labourers. According to Nguyen Dai Dong, Head of the Labour and Employment Agency under the Ministry of Labour, War Invalids and Social Affairs (MoLISA), the human resources can’t satisfy the needs of the labour market.
The official said that just 32% of the labourers were trained and 14.4% had short-term vocational training certificates.
The report on the labour market made by the MoLISA says: “Vietnam seriously lacks qualified technical workers and qualified service labour for the finance and banking, tourism sectors so Vietnam has to hire foreign labourers. Meanwhile, labourers for export are under-skilled.”
As the need for highly-skilled manpower is increasing along with the growth of the economy in recent years, labour quality has become a hot topic at many forums.
At a conference held by the MoLISA early this year, commenting about the information that Thailand was forecast to bring its workers to Vietnam in the next 8-10 years, Minister Nguyen Thi Hang expressed her worry that Vietnamese labourers could lose their home.
“We may have to export unskilled workers and import skilled ones,” Ms Hang said.
The low quality of workers also leads to difficulties in labour exports. On the other hand, low quality also makes salaries for high-class workers soar since employers don’t have many choices.
The annual survey on investment costs by the Japan External Trade Organisation (JETRO), which was published in late May 2007, showed that salaries of mid-level employees had increased suddenly, especially in HCM City.
“While the average salary increase level for mid-level staffs in other countries is 7%, it is 40% in Vietnam. This is considered the least competitive factor of Vietnam in drawing foreign investment,” JETRO’s report says.
According to some labour experts, the fields that are in serious shortage of human resources are information technology, finance, auditing, law and industrial sectors. Many labourers are not fluent enough in foreign languages though this situation is being improved thanks to the increasing flow of foreigners coming to the country and the number of Vietnamese people trained abroad returning.
To solve the problem, the Government and the MoLISA are working on large-scale vocational training programmes.
According to Mr. Nguyen Dai Dong, the MoLISA has submitted to the Government a programme with solutions to develop the labour market: developing the source of supply of labour, developing the need for labour, promoting transactions on the labour market, reforming the salary-wage system, perfecting the labour market institution, and the most important solution – developing vocational training.
At the conference on vocational training, job and labour export held in May 2007, Prime Minister Nguyen Tan Dung expressed his concern that Vietnam ranked 77th in the world in labour productivity and had around 10 million unemployed people.
Most recently, the Prime Minister approved the national programme on employment to 2010, under which Vietnam will spend around VND6 trillion (US$375 million) on vocational training in the next four years.
Specifically, from 2006 to 2010, this programme will create jobs for 2-2.2 million people, modernise 30-40 employment service centres and complete the information system on the labour market, and train 75,000 employees of employment related agencies from the local to central levels.
The programme includes three major projects: borrowing capital to create jobs, exporting manpower, and developing the labour market.
Relating to labour export, this programme aims to send 40,000 to 50,000 workers abroad. Those people will be trained vocationally by state funding.
Of the VND6 trillion for this ambitious programme, more than VND4.8 trillion will come from the state budget, VND560 billion from local budgets, VND500 billion from the community and around VND30 billion from the international community.
The Minister of Labour, War Invalids and Social Affairs is the head of the steering board of this programme.
Source: VNE
By the end of 2006, Vietnam had a total of 45.3 million workers, three-fourths of whom were rural labourers. According to Nguyen Dai Dong, Head of the Labour and Employment Agency under the Ministry of Labour, War Invalids and Social Affairs (MoLISA), the human resources can’t satisfy the needs of the labour market.
The official said that just 32% of the labourers were trained and 14.4% had short-term vocational training certificates.
The report on the labour market made by the MoLISA says: “Vietnam seriously lacks qualified technical workers and qualified service labour for the finance and banking, tourism sectors so Vietnam has to hire foreign labourers. Meanwhile, labourers for export are under-skilled.”
As the need for highly-skilled manpower is increasing along with the growth of the economy in recent years, labour quality has become a hot topic at many forums.
At a conference held by the MoLISA early this year, commenting about the information that Thailand was forecast to bring its workers to Vietnam in the next 8-10 years, Minister Nguyen Thi Hang expressed her worry that Vietnamese labourers could lose their home.
“We may have to export unskilled workers and import skilled ones,” Ms Hang said.
The low quality of workers also leads to difficulties in labour exports. On the other hand, low quality also makes salaries for high-class workers soar since employers don’t have many choices.
The annual survey on investment costs by the Japan External Trade Organisation (JETRO), which was published in late May 2007, showed that salaries of mid-level employees had increased suddenly, especially in HCM City.
“While the average salary increase level for mid-level staffs in other countries is 7%, it is 40% in Vietnam. This is considered the least competitive factor of Vietnam in drawing foreign investment,” JETRO’s report says.
According to some labour experts, the fields that are in serious shortage of human resources are information technology, finance, auditing, law and industrial sectors. Many labourers are not fluent enough in foreign languages though this situation is being improved thanks to the increasing flow of foreigners coming to the country and the number of Vietnamese people trained abroad returning.
To solve the problem, the Government and the MoLISA are working on large-scale vocational training programmes.
According to Mr. Nguyen Dai Dong, the MoLISA has submitted to the Government a programme with solutions to develop the labour market: developing the source of supply of labour, developing the need for labour, promoting transactions on the labour market, reforming the salary-wage system, perfecting the labour market institution, and the most important solution – developing vocational training.
At the conference on vocational training, job and labour export held in May 2007, Prime Minister Nguyen Tan Dung expressed his concern that Vietnam ranked 77th in the world in labour productivity and had around 10 million unemployed people.
Most recently, the Prime Minister approved the national programme on employment to 2010, under which Vietnam will spend around VND6 trillion (US$375 million) on vocational training in the next four years.
Specifically, from 2006 to 2010, this programme will create jobs for 2-2.2 million people, modernise 30-40 employment service centres and complete the information system on the labour market, and train 75,000 employees of employment related agencies from the local to central levels.
The programme includes three major projects: borrowing capital to create jobs, exporting manpower, and developing the labour market.
Relating to labour export, this programme aims to send 40,000 to 50,000 workers abroad. Those people will be trained vocationally by state funding.
Of the VND6 trillion for this ambitious programme, more than VND4.8 trillion will come from the state budget, VND560 billion from local budgets, VND500 billion from the community and around VND30 billion from the international community.
The Minister of Labour, War Invalids and Social Affairs is the head of the steering board of this programme.
Source: VNE
Internet penetration deep but fails to benefit commerce
Vietnam is among the global big boys in terms of internet penetration and user numbers but lags behind in using the net for e-commerce.
According to a recent survey by the Asia Digital Marketing Yearbook (www.asiadma.com), Vietnam was listed 17th in the world in internet use with 15.5mil users and a density of 18.64 users per 100 population.
These numbers surpass the world and Southeast Asian averages - including those of China, Thailand, and Indonesia, but behind Singapore and Malaysia.
"It is remarkable since the internet appeared in the country only a very short time ago - 10 years ago," Deputy Minister of Post and Telematics Tran Duc Lai said.
However, the internet is not used to any great effect: The websites of many ministries and provinces are not updated and do not have useful information; though all universities are connected, only a tiny number of students are able to access the net.
Furthermore, a survey by the Viet Nam Chamber of Commerce and Industry found that 92% of businesses that had websites did not bother to update them, 70% of businesses in big cities did not use web services, and 97% of entrepreneurs did not know about e-commerce.
Lai said: "An urgent task for the ministry and other authorities is to improve the quality of internet use in Vietnam."
Source: VNE
According to a recent survey by the Asia Digital Marketing Yearbook (www.asiadma.com), Vietnam was listed 17th in the world in internet use with 15.5mil users and a density of 18.64 users per 100 population.
These numbers surpass the world and Southeast Asian averages - including those of China, Thailand, and Indonesia, but behind Singapore and Malaysia.
"It is remarkable since the internet appeared in the country only a very short time ago - 10 years ago," Deputy Minister of Post and Telematics Tran Duc Lai said.
However, the internet is not used to any great effect: The websites of many ministries and provinces are not updated and do not have useful information; though all universities are connected, only a tiny number of students are able to access the net.
Furthermore, a survey by the Viet Nam Chamber of Commerce and Industry found that 92% of businesses that had websites did not bother to update them, 70% of businesses in big cities did not use web services, and 97% of entrepreneurs did not know about e-commerce.
Lai said: "An urgent task for the ministry and other authorities is to improve the quality of internet use in Vietnam."
Source: VNE
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