CEO and Co-founder of VinaCapital Don Lam, who is also the Chairman of the Vietnam Infrastructure Ltd, has denied the report that foreign investors are trying to withdraw from Vietnam.
Foreign investors have not sold shares in the last three months, they just have not bought them. This is also one of the reasons that made the market fall, Mr Don Lam said, trying to explain the fluctuations in the stock market recently under the view of a foreign investor.
Not long ago, several foreign institutions released reports which forecast the landing of a lot of foreign investment funds in Vietnam which would bring about several billion dollars. However, amid the optimistic reports, Merrill Lynch launched a controversial report, which suggested reducing foreign investment into Vietnam to zero.
Mr Don Lam said that Merrill Lynch released the report as an independent researcher. The institution may think that the stock prices in Vietnam have become overly high and advised its investors not to buy more.
“Foreign investors will absolutely not withdraw from Vietnam’s market,” he said.
It is clear that foreign investment funds are still moving ahead with their plans to march towards Vietnam’s market, which shows positive signs of high economic growth rate. However, a lot of factors, including regulations (foreign investors are allowed to hold up to 30% of total shares in local companies, and the ‘room’ for foreign investors is nearly running out), and the way of accessing investment capital of Vietnam, have kept the huge sums of capital continuing to wait.
According to Mr Don Lam, in general, new foreign investment funds will enter Vietnam after one, two or three years after the establishment. Several professional investors and funds, which have cash for investment, still are not making investments, because they find the stock prices overly expensive. They will make deposits at banks and wait for their opportunities.
In fact, in the last three months, both blue chips and penny stocks on the market were unsalable. Foreign investors did not buy shares in the last time, according to Mr Don Lam, because the P/E index was very high.
“They will buy stocks when prices go down,” Mr Don Lam said.
Regarding the recent unsuccessful auctions, he said that foreign investors offered low prices at the auctions because the stock prices were overly high at this moment. The P/Es of many share items were 30 or 40, and wise investors never accept such a high P/E level.
In fact, foreign investors aim at long-term investment; therefore, they will hold stocks and not sell out for profit.
Mr Don Lam said that the higher foreign ownership ratio in local companies was expected to help stimulate the market again. The market prices of many blue chips, like REE, SIS or VNM, have returned to their actual value after the continuous falls. However, foreigners cannot buy these shares any more because of no room.
Source: VNE
Thursday, August 16, 2007
Dollar surges to VND16'200
The local foreign exchange market witnessed a strong surge of the dollar against the local currency by end of last week and early this week.
The market was trading the greenback at VND16,180 to the dollar in the first days of last week, but the hard currency suddenly rose up significantly last Friday to close last week at VND16,210.
The big movement was attributed to a high dollar overnight interest rate traded since late last week till now. Inter-bank dollar interest rate for very short tenors (from overnight to two weeks) was at around 6% which almost twice the dong's overnight rate.
Consequently, no banks would like to keep the USD/VND short position while the market has still seen high demand for dollars from importers.
This movement is also recorded as one of the biggest depreciation on a daily basis (0.2% this time) in the last couple of years.
With the trading level at VND16,210 to the dollar at the moment, the dong has lost 0.9% versus the greenback in the year to date.
Meanwhile the exchange rate between the local currency against other major currencies continued to fluctuate broadly due to recent turbulence in global financial markets.
The euro dropped to VND22,120 from 22,320 one week earlier while high-yielding currencies like the Australian and New Zealand dollars also weakened sharply as declines in global equities and fears of liquidity and financing problems.
Meanwhile, the yen jumped to VND137.80 from 135.80 one week earlier since the yen strengthened broadly against the dollar by the end of last week as the current crisis in global financial markets caused big concern to investors.
After around six weeks of stability, the dong overnight rate has increased over last week. Average interbank offer rate is 3.45%, an increase of 17 basis points. Interest rates for short tenors also had similar changes, with one week offer at 3.82% (upby 18 points), and one month at 5.31% (up by 9 points).
It has been predicted that at this stage short term rates should go up, since high consumer prices are pressuring the government to implement anti-inflationary policies.
Reportedly, increasing demands for government short term T-notes and for greenbacks in the local market are driving dong interest rates up this time. Rates should keep up the same pace for this week.
Last week the State Bank of Vietnam withdrew VND6.1tril via its open market operations. This reflects a significant reduction in the amount of open market withdrawals, which were more than VND10tril every week over the last month.
This showed that surplus in the banking system has diminished thanks to new issuance of government notes of 182, 273, and 364 days.
This week should see further decrease of surplus in the system as the open market operations will be strengthened.
Source: VNE
The market was trading the greenback at VND16,180 to the dollar in the first days of last week, but the hard currency suddenly rose up significantly last Friday to close last week at VND16,210.
The big movement was attributed to a high dollar overnight interest rate traded since late last week till now. Inter-bank dollar interest rate for very short tenors (from overnight to two weeks) was at around 6% which almost twice the dong's overnight rate.
Consequently, no banks would like to keep the USD/VND short position while the market has still seen high demand for dollars from importers.
This movement is also recorded as one of the biggest depreciation on a daily basis (0.2% this time) in the last couple of years.
With the trading level at VND16,210 to the dollar at the moment, the dong has lost 0.9% versus the greenback in the year to date.
Meanwhile the exchange rate between the local currency against other major currencies continued to fluctuate broadly due to recent turbulence in global financial markets.
The euro dropped to VND22,120 from 22,320 one week earlier while high-yielding currencies like the Australian and New Zealand dollars also weakened sharply as declines in global equities and fears of liquidity and financing problems.
Meanwhile, the yen jumped to VND137.80 from 135.80 one week earlier since the yen strengthened broadly against the dollar by the end of last week as the current crisis in global financial markets caused big concern to investors.
After around six weeks of stability, the dong overnight rate has increased over last week. Average interbank offer rate is 3.45%, an increase of 17 basis points. Interest rates for short tenors also had similar changes, with one week offer at 3.82% (upby 18 points), and one month at 5.31% (up by 9 points).
It has been predicted that at this stage short term rates should go up, since high consumer prices are pressuring the government to implement anti-inflationary policies.
Reportedly, increasing demands for government short term T-notes and for greenbacks in the local market are driving dong interest rates up this time. Rates should keep up the same pace for this week.
Last week the State Bank of Vietnam withdrew VND6.1tril via its open market operations. This reflects a significant reduction in the amount of open market withdrawals, which were more than VND10tril every week over the last month.
This showed that surplus in the banking system has diminished thanks to new issuance of government notes of 182, 273, and 364 days.
This week should see further decrease of surplus in the system as the open market operations will be strengthened.
Source: VNE
VinaCapital launches infrastructure fund
VinaCapital officially launched Vietnam Infrastructure Limited (VNI), a US $402 million fund dedicated to investment in Vietnam’s rapidly growing infrastructure sector, at a ceremony held in Hanoi this afternoon.
The amount of money would be invested in infrastructure projects in Vietnam in field of energy, traffic system, water supply system and telecommunications, said Mr Don Lam, CEO and Co-Founder of VinaCapital.
The fund would focus its investment in such big cities as Hanoi, Ho Chi Minh City, Da Nang and Can Tho and key economic regions of Vietnam, he added.
Mr William Lean, managing director of VinaCapital said the VNI had bought 3.8% of the shares of the Tan Tao Industrial Park Joint Stock Company (ITACO), valued at nearly US $20 million.
The money was used for infrastructure in Long An province, including a 70-kilometre highway construction from Ho Chi Minh City-based Tan Son Nhat Airport to the centre of the province, a thermo-electric plant and a water supply company.
VNI has also bought 2.4% of the shares of Thac Mo Hydro-Electric Plant, equivalent to nearly US $2 million; and 5.2% of the shares of Ba Ria Thermo-Electric Plant, valued at nearly US $4 million.
Mr Lean added that VNI was also investing in projects to build a highway in Ha Tay province with an investment capital of US $80. The road is 40 metres wide and 24 kilometres long, linking the western part of Hanoi with Son Tay town of Ha Tay province.
At the launching ceremony, VNI signed two memoranda of understanding. The first is an agreement with TRANCO company for the construction of a road in the Hanoi area. The second, with ITACO, is for the development of a 600 MW power plant and supporting coal port.
VinaCapital July 5 listed its fourth fund Vietnam Infrastructure Limited on the Alternative Investment Market (AIM) which is for new and potential firms of the London Stock Exchange (LSE).
The closed-end fund has a size of US $402 million that was mobilised from overseas investors.
After listing, the fund was disbursed US $100 million to invest in hydropower and thermo-power plants. The remaining capital will be used within 12 to 18 months later to buy toll rights in big cities and participate to upgrade local airports into international ones.
With the fourth fund, VinaCapital has managed the amount of some US $1.8 billion investing mainly in Vietnam. The fund manager now also runs three other investment funds in Vietnam - the US $800-million Vietnam Opportunity Fund (VOF), the US $600-million VinaLand, and the US $50-million DFJ VinaCapital L.P. which invests in information technology. The two former funds are now listed on AIM as well.
Source: VNE
The amount of money would be invested in infrastructure projects in Vietnam in field of energy, traffic system, water supply system and telecommunications, said Mr Don Lam, CEO and Co-Founder of VinaCapital.
The fund would focus its investment in such big cities as Hanoi, Ho Chi Minh City, Da Nang and Can Tho and key economic regions of Vietnam, he added.
Mr William Lean, managing director of VinaCapital said the VNI had bought 3.8% of the shares of the Tan Tao Industrial Park Joint Stock Company (ITACO), valued at nearly US $20 million.
The money was used for infrastructure in Long An province, including a 70-kilometre highway construction from Ho Chi Minh City-based Tan Son Nhat Airport to the centre of the province, a thermo-electric plant and a water supply company.
VNI has also bought 2.4% of the shares of Thac Mo Hydro-Electric Plant, equivalent to nearly US $2 million; and 5.2% of the shares of Ba Ria Thermo-Electric Plant, valued at nearly US $4 million.
Mr Lean added that VNI was also investing in projects to build a highway in Ha Tay province with an investment capital of US $80. The road is 40 metres wide and 24 kilometres long, linking the western part of Hanoi with Son Tay town of Ha Tay province.
At the launching ceremony, VNI signed two memoranda of understanding. The first is an agreement with TRANCO company for the construction of a road in the Hanoi area. The second, with ITACO, is for the development of a 600 MW power plant and supporting coal port.
VinaCapital July 5 listed its fourth fund Vietnam Infrastructure Limited on the Alternative Investment Market (AIM) which is for new and potential firms of the London Stock Exchange (LSE).
The closed-end fund has a size of US $402 million that was mobilised from overseas investors.
After listing, the fund was disbursed US $100 million to invest in hydropower and thermo-power plants. The remaining capital will be used within 12 to 18 months later to buy toll rights in big cities and participate to upgrade local airports into international ones.
With the fourth fund, VinaCapital has managed the amount of some US $1.8 billion investing mainly in Vietnam. The fund manager now also runs three other investment funds in Vietnam - the US $800-million Vietnam Opportunity Fund (VOF), the US $600-million VinaLand, and the US $50-million DFJ VinaCapital L.P. which invests in information technology. The two former funds are now listed on AIM as well.
Source: VNE
ACB has a strong growth in Jan-July
Asia Commercial Bank (ACB), Vietnam's fifth largest, said on Thursday it made a gross profit of 1 trillion dong ($61.8 million) in the first seven months of this year compared with $42 million for all of 2006.
The Ho Chi Minh City-based bank also said in a statement its assets had jumped 40 percent to 62.52 trillion dong ($3.86 billion) between the end of 2006 and July 31.
ACB, which expects a 2007 gross profit of 1.5 trillion dong, did not give net profit or comparative year-ago figures for the January-July period.
It said deposits reached 56.35 trillion dong ($3.48 billion) in the first seven months, more than twice its loans in the same period, which amounted to 23.54 trillion dong.
The Hanoi-listed bank said last month that new lines of business, including gold trading and new mortgage products, had contributed to better results since the start of the year.
Shares in ACB rose 700 dong, or 0.6 percent, to close at 118,000 dong ($7.29) on the over-the-counter Hanoi stock market on Wednesday.
ACB is aiming for growth of 45 percent to 50 percent in the 2006-2010 period and to have assets of about $12 billion by the end of it.
Last month, the central bank allowed ACB to sell long-term bonds worth 6.5 trillion dong ($402 million) by the end of the year.
Demand for loans and other banking services is booming as Vietnam's economy expands rapidly. Gross domestic product grew an estimated 7.87 percent in the first half of 2007 from a year earlier, led by the industrial and construction sectors.
Four foreign shareholders have a combined 30 percent in ACB, of which Standard Chartered Plc. has the largest stake of 8.56 percent.
Source: Reuters
The Ho Chi Minh City-based bank also said in a statement its assets had jumped 40 percent to 62.52 trillion dong ($3.86 billion) between the end of 2006 and July 31.
ACB, which expects a 2007 gross profit of 1.5 trillion dong, did not give net profit or comparative year-ago figures for the January-July period.
It said deposits reached 56.35 trillion dong ($3.48 billion) in the first seven months, more than twice its loans in the same period, which amounted to 23.54 trillion dong.
The Hanoi-listed bank said last month that new lines of business, including gold trading and new mortgage products, had contributed to better results since the start of the year.
Shares in ACB rose 700 dong, or 0.6 percent, to close at 118,000 dong ($7.29) on the over-the-counter Hanoi stock market on Wednesday.
ACB is aiming for growth of 45 percent to 50 percent in the 2006-2010 period and to have assets of about $12 billion by the end of it.
Last month, the central bank allowed ACB to sell long-term bonds worth 6.5 trillion dong ($402 million) by the end of the year.
Demand for loans and other banking services is booming as Vietnam's economy expands rapidly. Gross domestic product grew an estimated 7.87 percent in the first half of 2007 from a year earlier, led by the industrial and construction sectors.
Four foreign shareholders have a combined 30 percent in ACB, of which Standard Chartered Plc. has the largest stake of 8.56 percent.
Source: Reuters
Wednesday, August 15, 2007
Both VN-Index and HaSTC-Index slide
The VN-Index at the Ho Chi Minh City Stock Exchange (HOSE) dropped again by the end of the August 15 morning trading session after rallying for gains the previous day.
By closing, the VN-Index fell 7.81 points or 0.85 percent to finish at 915.34 points. Nearly 3.7 million shares, worth more than 364 billion VND, were traded during the day.
Blue-chips like the Corporation for Financing and Promoting Technology (FPT), Saigon Thuong Tin Joint Stock Commercial Bank (STB) and Tay Ninh Rubber Joint Stock Company (TRC) enjoyed the largest trade volumes on the day.
Song Da Urban and Industrial Zone Investment and Development (SJS) suffered the biggest loss among the bourse’s 69 losers by having 9,000 VND wiped off its listed price. It was followed by FPT, Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) and the Tuong An Oil Joint Stock Company (TAC).
Meanwhile, only 24 shares rallied for gains and 20 remained unchanged. Binh Minh Minerals (BMC), Tay Ninh Cable Tour Company (TCT), Saigon Hotel Corporation (SGH) and North Kinh Do Food Joint Stock Company (NKD) were among shares to record the biggest increases.
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 0.19 points to finish at 254.05 points. Close to 763,000 shares, worth more than 77 billion VND, changed hands.
The session saw 39 shares decline, 24 make gains with 12 remaining the same.
Bao Viet Securities Company (BVS), Ba Hien Viglacera (BHV) and Song Da Joing Stock Company 9.09 (S99) were among the biggest losers of the day.
Saigon Securities Inc (SSI) led the market in terms of transaction volume with 200,400 shares, followed by Asia Commercial Bank (ACB), Tien Phong Plastic Joint Stock Company (NTP) and Ha Noi Milk (NHM).
Source: VNA
By closing, the VN-Index fell 7.81 points or 0.85 percent to finish at 915.34 points. Nearly 3.7 million shares, worth more than 364 billion VND, were traded during the day.
Blue-chips like the Corporation for Financing and Promoting Technology (FPT), Saigon Thuong Tin Joint Stock Commercial Bank (STB) and Tay Ninh Rubber Joint Stock Company (TRC) enjoyed the largest trade volumes on the day.
Song Da Urban and Industrial Zone Investment and Development (SJS) suffered the biggest loss among the bourse’s 69 losers by having 9,000 VND wiped off its listed price. It was followed by FPT, Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) and the Tuong An Oil Joint Stock Company (TAC).
Meanwhile, only 24 shares rallied for gains and 20 remained unchanged. Binh Minh Minerals (BMC), Tay Ninh Cable Tour Company (TCT), Saigon Hotel Corporation (SGH) and North Kinh Do Food Joint Stock Company (NKD) were among shares to record the biggest increases.
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 0.19 points to finish at 254.05 points. Close to 763,000 shares, worth more than 77 billion VND, changed hands.
The session saw 39 shares decline, 24 make gains with 12 remaining the same.
Bao Viet Securities Company (BVS), Ba Hien Viglacera (BHV) and Song Da Joing Stock Company 9.09 (S99) were among the biggest losers of the day.
Saigon Securities Inc (SSI) led the market in terms of transaction volume with 200,400 shares, followed by Asia Commercial Bank (ACB), Tien Phong Plastic Joint Stock Company (NTP) and Ha Noi Milk (NHM).
Source: VNA
Domestic-made market surveys booming
A lot of market surveys conducted by domestic financial institutions have been released in the last one month.
Investors now have a lot of choices when they want reliable reports and market surveys to refer to before making investment decisions. Besides the reports released by foreign HSBC or Merrill Lynch, they can also seek information and advice in domestic-made reports by SSI, VDSC or BVSC.
SSI’s report hit the market first, called “Vietnam’s stock market: the story about development”. After that, a lot of other reports conducted by other securities firms appeared on the market with different styles and diversified analyses.
In its report, Rong Viet (Viet Dragon VDSC) provides figures showing the overall picture of the economy: GDP growth rate 7.87% in first half of 2007, FDI $5.2bil, up by 8% over the same period of the last year, committed ODA $4.4bil, and export turnover $22.4bil.
The report mentions challenges Vietnam’s economy is facing such as high inflation, low disbursement of ODA, export growth slowdown. In the report, investors can also find general analyses about the financial situations of enterprises, both listed and unlisted, which are classified by business fields.
Bao Viet Securities (BVSC) on August 8 released a report with the prediction that the VN Index will hover at the 1,000 point level at the year’s end. The report also gives reasons for the fall of the market in the second quarter of the year 1. the market did not have strong impetuses, the P/E index was high 2. the ‘room’ for foreign investors had run out in many local companies 3. the central bank issued the decision to limit loans for securities investments.
Moreover, the report also identifies another reason, which is that 90% of companies listing on HOSE issued more shares in order to raise funds to inject in real estate projects, while real estate is not their main business field.
BVSC gives an optimistic view about the business operations of several big companies and big business fields. “The VN Index is believed to be on the upturn, and possibly will return to around the 1,000 point level; by that time, the P/E will be 26-27,” the report reads.
Meanwhile, Thang Long Securities Company writes in its report that the market’s performance will be very satisfactory in the future, but will not boom.
CBV’s (Bien Viet Securities Company) report provides a review of the market in the first seven months of the year based on CBV set of indexes: CBV Index (based on the 50 listing companies which have the biggest transaction volumes and market values) reached 133.04 points in the time period, and the market capitalisation volume had reached VND315,272bil ($19,704mil) by the end of July. The profitability level of the companies in these fields, according to CBV’s method of calculation, is very satisfactory, and even though the market fell down in July, the companies still maintained profitability.
CBV advises investors to make investment in MidCap group (companies with medium scale) instead of LargeCap (big-size companies) or SmallCap. The suggested investment addresses are companies in the fields of oil and gas, consumer goods and health care.
Big companies have good positions in the market, good trademarks, but now they are absorbed in expanding their businesses into other fields, which is not necessarily to their advantage. “This is a bad thing, which may lead to the price decrease of big groups and corporations,” the report concludes.
History shows that big groups and corporations can dominate smaller ones only when they focus on their main business fields.
Analysts have said that securities firms were trying to release market reports in the last time in order to polish their names, thus attracting more clients. In general, the reports bring more advice to investors, helping them make timely and suitable decisions.
Source: VNE
Investors now have a lot of choices when they want reliable reports and market surveys to refer to before making investment decisions. Besides the reports released by foreign HSBC or Merrill Lynch, they can also seek information and advice in domestic-made reports by SSI, VDSC or BVSC.
SSI’s report hit the market first, called “Vietnam’s stock market: the story about development”. After that, a lot of other reports conducted by other securities firms appeared on the market with different styles and diversified analyses.
In its report, Rong Viet (Viet Dragon VDSC) provides figures showing the overall picture of the economy: GDP growth rate 7.87% in first half of 2007, FDI $5.2bil, up by 8% over the same period of the last year, committed ODA $4.4bil, and export turnover $22.4bil.
The report mentions challenges Vietnam’s economy is facing such as high inflation, low disbursement of ODA, export growth slowdown. In the report, investors can also find general analyses about the financial situations of enterprises, both listed and unlisted, which are classified by business fields.
Bao Viet Securities (BVSC) on August 8 released a report with the prediction that the VN Index will hover at the 1,000 point level at the year’s end. The report also gives reasons for the fall of the market in the second quarter of the year 1. the market did not have strong impetuses, the P/E index was high 2. the ‘room’ for foreign investors had run out in many local companies 3. the central bank issued the decision to limit loans for securities investments.
Moreover, the report also identifies another reason, which is that 90% of companies listing on HOSE issued more shares in order to raise funds to inject in real estate projects, while real estate is not their main business field.
BVSC gives an optimistic view about the business operations of several big companies and big business fields. “The VN Index is believed to be on the upturn, and possibly will return to around the 1,000 point level; by that time, the P/E will be 26-27,” the report reads.
Meanwhile, Thang Long Securities Company writes in its report that the market’s performance will be very satisfactory in the future, but will not boom.
CBV’s (Bien Viet Securities Company) report provides a review of the market in the first seven months of the year based on CBV set of indexes: CBV Index (based on the 50 listing companies which have the biggest transaction volumes and market values) reached 133.04 points in the time period, and the market capitalisation volume had reached VND315,272bil ($19,704mil) by the end of July. The profitability level of the companies in these fields, according to CBV’s method of calculation, is very satisfactory, and even though the market fell down in July, the companies still maintained profitability.
CBV advises investors to make investment in MidCap group (companies with medium scale) instead of LargeCap (big-size companies) or SmallCap. The suggested investment addresses are companies in the fields of oil and gas, consumer goods and health care.
Big companies have good positions in the market, good trademarks, but now they are absorbed in expanding their businesses into other fields, which is not necessarily to their advantage. “This is a bad thing, which may lead to the price decrease of big groups and corporations,” the report concludes.
History shows that big groups and corporations can dominate smaller ones only when they focus on their main business fields.
Analysts have said that securities firms were trying to release market reports in the last time in order to polish their names, thus attracting more clients. In general, the reports bring more advice to investors, helping them make timely and suitable decisions.
Source: VNE
REE's 7-month profit soars 55.6 pct y/y
Vietnam's Refrigeration Electrical Engineering Co. (REE) said on Wednesday its pre-tax profit jumped 55.6 percent in the first seven months of 2007 from a year earlier to nearly $15 million on strong construction demand.
The Ho Chi Minh City-based firm, also known as REE, said in a statement issued through the Ho Chi Minh Stock Exchange the seven-month profit accounted for 71.22 percent of its annual target of 340 billion (nearly $20 million).
It did not provide a net profit figure.
Vietnam's construction sector expanded 9.51 percent in the first half of 2007 from a year earlier, government figures show.
REE works in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE, one of Vietnam's first two listed firms when the stock market opened in July 2000, also operates a software park in Ho Chi Minh City, Vietnam's commercial centre.
Its shares fell 1.5 percent to 131,000 dong ($8.1) on Wednesday.
Source: Reuters
The Ho Chi Minh City-based firm, also known as REE, said in a statement issued through the Ho Chi Minh Stock Exchange the seven-month profit accounted for 71.22 percent of its annual target of 340 billion (nearly $20 million).
It did not provide a net profit figure.
Vietnam's construction sector expanded 9.51 percent in the first half of 2007 from a year earlier, government figures show.
REE works in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE, one of Vietnam's first two listed firms when the stock market opened in July 2000, also operates a software park in Ho Chi Minh City, Vietnam's commercial centre.
Its shares fell 1.5 percent to 131,000 dong ($8.1) on Wednesday.
Source: Reuters
Tuesday, August 14, 2007
VN-Index on the up, HaSTC-Index falls again
The VN-Index at the Ho Chi Minh Stock Exchange (HoSE) rallied to add on 14 points or 1.51 percent to close at 923.15 points by the end of the August 13 trading session after a sharp decline the day before.
Over 5.1 million shares worth nearly 495.4 billion VND changed hands.
The market saw 84 stocks gain, including blue-chips Binh Dinh Minerals (BMC), Tay Ninh Cable Car Tour (TCT), and North Kinh Do Food (NKD); 23 shares decline with the biggest losses coming to Binh Trieu Construction and Engineering, Ben Tre Aquaproduct (ABT) and Viet Nam Petroleum Transport (VIP).
The HaSTC-Index at the Ha Noi Securities Trading Centre meanwhile continued its downward trend by dropping 0.24 points to finish at 254.24 points.
PetroVietnam Insurance (PVI), Song Da 505 (S55) and Ha Noi Textbook Printing (TPH) were amongst the biggest losses of a group of 34 companies that had value erased from their listed price.
The trading session saw an increase in trade volume but fall in value with 915,000 stocks worth 80.178 billion VND changing hands.
Source: VNA
Over 5.1 million shares worth nearly 495.4 billion VND changed hands.
The market saw 84 stocks gain, including blue-chips Binh Dinh Minerals (BMC), Tay Ninh Cable Car Tour (TCT), and North Kinh Do Food (NKD); 23 shares decline with the biggest losses coming to Binh Trieu Construction and Engineering, Ben Tre Aquaproduct (ABT) and Viet Nam Petroleum Transport (VIP).
The HaSTC-Index at the Ha Noi Securities Trading Centre meanwhile continued its downward trend by dropping 0.24 points to finish at 254.24 points.
PetroVietnam Insurance (PVI), Song Da 505 (S55) and Ha Noi Textbook Printing (TPH) were amongst the biggest losses of a group of 34 companies that had value erased from their listed price.
The trading session saw an increase in trade volume but fall in value with 915,000 stocks worth 80.178 billion VND changing hands.
Source: VNA
Local insurers dominate non-life market
Vietnamese firms, led by Viet Nam Insurance Corporation (Bao Viet), have won over world giants such as France’s Prevoir and US AIG, ACE Life and New York Life to garner 80 percent of the domestic non-life insurance market.
The Viet Nam Insurers’ Association said so far 19 businesses are operating in this burgeoning sector, which enjoyed a five-year high of 20 percent growth in the first half of the year, however only seven have foreign money.
Bao Viet alone earned 1 .1 trillion VND out of the nation’s total 3.6 trillion VND in the first half premium revenue.
Other major non-life insurance suppliers include the PetroVietnam Insurance (PVI) with 980 billion VND in premium, the Bao Minh Joint-Stock Corporation, 825 billion VND, and the Petrolimex Insurance Joint-Stock Company 335 billion VND.
However, experts warn that local firms should work out strategies for market expansion immediately or risk losing their shares to foreign rivals when the nation removes all barriers under WTO commitments.
A local insurer executive said his business has prepared a plan for rural expansion once the urban market is saturated.
Source: VNA
The Viet Nam Insurers’ Association said so far 19 businesses are operating in this burgeoning sector, which enjoyed a five-year high of 20 percent growth in the first half of the year, however only seven have foreign money.
Bao Viet alone earned 1 .1 trillion VND out of the nation’s total 3.6 trillion VND in the first half premium revenue.
Other major non-life insurance suppliers include the PetroVietnam Insurance (PVI) with 980 billion VND in premium, the Bao Minh Joint-Stock Corporation, 825 billion VND, and the Petrolimex Insurance Joint-Stock Company 335 billion VND.
However, experts warn that local firms should work out strategies for market expansion immediately or risk losing their shares to foreign rivals when the nation removes all barriers under WTO commitments.
A local insurer executive said his business has prepared a plan for rural expansion once the urban market is saturated.
Source: VNA
Saigontourist invests in upgrading Grand Hotel
Saigontourist Holding Company (Saigontourist) has invested 328 billion VND (20.5 million USD) into the Grand Hotel, adding more floors, more rooms, and more amemities.
This move aims to transform and upgrade the old building in district 1, Ho Chi Minh City, to five-star standards,
The new Grand Hotel will be built on a 2,780 sq.m site and will feature 20 floors with 233 rooms.
Saigontourist is focusing on building and expanding other hotels in Ho Chi Minh City, including the Majestic Hotel, Kim Do Hotel, and Continental Hotel, all in an effort to reach next year’s target of 2,000 rooms meeting the five-star standard.
Source: VNA
This move aims to transform and upgrade the old building in district 1, Ho Chi Minh City, to five-star standards,
The new Grand Hotel will be built on a 2,780 sq.m site and will feature 20 floors with 233 rooms.
Saigontourist is focusing on building and expanding other hotels in Ho Chi Minh City, including the Majestic Hotel, Kim Do Hotel, and Continental Hotel, all in an effort to reach next year’s target of 2,000 rooms meeting the five-star standard.
Source: VNA
RIC may beat profit target
The Taiwan-backed operator of Vietnam's biggest casino, Royal International Corp (RIC), may beat its profit target this year as it taps into the country's booming tourist industry by opening a Sheraton hotel in Halong Bay.
The company, which was floated on the Ho Chi Minh Stock Exchange <.VNI> last month, said it expects to post a net profit of $10 million for the whole of 2007, more than triple last year's figure of $2.9 million.
RIC's plan to open a 200-room Sheraton hotel, the first five-star accommodation in UNESCO-recognised Halong Bay, in October, may help it beat this target, which was set late last year.
"When we set the profit and revenue target for 2007 we did not count the revenues from Sheraton hotel so it is possible that the actual revenues and profit for 2007 would be higher than the target," Royal International Corp's Equity Department head Tran Trong Nghia said.
The Southeast Asian country is encouraging investors to build high-end hotels, resorts, and golf courses to help sustain a boom in tourism, particularly from South Korea and China.
Recent government figures in the first seven months of this year soared 27.5 percent to 1.54 million people compared to the same period last year.
Casinos are only allowed to cater to foreign tourists as gambling is banned in Vietnam.
The company posted a net profit of $4.5 million in the first half, eight times higher than the same period last year, the company said on Tuesday.
Shares in RIC rose 1.44 percent to close at 141,000 dong ($8.7) each on Tuesday, valuing the firm at about $309 million.
RIC, 63-percent-owned by Taiwanese investors, is the only casino operator listed on communist-ruled Vietnam's stock market which now has more than 110 companies.
Source: Reuters
The company, which was floated on the Ho Chi Minh Stock Exchange <.VNI> last month, said it expects to post a net profit of $10 million for the whole of 2007, more than triple last year's figure of $2.9 million.
RIC's plan to open a 200-room Sheraton hotel, the first five-star accommodation in UNESCO-recognised Halong Bay, in October, may help it beat this target, which was set late last year.
"When we set the profit and revenue target for 2007 we did not count the revenues from Sheraton hotel so it is possible that the actual revenues and profit for 2007 would be higher than the target," Royal International Corp's Equity Department head Tran Trong Nghia said.
The Southeast Asian country is encouraging investors to build high-end hotels, resorts, and golf courses to help sustain a boom in tourism, particularly from South Korea and China.
Recent government figures in the first seven months of this year soared 27.5 percent to 1.54 million people compared to the same period last year.
Casinos are only allowed to cater to foreign tourists as gambling is banned in Vietnam.
The company posted a net profit of $4.5 million in the first half, eight times higher than the same period last year, the company said on Tuesday.
Shares in RIC rose 1.44 percent to close at 141,000 dong ($8.7) each on Tuesday, valuing the firm at about $309 million.
RIC, 63-percent-owned by Taiwanese investors, is the only casino operator listed on communist-ruled Vietnam's stock market which now has more than 110 companies.
Source: Reuters
France Telecom eyes big stake in Vietnam MobiFone
France Telecom aims to buy a large stake in Vietnam's second-largest mobile phone service provider, MobiFone, state media quoted its chief executive as saying.
"We hope to participate with the highest stake possible," France Telecom CEO Didier Lombard was quoted by the Dau Tu (Investment) newspaper on Tuesday as saying.
"Vietnam is a market with potential for growth. Moreover, when we seek the partnership we aim to build a lasting relationship with a long-term vision," Lombard said in his first trip to Vietnam last week.
Mobifone said on Monday it had shortlisted six foreign firms which would bid to advise the state-run company on its partial privatisation, including an IPO expected in 2008.
MobiFone said Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Rothschild and UBS would bid to become the adviser for the Hanoi-based firm. It gave no timeframe for the bidding.
MobiFone, known formally as Vietnam Mobile Telecom Services Company and owned by Vietnam Posts and Telecommunications (VNPT), has said the IPO would take place early next year and VNPT would only hold one-third of the shares in MobiFone.
Strategic shareholders would have one third and outsiders the remaining stake, MobiFone's director Le Ngoc Minh said in May.
Foreign telecom giants including Vodafone and British Telecommunications Plc have said they wanted to be equity partners in the company.
MobiFone uses GSM technology and has about 8.5 million subscribers, or 35 percent share of the domestic market where it competes with military-run Viettel and state-run Vinaphone, which is also controlled by VNPT.
Privatising MobiFone, the first move in restructuring the telecommunications industry, was slow and difficult because Vietnam did not have a legal guide for the process, officials have said.
Source: Reuters
"We hope to participate with the highest stake possible," France Telecom CEO Didier Lombard was quoted by the Dau Tu (Investment) newspaper on Tuesday as saying.
"Vietnam is a market with potential for growth. Moreover, when we seek the partnership we aim to build a lasting relationship with a long-term vision," Lombard said in his first trip to Vietnam last week.
Mobifone said on Monday it had shortlisted six foreign firms which would bid to advise the state-run company on its partial privatisation, including an IPO expected in 2008.
MobiFone said Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Rothschild and UBS would bid to become the adviser for the Hanoi-based firm. It gave no timeframe for the bidding.
MobiFone, known formally as Vietnam Mobile Telecom Services Company and owned by Vietnam Posts and Telecommunications (VNPT), has said the IPO would take place early next year and VNPT would only hold one-third of the shares in MobiFone.
Strategic shareholders would have one third and outsiders the remaining stake, MobiFone's director Le Ngoc Minh said in May.
Foreign telecom giants including Vodafone and British Telecommunications Plc have said they wanted to be equity partners in the company.
MobiFone uses GSM technology and has about 8.5 million subscribers, or 35 percent share of the domestic market where it competes with military-run Viettel and state-run Vinaphone, which is also controlled by VNPT.
Privatising MobiFone, the first move in restructuring the telecommunications industry, was slow and difficult because Vietnam did not have a legal guide for the process, officials have said.
Source: Reuters
Vietnam doubles forex reserves, fights inflation
Vietnam has enough foreign exchange reserves to cover 20 weeks of imports, a senior central bank official was quoted on Tuesday as saying.
"We have dozens of billions of U.S. dollar in reserves," the Thanh Nien newspaper quoted Deputy Governor of the State Bank of Vietnam Nguyen Dong Tien as saying.
"While the foreign exchange reserves were just enough to cover nine to 10 weeks of imports, now they are enough for 20 weeks," Tien told a news conference on Monday to which foreign reporters were not invited.
He did not give the absolute value of reserves but said the increase resulted from rising foreign investment inflows and central bank purchases of foreign exchange to hold down the dong.
Economists say the central bank has bought $7 billion this year, meaning some 110 trillion dong has been pumped into the economy, which has fuelled inflation.
Consumer prices in July were 8.39 percent higher than the same month last year and by the end of July the consumer price index had risen 6.19 percent from the end of 2006.
The government is aiming for annual GDP growth of 8.5 percent this year while keeping inflation below that growth rate.
Economists say double-digit inflation is a possibility, but Tien told the news conference that the central bank had stepped up its draining of inflation-fuelling funds from the economy through open market transactions.
So far it had mopped up 80 percent of the dong spent to purchase the foreign currency, Tien said.
"The prime minister has a belief that it will be feasible to achieve both high economic growth and control of inflation," Tien was quoted by Thanh Nien as saying.
"I personally also believe so and I am ready to bet with anyone who says this year's inflation is double-digit," he said.
To back up the fight against inflation, the Finance Ministry cut the import duty on several diary products, meat, home appliances and cars last week.
The Finance Ministry and the Ministry of Industry and Trade are also asking domestic petrol distributors to cut petrol prices by 500 dong per litre, the government said. That is a cut of around 4 percent.
The government has instructed the Agriculture Ministry to try to contain pig disease now spreading in the central and southern provinces, which is pushing up meat prices.
Food accounts for more than 40 percent of the basket used to calculate Vietnam's consumer price index.
Source: Reuters
"We have dozens of billions of U.S. dollar in reserves," the Thanh Nien newspaper quoted Deputy Governor of the State Bank of Vietnam Nguyen Dong Tien as saying.
"While the foreign exchange reserves were just enough to cover nine to 10 weeks of imports, now they are enough for 20 weeks," Tien told a news conference on Monday to which foreign reporters were not invited.
He did not give the absolute value of reserves but said the increase resulted from rising foreign investment inflows and central bank purchases of foreign exchange to hold down the dong.
Economists say the central bank has bought $7 billion this year, meaning some 110 trillion dong has been pumped into the economy, which has fuelled inflation.
Consumer prices in July were 8.39 percent higher than the same month last year and by the end of July the consumer price index had risen 6.19 percent from the end of 2006.
The government is aiming for annual GDP growth of 8.5 percent this year while keeping inflation below that growth rate.
Economists say double-digit inflation is a possibility, but Tien told the news conference that the central bank had stepped up its draining of inflation-fuelling funds from the economy through open market transactions.
So far it had mopped up 80 percent of the dong spent to purchase the foreign currency, Tien said.
"The prime minister has a belief that it will be feasible to achieve both high economic growth and control of inflation," Tien was quoted by Thanh Nien as saying.
"I personally also believe so and I am ready to bet with anyone who says this year's inflation is double-digit," he said.
To back up the fight against inflation, the Finance Ministry cut the import duty on several diary products, meat, home appliances and cars last week.
The Finance Ministry and the Ministry of Industry and Trade are also asking domestic petrol distributors to cut petrol prices by 500 dong per litre, the government said. That is a cut of around 4 percent.
The government has instructed the Agriculture Ministry to try to contain pig disease now spreading in the central and southern provinces, which is pushing up meat prices.
Food accounts for more than 40 percent of the basket used to calculate Vietnam's consumer price index.
Source: Reuters
Two-digit inflation rate won’t occur
The government will instruct ministries to take necessary action to curb inflation; two-digit inflation rate will not occur, government officials said yesterday at a press conference to announce the Prime Minister’s conclusions about measures to curb the price increases.
When asked if the government would ask the National Assembly to adjust the approved plan for CPI growth rate as the prices increased sharply in the last time, Tran Quoc Toan, Deputy Chairman of the Government’s Office said that the government was determined to curb inflation, and the approved plan for CPI growth rate would still be followed.
Nguyen Xuan Phuc, Chairman of the Government’s Office, stressed that the economic potential Vietnam had now (foreign currency reserves, food and materials) was strong enough to prevent overly high price increases. Moreover, as a result of the policy on encouraging investment, the GDP growth rate would be higher than CPI in 2007.
“The scenario for two-digit inflation rate will never occur,” Mr Phuc said, denying the opinions by some experts that the inflation rate in 2007 would reach 10% or 11%.
Meanwhile, Nguyen Dong Tien, Deputy Governor of the State Bank of Vietnam, said that he did not believe those who said that the inflation rate would be two digits. “I would bet money that the inflation rate will not reach the two-digit level. I have confidence in the measures the ministries are taking to curb the price increases,” Mr Tien said.
At the press conference, the State Bank of Vietnam officially announced monetary policy solutions aiming to settle the monetary problems which people think were the main reason behind the high inflation rate in the first seven months of the year.
According to Mr Tien, in the first half of 2007, the balance of payments saw the surplus of $6bil, which has helped double the national foreign currency reserves in the last seven months compared to the end of 2006. Vietnam now has the foreign currency reserves equivalent to the payment for seven weeks of imports, the figure which was previously set for 2010.
“We are facing a problem, which has never been seen in history: the foreign investment capital flows in big quantity. We have sometimes bought $500-600mil a day, while we bought $4bil only in a whole year of 2006,” Mr Tien said, adding that this had put big pressure on the economy and needed suitable solutions.
The central bank had to spend VND to buy foreign currencies, and then issue bonds to withdraw VND from circulation. It is estimated that 82% of the cash spent on buying foreign currencies has been taken back by the bond issuances. Moreover, the decision on requiring higher compulsory reserve ratio on bank deposits has helped withdraw VND30tril from circulation, thus reducing the total payment instruments and curbing the price increases.
On August 13, the Ministry of Finance also announced it would issue VND18tril worth of bonds in the third quarter of the year. The bond issuance in July helped raise VND5tril, and it is expected that another VND13tril will be raised in August and September to withdraw cash from circulation.
Deputy Minister of Finance Tran Xuan Ha said at the press conference that his ministry would consider lowering taxes further by 50-70% on goods items which had the tax rates of 20-50% in order to ensure stable supplies, thus stabilising the market.
The goods items which may see further tax decreases include fish, materials to make food (cereal, wheat flour, canned food, sausage, fruit juice) and products belonging to the construction material group, like construction glass.
Mr Ha said that the government would keep strict control over rice exports in order to ensure food security. Vietnam has exported 2.8mil tonnes of rice so far this year, and if counting the signed contracts, the exports have reached 4.5mil tonnes, equal to the volume the government set for the whole of 2007. No more contracts will be allowed to be signed until the fourth quarter of the year.
On the decision to lower taxes on 18 categories of products effective as of August 8, Mr Ha said that if the imports could be kept at the level in the first months of the year, the state budget would lose VND1tril in the last five months of the year. However, it is necessary to sacrifice the state budget collection for the supply and demand balance of goods.
The Ministry of Trade and Industry has forecast that the drastic measures taken by ministries and branches will help curb the inflation rate at 0.5% in August 2007.
Source: VNE
When asked if the government would ask the National Assembly to adjust the approved plan for CPI growth rate as the prices increased sharply in the last time, Tran Quoc Toan, Deputy Chairman of the Government’s Office said that the government was determined to curb inflation, and the approved plan for CPI growth rate would still be followed.
Nguyen Xuan Phuc, Chairman of the Government’s Office, stressed that the economic potential Vietnam had now (foreign currency reserves, food and materials) was strong enough to prevent overly high price increases. Moreover, as a result of the policy on encouraging investment, the GDP growth rate would be higher than CPI in 2007.
“The scenario for two-digit inflation rate will never occur,” Mr Phuc said, denying the opinions by some experts that the inflation rate in 2007 would reach 10% or 11%.
Meanwhile, Nguyen Dong Tien, Deputy Governor of the State Bank of Vietnam, said that he did not believe those who said that the inflation rate would be two digits. “I would bet money that the inflation rate will not reach the two-digit level. I have confidence in the measures the ministries are taking to curb the price increases,” Mr Tien said.
At the press conference, the State Bank of Vietnam officially announced monetary policy solutions aiming to settle the monetary problems which people think were the main reason behind the high inflation rate in the first seven months of the year.
According to Mr Tien, in the first half of 2007, the balance of payments saw the surplus of $6bil, which has helped double the national foreign currency reserves in the last seven months compared to the end of 2006. Vietnam now has the foreign currency reserves equivalent to the payment for seven weeks of imports, the figure which was previously set for 2010.
“We are facing a problem, which has never been seen in history: the foreign investment capital flows in big quantity. We have sometimes bought $500-600mil a day, while we bought $4bil only in a whole year of 2006,” Mr Tien said, adding that this had put big pressure on the economy and needed suitable solutions.
The central bank had to spend VND to buy foreign currencies, and then issue bonds to withdraw VND from circulation. It is estimated that 82% of the cash spent on buying foreign currencies has been taken back by the bond issuances. Moreover, the decision on requiring higher compulsory reserve ratio on bank deposits has helped withdraw VND30tril from circulation, thus reducing the total payment instruments and curbing the price increases.
On August 13, the Ministry of Finance also announced it would issue VND18tril worth of bonds in the third quarter of the year. The bond issuance in July helped raise VND5tril, and it is expected that another VND13tril will be raised in August and September to withdraw cash from circulation.
Deputy Minister of Finance Tran Xuan Ha said at the press conference that his ministry would consider lowering taxes further by 50-70% on goods items which had the tax rates of 20-50% in order to ensure stable supplies, thus stabilising the market.
The goods items which may see further tax decreases include fish, materials to make food (cereal, wheat flour, canned food, sausage, fruit juice) and products belonging to the construction material group, like construction glass.
Mr Ha said that the government would keep strict control over rice exports in order to ensure food security. Vietnam has exported 2.8mil tonnes of rice so far this year, and if counting the signed contracts, the exports have reached 4.5mil tonnes, equal to the volume the government set for the whole of 2007. No more contracts will be allowed to be signed until the fourth quarter of the year.
On the decision to lower taxes on 18 categories of products effective as of August 8, Mr Ha said that if the imports could be kept at the level in the first months of the year, the state budget would lose VND1tril in the last five months of the year. However, it is necessary to sacrifice the state budget collection for the supply and demand balance of goods.
The Ministry of Trade and Industry has forecast that the drastic measures taken by ministries and branches will help curb the inflation rate at 0.5% in August 2007.
Source: VNE
Foreign investors reduce stakes in two companies
Deutsche Bank has announced the sale of 19,560 shares in the Ho Chi Minh City Infrastructure Investment Joint Stock Co, reducing its stake from 5.04 percent to 4.97 percent.
The bank continues to hold nearly 1.5 million shares in the company.
The Cable and Telecommunications Materials Co (SAM) also announced that Wareham Group Ltd’s stake in the company had been reduced from 12.68 percent to 10.51 percent.
Amersham Industries Ltd also now holds 4.2 million shares in SAM, a 7.8 percent stake, 1.66 percent lower than before.
Source: VNA
The bank continues to hold nearly 1.5 million shares in the company.
The Cable and Telecommunications Materials Co (SAM) also announced that Wareham Group Ltd’s stake in the company had been reduced from 12.68 percent to 10.51 percent.
Amersham Industries Ltd also now holds 4.2 million shares in SAM, a 7.8 percent stake, 1.66 percent lower than before.
Source: VNA
Banks tighten securities investment funding
Banks have begun taking action to tighten the funding of securities investment deals in order to bring their outstanding loans to stock investors to below 3% of total outstanding loans as the central bank has required.
The Director of the Saigon Housing Development Bank at the end of June 2007 released a decision to stop funding securities investments immediately. The bank has also stopped the disbursement of the loans which had been approved by bank leaders. The director asked his staffs to re-assess the securities market value, and asked borrowers to reduce the outstanding loans or provide more mortgaged assets.
The Military Bank still opens its doors to securities investors, but the bank now only provides loans to clients who have accounts at securities companies with whom the bank has cooperation agreements.
Meanwhile, state-owned banks, which have outstanding loans for securities investments at low levels so far, below 2%, seem to not intend to expand credit to securities investors, though they still could do that.
Le Dao Nguyen, Deputy Director General of the Bank for Investment and Development of Vietnam (BIDV), said that BIDV did not intend to provide loans to fund securities trading deals.
According to AC Nielsen, a market research company, only 0.26% of Vietnam’s population participates in the stock market. By June 29, the number of accounts opened at securities companies had reached 200,000, including 5,000 ones owned by foreign institutions and investors. The figure proves to be very ‘modest’ if compared to the high population. It is estimated that 55 investment funds are present in Vietnam, which have brought a huge sum of money worth $6bil.
The State Bank of Vietnam on August 9 released a document urging banks to collect debts to lower the outstanding loans given for securities investments. Commercial banks have six months more to do that. This showed the central bank’s determination to put a cap on loaning for securities investments, despite protests from commercial banks.
Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Vietnam, said that in the world only India limited its banks’ outstanding loans for securities investments at below 5%, while other countries allowed commercial banks to decide themselves how much to loan.
However, the central banks in these countries have good information systems, which allow them to initiate decisions in every bank quickly.
“The principle we follow is trying to limit loans for securities investments, but not cause big difficulties for banks and avoid sudden changes to the market,” Mr Nghia said.
Le Dac Son, Director General of VP Bank, said that in Vietnam, a fledgling market, it was necessary to control the loaning for securities investments. However, he said that it would be more appropriate to raise the cap from 3% of total outstanding loans to 5%-6%.
Source: VNS
The Director of the Saigon Housing Development Bank at the end of June 2007 released a decision to stop funding securities investments immediately. The bank has also stopped the disbursement of the loans which had been approved by bank leaders. The director asked his staffs to re-assess the securities market value, and asked borrowers to reduce the outstanding loans or provide more mortgaged assets.
The Military Bank still opens its doors to securities investors, but the bank now only provides loans to clients who have accounts at securities companies with whom the bank has cooperation agreements.
Meanwhile, state-owned banks, which have outstanding loans for securities investments at low levels so far, below 2%, seem to not intend to expand credit to securities investors, though they still could do that.
Le Dao Nguyen, Deputy Director General of the Bank for Investment and Development of Vietnam (BIDV), said that BIDV did not intend to provide loans to fund securities trading deals.
According to AC Nielsen, a market research company, only 0.26% of Vietnam’s population participates in the stock market. By June 29, the number of accounts opened at securities companies had reached 200,000, including 5,000 ones owned by foreign institutions and investors. The figure proves to be very ‘modest’ if compared to the high population. It is estimated that 55 investment funds are present in Vietnam, which have brought a huge sum of money worth $6bil.
The State Bank of Vietnam on August 9 released a document urging banks to collect debts to lower the outstanding loans given for securities investments. Commercial banks have six months more to do that. This showed the central bank’s determination to put a cap on loaning for securities investments, despite protests from commercial banks.
Le Xuan Nghia, Director of the Banking Development Strategy Department under the State Bank of Vietnam, said that in the world only India limited its banks’ outstanding loans for securities investments at below 5%, while other countries allowed commercial banks to decide themselves how much to loan.
However, the central banks in these countries have good information systems, which allow them to initiate decisions in every bank quickly.
“The principle we follow is trying to limit loans for securities investments, but not cause big difficulties for banks and avoid sudden changes to the market,” Mr Nghia said.
Le Dac Son, Director General of VP Bank, said that in Vietnam, a fledgling market, it was necessary to control the loaning for securities investments. However, he said that it would be more appropriate to raise the cap from 3% of total outstanding loans to 5%-6%.
Source: VNS
Low fines turn securities law into a toothless tiger
Authorities have recently punished a number of individuals and organisations for violating regulations in securities transactions, but analysts say the penalties haven't been strict enough.
Investors were eager when the State Securities Commission (SSC) first issued a decision to punish an investor in HCM City in late June with a fine of VND30mil (US$1,875) for entering into collusion to distort supply and demand on the market.
Less than a month later, two other individuals in the city were fined VND60mil ($3,750) and VND100mil ($6,250) for similar acts.
Among organisations, the Vietcombank, BIDV and Sai Gon Securities companies have were each fined VND10-20mil ($625-$1,250) for breaking securities management (i.e., registration, deposit, or payment) and reporting regulations.
Foreign companies were no exception. Indochina Capital was fined VND10mil for not conforming with regulations on internal transactions.
On July 25, the SSC slapped the Thien Viet Securities Co a VND50mil ($3,125) fine for its delay in publicising a change in its general director position.
On Monday, it announced a VND20mil ($1,250) fine on the Ba Ria-Vung Tau Housing Development Co for failure to make timely disclosures.
The SSC has taken great strides to make the market more transparent. However, the penalties it has issued so far have been too lightweight to have a real impact on investors, according to analysts, especially major players for whom a minor fine is mere chicken feed.
"The heaviest penalty for breaking securities laws or regulations is now only VND50mil. It's not a reasonable level," said SSC chief inspector Hoang Duc Long.
The commission is asking the Government to consider stricter penalty levels, he said, with some serious violations even subject to penal liability.
Authorities, meanwhile, face challenges in discovering all violations, Long said.
"In order to detect a lawbreaker, we have to check over 250,000 accounts on the market, and we only have about 20 inspectors," said Long.
"There have also been cases in which auditors have released inaccurate information or even colluded with enterprises to falsify reports. It's really a big concern."
Source: VNS
Investors were eager when the State Securities Commission (SSC) first issued a decision to punish an investor in HCM City in late June with a fine of VND30mil (US$1,875) for entering into collusion to distort supply and demand on the market.
Less than a month later, two other individuals in the city were fined VND60mil ($3,750) and VND100mil ($6,250) for similar acts.
Among organisations, the Vietcombank, BIDV and Sai Gon Securities companies have were each fined VND10-20mil ($625-$1,250) for breaking securities management (i.e., registration, deposit, or payment) and reporting regulations.
Foreign companies were no exception. Indochina Capital was fined VND10mil for not conforming with regulations on internal transactions.
On July 25, the SSC slapped the Thien Viet Securities Co a VND50mil ($3,125) fine for its delay in publicising a change in its general director position.
On Monday, it announced a VND20mil ($1,250) fine on the Ba Ria-Vung Tau Housing Development Co for failure to make timely disclosures.
The SSC has taken great strides to make the market more transparent. However, the penalties it has issued so far have been too lightweight to have a real impact on investors, according to analysts, especially major players for whom a minor fine is mere chicken feed.
"The heaviest penalty for breaking securities laws or regulations is now only VND50mil. It's not a reasonable level," said SSC chief inspector Hoang Duc Long.
The commission is asking the Government to consider stricter penalty levels, he said, with some serious violations even subject to penal liability.
Authorities, meanwhile, face challenges in discovering all violations, Long said.
"In order to detect a lawbreaker, we have to check over 250,000 accounts on the market, and we only have about 20 inspectors," said Long.
"There have also been cases in which auditors have released inaccurate information or even colluded with enterprises to falsify reports. It's really a big concern."
Source: VNS
Monday, August 13, 2007
Indices drop further
The Vn-Index at the Ho Chi Minh Stock Exchange (HoSE) saw a remarkable decrease of 26.53 points or 2.83 percent to close at 909.15 points by the end of the August 13 trading session.
Today's total trading volume also dropped with 4 million shares worth nearly 408.5 billion VND changing hands.
The market saw only 10 stocks gain, 95 other decline and eight stocks remain unchanged.
Blue-chipper Binh Dinh Minerals (BMC) topped the list of gainers by tacking 7,000 VND onto its listed price of 385,000 VND, followed by Full Power JSC (FPC), Lu Gia Mechanical Electric JSC (LGC), Royal Int'l JSC (RIC) and Cat Loi JSC (CLC).
Meanwhile, Kinh Do Corporation (KDC) dropped sharply by 13,000 VND per unit, followed by Hau Giang Pharmaceutical JSC, Song Da urban and industrial zone developer (SJS) and Tay Ninh Cable Car Tour (TCT).
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 2.86 points to finish at 254.48 points.
Today’s trading volume saw 780,800 stocks worth 80.178 billion VND traded. The session witnessed 14 stocks rally for gains, seven remain unchanged, 53 decline and 14 record no transactions.
Source: VNA
Today's total trading volume also dropped with 4 million shares worth nearly 408.5 billion VND changing hands.
The market saw only 10 stocks gain, 95 other decline and eight stocks remain unchanged.
Blue-chipper Binh Dinh Minerals (BMC) topped the list of gainers by tacking 7,000 VND onto its listed price of 385,000 VND, followed by Full Power JSC (FPC), Lu Gia Mechanical Electric JSC (LGC), Royal Int'l JSC (RIC) and Cat Loi JSC (CLC).
Meanwhile, Kinh Do Corporation (KDC) dropped sharply by 13,000 VND per unit, followed by Hau Giang Pharmaceutical JSC, Song Da urban and industrial zone developer (SJS) and Tay Ninh Cable Car Tour (TCT).
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 2.86 points to finish at 254.48 points.
Today’s trading volume saw 780,800 stocks worth 80.178 billion VND traded. The session witnessed 14 stocks rally for gains, seven remain unchanged, 53 decline and 14 record no transactions.
Source: VNA
Life insurers becoming optimistic again
The life insurance market, which has experienced two years of falling down, now is showing signs of recovery, according to the Vietnam Insurance Association (VIA).
The last two years witnessed the decline of the life insurance market with the APE (Annual Premium Equivalent) decreasing by 3-3.5% in 2005 and 2006. Big names like Prudential, AIA and Manulife all saw premiums down and lost their market shares. In 2006, the total insurance premiums of many companies saw minus growth rates, while the network of agents was narrowed by 30% compared to 2005.
However, VIA said that the market would bounce back and regain the hot development seen in 2000-2003.
The recovery of the market has been seen in the first half of the year, when most life insurers reported encouraging business results.
The total premiums gained by Bao Viet Life in the first six months of the year reached VND1,600bil, an increase of 5% compared to the same period last year, while the turnover from new policies increased by 35%. Moreover, turnover from financial investment of Bao Viet Life also increased by 20% over 2006, reaching VND600bil ($37.5mil).
AIA Vietnam has also reported satisfactory business results: the total premiums increased by 5% in the first quarter of the year over the same period last year. The business performance was even better in the second quarter with the total premiums up by 25%.
ACE Life’s business results proved to be very impressive: the total premiums increased by 300% in the first half of 2007 compared to the same period of 2006. This was a very satisfactory result if noting that the market was in the gloomy period.
Other insurers also reported increases in the real collected premiums from new policies. Prevoir, for example, saw the increase of 250%, Manulife 40% and Dai-ichi Life 22%. Total life insurance premiums grew by 9%.
Experts said that the recovery of the life insurance market was inevitable. WTO membership brings more opportunities to insurers: living standards and incomes have improved, which encourage people to take out more insurance policies.
In fact, insurers have also been trying to attract more clients. In June 2007, Prudential Vietnam announced it would give more insurance dividends worth VND521bil ($32.56mil) to eligible policyholders. The company said that this was the profit from the financial investment deals in 2006 and early months of 2007. Meanwhile, Nguyen Duc Tuan, Director General of Bao Viet Life, said that the launching of new products, which have brought new choices to clients, has helped raise the turnover of the company.
Source: VNE
The last two years witnessed the decline of the life insurance market with the APE (Annual Premium Equivalent) decreasing by 3-3.5% in 2005 and 2006. Big names like Prudential, AIA and Manulife all saw premiums down and lost their market shares. In 2006, the total insurance premiums of many companies saw minus growth rates, while the network of agents was narrowed by 30% compared to 2005.
However, VIA said that the market would bounce back and regain the hot development seen in 2000-2003.
The recovery of the market has been seen in the first half of the year, when most life insurers reported encouraging business results.
The total premiums gained by Bao Viet Life in the first six months of the year reached VND1,600bil, an increase of 5% compared to the same period last year, while the turnover from new policies increased by 35%. Moreover, turnover from financial investment of Bao Viet Life also increased by 20% over 2006, reaching VND600bil ($37.5mil).
AIA Vietnam has also reported satisfactory business results: the total premiums increased by 5% in the first quarter of the year over the same period last year. The business performance was even better in the second quarter with the total premiums up by 25%.
ACE Life’s business results proved to be very impressive: the total premiums increased by 300% in the first half of 2007 compared to the same period of 2006. This was a very satisfactory result if noting that the market was in the gloomy period.
Other insurers also reported increases in the real collected premiums from new policies. Prevoir, for example, saw the increase of 250%, Manulife 40% and Dai-ichi Life 22%. Total life insurance premiums grew by 9%.
Experts said that the recovery of the life insurance market was inevitable. WTO membership brings more opportunities to insurers: living standards and incomes have improved, which encourage people to take out more insurance policies.
In fact, insurers have also been trying to attract more clients. In June 2007, Prudential Vietnam announced it would give more insurance dividends worth VND521bil ($32.56mil) to eligible policyholders. The company said that this was the profit from the financial investment deals in 2006 and early months of 2007. Meanwhile, Nguyen Duc Tuan, Director General of Bao Viet Life, said that the launching of new products, which have brought new choices to clients, has helped raise the turnover of the company.
Source: VNE
VAFI considering setting up club of minority shareholders
The idea of setting up a club of minority shareholders, which has been suggested by Head of the Division for Macroeconomic Studies Research under the Central Institute of Economic Management (CIEM) Nguyen Dinh Cung, is being considered by the Vietnam Association of Financial Investors (VAFI).
Mr Cung said that in Vietnam there existed legal loopholes which could cause small shareholders, called ‘minority shareholders’, losses. He said that while waiting for the legal framework to be perfected, minority shareholders should stand in an organisation, a club for minority shareholders, so as to be able to protect themselves better.
Regarding the legal loopholes, Mr Cung said that the Enterprise Law and Securities Law both mentioned provisions for the protection of minority shareholders. However, the provisions are still far from reaching the highest standards in international practice.
For example, current laws require listing companies to expose regular information, irregular information as stipulated in Circular No 38 issued by the Ministry of Finance. However, information relating to the assessment about the future of listing companies is not required by the laws, while the information is very important.
For example, investors should know the assessment by listing companies’ management boards on the changes of the markets, the impacts of the capital market, and so on. They also deserve to know how many percent of stakes the management board holds in one company or another and the ability of the members of the management board.
Mr Cung said that only when investors were provided with the information they needed, especially information about possible changes with the listing companies, could they make suitable investment decisions ensuring healthy and transparent transactions.
He said that minority shareholders should gather to propose amendments to the legal documents that could help protect their benefit. For example, the current laws do not prohibit members of management boards from transferring shares. And in order to limit transfers, minority shareholders should ask for the stipulation that a transfer would only be allowed if the deal was accepted by the management board to ensure that it did not cause a supply-demand imbalance and losses for them.
For the time being, minority shareholders should gather in one club, in which they can exchange information and protect each others’ benefits.
Mr Cung has admitted that it is difficult to gather shareholders in one club. In fact, several groups of investors have been thinking of such clubs, but these are just small-scale clubs. “Such a club should be organised on a bigger scale, and there should be supporters, and a pioneer who leads the club,” he said.
Source: VNE
Mr Cung said that in Vietnam there existed legal loopholes which could cause small shareholders, called ‘minority shareholders’, losses. He said that while waiting for the legal framework to be perfected, minority shareholders should stand in an organisation, a club for minority shareholders, so as to be able to protect themselves better.
Regarding the legal loopholes, Mr Cung said that the Enterprise Law and Securities Law both mentioned provisions for the protection of minority shareholders. However, the provisions are still far from reaching the highest standards in international practice.
For example, current laws require listing companies to expose regular information, irregular information as stipulated in Circular No 38 issued by the Ministry of Finance. However, information relating to the assessment about the future of listing companies is not required by the laws, while the information is very important.
For example, investors should know the assessment by listing companies’ management boards on the changes of the markets, the impacts of the capital market, and so on. They also deserve to know how many percent of stakes the management board holds in one company or another and the ability of the members of the management board.
Mr Cung said that only when investors were provided with the information they needed, especially information about possible changes with the listing companies, could they make suitable investment decisions ensuring healthy and transparent transactions.
He said that minority shareholders should gather to propose amendments to the legal documents that could help protect their benefit. For example, the current laws do not prohibit members of management boards from transferring shares. And in order to limit transfers, minority shareholders should ask for the stipulation that a transfer would only be allowed if the deal was accepted by the management board to ensure that it did not cause a supply-demand imbalance and losses for them.
For the time being, minority shareholders should gather in one club, in which they can exchange information and protect each others’ benefits.
Mr Cung has admitted that it is difficult to gather shareholders in one club. In fact, several groups of investors have been thinking of such clubs, but these are just small-scale clubs. “Such a club should be organised on a bigger scale, and there should be supporters, and a pioneer who leads the club,” he said.
Source: VNE
World markets won’t fall on Vietnam
Vietnam’s fledgling stock market will not be influenced by the falls of world stock markets as Vietnam remains a very small market which does not have close links with world markets, experts say.
Just two days before last weekend, big banks in Europe, US and Asia deiced to pump more capital into the world’s banking system, totalling $326bil, in order to prevent the collapse of the global market. The move could help prevent a financial storm, but it could not help stop the decreases of stock prices in world markets on August 10.
In New York, the Dow Jones was down by more than 200 points in the morning trading session, and further decreased by 30.32 points in the afternoon, closing at 13,240.36 points.
The Nasdaq decreased by 11.6 points (0.45%) to 2,544.89 points, while FTSE 100 of London Stock Exchange witnessed its most lackluster day in four years on August 10 when it fell by 3.7%.
The global market began staggering after France's biggest listed bank, BNP Paribas, announced it would freeze three funds due to subprime problems. The European Central Bank (ECB) immediately decided to lend a huge sum of money worth Euro95bil to banks in order to mitigate the impacts of the decision, and the sum of Euro62bil for lending was announced the next day, August 10. The US Federal Reserve, the central banks of Canada, Australia and Japan all have decided to pump billions of dollars into their domestic banking systems. The central banks of Malaysia, Indonesia and other Asian banks are also taking actions in order to stabilise their markets.
A question has been raised about whether or not the world’s crisis will hurt Vietnam’s stock market. An official from the HCM City Stock Exchange (HOSE) said that Vietnam’s market would not be affected because it remained very small and did not have close links with world markets. Vietnam does not have big companies which list on American, European stock markets; therefore they do not bear bad influences from the outside.
The official also said that it was not likely that foreign financial institutions would withdraw their capital from Vietnam. The investment capital flowing into Vietnam’s stock market has been increasing sharply in the last time, but it is worth several billion dollars only. Of this amount, big financial institutions just have injected several hundred million dollars, a very small sum compared to their huge investment deals elsewhere.
Therefore, though suffering losses in other big markets, institutions will not need to withdraw capital from Vietnam to make payment deals in other markets.
Dr Nguyen Ngoc Nhung, senior expert in banking and finance, also said that there were no signs that world market falls would affect Vietnam’s stock market and banking system. Only if the falls severely hurt world economies would Vietnam’s national economy suffer as a result.
Source: VNE
Just two days before last weekend, big banks in Europe, US and Asia deiced to pump more capital into the world’s banking system, totalling $326bil, in order to prevent the collapse of the global market. The move could help prevent a financial storm, but it could not help stop the decreases of stock prices in world markets on August 10.
In New York, the Dow Jones was down by more than 200 points in the morning trading session, and further decreased by 30.32 points in the afternoon, closing at 13,240.36 points.
The Nasdaq decreased by 11.6 points (0.45%) to 2,544.89 points, while FTSE 100 of London Stock Exchange witnessed its most lackluster day in four years on August 10 when it fell by 3.7%.
The global market began staggering after France's biggest listed bank, BNP Paribas, announced it would freeze three funds due to subprime problems. The European Central Bank (ECB) immediately decided to lend a huge sum of money worth Euro95bil to banks in order to mitigate the impacts of the decision, and the sum of Euro62bil for lending was announced the next day, August 10. The US Federal Reserve, the central banks of Canada, Australia and Japan all have decided to pump billions of dollars into their domestic banking systems. The central banks of Malaysia, Indonesia and other Asian banks are also taking actions in order to stabilise their markets.
A question has been raised about whether or not the world’s crisis will hurt Vietnam’s stock market. An official from the HCM City Stock Exchange (HOSE) said that Vietnam’s market would not be affected because it remained very small and did not have close links with world markets. Vietnam does not have big companies which list on American, European stock markets; therefore they do not bear bad influences from the outside.
The official also said that it was not likely that foreign financial institutions would withdraw their capital from Vietnam. The investment capital flowing into Vietnam’s stock market has been increasing sharply in the last time, but it is worth several billion dollars only. Of this amount, big financial institutions just have injected several hundred million dollars, a very small sum compared to their huge investment deals elsewhere.
Therefore, though suffering losses in other big markets, institutions will not need to withdraw capital from Vietnam to make payment deals in other markets.
Dr Nguyen Ngoc Nhung, senior expert in banking and finance, also said that there were no signs that world market falls would affect Vietnam’s stock market and banking system. Only if the falls severely hurt world economies would Vietnam’s national economy suffer as a result.
Source: VNE
Nearly US$40 billion to enter Vietnam
According to the Foreign Investment Agency, there are 48 projects totalling US$39.8 billion waiting to come to Vietnam.
A large part of this huge source of capital will be poured into hi-tech, thermo-power, real estate and steel projects. Specifically, Taiwan’s Foxconn Group will invest $5 billion to build electronic technology parks in several provinces in Vietnam. Pacific Land Limited from Britain plans to invest $1 billion into the Sai Dong A Hi-tech Park in Hanoi.
Real estate and tourism projects account for over $16 billion, equivalent to 40.2% of the total amount of foreign capital that will come to Vietnam.
Switzerland’s Trustee Suisse will join hands with Vietnam’s Vinaconex to build the “Asian pearl” complex and a residential area on Phu Quoc Island, Kien Giang province, with $2.7 billion.
The Kumho Asiana of the Republic of Korea plans to invest $2.5 billion in the Giang Vo cultural-trade centre and the My Dinh exhibition centre in Hanoi.
Foreign investors also are interested in thermo-power plants with six projects totalling $8.5 billion. Japan’s Sumitomo wants to build a 2,640 MW plant in the central province of Khanh Hoa with $3.8 billion. Meanwhile, a joint venture between the US’ AES and the Vietnam Coal and Mineral Group will spend $1.463 billion on a 1,200 MW plant in the northern coastal province of Quang Ninh.
Notably, Chinese investors have expressed interest in building five big works in the fields of thermo-power and real estate. During President Nguyen Minh Triet’s visit to the US last May, the two sides signed memorandums of understanding on these five projects.
Specifically, Vietnam’s An Phu Corporation and Vietnam Shipping Line Corporation (Vinalines) and China’s Chieu Thuong Corporation and Khai Phat Bank will build the An Phu Hung new urban zone in HCM City and Ba Ria-Vung Tau province with $1 billion of capital.
In addition, Chinese investors will pump $650 million in a thermo-power plant in HCM City, a luxurious trading zone and the Ha Long-Mong Cai highway, worth $400 million each.
Source: VNE
A large part of this huge source of capital will be poured into hi-tech, thermo-power, real estate and steel projects. Specifically, Taiwan’s Foxconn Group will invest $5 billion to build electronic technology parks in several provinces in Vietnam. Pacific Land Limited from Britain plans to invest $1 billion into the Sai Dong A Hi-tech Park in Hanoi.
Real estate and tourism projects account for over $16 billion, equivalent to 40.2% of the total amount of foreign capital that will come to Vietnam.
Switzerland’s Trustee Suisse will join hands with Vietnam’s Vinaconex to build the “Asian pearl” complex and a residential area on Phu Quoc Island, Kien Giang province, with $2.7 billion.
The Kumho Asiana of the Republic of Korea plans to invest $2.5 billion in the Giang Vo cultural-trade centre and the My Dinh exhibition centre in Hanoi.
Foreign investors also are interested in thermo-power plants with six projects totalling $8.5 billion. Japan’s Sumitomo wants to build a 2,640 MW plant in the central province of Khanh Hoa with $3.8 billion. Meanwhile, a joint venture between the US’ AES and the Vietnam Coal and Mineral Group will spend $1.463 billion on a 1,200 MW plant in the northern coastal province of Quang Ninh.
Notably, Chinese investors have expressed interest in building five big works in the fields of thermo-power and real estate. During President Nguyen Minh Triet’s visit to the US last May, the two sides signed memorandums of understanding on these five projects.
Specifically, Vietnam’s An Phu Corporation and Vietnam Shipping Line Corporation (Vinalines) and China’s Chieu Thuong Corporation and Khai Phat Bank will build the An Phu Hung new urban zone in HCM City and Ba Ria-Vung Tau province with $1 billion of capital.
In addition, Chinese investors will pump $650 million in a thermo-power plant in HCM City, a luxurious trading zone and the Ha Long-Mong Cai highway, worth $400 million each.
Source: VNE
Stock market from August 6-10: transactions busy again
After twice plunging below the 900-point level, the VN-index recovered this week. Prices of several stocks increased as investors regained their confidence in placing buying orders.
Though the increasing trend is entirely clear as the VN-Index reduced slightly at the weekend session, down 2.53 points, closing at 935.68 but the recovery this time seems to be more stable. At the weekend trading session, though the index was down, the total market volume and value were still up. As many as over 6 million shares were traded for over VND 656 billion.
According to experts, many investors seemed to think that the index has reached the bottom of the adjustment period and now is the time to buy. Investors’ becoming familiar with the new automatic matching system at the southern bourse is also regarded as another explanation for the increase in trading volume and value this week.
In addition, the Ho Chi Minh City Securities Trading Centre was transform to Ho Chi Minh City Stock Exchange of on August 8 with its reforms supporting a better development in the stock market thereby bolstering the investors confidence in the recovery of the market.
According to many investors, the first sharp increase of the index on August 7 was of great importance to them, helping them find psychological support at the time they were losing direction.
To investors, the turnaround of the market on August 7 showed that the VN-Index had dropped to a level that most share prices on the market had now become more attractive.
On August 9, the increase were clear. Along with blue chips gains, prices of many other stocks also increased. A total of 83 stocks increased. FPT became a phenomenon when it continued to be in the list of top five gainers, up VND 11,00 a share and was also the most traded stock with nearly 538,000 shares changed hands.
It was noteworthy that the increases in total trading volume and value in these sessions have proved that purchasing power is still strong and shows the investor confidence in the securities market.
Thus, the VN-Index ended this week with three gains and two losses, marking a net increase of 42.80 points.
In Hanoi, the HaSTC index closed the week at 257.34, up 2.39 points compared to the figure of last week.
At the weekend trading session, total trading volume was over 1.4 million for a total value of over VND 143 billion. Foreign investors’ transactions were also up sharply. They bought and sold a total of 739,500 shares for over VND 74.3 billion.
SSI continued to be the most traded stock with over 300,000 shares changed hands, followed by NTP (177,400) , BCC (156,300), ACB and BTS (over 100,000).
In the following sessions, the northern bourse will attract the investor interest as one of the leading insurance company, the PetroVietnam Insurance Corporation, officially listed its 50 million PVI shares on August 10.
Source: Nhan Dan
Though the increasing trend is entirely clear as the VN-Index reduced slightly at the weekend session, down 2.53 points, closing at 935.68 but the recovery this time seems to be more stable. At the weekend trading session, though the index was down, the total market volume and value were still up. As many as over 6 million shares were traded for over VND 656 billion.
According to experts, many investors seemed to think that the index has reached the bottom of the adjustment period and now is the time to buy. Investors’ becoming familiar with the new automatic matching system at the southern bourse is also regarded as another explanation for the increase in trading volume and value this week.
In addition, the Ho Chi Minh City Securities Trading Centre was transform to Ho Chi Minh City Stock Exchange of on August 8 with its reforms supporting a better development in the stock market thereby bolstering the investors confidence in the recovery of the market.
According to many investors, the first sharp increase of the index on August 7 was of great importance to them, helping them find psychological support at the time they were losing direction.
To investors, the turnaround of the market on August 7 showed that the VN-Index had dropped to a level that most share prices on the market had now become more attractive.
On August 9, the increase were clear. Along with blue chips gains, prices of many other stocks also increased. A total of 83 stocks increased. FPT became a phenomenon when it continued to be in the list of top five gainers, up VND 11,00 a share and was also the most traded stock with nearly 538,000 shares changed hands.
It was noteworthy that the increases in total trading volume and value in these sessions have proved that purchasing power is still strong and shows the investor confidence in the securities market.
Thus, the VN-Index ended this week with three gains and two losses, marking a net increase of 42.80 points.
In Hanoi, the HaSTC index closed the week at 257.34, up 2.39 points compared to the figure of last week.
At the weekend trading session, total trading volume was over 1.4 million for a total value of over VND 143 billion. Foreign investors’ transactions were also up sharply. They bought and sold a total of 739,500 shares for over VND 74.3 billion.
SSI continued to be the most traded stock with over 300,000 shares changed hands, followed by NTP (177,400) , BCC (156,300), ACB and BTS (over 100,000).
In the following sessions, the northern bourse will attract the investor interest as one of the leading insurance company, the PetroVietnam Insurance Corporation, officially listed its 50 million PVI shares on August 10.
Source: Nhan Dan
OTC market to be monitored
Delegates who attended a seminar recently organised by the State Securities Commission (SSC) in Hanoi all shared the view that it’s time the over-the-counter market in Vietnam should be monitored.
According to SSC’s draft plan, unlisted public companies will have to register and deposit their shares at the Securities Depository Centre through a securities company which is a depository member.
Investors who want to carry out transactions of OTC shares have to open accounts at a securities company. Transactions will still be carried out through negotiations but all selling and buying orders will have to be carried out through their accounts at securities companies. These orders will then be transferred to a new system for regulating OTC transactions at the Hanoi Securities Trading Centre, allowing brokers to gain access, find buyers and sellers and make deals for investors.
HaSTC will collect results of transactions and then transferred to the depository centre within the same day for accounts’ balance.
Regulations on transactions on the OTC market will not be as tight as those on listed shares. There are no regulations on reference price, price fluctuation margin and trading unit. Investors can buy and sell one kind of stock within one trading day and payment settlement date will be T + 3, like the settlement applied to current transactions of listed stocks.
Experts hope that trading OTC shares through brokerages will help reduce risks for investors.
The SSC plans to select some public companies working in the financial, banking, insurance and securities sectors to make a trial run of the new OTC procedures in November before operating officially in early 2008.
Representatives of securities companies including Bao Viet, Thang Long and SSI all welcomed the SSC’s plan. However, they voiced their concerns over the possibility that securities companies will be swindled of their commissions for OTC trades by investors if there are no regulations referencing prices and price fluctuation margins.
“If there is no price fluctuation margin, investors may collude with each other to set up lower prices in order to cheat on commission fees.
Some have proposed a price fluctuation margin of 20% while some others insist that there should be reference prices. This will help prevent artificial inflated transactions, protecting small, individual investors and ensure a basis calculating fees and commissions for securities companies.
A Bao Viet Securities representative also proposed a common par value of VND 10,000 for shares of public companies as of now the par value of shares of public companies varies from VND 10,000, VND 100,000, VND 1 million.
All delegates urged the SSC to pour proper investment into a modern infrastructural facilities and information technology for the monitoring of this OTC market so as to ensure that it operates smoothly, meeting the market’s development for at least five years.
They also asked SSC to encourage public companies to fulfill their responsibilities in information announcements to investors, ensuring fairness, publicity and transparency in securities market activities.
The monitoring of transactions of shares of unlisted public companies can be considered as one of the measures to strengthen the supervision of the securities market so as to help ensure a health and sustainable development of Vietnamese stock market.
Source: VNE
According to SSC’s draft plan, unlisted public companies will have to register and deposit their shares at the Securities Depository Centre through a securities company which is a depository member.
Investors who want to carry out transactions of OTC shares have to open accounts at a securities company. Transactions will still be carried out through negotiations but all selling and buying orders will have to be carried out through their accounts at securities companies. These orders will then be transferred to a new system for regulating OTC transactions at the Hanoi Securities Trading Centre, allowing brokers to gain access, find buyers and sellers and make deals for investors.
HaSTC will collect results of transactions and then transferred to the depository centre within the same day for accounts’ balance.
Regulations on transactions on the OTC market will not be as tight as those on listed shares. There are no regulations on reference price, price fluctuation margin and trading unit. Investors can buy and sell one kind of stock within one trading day and payment settlement date will be T + 3, like the settlement applied to current transactions of listed stocks.
Experts hope that trading OTC shares through brokerages will help reduce risks for investors.
The SSC plans to select some public companies working in the financial, banking, insurance and securities sectors to make a trial run of the new OTC procedures in November before operating officially in early 2008.
Representatives of securities companies including Bao Viet, Thang Long and SSI all welcomed the SSC’s plan. However, they voiced their concerns over the possibility that securities companies will be swindled of their commissions for OTC trades by investors if there are no regulations referencing prices and price fluctuation margins.
“If there is no price fluctuation margin, investors may collude with each other to set up lower prices in order to cheat on commission fees.
Some have proposed a price fluctuation margin of 20% while some others insist that there should be reference prices. This will help prevent artificial inflated transactions, protecting small, individual investors and ensure a basis calculating fees and commissions for securities companies.
A Bao Viet Securities representative also proposed a common par value of VND 10,000 for shares of public companies as of now the par value of shares of public companies varies from VND 10,000, VND 100,000, VND 1 million.
All delegates urged the SSC to pour proper investment into a modern infrastructural facilities and information technology for the monitoring of this OTC market so as to ensure that it operates smoothly, meeting the market’s development for at least five years.
They also asked SSC to encourage public companies to fulfill their responsibilities in information announcements to investors, ensuring fairness, publicity and transparency in securities market activities.
The monitoring of transactions of shares of unlisted public companies can be considered as one of the measures to strengthen the supervision of the securities market so as to help ensure a health and sustainable development of Vietnamese stock market.
Source: VNE
Investors unsatisfied with new investment law
The new Investment Law has been in effect for more than one year and it is the improved version of the two systems of investment laws on foreign and domestic investment. However, many investors, especially foreign ones, are not satisfied with many points in the new law.
The Ministry of Planning and Investment (MPI) has recently organised a meeting with domestic and foreign investors to discuss problems associated with the new Investment Law in HCM City.
At the meeting, Nguyen Van Lai, General Director of Tovecan joint venture company, said that though the new Investment Law had been in effect for more than one year his joint venture still couldn’t transform the joint venture under the regulations of the new law because of objective and subjective reasons.
According to the new Investment Law, the legal representative of a joint venture business must be the Chairman of the Board of Directors or the General Director and this person must reside in Vietnam.
Meanwhile, the Chairman of Tovecan, which includes three partners from Vietnam, Taiwan and Japan, is a foreigner who doesn’t live often in Vietnam. Normally, if the Chairman doesn’t reside in Vietnam and can’t play the role of the legal representative for the business, the General Director will replace him.
However, it is not simple for Tovecan because the firm’s General Director is a hired personnel and no employer dares to let his hired employee be his legal representative when regulations on legal representation are not clear.
Mr. Lai said that his company had sought documents related to the responsibility and duties of the legal representative so that the company could give this role to its hired General Director.
“However, we have searched for a long time but haven’t been able to find any regulation associated with it while the law only mentions the legal representative and doesn’t explain the responsibilities and duties of the legal representative,” Mr. Lai said.
The new Investment Law has created urgent matters for foreign investors. Tran Thanh Liem, from the Investment Promotion and Consulting Centre of Long An province, said that even domestic investors couldn’t stand it so how could foreign investors.
He said that foreign investors, especially overseas Vietnamese investors, always complained to him about the difference between the new Investment Law and the Land Law.
The new Investment Law allows foreign investors to re-lease land but this regulation can’t be implemented at localities. A foreign investor who has a project in the southern province of Long An ran between local departments to ask for an investment certificate but he was always refused.
The local agencies explained that the Land Law didn’t allow foreign investors who hire land and pay land rental fees on an annual basis to re-lease the land, unless they had paid all land rental fees.
Also related to land, overseas Vietnamese investors are also considered foreign subject and are permitted to hire land but not to be allocated with land like local investors, Mr. Liem said.
Overseas Vietnamese investors who previously registered for investment under the former Law on Domestic Investment Encouragement are still allocated land under the new Investment Law but those who previously registered investment under the former Law on Foreign Investment are not permitted to enjoy this privilege.
“The new Investment Law states that investment licencing must be within 15 days of the day businesses submit applications but in fact, this process is several months because of impediments from policy implementing agencies,” Mr. Liem said.
Pham Manh Dung, Head of the Legal Department under the MPI, said that there had been many complaints from investors since the new Investment Law was applied, mainly related to formalities.
In addition, the new Investment Law also conflicts with other laws and Vietnam’s WTO commitments and its implementation is sowing discontent among ministries and agencies.
Local licencing agencies are very confused about granting licences for finance and banking projects because the new law requests $10 million of investment capital but Vietnam’s WTO commitments request $25 million. This is one problem for the implementation of the new Investment Law related to finance and banking operations.
The MPI is compiling a decree guiding the implementation of the new Investment Law under Vietnam’s WTO commitments. At present, according to Mr. Dung, when licencing domestic and foreign projects, provinces and cities must give priority to perform WTO commitments while applying legal regulations.
Source: VNE
The Ministry of Planning and Investment (MPI) has recently organised a meeting with domestic and foreign investors to discuss problems associated with the new Investment Law in HCM City.
At the meeting, Nguyen Van Lai, General Director of Tovecan joint venture company, said that though the new Investment Law had been in effect for more than one year his joint venture still couldn’t transform the joint venture under the regulations of the new law because of objective and subjective reasons.
According to the new Investment Law, the legal representative of a joint venture business must be the Chairman of the Board of Directors or the General Director and this person must reside in Vietnam.
Meanwhile, the Chairman of Tovecan, which includes three partners from Vietnam, Taiwan and Japan, is a foreigner who doesn’t live often in Vietnam. Normally, if the Chairman doesn’t reside in Vietnam and can’t play the role of the legal representative for the business, the General Director will replace him.
However, it is not simple for Tovecan because the firm’s General Director is a hired personnel and no employer dares to let his hired employee be his legal representative when regulations on legal representation are not clear.
Mr. Lai said that his company had sought documents related to the responsibility and duties of the legal representative so that the company could give this role to its hired General Director.
“However, we have searched for a long time but haven’t been able to find any regulation associated with it while the law only mentions the legal representative and doesn’t explain the responsibilities and duties of the legal representative,” Mr. Lai said.
The new Investment Law has created urgent matters for foreign investors. Tran Thanh Liem, from the Investment Promotion and Consulting Centre of Long An province, said that even domestic investors couldn’t stand it so how could foreign investors.
He said that foreign investors, especially overseas Vietnamese investors, always complained to him about the difference between the new Investment Law and the Land Law.
The new Investment Law allows foreign investors to re-lease land but this regulation can’t be implemented at localities. A foreign investor who has a project in the southern province of Long An ran between local departments to ask for an investment certificate but he was always refused.
The local agencies explained that the Land Law didn’t allow foreign investors who hire land and pay land rental fees on an annual basis to re-lease the land, unless they had paid all land rental fees.
Also related to land, overseas Vietnamese investors are also considered foreign subject and are permitted to hire land but not to be allocated with land like local investors, Mr. Liem said.
Overseas Vietnamese investors who previously registered for investment under the former Law on Domestic Investment Encouragement are still allocated land under the new Investment Law but those who previously registered investment under the former Law on Foreign Investment are not permitted to enjoy this privilege.
“The new Investment Law states that investment licencing must be within 15 days of the day businesses submit applications but in fact, this process is several months because of impediments from policy implementing agencies,” Mr. Liem said.
Pham Manh Dung, Head of the Legal Department under the MPI, said that there had been many complaints from investors since the new Investment Law was applied, mainly related to formalities.
In addition, the new Investment Law also conflicts with other laws and Vietnam’s WTO commitments and its implementation is sowing discontent among ministries and agencies.
Local licencing agencies are very confused about granting licences for finance and banking projects because the new law requests $10 million of investment capital but Vietnam’s WTO commitments request $25 million. This is one problem for the implementation of the new Investment Law related to finance and banking operations.
The MPI is compiling a decree guiding the implementation of the new Investment Law under Vietnam’s WTO commitments. At present, according to Mr. Dung, when licencing domestic and foreign projects, provinces and cities must give priority to perform WTO commitments while applying legal regulations.
Source: VNE
Challenges await new State Bank governor
A lot of works and challenges are awaiting Mr Nguyen Van Giau, who has taken office as the new State Bank of Vietnam governor.
Vietnam’s banking system is welcoming the new leader, who is expected to carry out reform so that the banking system, the heart of the national economy, can have a stable and healthy rhythm. Mr Giau will have to deal with a lot of problems in his term as governor of the central bank.
The first task is to curb the inflation. Prices are escalating again after a long time of being restrained, partially because of the cost push and demand pull.
In the first seven months of the year, the inflation rate climbed to 6.19%, which foreshadows that the inflation rate for 2007 will not be less than 8%, threatening to push the CPI growth rate in 2007 to a record height in the last five years.
The most noteworthy thing is that the inflation rate keeps high when the excess of imports over exports remains high ($5.45bil, or 21% of total export turnover in the first 7 months of the year), which shows that the price imbalance cannot be settled by the excess of imports.
The exchange rate of the local currency, VND, against the greenback and other hard foreign currencies also needs to be set based on a suitable policy which aims to encourage exports, while it must not become a factor leading to high inflation.
In the current situation, when foreign portfolio investment is increasing sharply, the plan to make the local currency into a convertible currency needs thorough consideration. A convertible VND which revaluates precariously is not a good sign. This may foretell possible financial fluctuations (on the stock market), or monetary fluctuations (reduction in national foreign currency reserve), and foreign trade (reduction in exports) as well.
However, the short-term problems can be settled if suitable solutions can be found, and the existing problems can be tackled fundamentally. First of all, Vietnam needs a central bank which operates in the true sense of the word.
In fact, international institutions including the International Monetary Fund (IMF) and the World Bank (WB) all have suggested a more active role of the State Bank of Vietnam in building up and regulating the monetary policy, and taking responsibility for the implementation of the monetary policy, aiming to fulfill the economic targets set by the National Assembly and the government.
A healthy competitive business environment, an equal playing field is the thing commercial banks need, because this is the core factor for the development of the domestic banking system. It is necessary to have a new model for the central bank, and it is necessary to have a new legal framework for the new model. Amending the State Bank Law and Credit Institution Law should be the priority works in the action programme of the new governor.
Supervision and inspection over companies operating in the fields of securities, banking and insurance will be a big problem to deal with. To date, this work has been undertaken by three state management bodies. Experts have asked for the establishment of an organ which can gather the strength and power of the three bodies and take responsibility for the supervision and inspection work.
If the proposal is accepted, the central bank will escape from this work, thus having more time to focus on the monetary policy. This may be an important decision that the governor will consider in his term.
Returning to monetary issues, the new governor will have to deal with the so-called “cash economy”. It has taken a lot of money and time to deal with the problem, but no considerable improvement has been made.
Commercial banks nowadays are trying to expand their ATM networks, but the network only can show its effectiveness in a non-cash economy. In fact, Vietnamese people even use dollars and gold to make payments for their big transactions. The payment in cash makes the expenses of the national economy increasingly high. An economist said that Vietnam’s cash economy had created a barrier to the absorbability of foreign investment flows.
Credit quality will also be one of the pressing issues for the coming time. This will depend on the professionalism of banks, good risk management process, good operation of enterprises and suitable policies.
Source: VNE
Vietnam’s banking system is welcoming the new leader, who is expected to carry out reform so that the banking system, the heart of the national economy, can have a stable and healthy rhythm. Mr Giau will have to deal with a lot of problems in his term as governor of the central bank.
The first task is to curb the inflation. Prices are escalating again after a long time of being restrained, partially because of the cost push and demand pull.
In the first seven months of the year, the inflation rate climbed to 6.19%, which foreshadows that the inflation rate for 2007 will not be less than 8%, threatening to push the CPI growth rate in 2007 to a record height in the last five years.
The most noteworthy thing is that the inflation rate keeps high when the excess of imports over exports remains high ($5.45bil, or 21% of total export turnover in the first 7 months of the year), which shows that the price imbalance cannot be settled by the excess of imports.
The exchange rate of the local currency, VND, against the greenback and other hard foreign currencies also needs to be set based on a suitable policy which aims to encourage exports, while it must not become a factor leading to high inflation.
In the current situation, when foreign portfolio investment is increasing sharply, the plan to make the local currency into a convertible currency needs thorough consideration. A convertible VND which revaluates precariously is not a good sign. This may foretell possible financial fluctuations (on the stock market), or monetary fluctuations (reduction in national foreign currency reserve), and foreign trade (reduction in exports) as well.
However, the short-term problems can be settled if suitable solutions can be found, and the existing problems can be tackled fundamentally. First of all, Vietnam needs a central bank which operates in the true sense of the word.
In fact, international institutions including the International Monetary Fund (IMF) and the World Bank (WB) all have suggested a more active role of the State Bank of Vietnam in building up and regulating the monetary policy, and taking responsibility for the implementation of the monetary policy, aiming to fulfill the economic targets set by the National Assembly and the government.
A healthy competitive business environment, an equal playing field is the thing commercial banks need, because this is the core factor for the development of the domestic banking system. It is necessary to have a new model for the central bank, and it is necessary to have a new legal framework for the new model. Amending the State Bank Law and Credit Institution Law should be the priority works in the action programme of the new governor.
Supervision and inspection over companies operating in the fields of securities, banking and insurance will be a big problem to deal with. To date, this work has been undertaken by three state management bodies. Experts have asked for the establishment of an organ which can gather the strength and power of the three bodies and take responsibility for the supervision and inspection work.
If the proposal is accepted, the central bank will escape from this work, thus having more time to focus on the monetary policy. This may be an important decision that the governor will consider in his term.
Returning to monetary issues, the new governor will have to deal with the so-called “cash economy”. It has taken a lot of money and time to deal with the problem, but no considerable improvement has been made.
Commercial banks nowadays are trying to expand their ATM networks, but the network only can show its effectiveness in a non-cash economy. In fact, Vietnamese people even use dollars and gold to make payments for their big transactions. The payment in cash makes the expenses of the national economy increasingly high. An economist said that Vietnam’s cash economy had created a barrier to the absorbability of foreign investment flows.
Credit quality will also be one of the pressing issues for the coming time. This will depend on the professionalism of banks, good risk management process, good operation of enterprises and suitable policies.
Source: VNE
Thong Nhat Rubber Company to debut on main bourse Aug 22
Vietnam's Thong Nhat Rubber Company (TNC) will float all of its 19.25 million shares on the Ho Chi Minh City Stock Exchange next week, company officials said on Monday.
TNC shares would begin trading on Aug. 22 at a starting price of 50,000 dong ($3.1) each, valuing the firm at nearly $60 million, an official at Thong Nhat's equity department said.
Shares of the company, based in the southern province of Ba Ria-Vung Tau, were being traded in the unofficial markets at about 60,000 to 65,000 dong ($3.7-$4.0), about four times the average prices fetched in the firm's IPO in March 2006.
TNC produces and exports rubber latex from 2,090 hectares (5,200 acres) of plantations.
Natural rubber is Vietnam's second-largest foreign exchange earning farm product after rice. January to July's rubber exports eased 3.2 percent from a year ago to 344,000 tonnes, government figures show.
Vietnam, the world's fourth-largest rubber exporter after Thailand, Indonesia and Malaysia, aims to raise rubber output to 700,000 tonnes from 550,000 hectares (1.36 million acres) under plantation by 2010, including areas in Laos and Cambodia.
It has projected to export 780,000 tonnes of rubber this year, compared with 708,000 tonnes shipped last year, from 490,000 hectares under plantation.
Thong Nhat Rubber Co targets a flat net profit this year of about 23 billion dong ($1.42 million) as 2007's revenues were expected to remain unchanged from 2006 at 127 billion dong ($7.8 million), its prospectus showed.
Source: Reuters
TNC shares would begin trading on Aug. 22 at a starting price of 50,000 dong ($3.1) each, valuing the firm at nearly $60 million, an official at Thong Nhat's equity department said.
Shares of the company, based in the southern province of Ba Ria-Vung Tau, were being traded in the unofficial markets at about 60,000 to 65,000 dong ($3.7-$4.0), about four times the average prices fetched in the firm's IPO in March 2006.
TNC produces and exports rubber latex from 2,090 hectares (5,200 acres) of plantations.
Natural rubber is Vietnam's second-largest foreign exchange earning farm product after rice. January to July's rubber exports eased 3.2 percent from a year ago to 344,000 tonnes, government figures show.
Vietnam, the world's fourth-largest rubber exporter after Thailand, Indonesia and Malaysia, aims to raise rubber output to 700,000 tonnes from 550,000 hectares (1.36 million acres) under plantation by 2010, including areas in Laos and Cambodia.
It has projected to export 780,000 tonnes of rubber this year, compared with 708,000 tonnes shipped last year, from 490,000 hectares under plantation.
Thong Nhat Rubber Co targets a flat net profit this year of about 23 billion dong ($1.42 million) as 2007's revenues were expected to remain unchanged from 2006 at 127 billion dong ($7.8 million), its prospectus showed.
Source: Reuters
Credit Suisse, and Vinalines in $700 mln loan deal
Global bank Credit Suisse said on Monday it would arrange up to $700 million in credit for Vietnam National Shipping Lines (Vinalines), the first offshore loan for the Vietnamese firm.
Mai Van Phuc, President and CEO of the unlisted Vinalines, said the agreement was part of a memorandum under which it would get from Credit Suisse ratings advisory, fund raising and risk management services, Credit Suisse said in a statement.
The Financial Service Memorandum envisaged the bank to develop a financing programme of up to $1 billion for Vinalines, the first offshore loans for Vietnam's leading shipping firm.
In January Credit Suisse said it had linked up with Vinalines and Vinashin, a leading ship building firm, to work on financing programmes as it ramps up activity in Vietnam's fast-growing economy.
In June it was the rating adviser and sole arranger for a $600 million loan to Vinashin, the global bank said.
Credit Suisse expects Vietnam's economy to grow 9.2 percent this year, after estimated growth of 8.2 percent in 2006.
The forecast is above a Vietnamese government growth projection of 8.5 percent for the whole of 2007.
Source: Reuters
Mai Van Phuc, President and CEO of the unlisted Vinalines, said the agreement was part of a memorandum under which it would get from Credit Suisse ratings advisory, fund raising and risk management services, Credit Suisse said in a statement.
The Financial Service Memorandum envisaged the bank to develop a financing programme of up to $1 billion for Vinalines, the first offshore loans for Vietnam's leading shipping firm.
In January Credit Suisse said it had linked up with Vinalines and Vinashin, a leading ship building firm, to work on financing programmes as it ramps up activity in Vietnam's fast-growing economy.
In June it was the rating adviser and sole arranger for a $600 million loan to Vinashin, the global bank said.
Credit Suisse expects Vietnam's economy to grow 9.2 percent this year, after estimated growth of 8.2 percent in 2006.
The forecast is above a Vietnamese government growth projection of 8.5 percent for the whole of 2007.
Source: Reuters
Vietnam to cut petrol prices by 4 pct to curb inflation
The Vietnamese government has agreed to a plan to reduce gasoline prices by about 4 percent as it seeks to contain high inflation.
Consumer prices in July rose by 8.39 percent from a year earlier due to higher import costs, rising food prices and higher foreign investment. The government says inflation was still under control but tight measures should be taken to curb price hikes.
Prime Minister Nguyen Tan Dung approved a proposal by the Finance Ministry at a cabinet meeting on Sunday to cut retail gasoline prices, a government report said. It gave no timing for the reduction, but the move is expected soon. Prices of other fuel, including coal, and oil products such as diesel and fuel oil will stay unchanged, the report said.
Finance Ministry officials have said retail gasoline prices would be cut by about 500 dong (3 U.S. cents) per litre. The most popular 92-octane petrol grade would be priced at about 11,300 dong (70 U.S. cents) per litre, down from 11,800 dong now.
Despite having allowed distributors to set their own selling prices earlier this year, Hanoi still maintains tight control over fuel prices as it requires sellers to seek government approval before making any changes.
Prime Minister Dung also ordered government offices to lay out effective measures to achieve an economic growth of 8.5 percent for the whole of 2007 and keep inflation below the economic growth rate, the report said.
Last week Hanoi slashed import tariffs on a host of products including cars, steel and several food items such as beef and diary products as it moved to battle rising consumer prices.
Vietnam ranks as Southeast Asia's third largest crude producer after Indonesia and Malaysia but is forced to import most of its oil product needs as it lacks major refineries.
Source: Reuters
Consumer prices in July rose by 8.39 percent from a year earlier due to higher import costs, rising food prices and higher foreign investment. The government says inflation was still under control but tight measures should be taken to curb price hikes.
Prime Minister Nguyen Tan Dung approved a proposal by the Finance Ministry at a cabinet meeting on Sunday to cut retail gasoline prices, a government report said. It gave no timing for the reduction, but the move is expected soon. Prices of other fuel, including coal, and oil products such as diesel and fuel oil will stay unchanged, the report said.
Finance Ministry officials have said retail gasoline prices would be cut by about 500 dong (3 U.S. cents) per litre. The most popular 92-octane petrol grade would be priced at about 11,300 dong (70 U.S. cents) per litre, down from 11,800 dong now.
Despite having allowed distributors to set their own selling prices earlier this year, Hanoi still maintains tight control over fuel prices as it requires sellers to seek government approval before making any changes.
Prime Minister Dung also ordered government offices to lay out effective measures to achieve an economic growth of 8.5 percent for the whole of 2007 and keep inflation below the economic growth rate, the report said.
Last week Hanoi slashed import tariffs on a host of products including cars, steel and several food items such as beef and diary products as it moved to battle rising consumer prices.
Vietnam ranks as Southeast Asia's third largest crude producer after Indonesia and Malaysia but is forced to import most of its oil product needs as it lacks major refineries.
Source: Reuters
Incombank issues CDs to raise $200 mln
State-run Vietnam Industrial and Commercial Bank (Incombank), the country's fourth-largest lender by assets, said on Monday it would raise $200 million through issuing dollar-denominated certificates of deposit (CD).
The Hanoi-based unlisted Incombank said it began issuing the CDs to Vietnamese investors and foreign investors residing in the country over a two-month period last week.
The bank did not say what it would use the proceeds for.
It offered to pay 5.3 percent interest on 12-month dollar-denominated certificates, 5.4 percent for 18-month deposits and 5.5 percent for the 24-month CDs, following approval from the central bank.
Incombank's assets at the end of June rose 12 percent from the end of 2006 to 155 trillion dong ($9.6 billion).
The central bank had said it would take more dong out of the economy in the coming months through open market transactions to curb inflation, which accelerated in July to 8.39 percent from a year earlier.
Source: ReutersPOSCO plans $4.5 bln-steel mill in Vietnam
POSCO, the world's third-largest steel maker, is seeking approval from the Vietnamese government to build a $4.5 billion steel mill with a local partner, state media reported on Monday.
The Dau Tu (Investment) newspaper quoted a POSCO proposal to the Vietnamese government as saying it would form a venture with dominant state shipbuilder Vinashin in which Vinashin will hold a 30 percent stake in the mill.
The hot-rolled steel mill, located in Van Phong Bay in the south central coastal province of Khanh Hoa, adjacent to a key transhipment port project, will be completed by 2010, the report said.
The group has already started construction of a $1.13 billion cold-rolled steel plant, which is scheduled to begin production in 2009 in the southern coastal province of Ba Ria-Vung Tau.
Source: Reuters
The Dau Tu (Investment) newspaper quoted a POSCO proposal to the Vietnamese government as saying it would form a venture with dominant state shipbuilder Vinashin in which Vinashin will hold a 30 percent stake in the mill.
The hot-rolled steel mill, located in Van Phong Bay in the south central coastal province of Khanh Hoa, adjacent to a key transhipment port project, will be completed by 2010, the report said.
The group has already started construction of a $1.13 billion cold-rolled steel plant, which is scheduled to begin production in 2009 in the southern coastal province of Ba Ria-Vung Tau.
Source: Reuters
HCMC to sell 500 bln dong in urban bonds
An investment fund in Vietnam's Ho Chi Minh City will raise a combined 500 billion dong ($31 million) by auctioning three types of urban bonds later this week, the Hanoi's stock exchange said on Monday.
The Ho Chi Minh City Investment Fund for Urban Development Project told the exchange that it would auction on Thursday a 150 billion-dong bond with maturity on Aug. 29, 2012 and a 200 billion-dong bond for maturity on Aug. 20, 2017.
A third bond to be auctioned on the same day would raise 150 billion dong for maturity on Aug. 20, 2022.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It assigned a Ba3 rating for the country's dong debts.
Source: Reuters
The Ho Chi Minh City Investment Fund for Urban Development Project told the exchange that it would auction on Thursday a 150 billion-dong bond with maturity on Aug. 29, 2012 and a 200 billion-dong bond for maturity on Aug. 20, 2017.
A third bond to be auctioned on the same day would raise 150 billion dong for maturity on Aug. 20, 2022.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It assigned a Ba3 rating for the country's dong debts.
Source: Reuters
Friday, August 10, 2007
Footwear sector sets 2010 target of 6.2 billion USD
Viet Nam’s footwear sector is striving to attain an export turnover of 6.2 billion USD and produce 720 million pairs of shoes and sandals by 2010.
The targets were set in an overall plan for the sector’s development through 2010, approved by the Ministry of Industry and Trade.
The plan estimates total investment for the sector to achieve these target at over 9.1 trillion VND (572 million USD).
Ha Noi, Da Nang and Ho Chi Minh City will dominate the sector, with emphasis on developing the local leather industry and finding more capital sources.
Source: VNA
The targets were set in an overall plan for the sector’s development through 2010, approved by the Ministry of Industry and Trade.
The plan estimates total investment for the sector to achieve these target at over 9.1 trillion VND (572 million USD).
Ha Noi, Da Nang and Ho Chi Minh City will dominate the sector, with emphasis on developing the local leather industry and finding more capital sources.
Source: VNA
Bridge Sec says $13 mln Vietnam HASECO deal fails
South Korean brokerage Bridge Securities Co. Ltd. said on Friday its $13 million deal to buy a stake in Hai Phong Securities Co. (HASECO) (HPC) had broken down because the Vietnamese firm had not met certain preconditions to the sale.
Bridge Securities signed a contract on June 30 to purchase 20 percent of the Vietnamese securities firm for about 12 billion won ($12.9 million) by subscribing to new HASECO shares.
"Not alone lack of cooperation in the due diligence process on Hai Phong Securities, preconditions to participating in its rights offering had not been fully met," the South Korean company said in a filing to the Korea Exchange.
"Despite Bridge Securities' demand to correct them, Hai Phong had failed in fulfilling the contract, so we cancelled the share-purchase contract."
However, Bridge said it will continue efforts to team up with or buy Vietnamese brokerages, without elaborating.
Shares of Bridge Securities tumbled 7.67 percent to close at 6,740 won prior to the disclosure, as Seoul shares had their biggest fall in three years.
Source: Reuters
Bridge Securities signed a contract on June 30 to purchase 20 percent of the Vietnamese securities firm for about 12 billion won ($12.9 million) by subscribing to new HASECO shares.
"Not alone lack of cooperation in the due diligence process on Hai Phong Securities, preconditions to participating in its rights offering had not been fully met," the South Korean company said in a filing to the Korea Exchange.
"Despite Bridge Securities' demand to correct them, Hai Phong had failed in fulfilling the contract, so we cancelled the share-purchase contract."
However, Bridge said it will continue efforts to team up with or buy Vietnamese brokerages, without elaborating.
Shares of Bridge Securities tumbled 7.67 percent to close at 6,740 won prior to the disclosure, as Seoul shares had their biggest fall in three years.
Source: Reuters
Texas Pacific sells part of stake in Vietnam's FPT
Private equity firm Texas Pacific Group has sold part of its stake in top Vietnam technology firm FPT but remains a key investor in the company, FPT's chief executive said on Friday.
TPG and Intel Capital, a unit of Intel Corp., paid $36.5 million for a combined 10 percent stake last year in FPT, Vietnam's second-largest listed firm.
"TPG had sold part of their shares but TPG and Intel will continue to be our strategic partners to help us expand globally," Truong Gia Binh said said in a live chat on Friday on e-newspaper VnExpress to clarify FPT's recent share price decline.
Shares in the Hanoi-based FPT have lost nearly 40 percent since they debuted on Ho Chi Minh Stock Exchange on Dec. 13 last year, to 245,000 dong ($15.20), valuing the company at $1.38 billion.
Source: Reuters
TPG and Intel Capital, a unit of Intel Corp., paid $36.5 million for a combined 10 percent stake last year in FPT, Vietnam's second-largest listed firm.
"TPG had sold part of their shares but TPG and Intel will continue to be our strategic partners to help us expand globally," Truong Gia Binh said said in a live chat on Friday on e-newspaper VnExpress to clarify FPT's recent share price decline.
Shares in the Hanoi-based FPT have lost nearly 40 percent since they debuted on Ho Chi Minh Stock Exchange on Dec. 13 last year, to 245,000 dong ($15.20), valuing the company at $1.38 billion.
Source: Reuters
Banks rushing to issue bonds
In July 2007 alone, the total value of bonds issued by commercial banks reached VND21,500bil, including the VND3tril worth of bonds issued by the Bank for Investment and Development of Vietnam (BIDV).
Banks are seemingly rushing to issue bonds at this moment, and analysts say that this is the result of the decision by the central bank in May to require higher compulsory reserve ratio on bank deposits. The decision has certainly led to the higher cost of capital mobilisation, which explains why banks have to find another way to mobilise capital. Issuing bonds proves to be a good solution, because banks do not have to make compulsory reserves for the capital raised from bond issuances as they have to do for the capital raised from bank deposits.
Commercial banks are ready to pay high interest rates for the bonds in order to attract more buyers. In the long term, the interest rates for deposits are expected to increase gradually, thus making the high interest rates banks have to pay at this moment cheaper.
Banks are rushing to issue bonds also because the issuances may help raise their total assets. Big total assets can satisfy shareholders of banks while attracting more clients.
However, the problem lies in the fact that banks are still trying to raise more funds though their usable capital remains profuse. The financial reports of several banks show that the mobilised capital has increased sharply in the last time, while outstanding loans have not increased accordingly. Last month BIDV issued VND3tril worth of bonds. Though the bank has not declared detailed figures, sources said that the buyers of the bonds were mainly other commercial banks.
Some analysts think that banks are trying to issue bonds because they want more long-term capital. Currently, the banking system is the biggest lender. The stock market is still in its first stage of development, and only few enterprises can access this capital source. Only a few enterprises have raised funds by issuing bonds, including the HCM City Infrastructure Investment (CII), which issued VND500bil worth of bonds last month with the guarantee of VIB Bank and VISecurities. There are many reasons behind the underdevelopment of the bond market, but the biggest reason, according to Dang Doan Kien, Director General of VISecurities, is that Vietnam still lacks credit rating firms, which can release credit ratings of enterprises as bond issuers.
In fact, the move by banks to issue bonds in the last time has been encouraged by the State Bank of Vietnam and the Ministry of Finance. On August 1, Deputy Prime Minister Nguyen Sinh Hung signed a document, requesting relevant ministries to join forces to control inflation. The central bank has been asked to check monetary policies, control payment instruments, and urged to use open market tools in order to limit the supply of cash. Therefore, bond issuance, which helps withdraw cash from circulation, has been backed by the central bank.
Sources said that several other banks were seeking permission to issue bonds and the proposals would be accepted.
Despite a lot of efforts, the consumer price index (CPI) jumped high in the first seven months of the year to 6.19%, higher than last year’s same period level of 4.4%. Controlling inflation is the most important task for the remaining months of the year. However, analysts have warned that it will be very difficult to obtain the goal at the same time as stabilising the exchange rate to encourage exports. International economics has the theory of the ‘impossible trinity’, which means three things cannot be obtained at the same time: free capital movement, a fixed exchange rate, and an independent monetary policy.
Source: VNE
Banks are seemingly rushing to issue bonds at this moment, and analysts say that this is the result of the decision by the central bank in May to require higher compulsory reserve ratio on bank deposits. The decision has certainly led to the higher cost of capital mobilisation, which explains why banks have to find another way to mobilise capital. Issuing bonds proves to be a good solution, because banks do not have to make compulsory reserves for the capital raised from bond issuances as they have to do for the capital raised from bank deposits.
Commercial banks are ready to pay high interest rates for the bonds in order to attract more buyers. In the long term, the interest rates for deposits are expected to increase gradually, thus making the high interest rates banks have to pay at this moment cheaper.
Banks are rushing to issue bonds also because the issuances may help raise their total assets. Big total assets can satisfy shareholders of banks while attracting more clients.
However, the problem lies in the fact that banks are still trying to raise more funds though their usable capital remains profuse. The financial reports of several banks show that the mobilised capital has increased sharply in the last time, while outstanding loans have not increased accordingly. Last month BIDV issued VND3tril worth of bonds. Though the bank has not declared detailed figures, sources said that the buyers of the bonds were mainly other commercial banks.
Some analysts think that banks are trying to issue bonds because they want more long-term capital. Currently, the banking system is the biggest lender. The stock market is still in its first stage of development, and only few enterprises can access this capital source. Only a few enterprises have raised funds by issuing bonds, including the HCM City Infrastructure Investment (CII), which issued VND500bil worth of bonds last month with the guarantee of VIB Bank and VISecurities. There are many reasons behind the underdevelopment of the bond market, but the biggest reason, according to Dang Doan Kien, Director General of VISecurities, is that Vietnam still lacks credit rating firms, which can release credit ratings of enterprises as bond issuers.
In fact, the move by banks to issue bonds in the last time has been encouraged by the State Bank of Vietnam and the Ministry of Finance. On August 1, Deputy Prime Minister Nguyen Sinh Hung signed a document, requesting relevant ministries to join forces to control inflation. The central bank has been asked to check monetary policies, control payment instruments, and urged to use open market tools in order to limit the supply of cash. Therefore, bond issuance, which helps withdraw cash from circulation, has been backed by the central bank.
Sources said that several other banks were seeking permission to issue bonds and the proposals would be accepted.
Despite a lot of efforts, the consumer price index (CPI) jumped high in the first seven months of the year to 6.19%, higher than last year’s same period level of 4.4%. Controlling inflation is the most important task for the remaining months of the year. However, analysts have warned that it will be very difficult to obtain the goal at the same time as stabilising the exchange rate to encourage exports. International economics has the theory of the ‘impossible trinity’, which means three things cannot be obtained at the same time: free capital movement, a fixed exchange rate, and an independent monetary policy.
Source: VNE
OTC market in disorder
“Chaotic” is the word analysts use to describe the OTC market at this moment: few transactions are successful, while there is no trustworthy price reference.
Analysts have said that the OTC market is in the gloomiest period in its history. There are no benchmarks for stock prices. Investors are facing risks in liquidity. They are looking forward to the day when OTC transactions are put under the supervision of the State Securities Commission (SSC).
There exist big gaps in the referred prices of stocks shown on securities websites. A website said that EIB’s (Eximbank) price was now 7.05 times higher than the face value, while another said 6.9. Meanwhile, on a website specialising in OTC transactions, an investor offers EIB at 6.7 but still cannot find buyers.
PNB is offering Vietstock at 3.75, while on another website, an investor remains unsuccessful with his sale of PNB at 3.6.
Le Hiep, an investor on HSC trading floor, who also makes OTC transactions, said that he himself found it difficult to buy or sell now on the OTC market. “When the market was hot, investors always made deals very quickly, but now they find it hard to reach agreements on final prices,” Mr Hiep said.
He added that it sometimes takes several days to make a deal. Meanwhile, on the official bourse, the orders of investors can be implemented in just several tens of seconds or within a trading session at maximum, because investors can make quick decisions after considering the reference prices and the trading band.
Mr Hiep said that on the official bourse, when a listing company issued additional shares, the price of the company’s shares would be adjusted immediately in accordance with a set formula. Meanwhile, no one takes this work of calculating and adjusting the reference price on the OTC market. The data on OTC websites sometimes is not updated even when companies issue additional shares; therefore, investors do not know what prices would be suitable.
“The OTC market needs a conductor,” said Nguyen Dung, an investor, who has an account at ACBS.
As there is no benchmark for stock prices, many institutions have been trying to set prices for the market. They, under the cloak of investors, offer to buy shares at different price levels in order to explore the situation. The existence of such institutions has been making the market more chaotic.
In general, investors make transactions with the assistance of ‘brokers’. Investors inform the brokers the prices they want, and brokers will find the investors suitable for the deals.
Analysts say that OTC transactions are in a vicious circle. Investors, afraid of the risks in price and liquidity, are trying not to make transactions these days, making less and less transactions successful. Meanwhile, as there are few transactions, the risks investors have to face have become more serious.
Investors on the OTC market all expect SSC to set up a transaction management system, which will help make the market become healthier.
Tran Thanh Nam, a staff from the MHB Securities Company’s Brokerage Company, said that once the system became operational, transactions on the OTC market would be more bustling and orderly.
Source: VNE
Analysts have said that the OTC market is in the gloomiest period in its history. There are no benchmarks for stock prices. Investors are facing risks in liquidity. They are looking forward to the day when OTC transactions are put under the supervision of the State Securities Commission (SSC).
There exist big gaps in the referred prices of stocks shown on securities websites. A website said that EIB’s (Eximbank) price was now 7.05 times higher than the face value, while another said 6.9. Meanwhile, on a website specialising in OTC transactions, an investor offers EIB at 6.7 but still cannot find buyers.
PNB is offering Vietstock at 3.75, while on another website, an investor remains unsuccessful with his sale of PNB at 3.6.
Le Hiep, an investor on HSC trading floor, who also makes OTC transactions, said that he himself found it difficult to buy or sell now on the OTC market. “When the market was hot, investors always made deals very quickly, but now they find it hard to reach agreements on final prices,” Mr Hiep said.
He added that it sometimes takes several days to make a deal. Meanwhile, on the official bourse, the orders of investors can be implemented in just several tens of seconds or within a trading session at maximum, because investors can make quick decisions after considering the reference prices and the trading band.
Mr Hiep said that on the official bourse, when a listing company issued additional shares, the price of the company’s shares would be adjusted immediately in accordance with a set formula. Meanwhile, no one takes this work of calculating and adjusting the reference price on the OTC market. The data on OTC websites sometimes is not updated even when companies issue additional shares; therefore, investors do not know what prices would be suitable.
“The OTC market needs a conductor,” said Nguyen Dung, an investor, who has an account at ACBS.
As there is no benchmark for stock prices, many institutions have been trying to set prices for the market. They, under the cloak of investors, offer to buy shares at different price levels in order to explore the situation. The existence of such institutions has been making the market more chaotic.
In general, investors make transactions with the assistance of ‘brokers’. Investors inform the brokers the prices they want, and brokers will find the investors suitable for the deals.
Analysts say that OTC transactions are in a vicious circle. Investors, afraid of the risks in price and liquidity, are trying not to make transactions these days, making less and less transactions successful. Meanwhile, as there are few transactions, the risks investors have to face have become more serious.
Investors on the OTC market all expect SSC to set up a transaction management system, which will help make the market become healthier.
Tran Thanh Nam, a staff from the MHB Securities Company’s Brokerage Company, said that once the system became operational, transactions on the OTC market would be more bustling and orderly.
Source: VNE
Taiwan telco joins forces with Viettel Mobile
Chunghwa Telecom Co. Ltd, a telecom giant in Taiwan, is mulling teaming up with Viettel Mobile to tap the fast-growing Vietnamese market.
The joint venture, which will be capitalized at around US$3.9mil, will first focus on Internet Data Center business and Chunghwa may diversify operations into other service sectors.
Under Vietnamese law, Chunghwa's ownership in the venture will be capped at less than 50%.
An executive from Chunghwa Telecom said the venture, if translated into reality, would be the first overseas telecom investment by Chunghwa and that it showed the growth potential held by the local market where large numbers of Taiwan investors have set up shop.
He said his company had assessed the feasibility of the investment project for nearly a year.
Viettel sent its senior officials to Taiwan last month to work with Chunghwa over the plan.
"At first, we planned to join hands with MobiFone through the acquisition of a 29% stake in it. However, the Vietnamese mobile service provider had not decided when to sell shares to Chunghwa since the two reached an agreement in May this year," he added.
The Taiwan telecom provider opened a representative office in HCMC last year.
Chunghwa Telecom president Shyue-Ching Lu said at the opening ceremony last year that the most important mission of the HCMC office was to boost the company's services for Taiwanese enterprises in Vietnam.
The company wants to strengthen cooperative ties with local telecom service providers, he said.
Under Chunghwa's plan, it has set aside US$181mil for overseas investments this year. It spent about US$36mil in the first six months of this year.
With 4,000 base transceiver stations, 10mil subscribers, the military-owned Viettel is emerging as one of the country's largest mobile service providers.
The firm's market share grew to 35% from 27% in late 2006.
Viettel posted revenue of VND7tril (US$437.5mil) in the first half of the year, equivalent to the amount recorded in all of 2006 or about 23% of the post and telecom sector's total.
Source: VNE
The joint venture, which will be capitalized at around US$3.9mil, will first focus on Internet Data Center business and Chunghwa may diversify operations into other service sectors.
Under Vietnamese law, Chunghwa's ownership in the venture will be capped at less than 50%.
An executive from Chunghwa Telecom said the venture, if translated into reality, would be the first overseas telecom investment by Chunghwa and that it showed the growth potential held by the local market where large numbers of Taiwan investors have set up shop.
He said his company had assessed the feasibility of the investment project for nearly a year.
Viettel sent its senior officials to Taiwan last month to work with Chunghwa over the plan.
"At first, we planned to join hands with MobiFone through the acquisition of a 29% stake in it. However, the Vietnamese mobile service provider had not decided when to sell shares to Chunghwa since the two reached an agreement in May this year," he added.
The Taiwan telecom provider opened a representative office in HCMC last year.
Chunghwa Telecom president Shyue-Ching Lu said at the opening ceremony last year that the most important mission of the HCMC office was to boost the company's services for Taiwanese enterprises in Vietnam.
The company wants to strengthen cooperative ties with local telecom service providers, he said.
Under Chunghwa's plan, it has set aside US$181mil for overseas investments this year. It spent about US$36mil in the first six months of this year.
With 4,000 base transceiver stations, 10mil subscribers, the military-owned Viettel is emerging as one of the country's largest mobile service providers.
The firm's market share grew to 35% from 27% in late 2006.
Viettel posted revenue of VND7tril (US$437.5mil) in the first half of the year, equivalent to the amount recorded in all of 2006 or about 23% of the post and telecom sector's total.
Source: VNE
Why are companies named after FPT being established?
The Corporation for Financing and Promoting Technology (FPT) has recently established a series of companies named FPT, for example the FPT Fund Management JS Company (FPT Capital), FPT Securities JS Company (FPTS) and the FPT Commercial JS Bank, but currently, most FPT shareholders don’t know how much capital that the parent company contributed to these new firms.
According to anonymous sources, the parent FPT only contributed from 15 to 35% of chartered capital in those new companies. It means that from 65-85% of the chartered capital of companies named FPT came from a minority group of shareholders, some key officials of FPT.
When the parent FPT contributed such a small amount of money, can the subsidiary be named after the parent group?
Although contributing a small percentage of capital, which means that FPT group’s interests are also low, which is correlative to the contributed capital, the initial personnel of those subsidiaries are mainly officials from the parent FPT group. Thus, the parent FPT group helps build the framework for those firms that are named FPT.
The FPT brand is well known in Vietnam and in the world. This brand has been created by the whole staff of the parent FPT group and it belongs to the ownership of the whole shareholder body of FPT group. However, founding shareholders of new companies use the name of the parent FPT group to seek profit for themselves.
For example, the FPT Securities JS Company (FPTS) has the initial chartered capital of VND200 billion (US$12.5 million). The parent FPT group holds only 15% of this, or VND30 billion ($1.87 million). Though this company has not officially begun operating yet, its shares are offered for sale on the over-the-counter (OTC) market at a very high price – 8.5 times more than the basic price.
None of the many securities trading companies which were established at the same time as FPTS have such a high price for their stocks like that of FPTS. Could it be that the super price for FPTS stocks is thanks to the FPT brand?
With a market price that is 8.5 times more than the face price, the capital value of FPTS will reach VND1,700 billion ($106.25 million). Of the surplus of VND1,500 billion ($93.85 million) (subtracting the chartered capital already), the parent FPT group enjoys only 15% and the remaining 85% belongs to other shareholders in FPTS.
If it is true, the parent FPT group is only a shadow for the profit of a group of shareholders.
Of the chartered capital contributed by the parent FPT group to the new companies, small shareholders benefit little. The parent FPT group is owned by all shareholders so when this brand is taken advantage of, small shareholders will be the first to incur losses.
Many shareholders question: why doesn’t FPT group establish limited liability companies? If it establishes joint stock firms, why doesn’t it hold the majority of shares?
Reacting against this, many shareholders of FPT have sold shares in recent days, making the prices for FPT stocks fall down, causing a domino effect that has pulled the stock market down as well.
Source: VNE
According to anonymous sources, the parent FPT only contributed from 15 to 35% of chartered capital in those new companies. It means that from 65-85% of the chartered capital of companies named FPT came from a minority group of shareholders, some key officials of FPT.
When the parent FPT contributed such a small amount of money, can the subsidiary be named after the parent group?
Although contributing a small percentage of capital, which means that FPT group’s interests are also low, which is correlative to the contributed capital, the initial personnel of those subsidiaries are mainly officials from the parent FPT group. Thus, the parent FPT group helps build the framework for those firms that are named FPT.
The FPT brand is well known in Vietnam and in the world. This brand has been created by the whole staff of the parent FPT group and it belongs to the ownership of the whole shareholder body of FPT group. However, founding shareholders of new companies use the name of the parent FPT group to seek profit for themselves.
For example, the FPT Securities JS Company (FPTS) has the initial chartered capital of VND200 billion (US$12.5 million). The parent FPT group holds only 15% of this, or VND30 billion ($1.87 million). Though this company has not officially begun operating yet, its shares are offered for sale on the over-the-counter (OTC) market at a very high price – 8.5 times more than the basic price.
None of the many securities trading companies which were established at the same time as FPTS have such a high price for their stocks like that of FPTS. Could it be that the super price for FPTS stocks is thanks to the FPT brand?
With a market price that is 8.5 times more than the face price, the capital value of FPTS will reach VND1,700 billion ($106.25 million). Of the surplus of VND1,500 billion ($93.85 million) (subtracting the chartered capital already), the parent FPT group enjoys only 15% and the remaining 85% belongs to other shareholders in FPTS.
If it is true, the parent FPT group is only a shadow for the profit of a group of shareholders.
Of the chartered capital contributed by the parent FPT group to the new companies, small shareholders benefit little. The parent FPT group is owned by all shareholders so when this brand is taken advantage of, small shareholders will be the first to incur losses.
Many shareholders question: why doesn’t FPT group establish limited liability companies? If it establishes joint stock firms, why doesn’t it hold the majority of shares?
Reacting against this, many shareholders of FPT have sold shares in recent days, making the prices for FPT stocks fall down, causing a domino effect that has pulled the stock market down as well.
Source: VNE
Thursday, August 09, 2007
VN-Index, HaSTC-Index on the rise
Both the Ho Chi Minh City bourse and its Ha Noi-based counterpart experienced rises by the end of the August 9 trading session.
The VN-Index at the Ho Chi Minh City Stock Exchange (HOSE) climbed by 28.16 points or 3.09 percent from the previous session to close at 938.21 points.
Over 5.6 million shares, worth more than 553 billion VND, changed hands. The market saw 83 stocks gain, 14 stocks remain unchanged and 16 stocks fall.
Blue-chippers such as Financing and Promoting Technology (FPT), Saigon Thuong Tin Commercial Joint Stock Bank (STB), Vinh Son - Song Hinh Hydropower (VSH), Pha Lai Thermo Power (PPC), and Refrigeration Electrical Engineering (REE) were the most traded stocks.
BMC topped the list of big movers by increasing 17,000 VND to finish at 360,000 VND and was closely followed by Kinh Do Corp. (KDC) and Song Da Urban and Industrial Zone Investment and Development (SJS), up by 12,000 VND per unit.
Meanwhile, Hoang Gia International (RIC) experienced the highest price fall, down by 6,000 VND per unit, followed by Viettronics Tanbinh (VTB), Import-Export and Economic Cooperation (SAV) and Ben Tre Aquaproduct Import and Export (ABT).
On the morning of August 9, the PetroVietnam Drilling and Well Services (PVD) officially issued an additional 340,000 PVD shares on the bourse.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by 4.23 points to close at 258.98 points with 46 stocks gaining, 21 falling and 18 remained unchanged.
By closing, the market had more than 1.3 million shares, worth over 113.5 billion VND traded.
For the gains, it was Ho Cho Lon Real Estate (RCL) that led the charge up the ladder by tacking on 5,600 VND to its listed price of 208,000 VND. Construction No. 2 (VC2) was also among the top five gainers at the bourse.
Professional investors said that speculators’ activities are now dominating the stock exchange.
Source: VNA
The VN-Index at the Ho Chi Minh City Stock Exchange (HOSE) climbed by 28.16 points or 3.09 percent from the previous session to close at 938.21 points.
Over 5.6 million shares, worth more than 553 billion VND, changed hands. The market saw 83 stocks gain, 14 stocks remain unchanged and 16 stocks fall.
Blue-chippers such as Financing and Promoting Technology (FPT), Saigon Thuong Tin Commercial Joint Stock Bank (STB), Vinh Son - Song Hinh Hydropower (VSH), Pha Lai Thermo Power (PPC), and Refrigeration Electrical Engineering (REE) were the most traded stocks.
BMC topped the list of big movers by increasing 17,000 VND to finish at 360,000 VND and was closely followed by Kinh Do Corp. (KDC) and Song Da Urban and Industrial Zone Investment and Development (SJS), up by 12,000 VND per unit.
Meanwhile, Hoang Gia International (RIC) experienced the highest price fall, down by 6,000 VND per unit, followed by Viettronics Tanbinh (VTB), Import-Export and Economic Cooperation (SAV) and Ben Tre Aquaproduct Import and Export (ABT).
On the morning of August 9, the PetroVietnam Drilling and Well Services (PVD) officially issued an additional 340,000 PVD shares on the bourse.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by 4.23 points to close at 258.98 points with 46 stocks gaining, 21 falling and 18 remained unchanged.
By closing, the market had more than 1.3 million shares, worth over 113.5 billion VND traded.
For the gains, it was Ho Cho Lon Real Estate (RCL) that led the charge up the ladder by tacking on 5,600 VND to its listed price of 208,000 VND. Construction No. 2 (VC2) was also among the top five gainers at the bourse.
Professional investors said that speculators’ activities are now dominating the stock exchange.
Source: VNA
Hoa Phat Group to list shares in September
After petitioning the HCM City Securities Trading Centre, the Hoa Phat Group is now scheduled to be listed in September at the latest, group chairman Tran Dinh Long said.
Hoa Phat announced that it had completed an issuance of 22 million shares to strategic institutional shareholders to increase its chartered capital to VND1.32 trillion (US$82.5 million) from VND1.1 trillion ($68.75 million).
"Listing on the HCM City Stock Exchange will create favourable conditions for the company to attract investments in long-term development and benefit the shareholders," Long said.
Surplus capital of VND1.3 trillion ($81.2 million) from the issuance will be used to invest in projects such as an office building for rent, a new urban zone and a cement plant, according to Long.
More details about the issuance will be disclosed in the near future, he said.
In the first six months of the year, Hoa Phat netted a profit of VND254 billion ($15.8 million) on a revenue of VND2.38 trillion ($148.9 million), accounting for 55 per cent and 77 per cent, respectively, of the targets set for the year.
The three affiliates who contributed the most to the group’s revenue and profit were Hoa Phat Joint Stock Co, Hoa Phat Steel Pipe Co and Hoa Phat Interior Co.
By the year’s end, Hoa Phat will expand its business in refrigeration equipment to meet the market’s increasing demand in addition to boosting furniture production, which is the corporation’s strength.
Long expected that by the end of the year the group would generate a turnover of VND4.7 trillion ($293.7 million) and gain a profit of VND420 billion ($26.3 million), representing year-on-year rises of 35 per cent and 110 per cent, respectively.
Source: VNS
Hoa Phat announced that it had completed an issuance of 22 million shares to strategic institutional shareholders to increase its chartered capital to VND1.32 trillion (US$82.5 million) from VND1.1 trillion ($68.75 million).
"Listing on the HCM City Stock Exchange will create favourable conditions for the company to attract investments in long-term development and benefit the shareholders," Long said.
Surplus capital of VND1.3 trillion ($81.2 million) from the issuance will be used to invest in projects such as an office building for rent, a new urban zone and a cement plant, according to Long.
More details about the issuance will be disclosed in the near future, he said.
In the first six months of the year, Hoa Phat netted a profit of VND254 billion ($15.8 million) on a revenue of VND2.38 trillion ($148.9 million), accounting for 55 per cent and 77 per cent, respectively, of the targets set for the year.
The three affiliates who contributed the most to the group’s revenue and profit were Hoa Phat Joint Stock Co, Hoa Phat Steel Pipe Co and Hoa Phat Interior Co.
By the year’s end, Hoa Phat will expand its business in refrigeration equipment to meet the market’s increasing demand in addition to boosting furniture production, which is the corporation’s strength.
Long expected that by the end of the year the group would generate a turnover of VND4.7 trillion ($293.7 million) and gain a profit of VND420 billion ($26.3 million), representing year-on-year rises of 35 per cent and 110 per cent, respectively.
Source: VNS
Adjusting IPO roadmap to balance market
Investors and experts have hailed the Government’s adjustment of the initial public offering (IPO) roadmap by state-owned enterprises (SOEs) under the equitisation process, calling it a suitable reaction to market changes.
After several unsuccessful IPOs since March, Prime Minister Nguyen Tan Dung has asked the Ministry of Finance and the State Securities Commission (SSC) to adjust the IPO plan in order to balance supply and demand, reduce the threats of a volatile market and ensure investors’ interests as well as limit state budget losses.
As many as 40 enterprises have made IPOs with nearly 451 million auctioned shares since early this year, according to the Monetary Policy Department under the State Bank of Viet Nam.
In a short period of time, a large amount of shares were issued; whilst investment capital was limited, making auctions bored. The average share price of IPOs since March has risen little over the initial level. Even worse, withdrawal of investors has meant many enterprises had to conduct a second auction. Typical examples were Viet Nam Insurance (BVI) and the PV Insurance Company (PVI).
According to experts, while the securities market has not yet been recovered, if IPOs keep going on as scheduled, shares will be devaluated, causing losses to both the state and investors.
Nguyen Trong Dung, Vice Director of the Government Office’s Enterprise Reform Department revealed that to-be-equitised SOE capital scale is so huge that pumping more commodities into the securities market while supply is over demand will cause loss to the state.
Deputy Director of the Institute for Market and Price Research under the Ministry of Finance Ngo Tri Long agreed that the IPO roadmap applied to major SOEs should be adjusted.
On these ground, several commercial banks reconsidered their IPO itinerary.
From now to the year-end, four commercial banks, including the Bank for Investment and Development of Viet Nam (BIDV) and 21 SOEs are scheduled for equitisation, resulting in a large amount of money about to be injected into the market.
BIDV is preparing for its IPO, but the bank should think twice, no deadline is to be fixed and it is necessary to ensure an appropriate price which will not only benefit the State but also ensure employees’ interests, said BIDV General Director Tran Bac Ha.
This message was echoed by Minister of Finance Vu Van Ninh, who said enterprises’ IPOs should be based on the market’s demand. The process of SOE equitisation will continue to be conducted as defined in a Prime Minister decision, but to-be-equitised enterprises should take time preparing IPOs, the minister added.
In 2007, as many as 20 SOEs, including the Ha Noi Beer Corporation, the Sai Gon Beer Corporation, the Viet Nam Commercial Bank (VCB), the Mekong Delta House Development Bank, the House Development and Investment Corporation and the Ha Noi Urban Development Corporation are set for equitisation. The number should top 71 by 2010.
Source: VNA
After several unsuccessful IPOs since March, Prime Minister Nguyen Tan Dung has asked the Ministry of Finance and the State Securities Commission (SSC) to adjust the IPO plan in order to balance supply and demand, reduce the threats of a volatile market and ensure investors’ interests as well as limit state budget losses.
As many as 40 enterprises have made IPOs with nearly 451 million auctioned shares since early this year, according to the Monetary Policy Department under the State Bank of Viet Nam.
In a short period of time, a large amount of shares were issued; whilst investment capital was limited, making auctions bored. The average share price of IPOs since March has risen little over the initial level. Even worse, withdrawal of investors has meant many enterprises had to conduct a second auction. Typical examples were Viet Nam Insurance (BVI) and the PV Insurance Company (PVI).
According to experts, while the securities market has not yet been recovered, if IPOs keep going on as scheduled, shares will be devaluated, causing losses to both the state and investors.
Nguyen Trong Dung, Vice Director of the Government Office’s Enterprise Reform Department revealed that to-be-equitised SOE capital scale is so huge that pumping more commodities into the securities market while supply is over demand will cause loss to the state.
Deputy Director of the Institute for Market and Price Research under the Ministry of Finance Ngo Tri Long agreed that the IPO roadmap applied to major SOEs should be adjusted.
On these ground, several commercial banks reconsidered their IPO itinerary.
From now to the year-end, four commercial banks, including the Bank for Investment and Development of Viet Nam (BIDV) and 21 SOEs are scheduled for equitisation, resulting in a large amount of money about to be injected into the market.
BIDV is preparing for its IPO, but the bank should think twice, no deadline is to be fixed and it is necessary to ensure an appropriate price which will not only benefit the State but also ensure employees’ interests, said BIDV General Director Tran Bac Ha.
This message was echoed by Minister of Finance Vu Van Ninh, who said enterprises’ IPOs should be based on the market’s demand. The process of SOE equitisation will continue to be conducted as defined in a Prime Minister decision, but to-be-equitised enterprises should take time preparing IPOs, the minister added.
In 2007, as many as 20 SOEs, including the Ha Noi Beer Corporation, the Sai Gon Beer Corporation, the Viet Nam Commercial Bank (VCB), the Mekong Delta House Development Bank, the House Development and Investment Corporation and the Ha Noi Urban Development Corporation are set for equitisation. The number should top 71 by 2010.
Source: VNA
Top 10 companies with biggest market value
The Index Evaluation Council has made public the list of the companies which had the biggest total market value in the first six months of the year. The Corporation for Financing and Promoting Technologies (FPT) tops the list.
According to the Index Evaluation Council, the companies in the finance sector held 28% of the total listing market capitalisation value, followed by the companies in the consumer service sector, which held 13.51%. Consumer products and industries ranked third and fourth, while electricity and water ranked fifth. The oil and gas sector had the lowest market value, 4%.
FPT was the company with the biggest total market value, at VND29tril (nearly $1.8bil). After considering the latest financial reports, which showed that 60% of total turnover of the company came from mobile phone distribution, and referring to the standards on business classification now applied at New York Stock Exchange and HCM City Stock Exchange, the Index Evaluation Council decided to list FPT as a consumer service company instead of part of the technology sector.
Of the top 10 companies with biggest market value, Vinamilk ranked second with $1.2bil, and Sacombank ranked third with nearly $1.1bil. SJS ranked fifth on the list, and with the dominant turnover from real estate trading, the Index Evaluation Council decided to put SJS into the finance sector.
The 10 companies with biggest market value included four from the finance sector, which shows the advantages of the finance sector over other fields in terms of the working capitalisation value on the listing market.
In related news, the HCM City Stock Exchange is considering building up a new VN Index to international standards, which will be used for reference when Vietnam provides information to the world market, according to Tran Dac Sinh, Director General of HOSE.
Mr Sinh said that the new VN Index would only be used in international transactions, and be based on the data of several tens of the biggest listing companies.
HOSE began operating yesterday, August 8, the forerunner of which was the HCM City Securities Trading Centre.
Source: VNE
According to the Index Evaluation Council, the companies in the finance sector held 28% of the total listing market capitalisation value, followed by the companies in the consumer service sector, which held 13.51%. Consumer products and industries ranked third and fourth, while electricity and water ranked fifth. The oil and gas sector had the lowest market value, 4%.
FPT was the company with the biggest total market value, at VND29tril (nearly $1.8bil). After considering the latest financial reports, which showed that 60% of total turnover of the company came from mobile phone distribution, and referring to the standards on business classification now applied at New York Stock Exchange and HCM City Stock Exchange, the Index Evaluation Council decided to list FPT as a consumer service company instead of part of the technology sector.
Of the top 10 companies with biggest market value, Vinamilk ranked second with $1.2bil, and Sacombank ranked third with nearly $1.1bil. SJS ranked fifth on the list, and with the dominant turnover from real estate trading, the Index Evaluation Council decided to put SJS into the finance sector.
The 10 companies with biggest market value included four from the finance sector, which shows the advantages of the finance sector over other fields in terms of the working capitalisation value on the listing market.
In related news, the HCM City Stock Exchange is considering building up a new VN Index to international standards, which will be used for reference when Vietnam provides information to the world market, according to Tran Dac Sinh, Director General of HOSE.
Mr Sinh said that the new VN Index would only be used in international transactions, and be based on the data of several tens of the biggest listing companies.
HOSE began operating yesterday, August 8, the forerunner of which was the HCM City Securities Trading Centre.
Source: VNE
Techcombank says assets jump 43 pct
Technological and Commercial Bank, Vietnam's seventh largest, said on Thursday its assets were 43 percent higher at the end of July than at the end of 2006 at 25 trillion dong ($1.5 billion) as loans grew 41 percent.
The unlisted Hanoi-based bank, 15 percent owned by HSBC Holdings Plc., said in a statement it had a gross profit of 364 billion dong ($22.5 million) in the first seven months of this year.
The lender, also known as Techcombank, said loans grew to 12.43 trillion dong ($769 million) but did not give a net profit or a comparative figure for the same period last year.
Techcombank's gross profit in the first seven months of this year is already higher than its pre-tax earnings for the whole of 2006, which rose 24.7 percent from 2005 to 357 billion dong.
Deposits in the first seven months rose 49 percent from the end of last year to 22.58 trillion dong ($1.4 billion).
Last month, the central bank gave Techcombank permission to raise 4 trillion dong ($248 million) in a domestic bond issue this year.
Source: Reuters
The unlisted Hanoi-based bank, 15 percent owned by HSBC Holdings Plc., said in a statement it had a gross profit of 364 billion dong ($22.5 million) in the first seven months of this year.
The lender, also known as Techcombank, said loans grew to 12.43 trillion dong ($769 million) but did not give a net profit or a comparative figure for the same period last year.
Techcombank's gross profit in the first seven months of this year is already higher than its pre-tax earnings for the whole of 2006, which rose 24.7 percent from 2005 to 357 billion dong.
Deposits in the first seven months rose 49 percent from the end of last year to 22.58 trillion dong ($1.4 billion).
Last month, the central bank gave Techcombank permission to raise 4 trillion dong ($248 million) in a domestic bond issue this year.
Source: Reuters
BIDV insurer increases capital to 500 billion VND
The Finance Ministry has given the nod to the BIDV Insurance Company (BIC) to increase its charter capital 2.5 times to 500 billion VND (31.25 million USD), the company announced.
This will be the third time BIC has boosted their charter capital since early 2006. In April 2006, it raised capital to 100 billion VND and the figure was doubled six months later.
According to BIC, the Bank for Investment and Development of Viet Nam (BIDV) made the move to capital for BIC with the aim of improving its financial capacity and competitive edge as well as meeting demand of the insurance sector, which is forecast to boom in the near future.
BIC is currently among Viet Nam's top five non-life insurance companies.
Source: VNA
This will be the third time BIC has boosted their charter capital since early 2006. In April 2006, it raised capital to 100 billion VND and the figure was doubled six months later.
According to BIC, the Bank for Investment and Development of Viet Nam (BIDV) made the move to capital for BIC with the aim of improving its financial capacity and competitive edge as well as meeting demand of the insurance sector, which is forecast to boom in the near future.
BIC is currently among Viet Nam's top five non-life insurance companies.
Source: VNA
Agribank enters non-life insurance market
The Viet Nam Bank for Agriculture and Rural Development (Agribank) took part in Viet Nam’s non-life insurance market with the opening of the Agribank Insurance Joint Stock Company (ABIC) on August 8.
The company has a chartered capital of 160 billion VND (nearly 1 million USD) and includes four founding shareholders: Agribank holding 47.81 percent of stake, the National Reinsurance Joint Stock Company (10 percent), and the Agribank Financial Leasing Companies 1 and 2 (6.56 percent each).
Besides providing common non-life insurance products, ABIC will develop new products that benefit farmers and contribute to the rural development.
The company has set a target of attaining a revenue of 150 billion VND (9.37 million USD) in the three initial years and joining the top tens of leading insurance enterprises in Viet Nam after five years of operation.
Source: VNA
The company has a chartered capital of 160 billion VND (nearly 1 million USD) and includes four founding shareholders: Agribank holding 47.81 percent of stake, the National Reinsurance Joint Stock Company (10 percent), and the Agribank Financial Leasing Companies 1 and 2 (6.56 percent each).
Besides providing common non-life insurance products, ABIC will develop new products that benefit farmers and contribute to the rural development.
The company has set a target of attaining a revenue of 150 billion VND (9.37 million USD) in the three initial years and joining the top tens of leading insurance enterprises in Viet Nam after five years of operation.
Source: VNA
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