Investors once breathed a sigh of relief when the Government announced it would not apply measures to control foreign portfolio investment flow in the stock market. However, the market has become stirred up again by the news that the Government will enact the regulation of monitoring securities companies, investment funds and fund management companies through many restrictions.
The draft regulation has been facing strong opposition from the Vietnam Association of Financial Investors (VAFI), which said that 80% of investment funds would withdraw from Vietnam if the draft regulation was enacted.
Phung Khac Ke, Deputy Governor of the State Bank of Vietnam (SBV), said that every country applies certain technical barriers to monitor the market and make it develop on the right track or the way the Government wants. Every country wants to seek prestigious and capable investors, which can ensure the sustainable growth of the market. “These are technical barriers, not policy barriers,” Mr Ke stressed.
When asked if the majority of the investment funds would withdraw from the market, Mr Ke said that the regulation, if enacted, would not be retroactive, which means that the operational funds that cannot meet the new regulations would still be allowed to operate in Vietnam.
“Only the investment funds to be set up after the regulation is enacted would have to meet the requirements. I think that the State Securities Commission (SSC) also thinks this way,” Mr Ke said.
He added that the principle of non-retroactive effect would be suitable in this case, as investors have come to Vietnam in the early days of the stock market.
Truong Van Phuoc, Director of the State Bank of Vietnam’s Transaction Centre, said that the question that policy makers always raise when compiling regulations is which goals the policies aim to.
“If Vietnam wants to attract stable capital flow which can serve long-term development, it must have a suitable mechanism to filter capital. We have to, as Vietnamese people always say, pick our company,” Mr Phuoc said.
However, Mr Phuoc said that state management authorities should consider carefully the measures to be applied, adding that administrative orders sometimes do not bring the desired effects. “The market should be controlled by economic measures rather than administrative orders,” he said.
Source: VNE
Wednesday, March 21, 2007
Petrovietnam allowed to raise new capital
The Viet Nam Oil and Gas Group (PetroVietnam) has been granted permission by the prime minister to find new funds.
A governmental decision stipulates that the company can mobilise business capital by issuing bonds and certificates of deposit or by taking out loans with financial institutions.
The group has the right to decide its own investment projects and to set its own selling and buying prices – excluding public services, which are set by the State.
PetroVietnam is also legally permitted to set up, disband or transfer ownership of its subsidies, branches and representative offices at home and abroad.
Under the terms of the law on petroleum, PetroVietnam can directly produce and trade petroleum products and equipment.
The decision also stipulates that the government and the prime minister have the right to make decisions on establishment, reorganisation, disbandment and equitisation of PetroVietnam, according to the wishes of its management board and the ministers of industry, finance, and planning and investment. The decision also requests PetroVietnam to make its financial reports available at short notice.
The group wholly owns six subsidiaries and 50% of 11 other subsidiaries.
Source: VNS
A governmental decision stipulates that the company can mobilise business capital by issuing bonds and certificates of deposit or by taking out loans with financial institutions.
The group has the right to decide its own investment projects and to set its own selling and buying prices – excluding public services, which are set by the State.
PetroVietnam is also legally permitted to set up, disband or transfer ownership of its subsidies, branches and representative offices at home and abroad.
Under the terms of the law on petroleum, PetroVietnam can directly produce and trade petroleum products and equipment.
The decision also stipulates that the government and the prime minister have the right to make decisions on establishment, reorganisation, disbandment and equitisation of PetroVietnam, according to the wishes of its management board and the ministers of industry, finance, and planning and investment. The decision also requests PetroVietnam to make its financial reports available at short notice.
The group wholly owns six subsidiaries and 50% of 11 other subsidiaries.
Source: VNS
Securities firm to insure its brokerage services
The Dai Viet Securities Company (DVSC) is in discussions to insure its brokerage services, and could become the first in Viet Nam to obtain such insurance.
Bui Van Tuynh, DVSC general director, said he was in discussion with French-British insurance broker Gras Savoye Willis Vietnam to find an appropriate insurer.
"We’re extremely interested in this kind of insurance since it will protect both brokers and customers, ensuring stability in the market," Tuynh said. The Securities Law prescribed such cover, he added.
"If more securities firms join us in the insurance contract, the premium will be lower," he told the Viet Nam News on the sidelines of a seminar on securities brokerage insurance last week in which DVSC and Gras Savoye Willis briefed securities companies on the advantages of insurance.
The insurance normally covers brokers’ malpractice including inappropriate recommendations, misrepresentation, unauthorised trading, failing to follow instructions, and price manipulation.
There are almost 40 securities companies providing brokerage services in Viet Nam while Vietnamese insurance companies do not offer policies for stockbrokers. However, DVSC’s policy would be with a local company that is in turn reinsured by a foreign insurer, possibly acting as a catalyst for the introduction of this product in the country.
Source: VNS
Bui Van Tuynh, DVSC general director, said he was in discussion with French-British insurance broker Gras Savoye Willis Vietnam to find an appropriate insurer.
"We’re extremely interested in this kind of insurance since it will protect both brokers and customers, ensuring stability in the market," Tuynh said. The Securities Law prescribed such cover, he added.
"If more securities firms join us in the insurance contract, the premium will be lower," he told the Viet Nam News on the sidelines of a seminar on securities brokerage insurance last week in which DVSC and Gras Savoye Willis briefed securities companies on the advantages of insurance.
The insurance normally covers brokers’ malpractice including inappropriate recommendations, misrepresentation, unauthorised trading, failing to follow instructions, and price manipulation.
There are almost 40 securities companies providing brokerage services in Viet Nam while Vietnamese insurance companies do not offer policies for stockbrokers. However, DVSC’s policy would be with a local company that is in turn reinsured by a foreign insurer, possibly acting as a catalyst for the introduction of this product in the country.
Source: VNS
New securities broker starts at VSE
The Southeast Asia Commercial Joint Stock Bank Securities Company (Seabank) made its debut at the Ho Chi Minh City Securities Trading Centre on Mar. 20, becoming the 36th member at the stock exchange.
Seabank, with a statutory capital of 50 billion VND, engages in securities brokerage, trading and issuance underwriting in addition to providing financial and securities investment consultancy and other financial services.
The company is expected to increase its statutory capital by three-fold this year and by six-fold by 2008.
Source: VNA
Seabank, with a statutory capital of 50 billion VND, engages in securities brokerage, trading and issuance underwriting in addition to providing financial and securities investment consultancy and other financial services.
The company is expected to increase its statutory capital by three-fold this year and by six-fold by 2008.
Source: VNA
Foreign investors interested in real estate
Japan ’s Asahi newspaper said on Mar. 20 that Viet Nam ’s real estate market has developed strongly and become more attractive to foreign investors.
The demand for housing, offices and restaurants for lease in Viet Nam will see rapid increase as the country’s economy is expected to achieve an average annual growth rate of about 8% in the next decade. Viet Nam ’s entry into the World Trade Organisation (WTO) will provide a driving force for its economic development, the paper said.
The joint-stock IndoChina Land company, which has invested one billion US$ in Viet Nam ’s real estate market in the past ten years, plans to inject additional one billion US$ into new projects in the future.
IndoChina Land ’s office manager Rick Mayor-Smith said the company plans to invest in building offices and apartment buildings in the next 18-24 months. Viet Nam ’s high economic growth rate has helped accelerate the development of the country’s real estate market, he said.
Meanwhile, Singapore ’s third largest real estate development company Keppel Land has established a joint venture in Viet Nam to build 1,600 apartments with total investment capital of 106 billion US$. The Banyan Tree Holdings has intended investing 270mio US$ in building a resort in central Da Nang city.
The paper quoted Peter Mitchell, Chief Executive Officer of the Asian Public Real Estate Association, as saying that Viet Nam is a symbol of the growth and a motive force for other Asian economies.
Source: VNA
The demand for housing, offices and restaurants for lease in Viet Nam will see rapid increase as the country’s economy is expected to achieve an average annual growth rate of about 8% in the next decade. Viet Nam ’s entry into the World Trade Organisation (WTO) will provide a driving force for its economic development, the paper said.
The joint-stock IndoChina Land company, which has invested one billion US$ in Viet Nam ’s real estate market in the past ten years, plans to inject additional one billion US$ into new projects in the future.
IndoChina Land ’s office manager Rick Mayor-Smith said the company plans to invest in building offices and apartment buildings in the next 18-24 months. Viet Nam ’s high economic growth rate has helped accelerate the development of the country’s real estate market, he said.
Meanwhile, Singapore ’s third largest real estate development company Keppel Land has established a joint venture in Viet Nam to build 1,600 apartments with total investment capital of 106 billion US$. The Banyan Tree Holdings has intended investing 270mio US$ in building a resort in central Da Nang city.
The paper quoted Peter Mitchell, Chief Executive Officer of the Asian Public Real Estate Association, as saying that Viet Nam is a symbol of the growth and a motive force for other Asian economies.
Source: VNA
FDI record predicted
Viet Nam is likely to achieve a new record in attracting foreign direct investment (FDI) in 2007, said representatives from several major international financial groups at the second Viet Nam Investment Forum, which opened in Ha Noi on Mar. 19.
"Attracting between 15-17 billion US$ in FDI each year is within the country's reach," said General Director of the Vina Capital Fund, Don Lam. He revealed the company's plan to invest
400mio US$ in building a complex of shopping centres and apartments for lease in Viet Nam.
Director General of the Dragon Capital Fund, Dominic Scriven, shared Lam's view, adding that a series of big investment projects will be implemented in Viet Nam in the near future, including a five billion US$ project of the HonHai Precision Industry Ltd. Company of Taiwan.
General Director of the Hong Kong and Shanghai Banking Corporation (HSBC), Michael Geoghegan, noted propitious conditions making Viet Nam an appealing destination to foreign investors, citing the country's young population and an abundant labour force with improved skills. Additionally, he said, Vietnamese people are quick to take to hi-tech services like the Internet and mobile phones.
Viet Nam's accession to the World Trade Organisation (WTO) would bring in new opportunities for the country's economy, particularly in the volume of FDI, added Geoghegan.
Participants at the forum agreed that how Viet Nam could maintain this capital flow is a challenge facing the country as many difficulties still remain in implementing approved projects, such as low capital disbursement, cumbersome procedures and a lack of synchronicity in enforcing laws.
The Vina Capital director said how Viet Nam opens its door and implements its commitments will affect their decision to invest in Viet Nam.
Dragon Capital's chief Scriven also agreed that the flow of direct or indirect foreign investment depends on domestic factors, and whether a country could maintain the investment capital flow depends on the way it treats customers and partners. However, he said he is optimistic that the capital flow pouring into Viet Nam will continue increasing.
According to the latest economic freedom ratings published by the Fraser Institute and members of the Economic Freedom Network, Viet Nam is ranked 138 out of the 157 rated economies while China, 119 and Thailand, 50.
Therefore, investors pointed to the need for Viet Nam to promote capital management capacity, reform investment licensing process, and create a more open and transparent investment and business environment.
Source: VNA
"Attracting between 15-17 billion US$ in FDI each year is within the country's reach," said General Director of the Vina Capital Fund, Don Lam. He revealed the company's plan to invest
400mio US$ in building a complex of shopping centres and apartments for lease in Viet Nam.
Director General of the Dragon Capital Fund, Dominic Scriven, shared Lam's view, adding that a series of big investment projects will be implemented in Viet Nam in the near future, including a five billion US$ project of the HonHai Precision Industry Ltd. Company of Taiwan.
General Director of the Hong Kong and Shanghai Banking Corporation (HSBC), Michael Geoghegan, noted propitious conditions making Viet Nam an appealing destination to foreign investors, citing the country's young population and an abundant labour force with improved skills. Additionally, he said, Vietnamese people are quick to take to hi-tech services like the Internet and mobile phones.
Viet Nam's accession to the World Trade Organisation (WTO) would bring in new opportunities for the country's economy, particularly in the volume of FDI, added Geoghegan.
Participants at the forum agreed that how Viet Nam could maintain this capital flow is a challenge facing the country as many difficulties still remain in implementing approved projects, such as low capital disbursement, cumbersome procedures and a lack of synchronicity in enforcing laws.
The Vina Capital director said how Viet Nam opens its door and implements its commitments will affect their decision to invest in Viet Nam.
Dragon Capital's chief Scriven also agreed that the flow of direct or indirect foreign investment depends on domestic factors, and whether a country could maintain the investment capital flow depends on the way it treats customers and partners. However, he said he is optimistic that the capital flow pouring into Viet Nam will continue increasing.
According to the latest economic freedom ratings published by the Fraser Institute and members of the Economic Freedom Network, Viet Nam is ranked 138 out of the 157 rated economies while China, 119 and Thailand, 50.
Therefore, investors pointed to the need for Viet Nam to promote capital management capacity, reform investment licensing process, and create a more open and transparent investment and business environment.
Source: VNA
Vinalines to issue bonds
The Viet Nam National Shipping Lines (Vinalines) will increase its contacts with Moody's and Standard and Poors to find out its trust index to make preparations for the issuance of its bond on the international financial market.
To the target, Vinalines, the largest shipping company in the country, plans to set up its branches in Japan, the European Union and the US and other major export-import partners of
Viet Nam in order to collect market information and promote its trademark. In the meantime, Vinalines will expand its relations with international financial organisations and other foreign and domestic prestigious partners to mobilise capital for investment. In the near future, Vinalines will borrow around 200mio US$ from City Group of the US and 150 million USD from Deutsche Bank AG of Germany to invest in developing its vessel fleet, seaports and maritime services.
Of late, Credit Suisse of Switzerland agreed to provide 1 billion US$ in loan to Vinalines to develop its vessel fleet, build seaports' infrastructure facilities and develop maritime services.
According to Vinalines' 2006-2010 development plan and orientation for 2020 that have been approved by the Prime Minister, the company needs around 51 trillion VND with 33.7 trillion VND going for its vessel fleet development and 13.3 trillion VND for capital construction.
Source: VNA
To the target, Vinalines, the largest shipping company in the country, plans to set up its branches in Japan, the European Union and the US and other major export-import partners of
Viet Nam in order to collect market information and promote its trademark. In the meantime, Vinalines will expand its relations with international financial organisations and other foreign and domestic prestigious partners to mobilise capital for investment. In the near future, Vinalines will borrow around 200mio US$ from City Group of the US and 150 million USD from Deutsche Bank AG of Germany to invest in developing its vessel fleet, seaports and maritime services.
Of late, Credit Suisse of Switzerland agreed to provide 1 billion US$ in loan to Vinalines to develop its vessel fleet, build seaports' infrastructure facilities and develop maritime services.
According to Vinalines' 2006-2010 development plan and orientation for 2020 that have been approved by the Prime Minister, the company needs around 51 trillion VND with 33.7 trillion VND going for its vessel fleet development and 13.3 trillion VND for capital construction.
Source: VNA
Tuesday, March 20, 2007
VinaCapital buys Omni Saigon Hotel
The London-listed VinaCapital has bought a 70% stake in Ho Chi Minh City’s Omni Saigon Hotel for 22mio US$ as part of its strategy to invest in the country’s property market.
VinaCapital said on its website that its two London-listed funds, VinaLand and the Vietnam Opportunity Fund (VOF), had picked up respectively 52.5% and 17.5% of the shares.
The remaining stakes are owned by local company Vietnam YouthCo but it is not known who sold the 70% stake to VinaCapital.
At a recent news briefing in HCMC, VinaCapital’s director, Don Lam, said VinaLand had invested in the parent company of Omni Saigon but refused to provide further details.
In August last year, the two funds paid a combined 43mio US$ to acquire a 70% stake in the Hilton Opera Hanoi, which is among the most profitable hotels in the capital.
VinaCapital also holds a 29% stake in the century-old Sofitel Metropole Hanoi, another top hotel in the Vietnamese capital.
Established in 2003, VinaCapital now manages three funds with a total corpus of nearly 1 billion US$: the $600 million, London-listed VOF; 205mio US$ Vinaland; and 50mio US$ DFJ VinaCapital L.P. which invests in information and communication technology firms.
Source: Thanh Nien
VinaCapital said on its website that its two London-listed funds, VinaLand and the Vietnam Opportunity Fund (VOF), had picked up respectively 52.5% and 17.5% of the shares.
The remaining stakes are owned by local company Vietnam YouthCo but it is not known who sold the 70% stake to VinaCapital.
At a recent news briefing in HCMC, VinaCapital’s director, Don Lam, said VinaLand had invested in the parent company of Omni Saigon but refused to provide further details.
In August last year, the two funds paid a combined 43mio US$ to acquire a 70% stake in the Hilton Opera Hanoi, which is among the most profitable hotels in the capital.
VinaCapital also holds a 29% stake in the century-old Sofitel Metropole Hanoi, another top hotel in the Vietnamese capital.
Established in 2003, VinaCapital now manages three funds with a total corpus of nearly 1 billion US$: the $600 million, London-listed VOF; 205mio US$ Vinaland; and 50mio US$ DFJ VinaCapital L.P. which invests in information and communication technology firms.
Source: Thanh Nien
Robust economic growth in Vietnam will continue
Viet Nam is the new powerhouse of Southeast Asia, according to Renee Chen, economic specialist from CitiGroup, who predicted the nation’s ecomomic growth would continue at a robust 8% or more for the next two years, following the 8.2% pace set in 2006.
The growth drivers included rising foreign investment, export expansion and increased consumer spending, Chen said, and Viet Nam’s WTO entry would further boost foreign investor confidence by ensuring a more stable regulatory environment and more level playing field between foreign and domestic enterprises.
The benefits of being a WTO member would also include fewer restrictions on exports to other member economies, including lower tariffs and the removal of quotas on textile and garment shipments to the US and EU, Chen said.
WTO accession would also help lock Viet Nam onto the path of continuous reform, particularly in the banking sector and the role of State-owned enterprises in the market.
The services sector, including banking and selected retail distribution services, would be opened up to foreign ownership and competition. Foreign banks, for example, would be allowed to establish 100-per-cent foreign-owned subsidiary banks in Viet Nam, effective next month.
To prepare domestic banks for the competition and ensure their solvency, the State Bank of Viet Nam has imposed higher chartered capital requirements on domestic joint stock banks. Regulations now stipulate that the minimum statutory capital of a joint stock bank must be VND1 trillion by 2008 and VND3 trillion by 2010.
According to Charly Madan, general manager of CitiGroup Viet Nam, Vietnamese banks have also been issuing shares to foreign strategic shareholders as an efficient way to expand operational networks and develop modern technology and management expertise.
A secure future
The year 2006 also witnessed exceptional growth in the securities market. The number of listed companies on both the HCM City Securities Trading Centre and Ha Noi Securities Trading Centre surged from 32 to 193, and stock prices rose sharply. Total market capitalisation rose twenty-fold year-on-year to reach 14 billion US$ (22.7% of GDP) at the end of 2006, far beyond the official target set in 2003 of 10-15% of GDP by 2010.
The State Securities Commission now foresees that stock market capitalisation could increase to 30-40% of GDP by 2010. Counting 5 billion US$ in bonds, securities market capitalisation already equalled about 30% of GDP as of the end of 2006.
"We expect the securities markets to grow robustly over the next two years amid strong capital demand for development (estimated to exceed 140 billion US$ over 2006-10).
The equitisation of State-owned enterprises and commercial banks will provide substantial new fodder for the stock market; and arge inflows of foreign indirect investment will continue," said Madan.
The strong appetite of foreign investors for 10-year Vietnamese dong-dominated Government bonds in November 2006 attested to the possibilities for financing a growing share of Viet Nam’s capital needs through the debt market.
The State Bank widened the inter-bank trading band for Vietnamese dong to +/-0.5% from +/-0.25% in early January. Substantial foreign direct investment and increasing portfolio inflows have boosted US dollar supplies and added to domestic liquidity in late 2006.
Foreign reserve accumulations are a precautionary move designed to maintain export competitiveness. At about 12 billion US$ at of end 2006, Viet Nam’s forex reserves were small compared to large reserves built-up elsewhere in Asia, limiting the scope for significant appreciation of the Vietnamese dong in the near future.
A wider trading band to cope with dong appreciation pressures could see the dong departing from its past behaviour of depreciation to remain increasingly steady against the US dollar. We expect to see increasing flexibility in currency movement via further band widening and/or easing of restrictions on capital flows, moves consistent with the official target to make the Vietnamese dong fully convertible by 2010.
Sharp increases in foreign reserves and substantial capital inflows could pose medium-term risks of non-performing loans. Prudent measures should be taken to manage money flows and minimise risks in the capital markets. New regulations to tighten stock market-related lending, for example, by banning commercial banks from granting loans to their affiliate securities companies for securities trading, and measures to stabilise the overheated stock market, including a decision to temporarily hold the ceiling on foreign ownership in listed companies at 49%, were desired moves, Madan said.
While authorities have planned to set up a watchdog agency to supervise the financial markets, more needed to be done in particular to improve corporate governance and public disclosure of listed companies, he added.
Source: VNS
The growth drivers included rising foreign investment, export expansion and increased consumer spending, Chen said, and Viet Nam’s WTO entry would further boost foreign investor confidence by ensuring a more stable regulatory environment and more level playing field between foreign and domestic enterprises.
The benefits of being a WTO member would also include fewer restrictions on exports to other member economies, including lower tariffs and the removal of quotas on textile and garment shipments to the US and EU, Chen said.
WTO accession would also help lock Viet Nam onto the path of continuous reform, particularly in the banking sector and the role of State-owned enterprises in the market.
The services sector, including banking and selected retail distribution services, would be opened up to foreign ownership and competition. Foreign banks, for example, would be allowed to establish 100-per-cent foreign-owned subsidiary banks in Viet Nam, effective next month.
To prepare domestic banks for the competition and ensure their solvency, the State Bank of Viet Nam has imposed higher chartered capital requirements on domestic joint stock banks. Regulations now stipulate that the minimum statutory capital of a joint stock bank must be VND1 trillion by 2008 and VND3 trillion by 2010.
According to Charly Madan, general manager of CitiGroup Viet Nam, Vietnamese banks have also been issuing shares to foreign strategic shareholders as an efficient way to expand operational networks and develop modern technology and management expertise.
A secure future
The year 2006 also witnessed exceptional growth in the securities market. The number of listed companies on both the HCM City Securities Trading Centre and Ha Noi Securities Trading Centre surged from 32 to 193, and stock prices rose sharply. Total market capitalisation rose twenty-fold year-on-year to reach 14 billion US$ (22.7% of GDP) at the end of 2006, far beyond the official target set in 2003 of 10-15% of GDP by 2010.
The State Securities Commission now foresees that stock market capitalisation could increase to 30-40% of GDP by 2010. Counting 5 billion US$ in bonds, securities market capitalisation already equalled about 30% of GDP as of the end of 2006.
"We expect the securities markets to grow robustly over the next two years amid strong capital demand for development (estimated to exceed 140 billion US$ over 2006-10).
The equitisation of State-owned enterprises and commercial banks will provide substantial new fodder for the stock market; and arge inflows of foreign indirect investment will continue," said Madan.
The strong appetite of foreign investors for 10-year Vietnamese dong-dominated Government bonds in November 2006 attested to the possibilities for financing a growing share of Viet Nam’s capital needs through the debt market.
The State Bank widened the inter-bank trading band for Vietnamese dong to +/-0.5% from +/-0.25% in early January. Substantial foreign direct investment and increasing portfolio inflows have boosted US dollar supplies and added to domestic liquidity in late 2006.
Foreign reserve accumulations are a precautionary move designed to maintain export competitiveness. At about 12 billion US$ at of end 2006, Viet Nam’s forex reserves were small compared to large reserves built-up elsewhere in Asia, limiting the scope for significant appreciation of the Vietnamese dong in the near future.
A wider trading band to cope with dong appreciation pressures could see the dong departing from its past behaviour of depreciation to remain increasingly steady against the US dollar. We expect to see increasing flexibility in currency movement via further band widening and/or easing of restrictions on capital flows, moves consistent with the official target to make the Vietnamese dong fully convertible by 2010.
Sharp increases in foreign reserves and substantial capital inflows could pose medium-term risks of non-performing loans. Prudent measures should be taken to manage money flows and minimise risks in the capital markets. New regulations to tighten stock market-related lending, for example, by banning commercial banks from granting loans to their affiliate securities companies for securities trading, and measures to stabilise the overheated stock market, including a decision to temporarily hold the ceiling on foreign ownership in listed companies at 49%, were desired moves, Madan said.
While authorities have planned to set up a watchdog agency to supervise the financial markets, more needed to be done in particular to improve corporate governance and public disclosure of listed companies, he added.
Source: VNS
Bao Minh signs airline insurance deal
Bao Minh Insurance Corporation and the Viet Nam Insurance Corporation (Bao Viet ) on March 16 signed a 4 billion US$ insurance contract with Vietnam Airlines.
Over 2.5 billion US$ of the total will be spent on aircraft insurance while about 1.5 billion US$ will go towards liability insurance. Bao Minh is the lead company in the deal.
In the past few years, Vietnam Airlines has coordinated with leading national insurance companies such as Bao Minh and Bao Viet in insuring its planes and passengers under international standards.
Bao Minh, the second largest insurer in Viet Nam, listed its shares on the Ha Noi stock exchange in November, last year. It has forecasted revenues of 1.6 trillion VND (100mio US$) in 2007, a 6% increase over the 2006 figures. After-tax profits have been pegged at 110 billion VND (6.88mio US$).
Revenues last year reached more than 1.4 trillion VND (90.3mio US$). The re-insurance division was especially strong, earning 80.9 billion VND (5.05mio US$), up 58% from 2005.
Source: VNA
Over 2.5 billion US$ of the total will be spent on aircraft insurance while about 1.5 billion US$ will go towards liability insurance. Bao Minh is the lead company in the deal.
In the past few years, Vietnam Airlines has coordinated with leading national insurance companies such as Bao Minh and Bao Viet in insuring its planes and passengers under international standards.
Bao Minh, the second largest insurer in Viet Nam, listed its shares on the Ha Noi stock exchange in November, last year. It has forecasted revenues of 1.6 trillion VND (100mio US$) in 2007, a 6% increase over the 2006 figures. After-tax profits have been pegged at 110 billion VND (6.88mio US$).
Revenues last year reached more than 1.4 trillion VND (90.3mio US$). The re-insurance division was especially strong, earning 80.9 billion VND (5.05mio US$), up 58% from 2005.
Source: VNA
Indochina Capital's fund makes positive debut
Indochina Capital Vietnam Holdings Limited announced its successful debut of its shares listed on the London Stock Exchange (LSE) in Ha Noi on March 19.
Managed by Indochina Capital, the fund is worth 500mio US$, about 200mio US$ more than planned.
This includes a 50mio US$ green shoe option.
"This is much higher than out initial target of between 300 and 350mio US$," said Peter Ryder, chief executive officer of Indochina Capital.
The investment jump is in part thanks to investment from 10 institutions including Tudor Funds, Deutsche Bank Prop Desk and Citigroup Global Markets that committed 225mio US$ to the company before the fund's initial public offering (IPO).
"We are delighted that so many prominent foreign institutional investors have chosen to invest in the fund's IPO. We believe the fund is well positioned to be a long-term investor in Vietnamese companies," said Ryder.
The investment fund is Viet Nam's first to be listed on the LSE's main board. It went public on March 7 under the stock ticker ICV.L and is considered a closed-end company.
Credit Suisse insured the company's IPO with Mekong Securities Joint Stock Company brokering the deal.
Tung Kim Nguyen, co-chief investment officer of Indochina Capital, said the fund will invest carefully in a broad range of businesses like private joint-stock companies, State-owned companies that are equitised, joint ventures and fixed income securities.
"Many of the companies we are going to invest in have not yet listed in Ha Noi or Ho Chi Minh City, but have a chance of listing in the future," said Nguyen.
Established in Viet Nam in 1999, Indochina Capital also manages two real estate funds, worth a combined 300mio US$. In total, the company manages around 900mio US$ in equities and bonds as well as real estate funds.
Indochina Capital chose the London Stock Exchange because it was most feasible for the company and because of its high level of liquidity.
"While most of our investors are taking a medium or long-term approach, London's great volume of daily trading means that if they have to sell their shares, there will be greater chances to do so there," said Ryder.
Source: VNA
Managed by Indochina Capital, the fund is worth 500mio US$, about 200mio US$ more than planned.
This includes a 50mio US$ green shoe option.
"This is much higher than out initial target of between 300 and 350mio US$," said Peter Ryder, chief executive officer of Indochina Capital.
The investment jump is in part thanks to investment from 10 institutions including Tudor Funds, Deutsche Bank Prop Desk and Citigroup Global Markets that committed 225mio US$ to the company before the fund's initial public offering (IPO).
"We are delighted that so many prominent foreign institutional investors have chosen to invest in the fund's IPO. We believe the fund is well positioned to be a long-term investor in Vietnamese companies," said Ryder.
The investment fund is Viet Nam's first to be listed on the LSE's main board. It went public on March 7 under the stock ticker ICV.L and is considered a closed-end company.
Credit Suisse insured the company's IPO with Mekong Securities Joint Stock Company brokering the deal.
Tung Kim Nguyen, co-chief investment officer of Indochina Capital, said the fund will invest carefully in a broad range of businesses like private joint-stock companies, State-owned companies that are equitised, joint ventures and fixed income securities.
"Many of the companies we are going to invest in have not yet listed in Ha Noi or Ho Chi Minh City, but have a chance of listing in the future," said Nguyen.
Established in Viet Nam in 1999, Indochina Capital also manages two real estate funds, worth a combined 300mio US$. In total, the company manages around 900mio US$ in equities and bonds as well as real estate funds.
Indochina Capital chose the London Stock Exchange because it was most feasible for the company and because of its high level of liquidity.
"While most of our investors are taking a medium or long-term approach, London's great volume of daily trading means that if they have to sell their shares, there will be greater chances to do so there," said Ryder.
Source: VNA
Foreign money pours into property market
Real estate development in Ha Noi and Ho Chi Minh City is showing signs of a heat-up with foreign investment fluxing in major projects.
Director of the Ha Noi Service of Planning and Investment Trieu Dinh Phuc said foreign investors are rushing for licenses to build high-tech parks, financial-banking meccas, new residential quarters, hotels, apartments, offices for lease, commerical centres, restaurants and super-markets.
The biggest project underway is the 500mio US$ investment in a high service complex in the district of Cau Giay. The Keangnam group from the Republic of Korea recently won the license for construction in a fierce race with another developmental giant from Japan, the Kanagawa Union under the Riviera group.
Ha Noi's Cau Giay district was chosen by the Charmvit group from the Republic of Korea to build a five star hotel on an area of almost 2 ha at a cost of 80mio US$.
The investor has applied to increase the highrise to 30 storeys from its original design of 18, to tap the advantages of this location, which is close to the National Convention Centre, opposite Big C, a major market chain. It is also close to a number of new residential quarters.
Antara Koh Development Pte.Ltd from Singapore is interested in the development of a residential complex on the northern bank of the Red River. The complex will include houses, offices for rent, shops, hotels and other public facilities.
Source: VNA
Director of the Ha Noi Service of Planning and Investment Trieu Dinh Phuc said foreign investors are rushing for licenses to build high-tech parks, financial-banking meccas, new residential quarters, hotels, apartments, offices for lease, commerical centres, restaurants and super-markets.
The biggest project underway is the 500mio US$ investment in a high service complex in the district of Cau Giay. The Keangnam group from the Republic of Korea recently won the license for construction in a fierce race with another developmental giant from Japan, the Kanagawa Union under the Riviera group.
Ha Noi's Cau Giay district was chosen by the Charmvit group from the Republic of Korea to build a five star hotel on an area of almost 2 ha at a cost of 80mio US$.
The investor has applied to increase the highrise to 30 storeys from its original design of 18, to tap the advantages of this location, which is close to the National Convention Centre, opposite Big C, a major market chain. It is also close to a number of new residential quarters.
Antara Koh Development Pte.Ltd from Singapore is interested in the development of a residential complex on the northern bank of the Red River. The complex will include houses, offices for rent, shops, hotels and other public facilities.
Source: VNA
Morgan Stanley forming Vietnam securities JV
Wall Street's Morgan Stanley said Monday it is forming a securities joint venture with Vietnam's State Capital Investment Corp., tapping a booming market that is expected to see a wave of equitizations.
The Hanoi-based joint venture, to be named SCIC Morgan Stanley Securities, will provide investment banking products such as M&A advisory and capital markets underwriting, equity and debt sales and trading, as well as research.
The venture will apply for domestic licenses and expects to begin operations in the fourth quarter.
The country's benchmark stock index jumped 144.5% in 2006 and is up more than 50% so far this year, powered in part by an influx of foreign funds chasing economic growth of 8-plus% and a population of 84 million with burgeoning spending power.
Global investment banks have been circling Vietnam in hopes of taking part in the country's surging capital markets activity. Last month, Credit Suisse and Deutsche Bank were chosen to advise as consultants to two Vietnamese banks on their equitizations this year.
Analysts expect strong growth of Vietnam's securities market over the next two years, thanks to substantial inflows of foreign direct and portfolio investment following the country's accession to the World Trade Organization (WTO).
The number of listed companies on the Ho Chi Minh City Securities Trading Center and Hanoi
Securities Trading Center surged to a combined 193 from 32 in 2006.
The total market capitalization of the two bourses rose 20 fold year-on-year to reach US$14 billion, or 22.7% of the country's GDP in 2006.
The State Securities Commission expects the stock market capitalization to jump to 30 to 40% of GDP by 2010.
State-owned SCIC, a strategic investment arm of the government of Vietnam, was created in mid-2005 to take capital ownership of the country's 5,000-plus state-run enterprises, which accounted for about 70% of the country's tax revenues.
SCIC can raise funds through issuing bonds and fund investment certificates. It is authorized to make direct and indirect investments domestically or abroad in any form or sectors.
Morgan Stanley will appoint the joint venture's chief executive, a source familiar with the tie-up said, while SCIC will name the firm's chairman. Both companies, along with staff, will hold equity stakes in the combined firm.
Source: Thanh Nien
The Hanoi-based joint venture, to be named SCIC Morgan Stanley Securities, will provide investment banking products such as M&A advisory and capital markets underwriting, equity and debt sales and trading, as well as research.
The venture will apply for domestic licenses and expects to begin operations in the fourth quarter.
The country's benchmark stock index jumped 144.5% in 2006 and is up more than 50% so far this year, powered in part by an influx of foreign funds chasing economic growth of 8-plus% and a population of 84 million with burgeoning spending power.
Global investment banks have been circling Vietnam in hopes of taking part in the country's surging capital markets activity. Last month, Credit Suisse and Deutsche Bank were chosen to advise as consultants to two Vietnamese banks on their equitizations this year.
Analysts expect strong growth of Vietnam's securities market over the next two years, thanks to substantial inflows of foreign direct and portfolio investment following the country's accession to the World Trade Organization (WTO).
The number of listed companies on the Ho Chi Minh City Securities Trading Center and Hanoi
Securities Trading Center surged to a combined 193 from 32 in 2006.
The total market capitalization of the two bourses rose 20 fold year-on-year to reach US$14 billion, or 22.7% of the country's GDP in 2006.
The State Securities Commission expects the stock market capitalization to jump to 30 to 40% of GDP by 2010.
State-owned SCIC, a strategic investment arm of the government of Vietnam, was created in mid-2005 to take capital ownership of the country's 5,000-plus state-run enterprises, which accounted for about 70% of the country's tax revenues.
SCIC can raise funds through issuing bonds and fund investment certificates. It is authorized to make direct and indirect investments domestically or abroad in any form or sectors.
Morgan Stanley will appoint the joint venture's chief executive, a source familiar with the tie-up said, while SCIC will name the firm's chairman. Both companies, along with staff, will hold equity stakes in the combined firm.
Source: Thanh Nien
Stock-market review
Seventy-nine stocks gained and fifteen lost ground in HCMC with PPC (Pha Lai Power Joint Stock Company) leading the market in terms of trading volume, with over 1.3 million shares changing hands – 15.11% of the stock exchange.
The runner-up was REE (Refrigeration Electrical Engineering Corp) with 413,880 shares being traded.
BMC (Binh Dinh Minerals Joint Stock Company) – one among the most wanted penny stocks over the past time – became the big loser yesterday, sliding VND22,000 to VND432,000 per share.
Another small stock SFI (Sea & Air Freight International) lost VND9,000 to close at VND197,000 per unit.
During yesterday’s session, some blue chips stocks stayed put, like IT developer FPT, Petroleum technical services suppliers PVD, and telecoms materials trading company SAM among others.
Nguyen Ho Nam, general director of Sacombank Securities Company, said he saw nothing that in the cards that could destabilize the stock exchange this week.
Foreign investors were net sellers yesterday, unleashing 1.9 million shares, an increase of 60% over the previous session.
In all of last year, foreign investors pumped between 2 and 3 billion US$ into the local stock exchange.
According to the market regulator, the number of securities accounts of foreign investors registered only 1,700 out of the market’s total 100,000 as of late last year.
However, foreign investors’ securities holdings accounted for 25 – 30% of the market.
Local investors are picking up on some of the habits of their foreign counterparts, beginning to invest only in quality stocks, instead of purchasing without conducting research on company performance.
But there are still plenty of local investors who continue to succumb to the ‘herd’ mentality, meaning there is plenty of cash still being pumped into the market.
Source: Thanh Nien
The runner-up was REE (Refrigeration Electrical Engineering Corp) with 413,880 shares being traded.
BMC (Binh Dinh Minerals Joint Stock Company) – one among the most wanted penny stocks over the past time – became the big loser yesterday, sliding VND22,000 to VND432,000 per share.
Another small stock SFI (Sea & Air Freight International) lost VND9,000 to close at VND197,000 per unit.
During yesterday’s session, some blue chips stocks stayed put, like IT developer FPT, Petroleum technical services suppliers PVD, and telecoms materials trading company SAM among others.
Nguyen Ho Nam, general director of Sacombank Securities Company, said he saw nothing that in the cards that could destabilize the stock exchange this week.
Foreign investors were net sellers yesterday, unleashing 1.9 million shares, an increase of 60% over the previous session.
In all of last year, foreign investors pumped between 2 and 3 billion US$ into the local stock exchange.
According to the market regulator, the number of securities accounts of foreign investors registered only 1,700 out of the market’s total 100,000 as of late last year.
However, foreign investors’ securities holdings accounted for 25 – 30% of the market.
Local investors are picking up on some of the habits of their foreign counterparts, beginning to invest only in quality stocks, instead of purchasing without conducting research on company performance.
But there are still plenty of local investors who continue to succumb to the ‘herd’ mentality, meaning there is plenty of cash still being pumped into the market.
Source: Thanh Nien
Indochina Capital invests in tourism complex
London-listed Indochina Capital will join forces with a local partner to invest in upgrading a wharf and building a commercial-tourism complex in Da Nang City.
Following the provincial authorities’ approval, Indochina Land Holdings (ILH), an affiliate of Indochina Capital, is to set up a joint venture for the investment project.
Further information on the project was not given.
As proposed, the newly-upgraded yacht wharf will provide international-standard seawater sport and rescue activities in case of emergency.
And the commercial-tourism complex will comprise of villas and high-end apartments along side Son Tra – Dien Ngoc beach for rent or sale, along with shopping malls and other facilities.
Indochina Capital, listed with the ticker symbol ICV on the London Stock Exchange earlier this month, have investments in the country and region valued at over 1 billion US$.
In related news, the first modern commercial area in Da Nang city, the Riverside Mall invested by ILH is set to open in November.
The 6,600 sq.m mall is home to garment, cosmetics, footwear, home appliances and food retailers.
The mall is located on the first three floors of the multi-purpose project Indochina Riverside Towers.
An international real estate consultancy service firm, CBRE, the sole marketing agent for the project, said that 50% of the mall had already been booked by clients and the rate would go up to at least 80% by opening time.
Source: Thanh Nien
Following the provincial authorities’ approval, Indochina Land Holdings (ILH), an affiliate of Indochina Capital, is to set up a joint venture for the investment project.
Further information on the project was not given.
As proposed, the newly-upgraded yacht wharf will provide international-standard seawater sport and rescue activities in case of emergency.
And the commercial-tourism complex will comprise of villas and high-end apartments along side Son Tra – Dien Ngoc beach for rent or sale, along with shopping malls and other facilities.
Indochina Capital, listed with the ticker symbol ICV on the London Stock Exchange earlier this month, have investments in the country and region valued at over 1 billion US$.
In related news, the first modern commercial area in Da Nang city, the Riverside Mall invested by ILH is set to open in November.
The 6,600 sq.m mall is home to garment, cosmetics, footwear, home appliances and food retailers.
The mall is located on the first three floors of the multi-purpose project Indochina Riverside Towers.
An international real estate consultancy service firm, CBRE, the sole marketing agent for the project, said that 50% of the mall had already been booked by clients and the rate would go up to at least 80% by opening time.
Source: Thanh Nien
Sunday, March 18, 2007
Agribank and AB Bank form strategic alliance
The State-owned Agribank and joint stock An Binh Bank (AB Bank) will now play for the same team thanks to a strategic partnership agreement signed on Mar. 15.
Under the agreement, the two banks will assist each other with international settlements, credit matters, foreign currency activities and securities trading, among others.
"Agribank, one of Viet Nam 's largest banks, will support us with capital and credit line so we can fund major power industry projects," said AB Bank general director Luu Duc Khanh.
AB Bank will also be able to tap Agribank's wide network of around 2,000 branches and transaction offices natiowide. Agribank also has around 950 bank agents in 113 countries.
Additionally, Agribank will have the right to buy AB Bank's shares and invest in its affiliates.
As well, AB Bank plans to set up a real estate and financial leasing company soon.
Electricity of Vietnam (EVN) is a major shareholder in the joint stock bank, whose equity capital stands at 1,131 trillion VND (77mio US$).
Under the agreement, the two banks will assist each other with international settlements, credit matters, foreign currency activities and securities trading, among others.
"Agribank, one of Viet Nam 's largest banks, will support us with capital and credit line so we can fund major power industry projects," said AB Bank general director Luu Duc Khanh.
AB Bank will also be able to tap Agribank's wide network of around 2,000 branches and transaction offices natiowide. Agribank also has around 950 bank agents in 113 countries.
Additionally, Agribank will have the right to buy AB Bank's shares and invest in its affiliates.
As well, AB Bank plans to set up a real estate and financial leasing company soon.
Electricity of Vietnam (EVN) is a major shareholder in the joint stock bank, whose equity capital stands at 1,131 trillion VND (77mio US$).
Power shortage perils FDI target
A shortage of electricity in Vietnam could impede the country’s target of 20 billion US$ in Foreign Direct Investment this year, a Vietnamese expert has said.
Doctor Le Dang Doanh of the Ministry of Planning and Investment said plans for power cuts by dominant state-run utility firm Electricity of Vietnam (EVN) could serve to dampen investment possibilities.
EVN, which said last month Vietnam may face a shortfall of nearly 1 billion Kwh this dry season, is now purchasing around 2% of its total electricity output from China.
He suggested state-owned power firms go public as soon as possible so that they will be more efficient in generating electricity to avert the shortage.
Not only FDI, but the country’s targeted economic growth rate of 8.5% would unlikely to be realized if the shortage goes on.
He also said that stabilizing the overheated stock market – whose benchmark index has soared over 1,000 points – is critical towards fulfilling the two targets.
Source: Thanh Nien
Doctor Le Dang Doanh of the Ministry of Planning and Investment said plans for power cuts by dominant state-run utility firm Electricity of Vietnam (EVN) could serve to dampen investment possibilities.
EVN, which said last month Vietnam may face a shortfall of nearly 1 billion Kwh this dry season, is now purchasing around 2% of its total electricity output from China.
He suggested state-owned power firms go public as soon as possible so that they will be more efficient in generating electricity to avert the shortage.
Not only FDI, but the country’s targeted economic growth rate of 8.5% would unlikely to be realized if the shortage goes on.
He also said that stabilizing the overheated stock market – whose benchmark index has soared over 1,000 points – is critical towards fulfilling the two targets.
Source: Thanh Nien
Saturday, March 17, 2007
Consumer spending to reach 53 billion US$ in 2010
Consumer spending is estimated to reach 840-860 trillion VND (53 billion US$D) by 2010, according to the Ministry of Trade.
For the past 10 years, the figure has average about 70% of the country's GDP per year, the ministry said, a high level compared to neighbours like Singapore (55.9%), Malaysia (58.2%) and Thailand (67.7%).
The ministry predicted the ratio would remain at around 70% through 2020 as the nation gives the priority to promoting investment and exports.
Retail goods will account for about 80% of consumer spending during 2006-10, when average expenditure per capita is expected to grow at about 10.5% per year.
By 2010, the average consumer spending per capita will be 657,800 VND, climbing to 1.1 million VND in urban areas, compared to 537,400 VND in rural areas.
The ministry believed that demand for entertainment would increase along with disposable incomes. Spending on healthcare, housing, transportation, and education would also grow apace, the ministry opined.
Retail spending on luxury goods was predicted to increase 5%, with the nation witnessing a growing popularity of upscale and more fashionable shops and shopping centres.
Demand for electricity and consumer electronics goods was expected to expand in rural areas, the ministry said.
Source: VNA
For the past 10 years, the figure has average about 70% of the country's GDP per year, the ministry said, a high level compared to neighbours like Singapore (55.9%), Malaysia (58.2%) and Thailand (67.7%).
The ministry predicted the ratio would remain at around 70% through 2020 as the nation gives the priority to promoting investment and exports.
Retail goods will account for about 80% of consumer spending during 2006-10, when average expenditure per capita is expected to grow at about 10.5% per year.
By 2010, the average consumer spending per capita will be 657,800 VND, climbing to 1.1 million VND in urban areas, compared to 537,400 VND in rural areas.
The ministry believed that demand for entertainment would increase along with disposable incomes. Spending on healthcare, housing, transportation, and education would also grow apace, the ministry opined.
Retail spending on luxury goods was predicted to increase 5%, with the nation witnessing a growing popularity of upscale and more fashionable shops and shopping centres.
Demand for electricity and consumer electronics goods was expected to expand in rural areas, the ministry said.
Source: VNA
SMC inaugurates steels factory
The SMC Investment Trading Joint Stock Company (SMC.VSE) )inaugurated a 44 billion VND (2.75mio US$) steel factory in Phu My 1 Industrial Park (IP) in the southern coastal province of Ba Ria-Vung Tau on Mar. 16.
Covering 2.1 hectares, the SMC Phu My Steel Factory has an annual output of 30,000 tonnes of products which are used in construction, shipbuilding, bridge engineering and electrical industries.
SMC is also carrying out a project worth 200 billion VND (12.5mio US$) to build a mechanical manufacturing factory in the Phu My 1 IP.
The project is expected to become operational in late 2008 to meet growing demands for mechanical-steel products both at home and abroad.
The company sold 250,000 tonnes of steel last year and has targeted to hold 4.5-5% of the domestic market share by 2010 (around 450,000-500,000 tonnes).
Source: VNA
Covering 2.1 hectares, the SMC Phu My Steel Factory has an annual output of 30,000 tonnes of products which are used in construction, shipbuilding, bridge engineering and electrical industries.
SMC is also carrying out a project worth 200 billion VND (12.5mio US$) to build a mechanical manufacturing factory in the Phu My 1 IP.
The project is expected to become operational in late 2008 to meet growing demands for mechanical-steel products both at home and abroad.
The company sold 250,000 tonnes of steel last year and has targeted to hold 4.5-5% of the domestic market share by 2010 (around 450,000-500,000 tonnes).
Source: VNA
Friday, March 16, 2007
Changes in the OTC market
There will be a lot of changes relating to several hundreds share items being transacted on the OTC (over the counter) market, when public companies have to follow the regulations on registration, information exposure and securities deposit as required by the Securities Law.
According to the Securities Law, there are three groups of public companies, including the companies that 1. have offered shares to the public 2. have listed on the bourse and 3. have at least 100 shareholders, not including the professional financial institutions, and have the contributed chartered capital of VND 10bil (0.62mio US$) at least.
The companies belonging to the third group must register to the competent authorities within 90 days since the day of becoming public companies. With this regulation, nearly all enterprises and banks, that have shares traded on the OTC market, are public companies. The Ministry of Finance has hurried public securities to register in March.
Public companies must expose periodic and unscheduled information as required by the Securities Law, and must seek permissions when issuing shares, deposit securities at depository centres, and follow the principles on companies’ governance stipulated by the Enterprise Law and circulars by the Ministry of Finance.
The shareholders, who hold more than 5% of shares, must report when they make the transactions that can change the share ownership in public companies by 1%. Public companies will be punished if they violate the regulations of the Securities Law.
Once the shares are deposited at the depository centre, the transfer of shares to be carried out by the companies or agents (securities companies) would be considered unlawful. The shares will only be transferred after they are deposited, and the ownership of the buyers will only be recognised by depository centre.
The requirement on depositing shares would lead to the big change in the OTC market. From now on, the transactions of OTC shares would be simpler and quicker. OTC shares will also have codes and be transacted through the accounts opened at securities companies like listing shares.
It is expected that securities companies will pay more attention to providing services relating to OTC shares, while freelance brokers will have no job to do. Making transactions through the depository centre will also help successfully control the transactions of shareholders, which will serve the taxation in the future. It is estimated that before the law on PIT (personal income tax) comes into effect in 2009, there will be a big wave of share assignment to avoid tax.
Analysts said that public companies all will list on the bourse, as the responsibilities they must fulfil are similar to the responsibilities of listing companies.
Source: VEN
According to the Securities Law, there are three groups of public companies, including the companies that 1. have offered shares to the public 2. have listed on the bourse and 3. have at least 100 shareholders, not including the professional financial institutions, and have the contributed chartered capital of VND 10bil (0.62mio US$) at least.
The companies belonging to the third group must register to the competent authorities within 90 days since the day of becoming public companies. With this regulation, nearly all enterprises and banks, that have shares traded on the OTC market, are public companies. The Ministry of Finance has hurried public securities to register in March.
Public companies must expose periodic and unscheduled information as required by the Securities Law, and must seek permissions when issuing shares, deposit securities at depository centres, and follow the principles on companies’ governance stipulated by the Enterprise Law and circulars by the Ministry of Finance.
The shareholders, who hold more than 5% of shares, must report when they make the transactions that can change the share ownership in public companies by 1%. Public companies will be punished if they violate the regulations of the Securities Law.
Once the shares are deposited at the depository centre, the transfer of shares to be carried out by the companies or agents (securities companies) would be considered unlawful. The shares will only be transferred after they are deposited, and the ownership of the buyers will only be recognised by depository centre.
The requirement on depositing shares would lead to the big change in the OTC market. From now on, the transactions of OTC shares would be simpler and quicker. OTC shares will also have codes and be transacted through the accounts opened at securities companies like listing shares.
It is expected that securities companies will pay more attention to providing services relating to OTC shares, while freelance brokers will have no job to do. Making transactions through the depository centre will also help successfully control the transactions of shareholders, which will serve the taxation in the future. It is estimated that before the law on PIT (personal income tax) comes into effect in 2009, there will be a big wave of share assignment to avoid tax.
Analysts said that public companies all will list on the bourse, as the responsibilities they must fulfil are similar to the responsibilities of listing companies.
Source: VEN
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