The nation is witnessing an increasing trend towards mergers and acquisitions among both Vietnamese and foreign companies. One of the most important factors in ensuring the success of an M&A deal is for the acquiring company to conduct proper "due diligence," lawyer-speak for the process whereby the potential buyer evaluates the target company and its assets.
While lawyers have long focused due diligence efforts on tangible assets, including land, buildings, and equipment, little attention has been paid to intangible assets, such as intellectual property, which can in some instances be as or more valuable to the company’s operations and profitability.
Due diligence should extend to a wide range of intangible assets related to intellectual property, including business information, employee know-how, licence agreements, marketing and distribution agreements, domain names and even intellectual property which is not legally protectable, e.g., business ideas. Like customer "good will", these types of intangible assets can be important elements of a target enterprise’s value, although evaluation of their worth is not an easy task.
Intellectual property itself is a term that has traditionally referred to copyrights, patents, trademarks and trade secrets. In Viet Nam, the new Intellectual Property Law states that "intellectual property rights are the rights of organisations and individuals to their intellectual property, including copyrights and copyright-related rights, industrial property rights and rights to plant varieties" (Article 4.1). The concept of industrial property is further understood as including industrial designs, utility solutions, layout-designs of semi-conductor integrated circuits, trademarks, trade names, geographical indications, trade secrets, and rights to repression of unfair competition under the IP Law.
Most industrial property objects are only protectable under the IP Law if they are registered with the National Office of Intellectual Property. Well-known trademarks established on the basis of use, however, may be protected independent from registration procedures. However, a claim for protection of a well-known mark is complex, as it is normally made during cancellation or infringement proceedings. Therefore, the protection afforded by registration is more effective in most ordinary cases.
Unlike industrial property objects such as industrial designs and trademarks, objects which are protected by copyright do not need to be registered to afford protection. In this respect, Vietnamese law is consistent with international definitions of copyright which provide that copyright adheres in an original work of authorship published or fixed in a particular medium. Registration of the copyrighted work serves purposes of providing notice and evidence of the copyright.
When conducting due diligence into these types of intangibles, a lawyer must ask two fundamental questions: (1) what are the key rights and intangible assets needed to operate the business successfully? and (2) how can the business be assured the benefits of those rights and assets following the acquisition?
The lawyer then must confirm licences and ownership records, evaluate contracts and licensing agreements, and check for existing litigation and infringement notices.
Issues uncovered in the course of due diligence may significantly alter the terms of an acquisition. For example, if the prospective buyer discovers the target company’s trademark is in use by another firm and rights cannot be secured to the target company, this could lead to significant costs involving re-branding and re-working marketing and promotional materials. Such information, revealed in the course of due diligence, could dramatically affect the target company’s value in the eyes of the prospective investor.
IP rights owned by another division within the target group would also need to be assigned or licensed to the target if the acquiring investor wants to secure these rights. Lawyers conducting due diligence must also ensure target company employees have signed confidentiality agreements and agreed in writing to assign inventions to their employer. This prevents critical copyrights, patents, and trade secrets from leaving the company with departing employees. For instance, a company might sell off a software division, only for the buyer to learn that it owns the copyright in original software but not in any modifications after the developer became an independent contractor.
In addition to ensuring control of IP rights before and during a merger or acquisition, lawyers must also consider what happens after the sale. Following any acquisition, patents will usually need to be re-assigned, licence agreements may need amendment, and notices about the transfer of rights may need to be issued.
Depending on the type of intellectual property, the lawyer must determine whether a particular form of intangible asset is transferable as a matter of contract or under the IP Law. For instance, most industrial property objects such as trademarks, patents, and industrial designs may be transferable, but the moral rights in a copyrighted work cannot be transferred, except under certain circumstances, pursuant to the IP Law.
In short, investigating IP issues in the course of due diligence is of paramount importance during an acquisition. Though often time-consuming and resource-intensive, solid IP due diligence will lessen risk, make valuation more accurate, and give an investor a better understanding of the target company’s business.
Source: VNS
Thursday, August 30, 2007
Sabeco IPO progresses cautiously
Leading beverage maker Sabeco will continue with its equitisation, but may move slower than expected as it attempts to list shares during the current period of uncertainty on the stock exchange.
The company’s IPO is still slated for some time in the fourth quarter, and is still receiving a great deal of attention from investors.
Nguyen Quang Minh, the company’s general director, says equitisation progress depends heavily on market demand for shares, which has been poor of late.
Post and Telecommunications Investment and Construction JSC (PTIC), for example, only sold 297,400 of the 2 million shares up for grabs in an auction yesterday. Lacklustre demand has been a problem for a slue of other large-cap companies, including Bao Viet.
Sabeco, maker of Sai Gon Beer, plans to sell a 20 per cent stake in the company during its IPO, with no shares allocated to foreign strategic partners.
"Sabeco will still attract investors, even with the market in such a poor state," says a Kim Long Securities analyst. "It’s one of those companies that investors have been eagerly anticipating, given its solid earnings results over the past few years."
People, though, should not expect to make money off Sabeco shares quickly, given current market uncertainties, and should instead look to the company’s long term prospects, according to Kim Long Securities.
The stock price may not surge on its first day on the bourse, but shares should sell out during the book building phase of the IPO, according to VinaCapital and Bien Viet Securities.
Seasonally strong earnings among food manufacturers in the final months of the year will ensure demand for the shares, analysts say.
Sabeco plans to use the capital raised during the IPO for capacity expansion projects, which will likely help the company’s bottom line in the long term.
In addition, the local beer market is expanding aggressively, catching foreign investor interests, with annual consumption at around 18 litres a person.
"We are also considering several co-operation projects with foreign partners, which will help us advertise products abroad," says Minh, who predicts 2007 revenue will be around VND8 trillion.
"With promising expansion plans, positive earnings result and control over a significant portion of the local market, buying into Sabeco is a good move, especially with the market in such a gloomy state," the Kim Long Securities analyst said.
Source: VNS
The company’s IPO is still slated for some time in the fourth quarter, and is still receiving a great deal of attention from investors.
Nguyen Quang Minh, the company’s general director, says equitisation progress depends heavily on market demand for shares, which has been poor of late.
Post and Telecommunications Investment and Construction JSC (PTIC), for example, only sold 297,400 of the 2 million shares up for grabs in an auction yesterday. Lacklustre demand has been a problem for a slue of other large-cap companies, including Bao Viet.
Sabeco, maker of Sai Gon Beer, plans to sell a 20 per cent stake in the company during its IPO, with no shares allocated to foreign strategic partners.
"Sabeco will still attract investors, even with the market in such a poor state," says a Kim Long Securities analyst. "It’s one of those companies that investors have been eagerly anticipating, given its solid earnings results over the past few years."
People, though, should not expect to make money off Sabeco shares quickly, given current market uncertainties, and should instead look to the company’s long term prospects, according to Kim Long Securities.
The stock price may not surge on its first day on the bourse, but shares should sell out during the book building phase of the IPO, according to VinaCapital and Bien Viet Securities.
Seasonally strong earnings among food manufacturers in the final months of the year will ensure demand for the shares, analysts say.
Sabeco plans to use the capital raised during the IPO for capacity expansion projects, which will likely help the company’s bottom line in the long term.
In addition, the local beer market is expanding aggressively, catching foreign investor interests, with annual consumption at around 18 litres a person.
"We are also considering several co-operation projects with foreign partners, which will help us advertise products abroad," says Minh, who predicts 2007 revenue will be around VND8 trillion.
"With promising expansion plans, positive earnings result and control over a significant portion of the local market, buying into Sabeco is a good move, especially with the market in such a gloomy state," the Kim Long Securities analyst said.
Source: VNS
Wednesday, August 29, 2007
VN-Index drops below 900 points
Ho Chi Minh City’s VN-Index dropped 7.91 points or 0.87 percent to slump below the 900 point barrier by the end of trading on August 29.
Finishing up on 894.67 points, the exchange had little reason to cheer as only 23 stocks rallied for games at the session. 3.8 million shares worth 351.5 billion VND were traded during the morning run.
The Capital City’s HaSTC-Index fared a little better as it dipped slightly by 0.38 percent to 250.48 points.
However, the trade volume remained low as 640,000 shares worth over 54.9 billion VND exchanged hands on the day.
Source: VNA
Finishing up on 894.67 points, the exchange had little reason to cheer as only 23 stocks rallied for games at the session. 3.8 million shares worth 351.5 billion VND were traded during the morning run.
The Capital City’s HaSTC-Index fared a little better as it dipped slightly by 0.38 percent to 250.48 points.
However, the trade volume remained low as 640,000 shares worth over 54.9 billion VND exchanged hands on the day.
Source: VNA
Indochina Capital buys stake in BIM Seafood
The Ha Long Investment and Development Company (BIM Group) on Aug. 28 announced the establishment of the BIM seafood joint stock company (BIM Seafood), the first shrimp processing association model in Viet Nam that will see 20 percent stake go to Indochina Capital.
The signing of a strategic cooperation pact between BIM Seafood and Indochia Capital Vietnam Holdings (ICVH), will allow ICVH to play the role of strategic investor and provide business and financial aid to BIM Seafood.
According to Peter R. Ryder, General Director of Indochina Capital, BIM Seafood is well placed to become a leading seafood processing company in both the domestic and international markets.
BIM, established in 1994, is involved in infrastructure and real estate development, seafood, salt production and tourism. BIM Seafood will be a top to bottom model from breeder shrimp production to, shrimp farms, to processing factories and the company's distribution network.
Source: VNA
The signing of a strategic cooperation pact between BIM Seafood and Indochia Capital Vietnam Holdings (ICVH), will allow ICVH to play the role of strategic investor and provide business and financial aid to BIM Seafood.
According to Peter R. Ryder, General Director of Indochina Capital, BIM Seafood is well placed to become a leading seafood processing company in both the domestic and international markets.
BIM, established in 1994, is involved in infrastructure and real estate development, seafood, salt production and tourism. BIM Seafood will be a top to bottom model from breeder shrimp production to, shrimp farms, to processing factories and the company's distribution network.
Source: VNA
Real estate market heating up as securities fever cools
As the stock market keeps falling down and bank deposits cannot bring high profit, investors are turning to inject money in real estate projects, making the market warmer.
No price fever is occurring on the real estate market; prices are just moving up gradually as the demand is expected to increase as more Viet Kieu will return home to settle down when they can enjoy visa waivers, and foreigners are allowed to buy houses for accommodation.
House prices began escalating in March 2007. Mr Tan, the broker at the Van Quan Property Office in Ha Dong town, said that the prices of the villas in advantageous positions had seen two-fold increases, from VND3bil to VND6bil on average.
The prices of Vimeco’s apartments near Big C Supermart in Trung Hoa-Nhan Chinh new urban area have increased by VND500mil from the original prices. The owners of Vinaconex’s 34-storey apartments, who bought the apartments two years ago, are now leasing the apartments at $500-1,000.
Lam Van Chuc, Director of the HCM City-based Phuc Duc Real Estate Brokerage Company, said that buyers were queuing to buy luxury apartments on ‘beautiful land plots’ like An Phu-An Khanh, Huy Hoang and 21st Century.
The prices of houses and land in districts 2 and 9 in HCM City changed continuously last week. The land plots on Song Hanh Road, Hanoi highway and An Phu-An Khanh residential quarter, which were offered at VND30-32mil/sq m, have jumped to VND35mil/sq m. Meanwhile, the prices of Huy Hoang apartments, which were thought to have the lowest levels, have also soared to over VND20mil/sq m from the previous levels of VND17-19mil/sq m.
Meanwhile, more than 400 buyers had to join the lucky draw to find out the ones eligible to buy 37 apartments of PN-Techcons project on Hoa Su Road in Phu Nhuan district. Those, who won the right to purchase the apartments, now can resell the apartments, gaining the profit of VND1-2mil/sq m.
Investment in real estate market can bring stable profit, while the stock market proves to be quite ‘fragile’. That explains why many investors have returned to the real estate market, while securities investments do not bring fat profit any more.
Though the supply has improved, it cannot meet the increased demand for accommodation. Lang-Hoa Lac road in Hanoi is nearly occupied with residential quarters. Neighbouring areas of Hanoi and HCM City are also full of residential quarters. Especially, investors accept buying projects that remain on paper. Investors with long-term vision are now seeking land plots in Vinh Phuc, Ha Tay and Bac Ninh – 25 km from the centre of Hanoi.
The demand for accommodation is forecast to increase in the near future thanks to open policies. Nguyen Manh Ha, Head of the Housing Management Department under the Ministry of Construction, said that the ministry had submitted to the government a plan on allowing foreigners living and working in Vietnam to buy houses for accommodation. It is estimated that some 21,000 foreigners will be eligible to buy houses in Vietnam once the government gives the nod on the plan.
Source: VNE
No price fever is occurring on the real estate market; prices are just moving up gradually as the demand is expected to increase as more Viet Kieu will return home to settle down when they can enjoy visa waivers, and foreigners are allowed to buy houses for accommodation.
House prices began escalating in March 2007. Mr Tan, the broker at the Van Quan Property Office in Ha Dong town, said that the prices of the villas in advantageous positions had seen two-fold increases, from VND3bil to VND6bil on average.
The prices of Vimeco’s apartments near Big C Supermart in Trung Hoa-Nhan Chinh new urban area have increased by VND500mil from the original prices. The owners of Vinaconex’s 34-storey apartments, who bought the apartments two years ago, are now leasing the apartments at $500-1,000.
Lam Van Chuc, Director of the HCM City-based Phuc Duc Real Estate Brokerage Company, said that buyers were queuing to buy luxury apartments on ‘beautiful land plots’ like An Phu-An Khanh, Huy Hoang and 21st Century.
The prices of houses and land in districts 2 and 9 in HCM City changed continuously last week. The land plots on Song Hanh Road, Hanoi highway and An Phu-An Khanh residential quarter, which were offered at VND30-32mil/sq m, have jumped to VND35mil/sq m. Meanwhile, the prices of Huy Hoang apartments, which were thought to have the lowest levels, have also soared to over VND20mil/sq m from the previous levels of VND17-19mil/sq m.
Meanwhile, more than 400 buyers had to join the lucky draw to find out the ones eligible to buy 37 apartments of PN-Techcons project on Hoa Su Road in Phu Nhuan district. Those, who won the right to purchase the apartments, now can resell the apartments, gaining the profit of VND1-2mil/sq m.
Investment in real estate market can bring stable profit, while the stock market proves to be quite ‘fragile’. That explains why many investors have returned to the real estate market, while securities investments do not bring fat profit any more.
Though the supply has improved, it cannot meet the increased demand for accommodation. Lang-Hoa Lac road in Hanoi is nearly occupied with residential quarters. Neighbouring areas of Hanoi and HCM City are also full of residential quarters. Especially, investors accept buying projects that remain on paper. Investors with long-term vision are now seeking land plots in Vinh Phuc, Ha Tay and Bac Ninh – 25 km from the centre of Hanoi.
The demand for accommodation is forecast to increase in the near future thanks to open policies. Nguyen Manh Ha, Head of the Housing Management Department under the Ministry of Construction, said that the ministry had submitted to the government a plan on allowing foreigners living and working in Vietnam to buy houses for accommodation. It is estimated that some 21,000 foreigners will be eligible to buy houses in Vietnam once the government gives the nod on the plan.
Source: VNE
Banks continue funding securities investments
While many joint stock banks have announced ceasing loaning to securities investors, other banks are trying to push up this operation, which proves to bring high profit.
SeABank Hanoi, for example, on August 20 announced that it would cooperate with SeABank Securities Company, belonging to the bank, to provide loans to securities investors with the mortgages being the securities themselves.
The bank will lend VND50mil at minimum for every deal and for six months. However, the bank requires high interest rates on the loans. For example, the interest rate for a six-month term loan is 1.1% per month. In case investors want to extend the loans, they would have to pay 1.32% per month. The borrowers will have to pay 1.65% a month for overdue debts. Moreover, they have to pay VND200,000 per deal for the so-called ‘credit management fee’.
The mortgage assets for the loans will be the securities items to be selected by SeABS, which are being listed on HCM City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HASTC). The market value of the mortgaged securities items will be the average closing price of the latest trading sessions. Borrowers are allowed to sell mortgaged securities, and right after the sale, they have to pay debts to the bank.
The Bank for Agriculture and Rural Development (Agribank) HCM City Branch has also signed contracts with Agribank Securities Company and Au Viet Securities Company to provide loans to stock investors. With Agribank, clients are allowed to borrow sums of money equivalent to 50% of shares’ value, and for 12 months at maximum.
It is said that Vietcombank and other state-owned banks, which have a percentage of loans for securities investments below the ceiling level of 3% of total outstanding loans, are trying to attract clients – securities investors – though they announced before that they would not pay much attention to this operation.
Loaning for securities investments proves to be a profitable business, and it is understandable why no joint stock bank refuses funding stock investment deals. These loans have been accounting for 10-40% of total outstanding loans of commercial banks.
The central bank has tried to limit the loaning for securities investments by issuing Instruction No 3, requesting banks to lower their outstanding loans for stock investments to less than 3% of banks’ total outstanding loans. The deadline for the implementation of the decision is December 31, 2007.
Source: VNE
SeABank Hanoi, for example, on August 20 announced that it would cooperate with SeABank Securities Company, belonging to the bank, to provide loans to securities investors with the mortgages being the securities themselves.
The bank will lend VND50mil at minimum for every deal and for six months. However, the bank requires high interest rates on the loans. For example, the interest rate for a six-month term loan is 1.1% per month. In case investors want to extend the loans, they would have to pay 1.32% per month. The borrowers will have to pay 1.65% a month for overdue debts. Moreover, they have to pay VND200,000 per deal for the so-called ‘credit management fee’.
The mortgage assets for the loans will be the securities items to be selected by SeABS, which are being listed on HCM City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HASTC). The market value of the mortgaged securities items will be the average closing price of the latest trading sessions. Borrowers are allowed to sell mortgaged securities, and right after the sale, they have to pay debts to the bank.
The Bank for Agriculture and Rural Development (Agribank) HCM City Branch has also signed contracts with Agribank Securities Company and Au Viet Securities Company to provide loans to stock investors. With Agribank, clients are allowed to borrow sums of money equivalent to 50% of shares’ value, and for 12 months at maximum.
It is said that Vietcombank and other state-owned banks, which have a percentage of loans for securities investments below the ceiling level of 3% of total outstanding loans, are trying to attract clients – securities investors – though they announced before that they would not pay much attention to this operation.
Loaning for securities investments proves to be a profitable business, and it is understandable why no joint stock bank refuses funding stock investment deals. These loans have been accounting for 10-40% of total outstanding loans of commercial banks.
The central bank has tried to limit the loaning for securities investments by issuing Instruction No 3, requesting banks to lower their outstanding loans for stock investments to less than 3% of banks’ total outstanding loans. The deadline for the implementation of the decision is December 31, 2007.
Source: VNE
SSC to have information about ATIP shares checked
The State Securities Commission (SSC) has promised to have the information about ATIP (ATI Petroleum) shares clarified after the government on August 8, 2007 requested that the Ministry of Finance and SSC provide faithful information about ATIP to investors.
According to SSC, ATIP is a foreign enterprise, established and now operating in Nevada state in the US. On July 4, 2001, ATIP got an investment licence from the Ministry of Planning and Investment for a joint venture project with PetroVietnam under the mode of PSC (production sharing contract) on exploring, developing and producing oil and gas at block No 102 and 106 on Vietnam’s continental shelf. Later, ATIP sold a part of the joint venture to Malaysia’s Petronas, and now ATIP holds 10% of total shares in the joint venture.
On January 26, 2007, Chairman of ATIP signed Decision No 01/QD on internal share issuance to 93 staffs. After buying ATIP shares, the staffs sold the shares to outside investors, and the shares have been available on the market.
SSC has checked information about the shareholders and found out that as of March 12, 2007, the number of investors who held ATIP shares was 251.
Recently, mass media have reported that ATIP shares are being listed on NYSE – Euronext, and that ATIP promised to give 10,000 ATIP shares as bonus to the national soccer squad.
The Securities Law, Enterprise Law and current guiding documents do not mention the fact that 100% foreign owned companies, established and operating in other countries, can offer shares for sale in Vietnam. However, in fact, ATIP shares have been transferred to 250 investors in Vietnam.
In order to protect the benefit of Vietnamese investors and avoid possible risks, SSC has two times asked ATIP to expose information about capital and financial situation, business performance and operation regulations of ATIP, as well as the transactions on NYSE – Euronext.
However, ATIP had not provided necessary information by August 10, 2007, except Dispatch No 10 to SSC dated August 10, 2007, saying that the company was preparing necessary documents. As the chairman of ATIP was away on business and would return in mid August, the company promised to gather all necessary documents and give explanations to the questions put by SSC at that time.
On August 17, 2007, ATIP sent a document to SSC, providing some details about the interested issues relating to the listing of ATIP on NYSE – Euronext. SSC thinks that it still needs to check the information before making it public; therefore, it plans to have a working session with ATIP to discuss related issues
Prior to that, SSC took an inspection tour of ATIP. The company organised workshops introducing its operation activities.
Source: VNE
According to SSC, ATIP is a foreign enterprise, established and now operating in Nevada state in the US. On July 4, 2001, ATIP got an investment licence from the Ministry of Planning and Investment for a joint venture project with PetroVietnam under the mode of PSC (production sharing contract) on exploring, developing and producing oil and gas at block No 102 and 106 on Vietnam’s continental shelf. Later, ATIP sold a part of the joint venture to Malaysia’s Petronas, and now ATIP holds 10% of total shares in the joint venture.
On January 26, 2007, Chairman of ATIP signed Decision No 01/QD on internal share issuance to 93 staffs. After buying ATIP shares, the staffs sold the shares to outside investors, and the shares have been available on the market.
SSC has checked information about the shareholders and found out that as of March 12, 2007, the number of investors who held ATIP shares was 251.
Recently, mass media have reported that ATIP shares are being listed on NYSE – Euronext, and that ATIP promised to give 10,000 ATIP shares as bonus to the national soccer squad.
The Securities Law, Enterprise Law and current guiding documents do not mention the fact that 100% foreign owned companies, established and operating in other countries, can offer shares for sale in Vietnam. However, in fact, ATIP shares have been transferred to 250 investors in Vietnam.
In order to protect the benefit of Vietnamese investors and avoid possible risks, SSC has two times asked ATIP to expose information about capital and financial situation, business performance and operation regulations of ATIP, as well as the transactions on NYSE – Euronext.
However, ATIP had not provided necessary information by August 10, 2007, except Dispatch No 10 to SSC dated August 10, 2007, saying that the company was preparing necessary documents. As the chairman of ATIP was away on business and would return in mid August, the company promised to gather all necessary documents and give explanations to the questions put by SSC at that time.
On August 17, 2007, ATIP sent a document to SSC, providing some details about the interested issues relating to the listing of ATIP on NYSE – Euronext. SSC thinks that it still needs to check the information before making it public; therefore, it plans to have a working session with ATIP to discuss related issues
Prior to that, SSC took an inspection tour of ATIP. The company organised workshops introducing its operation activities.
Source: VNE
New banks to be born
The number of applications for establishing new banks now on the table of the Governor of the State Bank of Vietnam has reached 20. The well-informed circle says that the central bank will give answers on the applications in October.
Big general corporations are all making capital contributions to set up banks, despite the worries about unmarketable shares, which have prompted Vietcombank, MHB and Incombank to delay their IPO plans. Investors think that banking, together with securities and real estate are the most profitable business fields nowadays
All big general corporations, from oil and gas, electricity to textiles and garments have been named as the founding shareholders of new banks. The biggest names among the shareholders are Bao Viet (insurers), Vietnam National Post and Telecommunications (VNPT), PetroVietnam (oil and gas), Vinatex (textile and garment), Song Da Corporation (construction), VSC (steel), Habeco (brewery).
Corporations are also seeking ways to become the strategic shareholders of existing banks. More than 10 general corporations have become strategic partners of the Export-Import Bank (Eximbank).
Vinatex, for example, has together with BIDV (bank), Vincom (real estate developer) and Vinashin (shipbuilder), applied to set up the Industrial Development Bank (IDB). At the same time, Vinatex has made capital contributions to Nam Viet Bank, Maritime Bank, ACB and Eximbank.
Euro Window, a well-known name in the field of interior decoration, is also seeking permission to establish Euro Window bank. Meanwhile, Euro Window has got a licence from the State Securities Commission to set up a securities company.
The central bank’s committee for appraising investment projects and licencing banks was set up at the end of July. The committee will consider the applications based on the set requirements.
It is expected that the bank to receive the first licence this year will be Dong Duong Tin Phat. Its application for setting up a bank was submitted to the central bank six months ago and has gotten approval in principle.
The candidate which lodged its application first was Lien Viet bank.
Experts said that a new bank would be set up by the end of this year at the latest. Meanwhile, officials from the State Bank of Vietnam are keeping quiet about this, leaving the financial market to make wild guesses about the newcomers who will join the market in some days.
No new bank has been set up in the last 10 years. Meanwhile, arguments have been raised on whether to establish more banks and how many banks would be enough for Vietnam.
There are only 34 operational joint stock banks in Vietnam, and according to experts the figure is too small if compared to the number of banks in Singapore or Taiwan. Meanwhile, others say that one should not compare Vietnam with Singapore, the regional financial centre in Southeast Asia.
In fact, bank share prices have been decreasing dramatically: blue chips prices have decreased by 30-50% in the last four months. “The fact that a series of banks are awaiting to be established worries me. I wonder if they know how to run a bank,” an investor said. The investor does not understand why people are rushing to set up banks when bank shares are not attractive in the eyes of investors any more.
However, some other experts have said that the bank share price decrease is just a temporary problem, while setting up banks is a long-term plan. Bank share prices should not serve as the basis for investors to decide whether to set up banks.
The director of an investment fund said that capital was not the worrying problem; the headache now was the labour force. “While existing banks cannot find qualified managers, where will new banks find managers?” he asked.
Source: VNE
Big general corporations are all making capital contributions to set up banks, despite the worries about unmarketable shares, which have prompted Vietcombank, MHB and Incombank to delay their IPO plans. Investors think that banking, together with securities and real estate are the most profitable business fields nowadays
All big general corporations, from oil and gas, electricity to textiles and garments have been named as the founding shareholders of new banks. The biggest names among the shareholders are Bao Viet (insurers), Vietnam National Post and Telecommunications (VNPT), PetroVietnam (oil and gas), Vinatex (textile and garment), Song Da Corporation (construction), VSC (steel), Habeco (brewery).
Corporations are also seeking ways to become the strategic shareholders of existing banks. More than 10 general corporations have become strategic partners of the Export-Import Bank (Eximbank).
Vinatex, for example, has together with BIDV (bank), Vincom (real estate developer) and Vinashin (shipbuilder), applied to set up the Industrial Development Bank (IDB). At the same time, Vinatex has made capital contributions to Nam Viet Bank, Maritime Bank, ACB and Eximbank.
Euro Window, a well-known name in the field of interior decoration, is also seeking permission to establish Euro Window bank. Meanwhile, Euro Window has got a licence from the State Securities Commission to set up a securities company.
The central bank’s committee for appraising investment projects and licencing banks was set up at the end of July. The committee will consider the applications based on the set requirements.
It is expected that the bank to receive the first licence this year will be Dong Duong Tin Phat. Its application for setting up a bank was submitted to the central bank six months ago and has gotten approval in principle.
The candidate which lodged its application first was Lien Viet bank.
Experts said that a new bank would be set up by the end of this year at the latest. Meanwhile, officials from the State Bank of Vietnam are keeping quiet about this, leaving the financial market to make wild guesses about the newcomers who will join the market in some days.
No new bank has been set up in the last 10 years. Meanwhile, arguments have been raised on whether to establish more banks and how many banks would be enough for Vietnam.
There are only 34 operational joint stock banks in Vietnam, and according to experts the figure is too small if compared to the number of banks in Singapore or Taiwan. Meanwhile, others say that one should not compare Vietnam with Singapore, the regional financial centre in Southeast Asia.
In fact, bank share prices have been decreasing dramatically: blue chips prices have decreased by 30-50% in the last four months. “The fact that a series of banks are awaiting to be established worries me. I wonder if they know how to run a bank,” an investor said. The investor does not understand why people are rushing to set up banks when bank shares are not attractive in the eyes of investors any more.
However, some other experts have said that the bank share price decrease is just a temporary problem, while setting up banks is a long-term plan. Bank share prices should not serve as the basis for investors to decide whether to set up banks.
The director of an investment fund said that capital was not the worrying problem; the headache now was the labour force. “While existing banks cannot find qualified managers, where will new banks find managers?” he asked.
Source: VNE
Hanoi bourse welcomes 89th company
Two and a half million shares of the Song Da No 6.06 Joint Stock Company were officially listed on the Hanoi Securities Trading Centre under the symbol SSS on August 28, bringing the total companies listed on the centre to 89.
On its first trading session, 10,200 SSS shares were traded at an average price of VND 50.700 a share.
The company is the 20th member of the Song Da Corporation listed on the northern bourse.
Song Da 6 Construction Company’s affiliate in Thua Thien- Hue, the precursor of Song Da No 6.06 JSC, was established in 1999. In 2002, the affiliate was shifted to Song Da 6.06 Enterprise under the Song Da 6 Company. Since January 2004, it has officially operated as a joint stock company with a registered capital of VND 5 billion.
After three years of operation, the company achieves an annual average growth of 30% with the charter capital increasing five fold to VND 25 billion in 2007, affirming its prestige in the central Thua Thien-Hue province as well as the central region and the Central Highlands.
Song Da 6 JSC currently holds 50% stake in Song Da No 6.06 JSC; 28.74% others belong to outside shareholders and the remaining are owned by the company’s employees.
The company specialises in providing assembling products and industrial production products such as concrete and concrete execution, exploiting limestone for cement companies, cement trading, etc.
Last year, the company’s total revenue stood at over VND 79 billion with an after tax profit of VND 4.7 billion and a 20% dividend. This year, Song Da No 6.06 JSC targets a total revenue of VND 116 billion with a net profit of nearly VND 8 billion and 19% dividend.
Source: VNE
On its first trading session, 10,200 SSS shares were traded at an average price of VND 50.700 a share.
The company is the 20th member of the Song Da Corporation listed on the northern bourse.
Song Da 6 Construction Company’s affiliate in Thua Thien- Hue, the precursor of Song Da No 6.06 JSC, was established in 1999. In 2002, the affiliate was shifted to Song Da 6.06 Enterprise under the Song Da 6 Company. Since January 2004, it has officially operated as a joint stock company with a registered capital of VND 5 billion.
After three years of operation, the company achieves an annual average growth of 30% with the charter capital increasing five fold to VND 25 billion in 2007, affirming its prestige in the central Thua Thien-Hue province as well as the central region and the Central Highlands.
Song Da 6 JSC currently holds 50% stake in Song Da No 6.06 JSC; 28.74% others belong to outside shareholders and the remaining are owned by the company’s employees.
The company specialises in providing assembling products and industrial production products such as concrete and concrete execution, exploiting limestone for cement companies, cement trading, etc.
Last year, the company’s total revenue stood at over VND 79 billion with an after tax profit of VND 4.7 billion and a 20% dividend. This year, Song Da No 6.06 JSC targets a total revenue of VND 116 billion with a net profit of nearly VND 8 billion and 19% dividend.
Source: VNE
Textile exports reach 5.1 billion US$ after 8 months
The garment and textiles industry posted a massive 5.1 billion USD in exports revenues for the first eight months of the year, representing a year-on-year surge of 30 percent.
The US remains to be Viet Nam’s largest market by importing almost 3 billion USD of products or a 20 percent increase over the same period last year. The figure represented a 60 percent share of Viet Nam’s gross garment exports.
The post-WTO surge of Viet Nam’s textiles and garments exportation to the US at 25 percent in the first half, however, is just slightly higher than the quota-imposition period prior to the country’s WTO membership which stood at 21 percent, said Le Quoc An, Chairman of the Viet Nam Textiles and Garments Association (VTGA).
“The recent level of exports by the textile and garment industry has not shown any signs of “unexpected highs” for the US side to use as a pretext for sueing Viet Nam on dumping charges,” he said.
The VTGA chief unveiled a plan in association with the Ministry of Industry and Trade to further lobby US authorities, especially the Department of Commerce, to lift more barriers that are blocking Viet Nam’s textile and garment exports.
An urged domestic enterprises to strictly control their exports to the world’s largest market by focusing on high priced contracts while turning away small and low value deals.
“This should allow the textile and garment industry to maintain its high export growth rates in the rest of the year,” emphasised the garment expert.
He also urged firms to expand into other markets such as the European Union and Japan.
Source: VNA
The US remains to be Viet Nam’s largest market by importing almost 3 billion USD of products or a 20 percent increase over the same period last year. The figure represented a 60 percent share of Viet Nam’s gross garment exports.
The post-WTO surge of Viet Nam’s textiles and garments exportation to the US at 25 percent in the first half, however, is just slightly higher than the quota-imposition period prior to the country’s WTO membership which stood at 21 percent, said Le Quoc An, Chairman of the Viet Nam Textiles and Garments Association (VTGA).
“The recent level of exports by the textile and garment industry has not shown any signs of “unexpected highs” for the US side to use as a pretext for sueing Viet Nam on dumping charges,” he said.
The VTGA chief unveiled a plan in association with the Ministry of Industry and Trade to further lobby US authorities, especially the Department of Commerce, to lift more barriers that are blocking Viet Nam’s textile and garment exports.
An urged domestic enterprises to strictly control their exports to the world’s largest market by focusing on high priced contracts while turning away small and low value deals.
“This should allow the textile and garment industry to maintain its high export growth rates in the rest of the year,” emphasised the garment expert.
He also urged firms to expand into other markets such as the European Union and Japan.
Source: VNA
Tuesday, August 28, 2007
VN-Index dips slightly after gains
The VN-Index at the Ho Chi Minh City Stock Exchange reported a miniscale decline by the end of the August 28 trading session by closing at 902.58 points, a dip of 6.49 points.
The market saw 4.9 million shares worth over 518.3 billion VND changing hands on the day.
Both Imexpharm Pharmaceutical JSC (IMP) and Domesco Medical Import & Export JSC (DMC) topped the list of 35 gainers by tacking 7,000 VND onto their listed prices of 160,000 VND and 152,000 VND, respectively.
Meanwhile, Binh Dinh Minerals (BMC) and Tay Ninh Cable Car Tour (TCT), which experienced consecutive increases in previous sessions, dropped sharply. BMC lost 27,000 VND to finish at 517,000 VND while TCT had 19,000 VND slashed off its unit-price.
Saigon Thuong Tin Commercial Joint Stock Bank again led the market in terms of trading volume with 445,800 shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre saw a very modest increase after finishing today's session at 250.69 points, an increase of 0.39 points.
As many as 555,000 shares worth 54.3 billion VND were traded, with Sai Gon Securities again on top of traded volume with 109,400 shares being bought and sold.
Source: VNA
The market saw 4.9 million shares worth over 518.3 billion VND changing hands on the day.
Both Imexpharm Pharmaceutical JSC (IMP) and Domesco Medical Import & Export JSC (DMC) topped the list of 35 gainers by tacking 7,000 VND onto their listed prices of 160,000 VND and 152,000 VND, respectively.
Meanwhile, Binh Dinh Minerals (BMC) and Tay Ninh Cable Car Tour (TCT), which experienced consecutive increases in previous sessions, dropped sharply. BMC lost 27,000 VND to finish at 517,000 VND while TCT had 19,000 VND slashed off its unit-price.
Saigon Thuong Tin Commercial Joint Stock Bank again led the market in terms of trading volume with 445,800 shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre saw a very modest increase after finishing today's session at 250.69 points, an increase of 0.39 points.
As many as 555,000 shares worth 54.3 billion VND were traded, with Sai Gon Securities again on top of traded volume with 109,400 shares being bought and sold.
Source: VNA
Jan-Aug industrial output to rise 17 pct y/y
Vietnam's January-to-August industrial output is expected to rise 17.1 percent from a year earlier to 377.07 trillion dong ($23.3 billion), but crude oil production has slowed, the government said on Tuesday.
The industrial sector, making up a third of Vietnam's economy, helped lift gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
But crude oil production during the first eight months is expected to fall 8 percent from the same period last year to 10.38 million tonnes, or 313,100 barrels per day, the government's General Statistics Office said in a monthly report.
Crude's decline "does not only affect greatly the export growth and state budget income but also has an impact on the industrial sector's contribution to the eight-month gross domestic product growth", it said, without giving details.
Crude exports, Vietnam's top foreign exchange earner, in January-to-August fell 11.8 percent from a year earlier to $5.1 billion, the statistics office said.
However, production of cars, machinery and air-conditioners in the eight-month period extended the strong growth since the start of the year, rising by between 60 percent and 70.2 percent from a year earlier.
The state sector was estimated to grow 10.2 percent during the first eight months, up from 9.7 percent in the January-to-July period.
Production by enterprises outside state control was also expected to expand slightly faster in the January-to-August period, growing 20.5 percent from a year earlier, up 0.1 percentage point compared with January-to-July.
Growth in the foreign investment sector slowed to 18.6 percent, from 18.9 percent during the first seven months.
Industry accounts for 34.9 percent of gross domestic product, ranking after the service sector which contributed 38.8 percent to Vietnam's GDP during the first half, the government said.
Vietnam aims for GDP growth of 9 percent in the second half of this year, which will help it meet its annual growth target of 8.5 percent.
Source: Reuters
The industrial sector, making up a third of Vietnam's economy, helped lift gross domestic product by 7.87 percent in the first half of the year from the same period a year earlier.
But crude oil production during the first eight months is expected to fall 8 percent from the same period last year to 10.38 million tonnes, or 313,100 barrels per day, the government's General Statistics Office said in a monthly report.
Crude's decline "does not only affect greatly the export growth and state budget income but also has an impact on the industrial sector's contribution to the eight-month gross domestic product growth", it said, without giving details.
Crude exports, Vietnam's top foreign exchange earner, in January-to-August fell 11.8 percent from a year earlier to $5.1 billion, the statistics office said.
However, production of cars, machinery and air-conditioners in the eight-month period extended the strong growth since the start of the year, rising by between 60 percent and 70.2 percent from a year earlier.
The state sector was estimated to grow 10.2 percent during the first eight months, up from 9.7 percent in the January-to-July period.
Production by enterprises outside state control was also expected to expand slightly faster in the January-to-August period, growing 20.5 percent from a year earlier, up 0.1 percentage point compared with January-to-July.
Growth in the foreign investment sector slowed to 18.6 percent, from 18.9 percent during the first seven months.
Industry accounts for 34.9 percent of gross domestic product, ranking after the service sector which contributed 38.8 percent to Vietnam's GDP during the first half, the government said.
Vietnam aims for GDP growth of 9 percent in the second half of this year, which will help it meet its annual growth target of 8.5 percent.
Source: Reuters
Price increases stopped by drastic measures
he prices of food, poultry meat, seafood and dairy products have been stabilised, while the prices of steel, import cars and electric products have been decreasing in some areas.
Regarding food prices, though rice exporters are trying to collect rice to fulfill signed export contracts, the rice price has still decreased by VND50-100/kg thanks to the superfluous supply, now selling at VND4,600-5,200/kg.
However, as the Ministry of Industry and Trade has forecast, as the northern region has entered the rainy and storm season, while floods threaten the south, the food price is expected to increase slightly in some areas.
Meanwhile, foodstuff prices are tending to slightly decrease thanks to superfluous supply. The price of pork, for example, saw a slight decrease in August after increasing sharply in July, now selling at VND19-23,000/kg in the north, and VND19-25,000/kg in the south.
The prices of beef, poultry meat, and seafood, seeing increases of VND2-4,000/kg in early August, have slightly decreased. Beef is selling at VND75-90,000/kg. Chicken bred in industrial farms is selling at VND35,000/kg, while chicken bred at households is selling at VND58-60,000/kg. In the Mekong River Delta, tra fish price reduced by VND500-600/kg, now selling at VND13,400/kg on average.
At the end of July and in early August, imported dairy products saw sharp price increases of VND20-96,000/unit. The decision to cut taxes on dairy products has helped prevent further increases, but has not helped reduce selling prices.
Nguyen Tien Thoa, Head of the Price Control Department under the Ministry of Finance, said that the 3-week inspection tours of steel mills, gas and dairy producers, the products that saw biggest price increases over the last time, was nearly finished, and the results would be announced in some days.
Regarding construction material prices, the Ministry of Industry and Trade (MIT) said that the prices would be stable until the end of the year thanks to big stocks.
Some 3mil tonnes of cement were consumed in August despite the rainy season, raising the total consumption level of cement to 23.3mil tonnes. The price is hovering between VND760-800,000/tonne in the north, and VND878-900,000 in the south. The volume of cement in stock is 2.21mil tonnes, which, together with local production, will ensure adequate supply for the market, and no price fever is expected to occur.
As for construction steel, Vietnamese steel producers now tend to purchase ingot steel from Malaysia and Thailand due to the limited supply from China. The steel price is VND9,550-9,900/kg now, down by VND300/kg over the previous month.
Also according to MIT, after the decision to reduce petrol price by VND500/litre, petrol distributors still can make profit of 9.6% of CIF price, while they are incurring heavy losses with diesel (VND1,488/litre) and kerosene (VND1,376/litre).
MIT has predicted the CPI growth rate of 0.2-0.3% for September, saying that the high purchasing power on the National Day holiday, the opening of the new academic year and Mid-Autumn festival will be the factors that can push up prices.
Also in an effort to curb the price increases, the central bank has announced it will continuously use the open market operations to withdraw cash from circulation. Since mid August 2007, the central bank has offered to sell bonds on all working days. Besides the 1-month, 2-month, 3-month, 6-month, 9-month and 12-month term, the central bank has offered 4-month and 5-month term bonds as well.
Source: VNE
Regarding food prices, though rice exporters are trying to collect rice to fulfill signed export contracts, the rice price has still decreased by VND50-100/kg thanks to the superfluous supply, now selling at VND4,600-5,200/kg.
However, as the Ministry of Industry and Trade has forecast, as the northern region has entered the rainy and storm season, while floods threaten the south, the food price is expected to increase slightly in some areas.
Meanwhile, foodstuff prices are tending to slightly decrease thanks to superfluous supply. The price of pork, for example, saw a slight decrease in August after increasing sharply in July, now selling at VND19-23,000/kg in the north, and VND19-25,000/kg in the south.
The prices of beef, poultry meat, and seafood, seeing increases of VND2-4,000/kg in early August, have slightly decreased. Beef is selling at VND75-90,000/kg. Chicken bred in industrial farms is selling at VND35,000/kg, while chicken bred at households is selling at VND58-60,000/kg. In the Mekong River Delta, tra fish price reduced by VND500-600/kg, now selling at VND13,400/kg on average.
At the end of July and in early August, imported dairy products saw sharp price increases of VND20-96,000/unit. The decision to cut taxes on dairy products has helped prevent further increases, but has not helped reduce selling prices.
Nguyen Tien Thoa, Head of the Price Control Department under the Ministry of Finance, said that the 3-week inspection tours of steel mills, gas and dairy producers, the products that saw biggest price increases over the last time, was nearly finished, and the results would be announced in some days.
Regarding construction material prices, the Ministry of Industry and Trade (MIT) said that the prices would be stable until the end of the year thanks to big stocks.
Some 3mil tonnes of cement were consumed in August despite the rainy season, raising the total consumption level of cement to 23.3mil tonnes. The price is hovering between VND760-800,000/tonne in the north, and VND878-900,000 in the south. The volume of cement in stock is 2.21mil tonnes, which, together with local production, will ensure adequate supply for the market, and no price fever is expected to occur.
As for construction steel, Vietnamese steel producers now tend to purchase ingot steel from Malaysia and Thailand due to the limited supply from China. The steel price is VND9,550-9,900/kg now, down by VND300/kg over the previous month.
Also according to MIT, after the decision to reduce petrol price by VND500/litre, petrol distributors still can make profit of 9.6% of CIF price, while they are incurring heavy losses with diesel (VND1,488/litre) and kerosene (VND1,376/litre).
MIT has predicted the CPI growth rate of 0.2-0.3% for September, saying that the high purchasing power on the National Day holiday, the opening of the new academic year and Mid-Autumn festival will be the factors that can push up prices.
Also in an effort to curb the price increases, the central bank has announced it will continuously use the open market operations to withdraw cash from circulation. Since mid August 2007, the central bank has offered to sell bonds on all working days. Besides the 1-month, 2-month, 3-month, 6-month, 9-month and 12-month term, the central bank has offered 4-month and 5-month term bonds as well.
Source: VNE
Price increases – reverse effects of WTO admission
he price increases in the last eight months, according to economist Pham Chi Lan, have been explained as reverse effects of Vietnam’s admission to the WTO due to shortcomings in the management of the national economy.
The consumer price index (CPI) has increased by 6.78% through August, and 8.57% over the same period last year. The most worrying thing is that rural areas have exceeded urban areas in terms of CPI growth rate: in August, the CPI increase in rural areas was higher than that in urban areas, 0.6% vs. 0.5%. The continued price increases have negatively impacted peoples’ lives.
The price increases seem to come contrary to peoples’ expectations that prices would decrease as a result of WTO membership.
However, as Economist Pham Chi Lan, a former member of the Prime Minister’s Research Team, has pointed out, the price increases were expected. This is called one of the ‘prompt reverse effects’ occurring right after Vietnam has joined the WTO and signals the process of more deep integration into the world’s economy.
Mrs Lan said that WTO membership had brought both active and inactive effects. The active ones include the increasing investment flow into Vietnam, while the inactive ones include the price increases.
According to Mrs Lan, since becoming an official member of the WTO, the vulnerability of the national economy has become clearer. The links connecting Vietnam and the world’s market have become closer, i.e. the world’s market fluctuations have more direct impacts on Vietnam. Vietnam, for example, has been influenced by the oil price increases. It proves to be quite different from 1997, when the financial and monetary crisis occurred. At that time, the outside happenings did not have negative impacts on Vietnam.
As Vietnam has opened its market, the national economy has shown some shortcomings. As Vietnam’s management skills are not good, it finds it hard to control the market and prices.
Moreover, Vietnam still lacks necessary factors to run a market in which prices are defined purely by the supply and demand basis. Let’s take petrol price as an example. Enterprises did not lower the selling prices of petrol even when the world’s prices went down and the government asked them to lower prices. Mrs Lan said that in this case, it was because Vietnam did not have necessary market forces which could create healthy competition. Vietnam has 11 petrol distributors, including nine state owned, and Petrolimex alone holds up to 60% of the market share.
Mrs Lan said that in the short term, Vietnam would have to bear reverse effects of WTO membership, and the undesired effects would gradually disappear when Vietnam improved its management capability.
Source: VNE
The consumer price index (CPI) has increased by 6.78% through August, and 8.57% over the same period last year. The most worrying thing is that rural areas have exceeded urban areas in terms of CPI growth rate: in August, the CPI increase in rural areas was higher than that in urban areas, 0.6% vs. 0.5%. The continued price increases have negatively impacted peoples’ lives.
The price increases seem to come contrary to peoples’ expectations that prices would decrease as a result of WTO membership.
However, as Economist Pham Chi Lan, a former member of the Prime Minister’s Research Team, has pointed out, the price increases were expected. This is called one of the ‘prompt reverse effects’ occurring right after Vietnam has joined the WTO and signals the process of more deep integration into the world’s economy.
Mrs Lan said that WTO membership had brought both active and inactive effects. The active ones include the increasing investment flow into Vietnam, while the inactive ones include the price increases.
According to Mrs Lan, since becoming an official member of the WTO, the vulnerability of the national economy has become clearer. The links connecting Vietnam and the world’s market have become closer, i.e. the world’s market fluctuations have more direct impacts on Vietnam. Vietnam, for example, has been influenced by the oil price increases. It proves to be quite different from 1997, when the financial and monetary crisis occurred. At that time, the outside happenings did not have negative impacts on Vietnam.
As Vietnam has opened its market, the national economy has shown some shortcomings. As Vietnam’s management skills are not good, it finds it hard to control the market and prices.
Moreover, Vietnam still lacks necessary factors to run a market in which prices are defined purely by the supply and demand basis. Let’s take petrol price as an example. Enterprises did not lower the selling prices of petrol even when the world’s prices went down and the government asked them to lower prices. Mrs Lan said that in this case, it was because Vietnam did not have necessary market forces which could create healthy competition. Vietnam has 11 petrol distributors, including nine state owned, and Petrolimex alone holds up to 60% of the market share.
Mrs Lan said that in the short term, Vietnam would have to bear reverse effects of WTO membership, and the undesired effects would gradually disappear when Vietnam improved its management capability.
Source: VNE
Vietcombank fails to keep IPO timetable
The Vietnam Bank for Foreign Trade (Vietcombank) cannot make IPO prior to August 30 as previously planned as the government has not given the green light on the IPO plan.
Vietcombank announced in February 2007, right after it signed a contract with Credit Suisse on equitisation consultancy, that it would make IPO at the end of July or August at the latest, and have its shares listed on the bourse prior to the end of October.
However, Vietcombank Deputy Director General Nguyen Thu Ha on August 24 announced that Vietcombank would not be able to make IPO in August as it had not received any instructions from the government yet.
Last year and earlier this year, the government many times urged banks to speed up the equitisation process. However, it has not been hurrying banks since June, when the stock market began falling down. Analysts have also warned about the oversupply of commodities on the stock market causing losses to the state.
Owing to these warnings, banks themselves have been hesitating to put commodities on sale while the market is quiet with few transactions. The Bank for Investment and Development of Vietnam (BIDV), which volunteered to be equitised, has asked the government to reconsider the timing of the IPOs of big state owned enterprises. As previously planned, BIDV will complete its equitisation plan to be submitted to the government before the IPO is made at the end of the fourth quarter of the year.
The Vietnam Industrial and Commercial Bank (ICB), which also volunteered for equitisation, now is considering the re-timing of its IPO. ICB Director General Pham Huy Hung said that the bank "would do what the government instructed".
It is clear that Vietcombank cannot make IPO right in August, but Mrs Ha said that the bank would run the IPO as previously planned if the government approved, despite the gloomy market.
“The market now is not as favourable as previously, but we do not plan to delay IPO and the equitisation plan because of this. No one can know for sure how the market will perform later,” said Mrs Ha.
Vietcombank has every reason to be optimistic about its IPO plan. Several tens of international financial groups have expressed their desire to become Vietcombank’s strategic partners, when Vietnam’s first state owned bank becomes equitised. The five names which have been short listed for government consideration are all big names in the world.
Le Dao Nguyen, Deputy Director General of BIDV, said that bank shares were still being hunted by investors, especially shares of profitable and prestigious banks.
“We do not intend to make IPOs at any cost. Price will be an important factor to consider when offering shares, and enterprises all want to sell shares at the moment when prices reach peaks. However, it would be even worse if the auction prices are high, but the prices later decrease and no investor wants to buy them,” said Mr Nguyen.
Mr Nguyen said that BIDV was still hectically preparing for the equitisation and IPO.
In a report released on August 1 on Vietnam’s financial situation, the Hong Kong and Shanghai Banking Corporation HSBC said there was no need to worry about the IPOs of big banks. The sale of good commodities will help stimulate the market demand and attract new foreign investors.
Source: VNE
Vietcombank announced in February 2007, right after it signed a contract with Credit Suisse on equitisation consultancy, that it would make IPO at the end of July or August at the latest, and have its shares listed on the bourse prior to the end of October.
However, Vietcombank Deputy Director General Nguyen Thu Ha on August 24 announced that Vietcombank would not be able to make IPO in August as it had not received any instructions from the government yet.
Last year and earlier this year, the government many times urged banks to speed up the equitisation process. However, it has not been hurrying banks since June, when the stock market began falling down. Analysts have also warned about the oversupply of commodities on the stock market causing losses to the state.
Owing to these warnings, banks themselves have been hesitating to put commodities on sale while the market is quiet with few transactions. The Bank for Investment and Development of Vietnam (BIDV), which volunteered to be equitised, has asked the government to reconsider the timing of the IPOs of big state owned enterprises. As previously planned, BIDV will complete its equitisation plan to be submitted to the government before the IPO is made at the end of the fourth quarter of the year.
The Vietnam Industrial and Commercial Bank (ICB), which also volunteered for equitisation, now is considering the re-timing of its IPO. ICB Director General Pham Huy Hung said that the bank "would do what the government instructed".
It is clear that Vietcombank cannot make IPO right in August, but Mrs Ha said that the bank would run the IPO as previously planned if the government approved, despite the gloomy market.
“The market now is not as favourable as previously, but we do not plan to delay IPO and the equitisation plan because of this. No one can know for sure how the market will perform later,” said Mrs Ha.
Vietcombank has every reason to be optimistic about its IPO plan. Several tens of international financial groups have expressed their desire to become Vietcombank’s strategic partners, when Vietnam’s first state owned bank becomes equitised. The five names which have been short listed for government consideration are all big names in the world.
Le Dao Nguyen, Deputy Director General of BIDV, said that bank shares were still being hunted by investors, especially shares of profitable and prestigious banks.
“We do not intend to make IPOs at any cost. Price will be an important factor to consider when offering shares, and enterprises all want to sell shares at the moment when prices reach peaks. However, it would be even worse if the auction prices are high, but the prices later decrease and no investor wants to buy them,” said Mr Nguyen.
Mr Nguyen said that BIDV was still hectically preparing for the equitisation and IPO.
In a report released on August 1 on Vietnam’s financial situation, the Hong Kong and Shanghai Banking Corporation HSBC said there was no need to worry about the IPOs of big banks. The sale of good commodities will help stimulate the market demand and attract new foreign investors.
Source: VNE
Monday, August 27, 2007
Indexes see slight increases
Both of the country's bourses in Ho Chi Minh City and Ha Noi experienced slight increases after the conclusion of the August 27 trading session.
The VN-Index at the HCM City Stock Exchange rose 3.59 points to finish at 909.07 points.
Today's session had 6.2 million shares worth nearly 543 billion VND change hands.
Binh Dinh Mining (BMC) continued topping the list of 51 shares that recorded gains by adding 25,000 VND onto its listed price to end at 544,000 VND. It was followed by the Sea & Air Freight Int'l (SFI) with a 9,000 VND spike and Tay Ninh Cable Car Tour's (TCT), 6,000 VND increase.
The Saigon Thuong Tin Commercial Joint Stock Bank still led the market in terms of transaction volume with nearly 1.3 million shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by mere 0.15 points to finish at 250.3 points, but decreased in terms of transaction volume and value with 800,000 shares worth a total 80 billion VND changing hands.
Source: VNA
The VN-Index at the HCM City Stock Exchange rose 3.59 points to finish at 909.07 points.
Today's session had 6.2 million shares worth nearly 543 billion VND change hands.
Binh Dinh Mining (BMC) continued topping the list of 51 shares that recorded gains by adding 25,000 VND onto its listed price to end at 544,000 VND. It was followed by the Sea & Air Freight Int'l (SFI) with a 9,000 VND spike and Tay Ninh Cable Car Tour's (TCT), 6,000 VND increase.
The Saigon Thuong Tin Commercial Joint Stock Bank still led the market in terms of transaction volume with nearly 1.3 million shares being traded.
The HaSTC-Index at the Ha Noi Securities Trading Centre rose by mere 0.15 points to finish at 250.3 points, but decreased in terms of transaction volume and value with 800,000 shares worth a total 80 billion VND changing hands.
Source: VNA
San Miguel looks to expand brewing in Vietnam
San Miguel Corp of the Philippines said Friday it wants to expand brewing operations in Viet Nam and possibly into neighboring Cambodia.
Local press reports said San Miguel, Southeast Asia's largest publicly-listed food, beverage and packaging group, would spend up to eight million dollars to build up the capacity of its Viet Nam plant.
"The company confirms that it intends to expand its presence in Viet Nam and that it is studying the feasibility of putting up a brewery in Cambodia," San Miguel said in a brief statement to the Philippine Stock Exchange.
It did not give any financial details in its disclosure.
In the press reports, San Miguel beer division assistant vice president Benjamin Aton was quoted as saying that a brewery in Cambodia might cost 16 million dollars.
The company plans to spin off its domestic beer business under San Miguel Brewery Inc. for an initial public offering possibly before the year ends.
San Miguel, which is 20 percent owned by Kirin Holdings of Japan, also plans to venture into other businesses such as power generation and transmission, water and other utilities, mining and infrastructure.
Source: VNE
Local press reports said San Miguel, Southeast Asia's largest publicly-listed food, beverage and packaging group, would spend up to eight million dollars to build up the capacity of its Viet Nam plant.
"The company confirms that it intends to expand its presence in Viet Nam and that it is studying the feasibility of putting up a brewery in Cambodia," San Miguel said in a brief statement to the Philippine Stock Exchange.
It did not give any financial details in its disclosure.
In the press reports, San Miguel beer division assistant vice president Benjamin Aton was quoted as saying that a brewery in Cambodia might cost 16 million dollars.
The company plans to spin off its domestic beer business under San Miguel Brewery Inc. for an initial public offering possibly before the year ends.
San Miguel, which is 20 percent owned by Kirin Holdings of Japan, also plans to venture into other businesses such as power generation and transmission, water and other utilities, mining and infrastructure.
Source: VNE
Friday, August 24, 2007
VN-Index records sharp increase
The VN-Index at the Ho Chi Minh City Stock Exchange climbed 17.86 points after the conclusion of the August 24 trading session to finish at 905.48.
As many as 7.563 million shares worth 660.955 billion VND changed hands with Binh Dinh mining (BMC) topping the list of 88 shares recording gains by adding 24,000 VND onto its listed price. BMC was followed by Tay Ninh Cable Tour with an 18,000 VND spike and North Kinh Do Food's 9,000 VND rise.
The Saigon Thuong Tin Commercial Joint Stock Bank led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw a slight increase as it rose 2.78 points to finish at 250.15 points.
Among 918,000 shares traded at a total cost of 81.8 billion VND. Saigon Securities Inc. topped the market in terms of transaction value with 158,000 shares being brought or sold.
Source: VNA
As many as 7.563 million shares worth 660.955 billion VND changed hands with Binh Dinh mining (BMC) topping the list of 88 shares recording gains by adding 24,000 VND onto its listed price. BMC was followed by Tay Ninh Cable Tour with an 18,000 VND spike and North Kinh Do Food's 9,000 VND rise.
The Saigon Thuong Tin Commercial Joint Stock Bank led the market in terms of transaction volume.
The HaSTC-Index in the Ha Noi Securities Trading Centre also saw a slight increase as it rose 2.78 points to finish at 250.15 points.
Among 918,000 shares traded at a total cost of 81.8 billion VND. Saigon Securities Inc. topped the market in terms of transaction value with 158,000 shares being brought or sold.
Source: VNA
VNPT signs strategic pact with Vincom
Viet Nam Post and Telecommunications Group (VNPT) and Vincom Joint Stock Company on Aug. 23 signed an agreement making them strategic partners.
The agreement involves closer cooperation between the two companies, so that they will become strategic shareholders and customers of each other’s respective enterprises.
While VNPT will become the main supplier of telecom equipment for Vincom’s real estate projects, Vincom will be awarded VNPT infrastructure development contracts.
“This is a very notable partnership as it will combine the strengths and resources of two of the country’s leading companies,” said VNPT’s vice general director Nguyen Ba Thuoc.
Thuoc stressed that the collaboration between the two large corporations would boost Viet Nam’s economy and the technology sector, in particular, during integration into the World Trade Organisation.
He also said that the collaboration would promote the competitive edge of the two firms on the international market.
Last year, VNPT, the country’s largest telecom service provider, posted a revenue of 38.3 trillion VND (2.4 billion USD), up 14.9 percent compared to 2005 and 3.4 percent higher than the company’s initial forecast.
Real estate developer Vincom ISC generated revenue of 548.4 billion VND (34 million USD) last year, four times higher than the previous year’s figure. Its after-tax profit increased five fold, reaching 343.7 billion VND (21.4 million USD). Vincom, wholly owned by Vietnamese investors, also brings Ha Noi Vincom Tower to the table, among many other properties.
Source: VNA
The agreement involves closer cooperation between the two companies, so that they will become strategic shareholders and customers of each other’s respective enterprises.
While VNPT will become the main supplier of telecom equipment for Vincom’s real estate projects, Vincom will be awarded VNPT infrastructure development contracts.
“This is a very notable partnership as it will combine the strengths and resources of two of the country’s leading companies,” said VNPT’s vice general director Nguyen Ba Thuoc.
Thuoc stressed that the collaboration between the two large corporations would boost Viet Nam’s economy and the technology sector, in particular, during integration into the World Trade Organisation.
He also said that the collaboration would promote the competitive edge of the two firms on the international market.
Last year, VNPT, the country’s largest telecom service provider, posted a revenue of 38.3 trillion VND (2.4 billion USD), up 14.9 percent compared to 2005 and 3.4 percent higher than the company’s initial forecast.
Real estate developer Vincom ISC generated revenue of 548.4 billion VND (34 million USD) last year, four times higher than the previous year’s figure. Its after-tax profit increased five fold, reaching 343.7 billion VND (21.4 million USD). Vincom, wholly owned by Vietnamese investors, also brings Ha Noi Vincom Tower to the table, among many other properties.
Source: VNA
Thursday, August 23, 2007
VN-Index slides, HaSTC-Index bounces back
The Ho Chi Minh City Stock Exchange (HOSE) reported losses again while its Ha Noi-based counterpart bounced back by the end of the August 23 trading session.
The VN-Index at the HOSE dropped 4.45 points or 0.5 percent to finish at 887.62 points. Close to 6 million shares, worth more than 439 billion VND, changed hands during the day.
The session witnessed 52 shares decline, 22 remain unchanged and 40 others rally for gains.
Shares that suffered the biggest losses included blue-chips Tan Tao Industrial Park Corporation (ITA), PetroVietnam Drilling and Well Services (PVD) and the Corporation for Financing and Promoting Technology (FPT).
Meanwhile, Binh Dinh Minerals (BMC) continued to top the list of movers by tacking 23,000 VND onto its listed price to finish at 495,000 VND per unit. It was followed by Tay Ninh Cable Tour Company (TCT) and the Saigon Hotel Corporation (SGH).
Saigon Thuong Tin Commercial Bank (STB), Vinh Son - Song Hinh Hydropower (VSH) and FPT were among the shares that led the market in terms of transaction volume.
The HaSTC-Index at the Ha Noi Securities Trading Centre meanwhile rose 0.9 point to finish at 247.37 points. More than 972,000 shares, worth over 90 billion VND, were traded.
Asia Commercial Bank (ACB) and Saigon Securities Inc. (SSI) continued to lead the market in terms of transaction volume with 152,000 shares changing hands.
The Over-The-Counter (OTC) market has also become less attractive to investors. The market saw many shares decline, including Vietcombank shares, which dropped by 50 percent to finish at 140,000 VND per unit.
The HOSE will close on September 3 for National Day and will resume operations on September 4, according to the bourse's General Director Tran Dac Sinh.
Source: VNA
The VN-Index at the HOSE dropped 4.45 points or 0.5 percent to finish at 887.62 points. Close to 6 million shares, worth more than 439 billion VND, changed hands during the day.
The session witnessed 52 shares decline, 22 remain unchanged and 40 others rally for gains.
Shares that suffered the biggest losses included blue-chips Tan Tao Industrial Park Corporation (ITA), PetroVietnam Drilling and Well Services (PVD) and the Corporation for Financing and Promoting Technology (FPT).
Meanwhile, Binh Dinh Minerals (BMC) continued to top the list of movers by tacking 23,000 VND onto its listed price to finish at 495,000 VND per unit. It was followed by Tay Ninh Cable Tour Company (TCT) and the Saigon Hotel Corporation (SGH).
Saigon Thuong Tin Commercial Bank (STB), Vinh Son - Song Hinh Hydropower (VSH) and FPT were among the shares that led the market in terms of transaction volume.
The HaSTC-Index at the Ha Noi Securities Trading Centre meanwhile rose 0.9 point to finish at 247.37 points. More than 972,000 shares, worth over 90 billion VND, were traded.
Asia Commercial Bank (ACB) and Saigon Securities Inc. (SSI) continued to lead the market in terms of transaction volume with 152,000 shares changing hands.
The Over-The-Counter (OTC) market has also become less attractive to investors. The market saw many shares decline, including Vietcombank shares, which dropped by 50 percent to finish at 140,000 VND per unit.
The HOSE will close on September 3 for National Day and will resume operations on September 4, according to the bourse's General Director Tran Dac Sinh.
Source: VNA
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