The stock market is expected to see optimistic signs in the third and fourth quarters of the year, when listing companies begin reaping fruits in their business.
Though the stock market is still lackluster with falls in prices, experts still believe that the bourse will recover its prosperity by the end of the year.
The good performance of listing companies, the interest of foreign investors in Vietnam’s stocks, the equitisation and IPOs of big corporations all are believed will help warm up the market. Moreover, investors will increase trading once they believe that share prices have returned to their actual values.
In a meeting with the press in early August, 2007, Chairman of the State Securities Commission (SSC) Vu Bang said he was optimistic about the development of Vietnam’s stock market. “I believe that the market still has many opportunities to develop as the foreign capital flow keeps rising. Many big foreign investors have expressed their interest in Vietnam’s stocks, including Goldman Sachs and Merrill Lynch,” said Mr Bang.
Huy Nam, securities and finance expert, also said that the bourse would be better towards the year’s end. However, he declined to forecast how much better the market would be.
Though the market has been in the ‘correction’ period, it has not witnessed serious setbacks, and investors have not fled. Mr Nam said that his survey showed that the number of new accounts opened at securities companies was still rising weekly.
Hoang Xuan Quyen, Head of the Research Division under the Tan Viet Securities Company, also said that the stock market would warm up towards the year’s end, though he warned that it would not warm up much. What can bring hope to investors are satisfactory business results of listing companies in the third and fourth quarters of the year (the third and fourth quarters are always the best season of enterprises).
SSC has announced that a taskforce in charge of auctioning shares has been established. The taskforce will programme the auctions of shares of equitising enterprises, ensuring the auctions in the harmonisation with the stock market situation and the listing of other enterprises.
Hanoi Boston Group under Vietnam Report Co has released a report about the stock market from August 31-September 7, saying that it is the right time to buy stocks again.
The sideways of the VN Index, hovering at the 900 point level, still fills investors with doubt about the recovery of the market. However, it is clear that the 900 point level is a firm bottom of the share prices. Investors who buy shares at this time have reason to believe that they are buying at the lowest possible price levels.
For these reasons, the group has advised investors to buy stocks at this moment, when share prices have returned to the actual value, and the picture of the stock market has become brighter than last month.
Meanwhile, the Hong Kong and Shanghai Banking Corporation (HSBC) has released a report about Vietnam’s stock market, the conclusions of which prove to coincide with the suggestions by Hanoi Boston Group. “We recommend investors look to buy Vietnamese equities again. Earnings are growing strongly, and valuations now look reasonable. The catalyst may be successful privatisation offerings in Q4,” the report reads.
If considering the main indexes of the national economy, one would see that it is the right time to make investment in stocks: the national economy growth is rapid and firmly, inflation has been controlled, the profits of listing company are very high, while the growth rate of EPS is clearly lower than the net profit growth rate due to the dilution effects of new issuances. The EPS growth rate, according to HSBC, is 22-25%, higher than that of China (15%) and Malaysia (19%). It is likely that the VN Index will return to the 1,150 point level by the end of this year.
Investment funds are expected to push up disbursement in September. To date, only a small proportion of capital has been disbursed, while funds are still awaiting the big IPOs slated for the fourth quarter of the year.
Source: VNE
Tuesday, September 04, 2007
Racing against time to achieve economic growth rate of 8.5%
To obtain the target for GDP growth rate of 8.5 percent set by the National Assembly and control the inflation rate, the Government and localities must make more effort and introduce stronger measures.
Earlier August 2007, Doctor Vo Tri Thanh, head of the Department for International Economic Integration Policy under the Central Institute for Economic Management (CIEM), said the target for GDP growth rate of 8-8.5 percent is within reach. But many other economic experts said the annual GDP growth rate will be around 8.3 percent.
According to Doctor Nguyen Dinh Anh from the Financial Science Academy said if this year the target for GDP growth rate of 8.5 percent is not fulfilled it will be difficult to implement economic growth rates in the next three years.
Researcher Nguyen Trung said the annual GDP growth rate of 7-8 percent in the past years is one of the nation’s strengths. However, Vietnam should look at imbalanced issues during the development process, for example economic vision and strategy, development requirements and management capacity, infrastructure supply and demand, quality, quantity and supply and demand in human resources development.
In the past three years, it was not Vietnam (with an annual GDP growth rate of 8.13 percent), but Cambodia (with an annual GDP growth rate of 10.5 percent) trailing after “Giant” China. In Southern Asia, India ranks third with an annual GDP growth rate of 8.73 percent.
In 1986 – the first year of implementation of the Doi Moi (Renewal) process, Vietnam’s average per capita income was US$200 lower than China, US$997 lower than Thailand, US$1,950 lower than Malaysia and US$6,940 lower than the Republic of Korea. But the differences in 2006 were US$1,100, US$2,140, US$4,520 and US$17,000, respectively. These figures show big income gaps between Vietnam and these countries.
To obtain an economic growth rate of 8.5 percent, Mr Anh said Vietnam should consider growth related factors such as labour productivity and investment capital. In the past eight months, many industrial products achieved high growth, including air conditioners (70.2 percent), automobiles (65.5 percent), machine tools (60 percent), motorbikes (28.1 percent) and electric engines (26.3 percent). Exports in the first eight months of this year increased by 19 percent to nearly US$31.2 billion, but the real added values were not high as most products are manufactured under contract.
Imports seemed to reduce (Import in August decreased 0.4 percent compared to July) but imports in the eight months was still up by 30 percent compared to the same period last year. Many economists expect an increase in investment.
According to the Ministry of Finance, investment capital disbursement in the past eight months only reached around 40 percent of the yearly plan due to the low feasibility of big projects, for example a Dinh Vu DAP factory project. Dr Vo Chi Thanh said to ensure the economic growth rate, the Government and relevant ministries, departments and localities should pay more attention to the issue.
Many experts said factors affecting Vietnamese growth are mainly long-term development factors. In the past eight months, Vietnam attracted an additional US$8.3 billion foreign direct investment (FDI) capital. Thus, average FDI into Vietnam is more than US$1 billion a month, up nearly 40 percent compared to last year.
Mr Thanh said there are three main snags in long-term development: institutions, human resources and infrastructure. There is a lack of human resources, especially high-level human resources. The price of high-level human resources is higher than in Shanghai, China. Besides, infrastructure, such as roads and electricity is poor. These snags cannot be resolved in several months.
In addition to these three snags, Vietnam is likely to face an unstable macro economy and hunger in the central region. If these five issues are resolved, Vietnam will achieve a growth rate of 8.5 percent, creating a firm foundation for economic growth in next few years.
Source: VNE
Earlier August 2007, Doctor Vo Tri Thanh, head of the Department for International Economic Integration Policy under the Central Institute for Economic Management (CIEM), said the target for GDP growth rate of 8-8.5 percent is within reach. But many other economic experts said the annual GDP growth rate will be around 8.3 percent.
According to Doctor Nguyen Dinh Anh from the Financial Science Academy said if this year the target for GDP growth rate of 8.5 percent is not fulfilled it will be difficult to implement economic growth rates in the next three years.
Researcher Nguyen Trung said the annual GDP growth rate of 7-8 percent in the past years is one of the nation’s strengths. However, Vietnam should look at imbalanced issues during the development process, for example economic vision and strategy, development requirements and management capacity, infrastructure supply and demand, quality, quantity and supply and demand in human resources development.
In the past three years, it was not Vietnam (with an annual GDP growth rate of 8.13 percent), but Cambodia (with an annual GDP growth rate of 10.5 percent) trailing after “Giant” China. In Southern Asia, India ranks third with an annual GDP growth rate of 8.73 percent.
In 1986 – the first year of implementation of the Doi Moi (Renewal) process, Vietnam’s average per capita income was US$200 lower than China, US$997 lower than Thailand, US$1,950 lower than Malaysia and US$6,940 lower than the Republic of Korea. But the differences in 2006 were US$1,100, US$2,140, US$4,520 and US$17,000, respectively. These figures show big income gaps between Vietnam and these countries.
To obtain an economic growth rate of 8.5 percent, Mr Anh said Vietnam should consider growth related factors such as labour productivity and investment capital. In the past eight months, many industrial products achieved high growth, including air conditioners (70.2 percent), automobiles (65.5 percent), machine tools (60 percent), motorbikes (28.1 percent) and electric engines (26.3 percent). Exports in the first eight months of this year increased by 19 percent to nearly US$31.2 billion, but the real added values were not high as most products are manufactured under contract.
Imports seemed to reduce (Import in August decreased 0.4 percent compared to July) but imports in the eight months was still up by 30 percent compared to the same period last year. Many economists expect an increase in investment.
According to the Ministry of Finance, investment capital disbursement in the past eight months only reached around 40 percent of the yearly plan due to the low feasibility of big projects, for example a Dinh Vu DAP factory project. Dr Vo Chi Thanh said to ensure the economic growth rate, the Government and relevant ministries, departments and localities should pay more attention to the issue.
Many experts said factors affecting Vietnamese growth are mainly long-term development factors. In the past eight months, Vietnam attracted an additional US$8.3 billion foreign direct investment (FDI) capital. Thus, average FDI into Vietnam is more than US$1 billion a month, up nearly 40 percent compared to last year.
Mr Thanh said there are three main snags in long-term development: institutions, human resources and infrastructure. There is a lack of human resources, especially high-level human resources. The price of high-level human resources is higher than in Shanghai, China. Besides, infrastructure, such as roads and electricity is poor. These snags cannot be resolved in several months.
In addition to these three snags, Vietnam is likely to face an unstable macro economy and hunger in the central region. If these five issues are resolved, Vietnam will achieve a growth rate of 8.5 percent, creating a firm foundation for economic growth in next few years.
Source: VNE
Friday, August 31, 2007
Stock indexes record modest bumps
The last trading session of the week saw improvement made by the two price indices on the Northern and Southern bourses.
HCM bourse:
HCM was reported to see a stunning high trade against yesterday’s poor performance, which was partly attributed to the system’s technical breakdown. The market price indicator saw its second consecutive rise. Vn-index closed at 908.37 points, up a slight 4.43 points, or 0.49% against the session earlier. The bourse saw a consolidated 7.8 million shares changing hands, worth a combined VND 673 billion. As such, the market’s total trade volume rose by rougly 60%, far exceeding the average of August. There were reportedly around 67 advancers, 23 decliners and 23 stills.
Though the number of rising stocks outstripped that of decliners and stills combined, HCM’s price index did not witness a strong rebound, which was partly attributed to the price decreases sufferred by those stocks of big listings and high capitalization as KDC, BMP, VNM, PVD. The stocks’ falls ranged from VND 1,000 to VND 4,000. Others such as NKD, TAC, ITA,SJS, DHG, REE, SAM was entitled to slight increases ranging from VND 1,000 to VND 3,000.
In terms of trade volume, the top advancers list this morning saw the presences of PPC and SAM. The former saw roughly 700,000 shares changing hands, while the latter saw 260,000 shares successfully matched. As usual, STB led the market in terms of liquidity with as many as 926,000 units traded. Sharp volumes were also seen with the fund VF1 and VNM.
Hanoi bourse:
Closing the session this morning, HaSTC index enjoyed a slight rise of 1.27 points, or 0.51% to reach 252.55 points. The market saw a consolidated 857,600 shares matched with volume totalling VND 86.12 billion. There were 43 rising stocks, 22 falling ones and 24 stills.
Included in the top advancers list this morning were the triple of Song Da Constrcution Group with decreasing band being expanded. VMC led the top advancers list with an increase of VND 5,200 and 1,000 units successfullymatched.
In the reverse direction, S99 suffered slight loss, leading the top losers list with a VND 2,800 fall. Next in the list were VNR, MEC, NTP and VTS, falling from VND 1,000 to VND 2,200 each. NTP saw the stunning high rise in the last couple of sessions. The stock lost VND 1,500.
In terms of trade volume, no significant changes witnessed with the top active list by volume. Included in the list were stocks of high frequency as SSI, NTP, ACB, MPC. New comer was SD9, which rose by VND 2,800 and saw roughly 38,000 units changing hands. Foreign investors continued to reduce trade. Such group brought in a total of 77,700 shares while sold out 200 units of SSI and SJE.
Source: InfoTV
HCM bourse:
HCM was reported to see a stunning high trade against yesterday’s poor performance, which was partly attributed to the system’s technical breakdown. The market price indicator saw its second consecutive rise. Vn-index closed at 908.37 points, up a slight 4.43 points, or 0.49% against the session earlier. The bourse saw a consolidated 7.8 million shares changing hands, worth a combined VND 673 billion. As such, the market’s total trade volume rose by rougly 60%, far exceeding the average of August. There were reportedly around 67 advancers, 23 decliners and 23 stills.
Though the number of rising stocks outstripped that of decliners and stills combined, HCM’s price index did not witness a strong rebound, which was partly attributed to the price decreases sufferred by those stocks of big listings and high capitalization as KDC, BMP, VNM, PVD. The stocks’ falls ranged from VND 1,000 to VND 4,000. Others such as NKD, TAC, ITA,SJS, DHG, REE, SAM was entitled to slight increases ranging from VND 1,000 to VND 3,000.
In terms of trade volume, the top advancers list this morning saw the presences of PPC and SAM. The former saw roughly 700,000 shares changing hands, while the latter saw 260,000 shares successfully matched. As usual, STB led the market in terms of liquidity with as many as 926,000 units traded. Sharp volumes were also seen with the fund VF1 and VNM.
Hanoi bourse:
Closing the session this morning, HaSTC index enjoyed a slight rise of 1.27 points, or 0.51% to reach 252.55 points. The market saw a consolidated 857,600 shares matched with volume totalling VND 86.12 billion. There were 43 rising stocks, 22 falling ones and 24 stills.
Included in the top advancers list this morning were the triple of Song Da Constrcution Group with decreasing band being expanded. VMC led the top advancers list with an increase of VND 5,200 and 1,000 units successfullymatched.
In the reverse direction, S99 suffered slight loss, leading the top losers list with a VND 2,800 fall. Next in the list were VNR, MEC, NTP and VTS, falling from VND 1,000 to VND 2,200 each. NTP saw the stunning high rise in the last couple of sessions. The stock lost VND 1,500.
In terms of trade volume, no significant changes witnessed with the top active list by volume. Included in the list were stocks of high frequency as SSI, NTP, ACB, MPC. New comer was SD9, which rose by VND 2,800 and saw roughly 38,000 units changing hands. Foreign investors continued to reduce trade. Such group brought in a total of 77,700 shares while sold out 200 units of SSI and SJE.
Source: InfoTV
Power Company joins hand with securities firm
Power Company No. 1 and Ha Thanh Securities signed a comprehensive strategic cooperation agreement on Aug. 30.
Under the agreement, the power company will contribute capital to Ha Thanh Securities, while Ha Thanh is expected to pour capital in power transmission, real estate and finance services projects invested by Power company No. 1.
Ha Thanh will become a partner in providing outline consultation for equitisation, share issuance, shareholder management and other services as the power company carries out its equitisation.
The power company will work with Ha Thanh to open transaction units and stock order agents at the power company’s several locations.
The General Director of Electricity of Viet Nam (EVN), Pham Le Thanh, said that the agreement aimed to fully utilise the two companies’ potential.
Cooperation enhancement between Ha Thanh Securities and Power Company No. 1 is regarded as the first step in the development of EVN’s multi-sectoral economic growth.
Source: VNA
Under the agreement, the power company will contribute capital to Ha Thanh Securities, while Ha Thanh is expected to pour capital in power transmission, real estate and finance services projects invested by Power company No. 1.
Ha Thanh will become a partner in providing outline consultation for equitisation, share issuance, shareholder management and other services as the power company carries out its equitisation.
The power company will work with Ha Thanh to open transaction units and stock order agents at the power company’s several locations.
The General Director of Electricity of Viet Nam (EVN), Pham Le Thanh, said that the agreement aimed to fully utilise the two companies’ potential.
Cooperation enhancement between Ha Thanh Securities and Power Company No. 1 is regarded as the first step in the development of EVN’s multi-sectoral economic growth.
Source: VNA
Supply side shocks, liquidity drive inflation
Headline inflation picked up in August from 6.6 per cent at the end-2006 to 8.6 per cent year-on-year. This represents an inflation of 7.4 per cent in the first eight months of the year, somewhat below the real GDP growth of 7.8 per cent during the first half of the year.
Rising inflation was initially induced by a rapid increase in food prices, for example in staple crops, and then later in other goods, especially pork.
Non-food prices inched up only marginally during the same period from 5 per cent to 5.2 per cent year-on-year. While broadly stable, non-food price inflation is by no means low.
Categories with rapid price increases include housing and construction materials, and other goods and services, mainly personal consumption items. Except for transportation and education, most other prices are hovering between 5 and 8 per cent.
Adjusting for seasonal variations, the recent price acceleration can be seen clearly as a supply side shock. Non-food prices have been broadly stable at below 6 per cent since the third quarter of 2006, while food prices started to increase sharply from the early part of this year.
Food price inflation in Viet Nam reflects a region-wide development with China and Indonesia, in particular, experiencing a similar upswing. However, because of lower non-food inflation in these countries, Viet Nam’s headline inflation is one of the highest in the region.
Underlying factors
There are several underlying factors that could explain the recent pick up in inflation.
First, shortages of food arising from weather related calamities, compounded by foot-and-mouth and, most recently, blue-ear disease, have driven food prices higher, such as rice and pork, along with several vegetables and cooking oil.
Second, international commodity prices rose sharply in 2007, peaking in mid-year, and filtered through to the local market. For example, from the second quarter of 2006 to mid-2007, international cereal prices rose by 21 per cent, vegetable oil by 5 per cent, meat by 9 per cent, and metals by as much as 80 per cent.
Third, aggregate demand has remained strong during the first half of 2007, not only driving non-food inflation but also merchandise imports. The increase in imports helped to release some of the pressures from domestic demand. However, higher international prices also implied a sharp increase in the unit value of imports.
Fourth, the higher inflation in Viet Nam could partly be a relative price adjustment process, although a lack of quantitative evidence makes it difficult to affirm.
Policy and responses
The regular seasonal slowdown of economic activity in the first half of 2007 was less visible as strong domestic demand and exports helped sustain a high rate of GDP growth.
Non-oil exports recorded an overall growth of 28 per cent during the first eight months in US dollar terms, while strong domestic demand in response to large capital inflows and rising household incomes through the asset boom led to a pick up in consumer demand. Furthermore, investment remained robust in part due to increasing foreign direct investment (FDI) and construction.
Domestic sales data shows an increase of 23 per cent during the first eight months of the year, and construction sector rising by 10.5 per cent in the second quarter.
Moreover, non-oil import merchandise grew by 34 per cent during the same period, reflecting not only imports of capital and intermediate goods but also final consumer products such as cars and electronics.
As such, relatively low agricultural production compared with previous years was more than compensated by the strong growth in manufacturing, construction, and services.
Macroeconomic policies were broadly accommodative of these developments. The liquidity injection arising from foreign exchange market intervention was only partly sterilised, facilitating rapid private sector credit growth. Furthermore, credit expansion had a more direct impact on consumption than indirectly through the real balance effect by fuelling an asset boom and also through direct consumer loans.
Adding to this liquidity injection are private capital inflows, which in the case of dollarised economies, can add directly to domestic liquidity.
There was no added fiscal stimulus in the first half of the year as spending was contained.
However, the non-oil fiscal balance still remains well above 10 per cent of GDP. In other words, this amount represents a net fiscal injection of money into the economy that is not raised from local sources.
Short-term outlook
Inflation outlook is subject to various conditions. On the supply side, food inflation could pick up in the fourth quarter, repeating last year’s pattern, but is subject to weather conditions. Also, pork supply has not yet been brought under control, and will be an important factor in determining food inflation in the second half.
Overall inflation, however, will be influenced by macroeconomic policies. Policies implemented to date argue for some optimism.
Various measures introduced by the Government - for example State Bank of Viet Nam (SBV) Decision 03/2007 and Directive 03, and raising commercial banks’ required reserves by 100 per cent in June - helped absorb liquidity.
The longer maturity and larger quantity of SBV bills issued in recent months also helped to tighten the interbank market condition.
Assuming that the SBV will continue to do so in an environment where inflows have moderated due to the recent global financial turmoil related to the US sub-prime mortgage market, the rate of acceleration of monetary aggregates could be contained in the second half of the year.
Nevertheless, the recent cooling on the stock market by itself cannot assure containment of the asset boom as there is still ample liquidity that will search for other assets such as property.
On the fiscal policy side, the deferment of minimum wage increases by the Government and the containment of capital spending in the second half of the year will ensure that no added fiscal stimulus is provided to the economy.
Finally, the current moderation of inflows provides an opportunity for the Government to supplement the positive effect of the temporary reduction of tariff rates by intervening less rigorously in the foreign exchange market.
Higher inflation is a concern as it affects the poor more than the rich, especially if inflation is induced by an asset boom. Moreover, what matters is not whether inflation has exceeded GDP growth, but whether uncertainties created by high inflation is starting to have an adverse impact on economic growth itself.
Source: VNS
Rising inflation was initially induced by a rapid increase in food prices, for example in staple crops, and then later in other goods, especially pork.
Non-food prices inched up only marginally during the same period from 5 per cent to 5.2 per cent year-on-year. While broadly stable, non-food price inflation is by no means low.
Categories with rapid price increases include housing and construction materials, and other goods and services, mainly personal consumption items. Except for transportation and education, most other prices are hovering between 5 and 8 per cent.
Adjusting for seasonal variations, the recent price acceleration can be seen clearly as a supply side shock. Non-food prices have been broadly stable at below 6 per cent since the third quarter of 2006, while food prices started to increase sharply from the early part of this year.
Food price inflation in Viet Nam reflects a region-wide development with China and Indonesia, in particular, experiencing a similar upswing. However, because of lower non-food inflation in these countries, Viet Nam’s headline inflation is one of the highest in the region.
Underlying factors
There are several underlying factors that could explain the recent pick up in inflation.
First, shortages of food arising from weather related calamities, compounded by foot-and-mouth and, most recently, blue-ear disease, have driven food prices higher, such as rice and pork, along with several vegetables and cooking oil.
Second, international commodity prices rose sharply in 2007, peaking in mid-year, and filtered through to the local market. For example, from the second quarter of 2006 to mid-2007, international cereal prices rose by 21 per cent, vegetable oil by 5 per cent, meat by 9 per cent, and metals by as much as 80 per cent.
Third, aggregate demand has remained strong during the first half of 2007, not only driving non-food inflation but also merchandise imports. The increase in imports helped to release some of the pressures from domestic demand. However, higher international prices also implied a sharp increase in the unit value of imports.
Fourth, the higher inflation in Viet Nam could partly be a relative price adjustment process, although a lack of quantitative evidence makes it difficult to affirm.
Policy and responses
The regular seasonal slowdown of economic activity in the first half of 2007 was less visible as strong domestic demand and exports helped sustain a high rate of GDP growth.
Non-oil exports recorded an overall growth of 28 per cent during the first eight months in US dollar terms, while strong domestic demand in response to large capital inflows and rising household incomes through the asset boom led to a pick up in consumer demand. Furthermore, investment remained robust in part due to increasing foreign direct investment (FDI) and construction.
Domestic sales data shows an increase of 23 per cent during the first eight months of the year, and construction sector rising by 10.5 per cent in the second quarter.
Moreover, non-oil import merchandise grew by 34 per cent during the same period, reflecting not only imports of capital and intermediate goods but also final consumer products such as cars and electronics.
As such, relatively low agricultural production compared with previous years was more than compensated by the strong growth in manufacturing, construction, and services.
Macroeconomic policies were broadly accommodative of these developments. The liquidity injection arising from foreign exchange market intervention was only partly sterilised, facilitating rapid private sector credit growth. Furthermore, credit expansion had a more direct impact on consumption than indirectly through the real balance effect by fuelling an asset boom and also through direct consumer loans.
Adding to this liquidity injection are private capital inflows, which in the case of dollarised economies, can add directly to domestic liquidity.
There was no added fiscal stimulus in the first half of the year as spending was contained.
However, the non-oil fiscal balance still remains well above 10 per cent of GDP. In other words, this amount represents a net fiscal injection of money into the economy that is not raised from local sources.
Short-term outlook
Inflation outlook is subject to various conditions. On the supply side, food inflation could pick up in the fourth quarter, repeating last year’s pattern, but is subject to weather conditions. Also, pork supply has not yet been brought under control, and will be an important factor in determining food inflation in the second half.
Overall inflation, however, will be influenced by macroeconomic policies. Policies implemented to date argue for some optimism.
Various measures introduced by the Government - for example State Bank of Viet Nam (SBV) Decision 03/2007 and Directive 03, and raising commercial banks’ required reserves by 100 per cent in June - helped absorb liquidity.
The longer maturity and larger quantity of SBV bills issued in recent months also helped to tighten the interbank market condition.
Assuming that the SBV will continue to do so in an environment where inflows have moderated due to the recent global financial turmoil related to the US sub-prime mortgage market, the rate of acceleration of monetary aggregates could be contained in the second half of the year.
Nevertheless, the recent cooling on the stock market by itself cannot assure containment of the asset boom as there is still ample liquidity that will search for other assets such as property.
On the fiscal policy side, the deferment of minimum wage increases by the Government and the containment of capital spending in the second half of the year will ensure that no added fiscal stimulus is provided to the economy.
Finally, the current moderation of inflows provides an opportunity for the Government to supplement the positive effect of the temporary reduction of tariff rates by intervening less rigorously in the foreign exchange market.
Higher inflation is a concern as it affects the poor more than the rich, especially if inflation is induced by an asset boom. Moreover, what matters is not whether inflation has exceeded GDP growth, but whether uncertainties created by high inflation is starting to have an adverse impact on economic growth itself.
Source: VNS
Bosses try to ease investors’ jitters
The heads of four leading Vietnamese companies met with shareholders yesterday to allay fears amid tumbling share prices.
Investors fired more than 30 questions at bosses of the Refrigeration Electrical Engineering Corporation (REE), the Cables and Telecom Materials Company (SAM), the Gemadept Corporation (GMD) and the Kinh Do Corporation (KDC).
Top of investor concerns was falling prices - despite seemingly sound business performances and potential investment plans.
Sacom General Director Do Van Trac said three factors were chiefly to blame for declining stock values - the State’s macro-economic policies (such as the State Bank of Viet Nam’s decree 03), business results and investor confidence.
He said the most noticeable feature of the Vietnamese stock market was the imitative behaviour of investors.
"Vietnamese investors often follow each others’ decisions, which has a negative influence on share prices," said Trac.
"Investors cannot blame their losses on market factors, they must look to themselves. They should be patient and believe in their companies’ future, rather than just off-loading shares when they find prices go down, which makes the situation worse."
Trac added that he hoped the shareholder meeting would convince investors either to sell their shares or hold onto them.
GMD General Director Do Van Minh said prices had been inflated beyond their real value and that it was only normal to expect them to find their own level.
He said that GMD’s true share price lay between VND160,000 and VND180,000. Next year, if GMD profit’s grow by 30 per cent, as anticipated, investors could expect stock values to rise accordingly.
Investors also raised the issue of foreign ownership, which currently stands at 49 per cent of REE and GMD.
Investors asked if the companies intended to issue more shares to attract greater foreign investment to hike prices.
Minh said: "If the company issues more shares, we will try not to sell directly to foreign strategic shareholders in order to force them to buy on the stock exchange. This can make prices higher."
Trac said foreign investors now owned 40.3 per cent of SAM’s shares. He said if they wished to buy a larger stake in the company they would have to do it through the stock exchange. However, he doubted strategic shareholders would sell.
The chairwoman of REE Management Board, Nguyen Thi Mai Thanh, said her company would only issue more shares as part of its business plan.
On this issue investors expressed concerns about investment in real estate.
Thanh affirmed that REE’s main investments were in property and finance. She said profits from real estate investments this year would be VND100 billion (US$6.2 million), accounting for one-third of the company’s total targeted profit.
Source: VNS
Investors fired more than 30 questions at bosses of the Refrigeration Electrical Engineering Corporation (REE), the Cables and Telecom Materials Company (SAM), the Gemadept Corporation (GMD) and the Kinh Do Corporation (KDC).
Top of investor concerns was falling prices - despite seemingly sound business performances and potential investment plans.
Sacom General Director Do Van Trac said three factors were chiefly to blame for declining stock values - the State’s macro-economic policies (such as the State Bank of Viet Nam’s decree 03), business results and investor confidence.
He said the most noticeable feature of the Vietnamese stock market was the imitative behaviour of investors.
"Vietnamese investors often follow each others’ decisions, which has a negative influence on share prices," said Trac.
"Investors cannot blame their losses on market factors, they must look to themselves. They should be patient and believe in their companies’ future, rather than just off-loading shares when they find prices go down, which makes the situation worse."
Trac added that he hoped the shareholder meeting would convince investors either to sell their shares or hold onto them.
GMD General Director Do Van Minh said prices had been inflated beyond their real value and that it was only normal to expect them to find their own level.
He said that GMD’s true share price lay between VND160,000 and VND180,000. Next year, if GMD profit’s grow by 30 per cent, as anticipated, investors could expect stock values to rise accordingly.
Investors also raised the issue of foreign ownership, which currently stands at 49 per cent of REE and GMD.
Investors asked if the companies intended to issue more shares to attract greater foreign investment to hike prices.
Minh said: "If the company issues more shares, we will try not to sell directly to foreign strategic shareholders in order to force them to buy on the stock exchange. This can make prices higher."
Trac said foreign investors now owned 40.3 per cent of SAM’s shares. He said if they wished to buy a larger stake in the company they would have to do it through the stock exchange. However, he doubted strategic shareholders would sell.
The chairwoman of REE Management Board, Nguyen Thi Mai Thanh, said her company would only issue more shares as part of its business plan.
On this issue investors expressed concerns about investment in real estate.
Thanh affirmed that REE’s main investments were in property and finance. She said profits from real estate investments this year would be VND100 billion (US$6.2 million), accounting for one-third of the company’s total targeted profit.
Source: VNS
It’s time to buy shares
The Hong Kong and Shanghai Banking Corporation (HSBC) has released a new report in a series of reports about Vietnam’s national economy and financial market.
In the report, HSBC’s experts advise investors to buy Vietnamese stocks at this moment.
At the end of January 2007, HSBC gave the forecast that the VN Index would stand at the 900 point level by the end of this year, and the forecast was repeated in its latest report. After declining by 25% after hitting its peak in March, the VN Index has come back to the forecast level, making share items on the bourse become attractive – once again.
Vietnam’s national economy maintains high growth rates, 8.1% in the second quarter of 2007, while the foreign direct investment (FDI) keeps flowing into Vietnam in big quantities ($6.7bil to date, much higher than last year’s level of $2.8bil). Vietnam’s export growth rate is at 19%.
Meanwhile, the growth rate of the profit of listing companies proves to be very satisfactory. The net profit of the 12 companies which own the 12 blue chips saw the impressive growth rate of 83% in the first half of the year. Some of them saw profit double or triple that of the same period last year.
However, the report reminded investors that the high profit of the listing companies came from financial investment deals. Vinamilk (the Vietnam Dairy Products Company), for example, would have gained the net profit of 23% instead of 36% if it had not made financial investments.
As many companies have issued additional shares, the EPS proves to be much lower than the net profit growth rate. Anyway, the EPS in the first half of the year still grew by 35% over the same period of last year.
Investment fund management companies in Vietnam share the same view that EPS growth rate will be between 22% and 25% this year, and 15-20% in 2008. Meanwhile, the EPS growth rate of Indian companies is expected to be 9% this year and 20% next year. The figures are 15% and 19% for Chinese companies, respectively, and 19% and 11% for Malaysian companies. Therefore, investors may see that the EPS growth rate for Vietnamese companies is relatively attractive.
The prices of the stocks on Vietnam’s bourse are believed to have returned to the actual values. In March, when the market was very hot, the P/E was 37, and now it has fallen to 31. If considering that the EPS growth rate is 25% this year and 15% the next year, the P/E of 2008 would be 20.
Though share prices prove to be not so cheap, HSBC still believes that the current price levels are close to the actual values. According to HSBC, the VN Index is likely to reach the 1,100 point level by the end of 2008.
Until now, Vietnam has not born impacts of the world’s stock market crisis. The majority of foreign currencies on Vietnam’s market come from domestic funds, which do not have plans to sell.
In fact, only a small part of the total capital of foreign investment funds has been injected in the market. Funds are still holding onto capital, waiting for the share issuances in the last six months of the year. HSBV thinks that some $3bil more remains undisbursed. Once the VN Index is around the 900 point level, which foreign investors think is close to the actual value, the capital will be pumped into the market.
This explains the recovery of Vietnam’s stock market in the context of the world’s gloomy market. While Asian markets have witnessed sharp falls of 18% between July 24 and August 17, Vietnam’s saw the slight decrease of 9.6%, the lowest decrease among Asian markets.
Nevertheless, HSBC has warned that Vietnam’s stock market will be influenced if the world’s market continues fluctuating.
HSBC does not share the same viewpoint as Vietnamese officials that massive IPOs, slated for the remaining months of the year, will cause indigestion in the market due to oversupply. HSBC thinks that demand will increase when there is supply, saying that the IPOs may serve as a catalyst for the recovery of the market.
Source: VNE
In the report, HSBC’s experts advise investors to buy Vietnamese stocks at this moment.
At the end of January 2007, HSBC gave the forecast that the VN Index would stand at the 900 point level by the end of this year, and the forecast was repeated in its latest report. After declining by 25% after hitting its peak in March, the VN Index has come back to the forecast level, making share items on the bourse become attractive – once again.
Vietnam’s national economy maintains high growth rates, 8.1% in the second quarter of 2007, while the foreign direct investment (FDI) keeps flowing into Vietnam in big quantities ($6.7bil to date, much higher than last year’s level of $2.8bil). Vietnam’s export growth rate is at 19%.
Meanwhile, the growth rate of the profit of listing companies proves to be very satisfactory. The net profit of the 12 companies which own the 12 blue chips saw the impressive growth rate of 83% in the first half of the year. Some of them saw profit double or triple that of the same period last year.
However, the report reminded investors that the high profit of the listing companies came from financial investment deals. Vinamilk (the Vietnam Dairy Products Company), for example, would have gained the net profit of 23% instead of 36% if it had not made financial investments.
As many companies have issued additional shares, the EPS proves to be much lower than the net profit growth rate. Anyway, the EPS in the first half of the year still grew by 35% over the same period of last year.
Investment fund management companies in Vietnam share the same view that EPS growth rate will be between 22% and 25% this year, and 15-20% in 2008. Meanwhile, the EPS growth rate of Indian companies is expected to be 9% this year and 20% next year. The figures are 15% and 19% for Chinese companies, respectively, and 19% and 11% for Malaysian companies. Therefore, investors may see that the EPS growth rate for Vietnamese companies is relatively attractive.
The prices of the stocks on Vietnam’s bourse are believed to have returned to the actual values. In March, when the market was very hot, the P/E was 37, and now it has fallen to 31. If considering that the EPS growth rate is 25% this year and 15% the next year, the P/E of 2008 would be 20.
Though share prices prove to be not so cheap, HSBC still believes that the current price levels are close to the actual values. According to HSBC, the VN Index is likely to reach the 1,100 point level by the end of 2008.
Until now, Vietnam has not born impacts of the world’s stock market crisis. The majority of foreign currencies on Vietnam’s market come from domestic funds, which do not have plans to sell.
In fact, only a small part of the total capital of foreign investment funds has been injected in the market. Funds are still holding onto capital, waiting for the share issuances in the last six months of the year. HSBV thinks that some $3bil more remains undisbursed. Once the VN Index is around the 900 point level, which foreign investors think is close to the actual value, the capital will be pumped into the market.
This explains the recovery of Vietnam’s stock market in the context of the world’s gloomy market. While Asian markets have witnessed sharp falls of 18% between July 24 and August 17, Vietnam’s saw the slight decrease of 9.6%, the lowest decrease among Asian markets.
Nevertheless, HSBC has warned that Vietnam’s stock market will be influenced if the world’s market continues fluctuating.
HSBC does not share the same viewpoint as Vietnamese officials that massive IPOs, slated for the remaining months of the year, will cause indigestion in the market due to oversupply. HSBC thinks that demand will increase when there is supply, saying that the IPOs may serve as a catalyst for the recovery of the market.
Source: VNE
What can big corporations’ cooperation deals bring?
Analysts have been talking about the trend of “brand name trading”. This is when big corporations signs agreements on strategic partnership and cooperation.
A lot of cooperation agreements have been signed recently, between the Vietnam Post and Telecommunications Group (VNPT) and three corporations, Vincom (real estate developer), BIDV (bank) and Vinaconex (construction); between BIDV and the Vietnam Development Bank (VDB); between the Vietnam Coal and Mineral Industries Group (Vinacoal) and a transport works design company.
It has become a trend that big corporations cooperate with each other, which can help them share risks in doing business while allowing them to seek more profit.
VNPT, for example, is mainly a telecommunications service provider. However, with the cooperation with Vinaconex and Vincom, it is attempting to enter a new business field: construction and real estate. The enterprises that cooperate with VNPT will also benefit from having VNPT as a special partner in terms of access to its services.
The news about cooperation between corporations has brought about a lot of effects. One year ago, when the stock market was hot, news about cooperation deals helped a lot in making corporations’ shares more valuable. The shares of the companies involved in cooperation agreements skyrocketed right after mass media reported on the deals.
That explains why questions have been raised about the reasons for the partnerships.
VNPT now can establish a bank, while FPT, a software and informatics company, now can jump into other business fields, including finance and securities. Meanwhile, other enterprises have not made any moves after their hand shakings.
Vincom’s representatives stressed that the company did not intend to take advantage of VNPT to polish its image. VNPT and Vincom now have common, specific goals in capital investment, technology infrastructure for high-grade apartment areas.
According to VNPT’s representative, it will not happen that VNPT will be the sole service provider for Vincom. VNPT will have to compete with other rivals, though it has advantages as the strategic partner of Vincom.
Anyway, experts have warned that enterprises should think carefully before making cooperation deals. If the benefit the two sides can get does not satisfy enterprises, they will cheapen their brand names.
Source: VNE
A lot of cooperation agreements have been signed recently, between the Vietnam Post and Telecommunications Group (VNPT) and three corporations, Vincom (real estate developer), BIDV (bank) and Vinaconex (construction); between BIDV and the Vietnam Development Bank (VDB); between the Vietnam Coal and Mineral Industries Group (Vinacoal) and a transport works design company.
It has become a trend that big corporations cooperate with each other, which can help them share risks in doing business while allowing them to seek more profit.
VNPT, for example, is mainly a telecommunications service provider. However, with the cooperation with Vinaconex and Vincom, it is attempting to enter a new business field: construction and real estate. The enterprises that cooperate with VNPT will also benefit from having VNPT as a special partner in terms of access to its services.
The news about cooperation between corporations has brought about a lot of effects. One year ago, when the stock market was hot, news about cooperation deals helped a lot in making corporations’ shares more valuable. The shares of the companies involved in cooperation agreements skyrocketed right after mass media reported on the deals.
That explains why questions have been raised about the reasons for the partnerships.
VNPT now can establish a bank, while FPT, a software and informatics company, now can jump into other business fields, including finance and securities. Meanwhile, other enterprises have not made any moves after their hand shakings.
Vincom’s representatives stressed that the company did not intend to take advantage of VNPT to polish its image. VNPT and Vincom now have common, specific goals in capital investment, technology infrastructure for high-grade apartment areas.
According to VNPT’s representative, it will not happen that VNPT will be the sole service provider for Vincom. VNPT will have to compete with other rivals, though it has advantages as the strategic partner of Vincom.
Anyway, experts have warned that enterprises should think carefully before making cooperation deals. If the benefit the two sides can get does not satisfy enterprises, they will cheapen their brand names.
Source: VNE
What’s the fate of 6 blue chips on HOSE?
Having the total capitalisation volume of VND120tril ($7.5bil), six share items, SJS, STB, FPT, VNM, PPC, and PVD, now account for one-third of the total listing market capitalisation.
Domestic and foreign investors always refer to the prices of the six blue chips when making investment decisions, considering these the barometer of the stock market.
Several days ago, foreign investors were given an unexpected gift: as the securities depository centre made a mistake in defining the foreign ownership ratio in Sacombank, foreign investors could freely purchase many more Sacombank shares. Though the depository centre announced its mistake, foreign investors decided not to sell Sacombank shares in order to reduce the foreign ownership ratio to 30% as required. The event shows the big attractiveness of Sacombank shares (STB).
In the last trading sessions, STB has led the market in transaction volume. However, as the market remains quiet, STB’s price did not increase, selling at VND53,000/share on August 28.
According to Bui Ngoc Tuoc, a securities expert, though STB has high liquidity and low P/E index, it has several shortcomings that may worry investors.
First, STB have been listed in the largest quantity on the market with listed 442mil, many of which have been additionally issued, and at the moments when the demand was lower than supply.
Second, STB has witnessed a lot of changes in staff, while members of management board and their relatives have continuously sold STB recently.
Third, investors still want to keep the ‘wait-and-see’ attitude as they want to know how Sacombank will perform when many foreign banks enter the market and more local banks are set up.
Mr Tuoc said that if the shortcomings could be fixed, STB would still deserve to be listed among investors’ portfolios.
Once the hottest share item on the bourse, SJS has surrendered its first position to another item though it remains influential. When Song Da Corporation (the parent group of SJS) sold 6mil SJS shares, big doubts were left among investors.
Vu Chi Tung, an investor on SSI trading floor, said that this was one of the factors that had prompted him and other investors not to keep SJS any more. “Song Da would not have sold SJS in large quantities if SJS had been actually promising,” he said.
The director of a securities company said that SJS would have difficulty retaining its previous position as the real estate boom was over. Meanwhile, several other real estate firms, which also have big competitiveness, are also going to make IPOs or list on the bourse.
The director said that the actual value of SJS would be somewhere between VND200-250,000/share. If the real estate market does not witness a new price fever, and the company does not have business plans which promise fat profit, SJS will not be able to return to the over VND300,000/share level.
Recently, Vinamilk (VNM) has revealed its intention of listing on a foreign bourse. Together with STB, VNM is a big name among the six blue chips most wanted by investors. If the government approves the raising of foreign ownership ratio, and VNM lists on foreign bourses, VNM price will skyrocket. However, there is always a big gap between expectations and reality.
FPT prices slid dramatically recently from their highest peak. Three reasons have been cited to explain the sharp price decreases 1. bad rumours about FPT, which were not addressed timely 2. TPG registered to sell a large quantity of FPT 3. Two members of FPT registered to sell a large volume of FPT also at that time. Whether FPT prices can recover in the time to come will depend on many factors, while FPT’s management board has committed not to sell shares until the year’s end.
PPC, though having the lowest P/E index among the group of six (less than 17), has the lowest price level, at VND52,500/share.
The paradox has been explained by Electricity Engineer Tran Vinh Nghi: outdated equipment and low management skills both make PPC’s value low.
Meanwhile, PVD has overly high P/E (over 74), while the new projects of the company have not shown efficiency; therefore, investors dare not inject mooney in PVD. Moreover, if wanting to make investment in oil and gas companies, investors will have more choices in the near future, when more oil and gas enterprises are equitised.
Domestic and foreign investors always refer to the prices of the six blue chips when making investment decisions, considering these the barometer of the stock market.
Several days ago, foreign investors were given an unexpected gift: as the securities depository centre made a mistake in defining the foreign ownership ratio in Sacombank, foreign investors could freely purchase many more Sacombank shares. Though the depository centre announced its mistake, foreign investors decided not to sell Sacombank shares in order to reduce the foreign ownership ratio to 30% as required. The event shows the big attractiveness of Sacombank shares (STB).
In the last trading sessions, STB has led the market in transaction volume. However, as the market remains quiet, STB’s price did not increase, selling at VND53,000/share on August 28.
According to Bui Ngoc Tuoc, a securities expert, though STB has high liquidity and low P/E index, it has several shortcomings that may worry investors.
First, STB have been listed in the largest quantity on the market with listed 442mil, many of which have been additionally issued, and at the moments when the demand was lower than supply.
Second, STB has witnessed a lot of changes in staff, while members of management board and their relatives have continuously sold STB recently.
Third, investors still want to keep the ‘wait-and-see’ attitude as they want to know how Sacombank will perform when many foreign banks enter the market and more local banks are set up.
Mr Tuoc said that if the shortcomings could be fixed, STB would still deserve to be listed among investors’ portfolios.
Once the hottest share item on the bourse, SJS has surrendered its first position to another item though it remains influential. When Song Da Corporation (the parent group of SJS) sold 6mil SJS shares, big doubts were left among investors.
Vu Chi Tung, an investor on SSI trading floor, said that this was one of the factors that had prompted him and other investors not to keep SJS any more. “Song Da would not have sold SJS in large quantities if SJS had been actually promising,” he said.
The director of a securities company said that SJS would have difficulty retaining its previous position as the real estate boom was over. Meanwhile, several other real estate firms, which also have big competitiveness, are also going to make IPOs or list on the bourse.
The director said that the actual value of SJS would be somewhere between VND200-250,000/share. If the real estate market does not witness a new price fever, and the company does not have business plans which promise fat profit, SJS will not be able to return to the over VND300,000/share level.
Recently, Vinamilk (VNM) has revealed its intention of listing on a foreign bourse. Together with STB, VNM is a big name among the six blue chips most wanted by investors. If the government approves the raising of foreign ownership ratio, and VNM lists on foreign bourses, VNM price will skyrocket. However, there is always a big gap between expectations and reality.
FPT prices slid dramatically recently from their highest peak. Three reasons have been cited to explain the sharp price decreases 1. bad rumours about FPT, which were not addressed timely 2. TPG registered to sell a large quantity of FPT 3. Two members of FPT registered to sell a large volume of FPT also at that time. Whether FPT prices can recover in the time to come will depend on many factors, while FPT’s management board has committed not to sell shares until the year’s end.
PPC, though having the lowest P/E index among the group of six (less than 17), has the lowest price level, at VND52,500/share.
The paradox has been explained by Electricity Engineer Tran Vinh Nghi: outdated equipment and low management skills both make PPC’s value low.
Meanwhile, PVD has overly high P/E (over 74), while the new projects of the company have not shown efficiency; therefore, investors dare not inject mooney in PVD. Moreover, if wanting to make investment in oil and gas companies, investors will have more choices in the near future, when more oil and gas enterprises are equitised.
Thursday, August 30, 2007
VN-Index surpasses 900 point benchmark
Modest rises were witnessed in the two bourses this morning. In HCM bourse, VN-Index closed another session surviving the 900 level. The index closed at 903.94 points, up a slight 2.77 points against the session earlier. The market saw roughly 4.83 million shares changing hands, worth a combined VND 426.51 billion. The thing worth noting in the session this morning was HOSE’s electronic board suddenly going black for nearly one hour, which resulted in the reduced trading volume and orders placed by investors.
The number of rising stocks was reportedly around 54, while that of falling and still closed at 28 and 32, respectively. Some bluechips saw initial rebounds. BMC and TCT continued to draw much investors’ attention by their sharp rises and falls. The two stocks were back at the top of the top advancers list, increasing VND 25,000 and VND 17,000 each by the end of the session. Other sharp risers included KDC, HAS and BBC. Others closed at their reference prices, namely NKD, REE, RIC, SAM, STB, TDH, VNM, VSH, etc.
In the reverse direction, decliners saw moderate falls. The two most severely hit by price falls on the bourse, ABT and IMP each suffereed VND 4,000. The remaining decliners saw modest falls. 20 out of 28 decliners restricted their falls to VND 1,000 only.
In terms of trade volume, TNC put an end to its string of rising sessions since its bourse debut one week ago. The stock’s volume was reduced sharply to one third that of yesterday, prompting STB to regain its posisition as the most-heavily traded stock. Next active stocks were FPT, VSH and VNM.
Closing the session this morning, HaSTC closed at 251.28 points, up a very slight 0.8 points, or 0.31% against the session earlier. The market saw rougly 747,600 units changing hands, worth a combined VND 68.22 billion. There were 39 rising stocks, 30 falling stocks and 20 stills.
Things barely changed over the course of the last couple of trading sessions. Stocks saw moderate ups and downs, except for S99, the stock of sharp increments. NTP was reportedly the stock on highest rise, gaining an additional VND 4,500 to its reference price. Next in the list were SD9, BVS, SD3 and PLC. Of the remaining 34 falling stocks, 24 saw decreases less than VND 1,000 and 10 others in VND 1-2,000 each.
In the reverse direction, the bourse’s new comer, SSS, ebbed VND 3,000 with volume amounting to 1,700 units. Next in the top losers list were STC, MCO, HTP and PSC with decreases ranging from VND 15,000-2,500 each.
In terms of trading volume, 5 stocks of heaviest trade were NTP, ACB, SSI, SD9 and PVI. SSI saw a severe decline in volume, which fell short of 100,000 units. NTP and ACB, on the contrary, saw trade exceeding that level. Foreign investors bought in 119,300 shares of different stocks while sold out 100 SSI shares only.
Source: Infotv
The number of rising stocks was reportedly around 54, while that of falling and still closed at 28 and 32, respectively. Some bluechips saw initial rebounds. BMC and TCT continued to draw much investors’ attention by their sharp rises and falls. The two stocks were back at the top of the top advancers list, increasing VND 25,000 and VND 17,000 each by the end of the session. Other sharp risers included KDC, HAS and BBC. Others closed at their reference prices, namely NKD, REE, RIC, SAM, STB, TDH, VNM, VSH, etc.
In the reverse direction, decliners saw moderate falls. The two most severely hit by price falls on the bourse, ABT and IMP each suffereed VND 4,000. The remaining decliners saw modest falls. 20 out of 28 decliners restricted their falls to VND 1,000 only.
In terms of trade volume, TNC put an end to its string of rising sessions since its bourse debut one week ago. The stock’s volume was reduced sharply to one third that of yesterday, prompting STB to regain its posisition as the most-heavily traded stock. Next active stocks were FPT, VSH and VNM.
Closing the session this morning, HaSTC closed at 251.28 points, up a very slight 0.8 points, or 0.31% against the session earlier. The market saw rougly 747,600 units changing hands, worth a combined VND 68.22 billion. There were 39 rising stocks, 30 falling stocks and 20 stills.
Things barely changed over the course of the last couple of trading sessions. Stocks saw moderate ups and downs, except for S99, the stock of sharp increments. NTP was reportedly the stock on highest rise, gaining an additional VND 4,500 to its reference price. Next in the list were SD9, BVS, SD3 and PLC. Of the remaining 34 falling stocks, 24 saw decreases less than VND 1,000 and 10 others in VND 1-2,000 each.
In the reverse direction, the bourse’s new comer, SSS, ebbed VND 3,000 with volume amounting to 1,700 units. Next in the top losers list were STC, MCO, HTP and PSC with decreases ranging from VND 15,000-2,500 each.
In terms of trading volume, 5 stocks of heaviest trade were NTP, ACB, SSI, SD9 and PVI. SSI saw a severe decline in volume, which fell short of 100,000 units. NTP and ACB, on the contrary, saw trade exceeding that level. Foreign investors bought in 119,300 shares of different stocks while sold out 100 SSI shares only.
Source: Infotv
Kinh Do sees one third '07 profit rise
Vietnam's Kinh Do Food Corporation (KDC) expects its net profit to rise by one third this year and to complete the takeovers of two subsidiaries, including North Kinh Do Food Co (NKD), an executive said on Thursday.
Le Phung Hao, Deputy General Director of the Ho Chi Minh City-based firm, said this year's net profit would rise 37.8 percent from 2006 to 332 billion dong ($20.5 million) and to 572 billion dong ($35.4 million) next year.
"We will complete the acquisitions within this year after a share issue for which we are seeking licence from the State Securities Commission," Hao told Reuters on the sidelines of a conference in Hanoi.
In April, Kinh Do said it would issue 11 million shares to raise funds for three property projects and lift its registered capital by 30.6 percent to 470 billion dong ($29 million).
"We need more than 1,200 billion dong for our property projects," Hao said.
The projects include an office building in downtown Ho Chi Minh City, a shopping mall and office complex and an apartment building.
"Foreign investors are arriving in Vietnam, people's living standards are also getting higher, so the pressure on housing in Ho Chi Minh City is huge," Hao said.
Kinh Do was also running a venture with a Vietnamese military company to build a complex of office, trade promotion facilities and apartments in Ho Chi Minh City, he said.
Kinh Do's future business would include food processing, retail property and financial investment with food processing still contributing 70-80 percent of revenues, Hao said.
After the share issue, Kinh Do will take over the North Kinh Do Food Company, based in the northern province of Hung Yen.
It would be the first acquisition between two firms listed on the country's fledgling stock market, which has risen about 20 percent so far this year after a 144 percent surge last year.
North Kinh Do, which has a market value of $144 million, makes cakes, snacks and processes foods for domestic markets and export to the United States and Taiwan. Its shares last traded flat at 230,000 dong ($14.2) each.
Kinh Do makes food, confectionaries and fruit juice. It is also a general trading firm, dealing with a wide range of goods from textiles and electric appliances to stationery, fruit and vegetables.
Shares in Kinh Do ended up 2.04 percent at 250,000 dong ($15.5) on Thursday, valuing the company at $557 million.
It would also take over Kido Company, another subsidiary in the 10-member Kinh Do group, Hao said.
Source: Reuters
Le Phung Hao, Deputy General Director of the Ho Chi Minh City-based firm, said this year's net profit would rise 37.8 percent from 2006 to 332 billion dong ($20.5 million) and to 572 billion dong ($35.4 million) next year.
"We will complete the acquisitions within this year after a share issue for which we are seeking licence from the State Securities Commission," Hao told Reuters on the sidelines of a conference in Hanoi.
In April, Kinh Do said it would issue 11 million shares to raise funds for three property projects and lift its registered capital by 30.6 percent to 470 billion dong ($29 million).
"We need more than 1,200 billion dong for our property projects," Hao said.
The projects include an office building in downtown Ho Chi Minh City, a shopping mall and office complex and an apartment building.
"Foreign investors are arriving in Vietnam, people's living standards are also getting higher, so the pressure on housing in Ho Chi Minh City is huge," Hao said.
Kinh Do was also running a venture with a Vietnamese military company to build a complex of office, trade promotion facilities and apartments in Ho Chi Minh City, he said.
Kinh Do's future business would include food processing, retail property and financial investment with food processing still contributing 70-80 percent of revenues, Hao said.
After the share issue, Kinh Do will take over the North Kinh Do Food Company, based in the northern province of Hung Yen.
It would be the first acquisition between two firms listed on the country's fledgling stock market, which has risen about 20 percent so far this year after a 144 percent surge last year.
North Kinh Do, which has a market value of $144 million, makes cakes, snacks and processes foods for domestic markets and export to the United States and Taiwan. Its shares last traded flat at 230,000 dong ($14.2) each.
Kinh Do makes food, confectionaries and fruit juice. It is also a general trading firm, dealing with a wide range of goods from textiles and electric appliances to stationery, fruit and vegetables.
Shares in Kinh Do ended up 2.04 percent at 250,000 dong ($15.5) on Thursday, valuing the company at $557 million.
It would also take over Kido Company, another subsidiary in the 10-member Kinh Do group, Hao said.
Source: Reuters
Sacom to invest $24.7 mln in new bank
Vietnam telecommunications cable maker Sacom (SAM) plans to invest 400 billion dong ($24.7 million) in a 20-percent stake in a start-up bank, its chief executive said on Thursday.
Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.
"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.
Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.
"The bank operation would rely on these investors with their working capital," Trac said.
When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.
Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.
More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.
Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.
But in recent years it has been seeking to branch out into real estate and telecoms services.
Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.
He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.
VNPT has a stake of about 31 percent in Sacom.
Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.
Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.
Source: Reuters
Sacom, Military Bank and major construction firm Song Da Urban & Industrial Zone Investment and Development Joint Stock Co (SJS) would each contribute 10 percent to form the bank, Sacom Chief Executive Officer Do Van Trac said.
"The application for a licence is with the central bank and we expect it soon as we have prepared all the details required," Trac told Reuters on the sidelines of a conference in Hanoi.
Other investors in the bank, to be called Kinh Bac Bank, included the Vietnam Motor Industry Corporation (Vinamotor) and Duc Giang Garment Company, he said.
"The bank operation would rely on these investors with their working capital," Trac said.
When licensed, the bank would operate in Bac Ninh province, Haiphong, Hanoi, Ho Chi Minh City, Danang and Can Tho, Trac said.
Ho Chi Minh City-based Sacom had 1.7 trillion dong ($105 million) in surplus cash after a share issue and it was looking to invest the money, Trac said on on-line chat with investors after the conference.
More than 30 partly private banks are operating in Vietnam, where five state-run commercial banks account for 70 percent of lending.
Based in the southern province of Dong Nai, Sacom -- one of Vietnam's first two listed firms -- initially manufactured electrical and telecommunications cables.
But in recent years it has been seeking to branch out into real estate and telecoms services.
Trac said Sacom would invest in a $30 million office building in Ho Chi Minh City and also a resort including a golf course in the Central Highland province of Lam Dong.
He did not provide a forecast of the firm's results this year, but said 70 percent of Sacom's revenues so far had come from VNPT, the country's top telecoms group, while the military-run telecoms firm Viettel contributed 20 percent.
VNPT has a stake of about 31 percent in Sacom.
Many Vietnamese companies have rushed to seek central bank licences to set up commercial banks to cash in on the relatively new but highly lucrative domestic sector, analysts said.
Refrigeration firm REE (REE) also told investors on Thursday it would invest about $10 million in shares in two start-up banks.
Source: Reuters
REE makes foray into banking, brokerage
Vietnamese engineering firm Refrigeration Electrical Engineering Co. (REE) plans to invest in two start-up banks in Vietnam as it diversifies into financial services, its chief executive said on Thursday.
Communist Vietnam's banking sector is experiencing growth of more than 20 percent in loans and deposits, fuelled by a fast-growing economy where 85 million people hold just 5 million bank accounts.
"These are new banks which are applying for licences," REE CEO Nguyen Thi Mai Thanh told Reuters on the sidelines of a conference in Hanoi without identifying the lenders.
She said one bank would have a registered capital of 1 trillion dong ($62 million) and another, registered capital of 1.2 trillion dong. The licences have not yet been issued.
Thanh said Ho Chi Minh City-based REE has invested 834 billion dong ($52 million) in shares of Vietnamese banks such as Sacombank (STB), bonds, as well as shares of listed and unlisted firms so far.
Online newspaper VnExpress on Thursday quoted Thanh as saying REE would invest $10 million in the two banks and would also establish its own securities subsidiary.
Shares in REE closed flat at 131,000 dong ($8.1) on Thursday, valuing the firm at $664 million.
Thanh said in the long run, REE expects its core engineering business to generate one third of its profits, property to bring one third and financial investments another third.
REE's net profit is expected to rise 51 percent to 245 billion dong ($15 million) this year as revenues would more than double to 1 trillion dong ($62 million), she said at the conference.
REE, one of Vietnam's first two listed firms when the Ho Chi Minh Stock Exchange opened in July 2000, has targeted an overall growth of at least 20 percent a year until 2010 when its net profit would grow to 800 billion dong, Thanh added.
REE's current core business is in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE also operates a software park in Ho Chi Minh City.
Thanh said REE has been building to add 40,000 square metres of office space, residential areas and industrial zones to bring its total space for lease at the year end to 110,000 square metres and that should generate $15 million in revenues by 2009.
"Until 2010 we would expand our space for lease to 200,000 square metres," she said.
REE's pre-tax profit jumped 55.6 percent in the first seven months of 2007 from a year earlier to nearly $15 million on strong construction demand, the company said
Source: Reuters
Communist Vietnam's banking sector is experiencing growth of more than 20 percent in loans and deposits, fuelled by a fast-growing economy where 85 million people hold just 5 million bank accounts.
"These are new banks which are applying for licences," REE CEO Nguyen Thi Mai Thanh told Reuters on the sidelines of a conference in Hanoi without identifying the lenders.
She said one bank would have a registered capital of 1 trillion dong ($62 million) and another, registered capital of 1.2 trillion dong. The licences have not yet been issued.
Thanh said Ho Chi Minh City-based REE has invested 834 billion dong ($52 million) in shares of Vietnamese banks such as Sacombank (STB), bonds, as well as shares of listed and unlisted firms so far.
Online newspaper VnExpress on Thursday quoted Thanh as saying REE would invest $10 million in the two banks and would also establish its own securities subsidiary.
Shares in REE closed flat at 131,000 dong ($8.1) on Thursday, valuing the firm at $664 million.
Thanh said in the long run, REE expects its core engineering business to generate one third of its profits, property to bring one third and financial investments another third.
REE's net profit is expected to rise 51 percent to 245 billion dong ($15 million) this year as revenues would more than double to 1 trillion dong ($62 million), she said at the conference.
REE, one of Vietnam's first two listed firms when the Ho Chi Minh Stock Exchange opened in July 2000, has targeted an overall growth of at least 20 percent a year until 2010 when its net profit would grow to 800 billion dong, Thanh added.
REE's current core business is in industrial air-conditioning systems and electrical engineering. It also produces household appliances such as washing machines, refrigerators and air-conditioners.
REE also operates a software park in Ho Chi Minh City.
Thanh said REE has been building to add 40,000 square metres of office space, residential areas and industrial zones to bring its total space for lease at the year end to 110,000 square metres and that should generate $15 million in revenues by 2009.
"Until 2010 we would expand our space for lease to 200,000 square metres," she said.
REE's pre-tax profit jumped 55.6 percent in the first seven months of 2007 from a year earlier to nearly $15 million on strong construction demand, the company said
Source: Reuters
Vietnam's Gemadept to build $410 mln container port
Vietnam's top forwarder Gemadept Corporation will start building a $410 million deep-water container port in early 2008 to handle more transhipments, its chief executive said on Thursday.
"So far transhipments are carried out in Singapore, Taiwan or Hong Kong but when we put the port into operation, ships from the United States could come directly to Cai Mep port for transhipments to regional countries," Gemadept CEO Do Van Minh told reporters.
The government has identified Cai Mep container port as one of five ports to be built in the southern province of Ba Ria-Vung Tau by 2010 to serve the region which handles 70 percent of containers in the country.
The five ports will be used when the government relocates Saigon Port and related facilities from Ho Chi Minh City over the next few years.
"We will strive to start construction in early 2008 and complete it in 2010," Minh said at a conference in Hanoi.
He did not say how much Gemadept would invest in the port which is designed to have a depth of 16 metres.
Minh said Gemadept has been building two more ports in the central region, the $36-million Dung Quat port and the $230-million Nhon Hoi port, each to get a 55 percent of investment from Gemadept.
Shares in Gemadept traded up 0.8 percent to 126,000 dong ($7.8) on Thursday, valueing the company at $336 million.
The Ho Chi Minh City-based company operates ports, provides logistics services including container transport and acts as an agent for several dozen foreign shipping lines.
Its two warehouses of 40,000 square metres are Vietnam's largest facility for stocking coffee.
Minh said Gemadept has also been diversifying its business into property and financial investment.
Source: Reuters
"So far transhipments are carried out in Singapore, Taiwan or Hong Kong but when we put the port into operation, ships from the United States could come directly to Cai Mep port for transhipments to regional countries," Gemadept CEO Do Van Minh told reporters.
The government has identified Cai Mep container port as one of five ports to be built in the southern province of Ba Ria-Vung Tau by 2010 to serve the region which handles 70 percent of containers in the country.
The five ports will be used when the government relocates Saigon Port and related facilities from Ho Chi Minh City over the next few years.
"We will strive to start construction in early 2008 and complete it in 2010," Minh said at a conference in Hanoi.
He did not say how much Gemadept would invest in the port which is designed to have a depth of 16 metres.
Minh said Gemadept has been building two more ports in the central region, the $36-million Dung Quat port and the $230-million Nhon Hoi port, each to get a 55 percent of investment from Gemadept.
Shares in Gemadept traded up 0.8 percent to 126,000 dong ($7.8) on Thursday, valueing the company at $336 million.
The Ho Chi Minh City-based company operates ports, provides logistics services including container transport and acts as an agent for several dozen foreign shipping lines.
Its two warehouses of 40,000 square metres are Vietnam's largest facility for stocking coffee.
Minh said Gemadept has also been diversifying its business into property and financial investment.
Source: Reuters
Shinpetrol to start small refinery in Sept
LPG trader Shinpetrol (VSP) will start operating a small oil refinery with an initial capacity of 2,000 barrels per day in southern Vietnam next month, state media reported on Thursday.
The refinery in the Mekong Delta city of Can Tho was expected to have an internal rate of return of 23.46 percent, the Dau Tu Chung Khoan (Stock Investment) magazine quoted Chief Executive Nguyen Duy Hung as saying.
The plant, which has a small terminal for 1,000-DWT vessels, will produce oil products including fuel oil, diesel, LPG and gasoline, Hung said.
He also said the firm planned to upgrade the terminal to receive bigger tankers of about 10,000 DWT.
Shinpetrol, a subsidiary of Vietnam's largest state-owned shipbuilder Vinashin, has set a target to achieve revenue of 752 billion dong ($47 million) this year.
Vietnam is Southeast Asia's third-largest crude oil producer but still relies on oil product imports as it lacks major oil refineries.
Its first large-scale oil refinery, Dung Quat, will have a capacity of 130,000 barrels per day when it begins operations by February 2009.
Source: Reuters
The refinery in the Mekong Delta city of Can Tho was expected to have an internal rate of return of 23.46 percent, the Dau Tu Chung Khoan (Stock Investment) magazine quoted Chief Executive Nguyen Duy Hung as saying.
The plant, which has a small terminal for 1,000-DWT vessels, will produce oil products including fuel oil, diesel, LPG and gasoline, Hung said.
He also said the firm planned to upgrade the terminal to receive bigger tankers of about 10,000 DWT.
Shinpetrol, a subsidiary of Vietnam's largest state-owned shipbuilder Vinashin, has set a target to achieve revenue of 752 billion dong ($47 million) this year.
Vietnam is Southeast Asia's third-largest crude oil producer but still relies on oil product imports as it lacks major oil refineries.
Its first large-scale oil refinery, Dung Quat, will have a capacity of 130,000 barrels per day when it begins operations by February 2009.
Source: Reuters
Govt gives green light on Vietcombank equitisation
The plan on equitising Vietcombank was approved in principle by the government yesterday, Vietcombank’s leader confirmed this morning, saying that the official decision would be made next week.
The government has agreed to the proposals of international consultants and auditors relating to the bank’s appraisal in accordance with international standards. This means that Vietcombank’s appraisal process will be quick and in good order, while passing over some steps.
After the equitisation, the bank will be allowed to apply the corporate governance method in accordance with the best possible international standards, provided that these do not come contrary to Vietnam’s regulations. The decision by the government has helped remove investors’ worries that the equitised Vietcombank would be a ‘new decanter with old wine inside’ (i.e. Vietcombank will operate under the previously applied mechanism after the equitisation).
According to an official from Vietcombank, the government has been paying special attention to the selection of strategic partners. Under the previous plan, Vietcombank would set the timetable for making IPO first, and then define the selling prices of shares applied to strategic investors. But now the government has set higher requirements on choosing strategic investors and leaves the IPO timetable open. Vietcombank may choose strategic investors before making IPO.
The official stressed that the selling prices applied to strategic foreign investors would be independent from the IPO prices. Vietcombank will submit prices for strategic foreign investors for the government’s approval.
“Prices will not be the most important factor Vietcombank will rely on to seek foreign strategic investors. Vietcombank will highly rate the technical support, investment cooperation, and especially, the duration to hold shares after the listing,” the official said.
The government proves to be very ‘open’ when saying that if foreign investors make good commitments, the government will give preferences back to Vietcombank.
In special cases, foreign investors can hold more than the currently applied ceiling foreign ownership ratio of 15%, the official said.
Vietcombank has wrapped up the two rounds of negotiations with the short-listed bidders. It is expected that the partners will send the final offers one week after the government approves the equitisation plan. If so, Vietcombank will submit its ideas to the government on September 20, and will officially announce the foreign strategic partners in early October.
Source: VNE
The government has agreed to the proposals of international consultants and auditors relating to the bank’s appraisal in accordance with international standards. This means that Vietcombank’s appraisal process will be quick and in good order, while passing over some steps.
After the equitisation, the bank will be allowed to apply the corporate governance method in accordance with the best possible international standards, provided that these do not come contrary to Vietnam’s regulations. The decision by the government has helped remove investors’ worries that the equitised Vietcombank would be a ‘new decanter with old wine inside’ (i.e. Vietcombank will operate under the previously applied mechanism after the equitisation).
According to an official from Vietcombank, the government has been paying special attention to the selection of strategic partners. Under the previous plan, Vietcombank would set the timetable for making IPO first, and then define the selling prices of shares applied to strategic investors. But now the government has set higher requirements on choosing strategic investors and leaves the IPO timetable open. Vietcombank may choose strategic investors before making IPO.
The official stressed that the selling prices applied to strategic foreign investors would be independent from the IPO prices. Vietcombank will submit prices for strategic foreign investors for the government’s approval.
“Prices will not be the most important factor Vietcombank will rely on to seek foreign strategic investors. Vietcombank will highly rate the technical support, investment cooperation, and especially, the duration to hold shares after the listing,” the official said.
The government proves to be very ‘open’ when saying that if foreign investors make good commitments, the government will give preferences back to Vietcombank.
In special cases, foreign investors can hold more than the currently applied ceiling foreign ownership ratio of 15%, the official said.
Vietcombank has wrapped up the two rounds of negotiations with the short-listed bidders. It is expected that the partners will send the final offers one week after the government approves the equitisation plan. If so, Vietcombank will submit its ideas to the government on September 20, and will officially announce the foreign strategic partners in early October.
Source: VNE
VND devaluates 0.8%: Citibank
Citibank experts say in a newly released report that the local currency has lost 0.8% in value since July 2007, and that the VND is at risk of further devaluating in the time to come.
Citibank on August 29 released a report about Asia’s economy, which mentions the key problems of Vietnam at this moment: inflation, monetary policy and external risks.
The report says that there are no signs of inflation decreasing due to the price increases of food and construction materials. The government has decided to lower import taxes on several kinds of products, but it will still take time to confirm the impacts of the decision on retail prices.
Citibank says it’s a possibility that the inflation rate will be lower than the GDP growth rate, which is estimated to reach 8% in 2007. However, this will happen only if crude oil can be stabilised and Vietnam continues tightening its monetary policy, and controlling the prices of key products.
Regarding the value of the local currency, Citibank says that the local currency has devaluated by 0.8% since the end of July. The demand of enterprises and importers for dollars has increased. The wider gap in the purchasing and selling prices between the VND and the greenback also shows less demand for VND compared to the greenback.
Regarding external risks, Citibank says that the trade gap doubled between January and July 2007 due to the sharp increases of imports.
Despite the big difficulties caused by the high inflation rate and the external risks, Citibank’s experts give the optimistic conclusion that Vietnam’s national economy will be firm enough to deal with the difficulties. Industrial value in July increased by 18.7% over the same period last year, while retail turnover increased by 23.1%, and foreign direct investment by 49.8%.
The increased demand on the domestic market will make up for the trade gap. Moreover, one of the factors that lead the experts to give the optimistic conclusion is the successful reelection of Prime Minister Nguyen Tan Dung. The new cabinet which comprises young and intellectual members is expected to actively impact the national economy.
Citibank’s experts also discuss some risks for Vietnam, including a food shortage and further price increases due to animal epidemics, as well as the further devaluation of the local currency.
Source: VNE
Citibank on August 29 released a report about Asia’s economy, which mentions the key problems of Vietnam at this moment: inflation, monetary policy and external risks.
The report says that there are no signs of inflation decreasing due to the price increases of food and construction materials. The government has decided to lower import taxes on several kinds of products, but it will still take time to confirm the impacts of the decision on retail prices.
Citibank says it’s a possibility that the inflation rate will be lower than the GDP growth rate, which is estimated to reach 8% in 2007. However, this will happen only if crude oil can be stabilised and Vietnam continues tightening its monetary policy, and controlling the prices of key products.
Regarding the value of the local currency, Citibank says that the local currency has devaluated by 0.8% since the end of July. The demand of enterprises and importers for dollars has increased. The wider gap in the purchasing and selling prices between the VND and the greenback also shows less demand for VND compared to the greenback.
Regarding external risks, Citibank says that the trade gap doubled between January and July 2007 due to the sharp increases of imports.
Despite the big difficulties caused by the high inflation rate and the external risks, Citibank’s experts give the optimistic conclusion that Vietnam’s national economy will be firm enough to deal with the difficulties. Industrial value in July increased by 18.7% over the same period last year, while retail turnover increased by 23.1%, and foreign direct investment by 49.8%.
The increased demand on the domestic market will make up for the trade gap. Moreover, one of the factors that lead the experts to give the optimistic conclusion is the successful reelection of Prime Minister Nguyen Tan Dung. The new cabinet which comprises young and intellectual members is expected to actively impact the national economy.
Citibank’s experts also discuss some risks for Vietnam, including a food shortage and further price increases due to animal epidemics, as well as the further devaluation of the local currency.
Source: VNE
PM’s decision brings millions of clients to banks
The instruction by the Prime Minister on paying salaries to state officials through bank accounts proves to be good news for banks as banks will have several million more clients.
State employees at ministries, government agencies, and central People’s Committees will receive their salaries through bank accounts under a newly-implemented instruction passed by the Prime Minister.
In fact, salary payments for retired officials through the bank have been implemented on a trial basis in HCM City since June 2006.
Cao Van Sang, Deputy Director of the HCM City Social Insurance, said that there were 90,000 pension and social allowance beneficiaries in HCM City, who receive VND100bil a month. Therefore, the payment through banks would benefit both the beneficiaries and the city’s social insurance.
Tran Phuong Binh, Director General of East Asia Bank (EAB), acknowledged that the Prime Minister’s instruction was good news for banks.
EAB has been providing payment services to retired state officials in HCM City since April 2007, and now the bank has begun providing the services in Tien Giang province.
In fact, EAB and 20 other banks have been providing payment services to several million labourers of many enterprises in HCM City.
According to the State Bank of Vietnam, to date, 20 banks have issued payment cards with 6.2mil issued cards, four car alliances, which own 3,800 auto teller machines (ATMs) nationwide. If banks and alliances can cooperate with each other well, the salary payments through banks will not be a technical problem for banks.
Commercial banks have applauded the Prime Minister’s decision, which aims to fight against corruption and fulfill the plan on non-cash payment in the 2006-2010 period approved in late 2006. The credit operation director of a bank said that banks would have several million more clients. Banks can collect fees not only from transactions, but also from a lot of other services that the clients will use.
“If clients can be served well, they will think of making deposits, borrowing money and use other services of the banks,” he said.
In fact, many banks have been trying to provide additional services to clients who receive salaries through bank accounts. EAB, for example, allows the overdraft of up to five-month salaries. The bank also exempts them from paying card issuance fees, fees for paying salaries and annual fees for the first two years. Meanwhile, ACB offers them loans worth up to VND100mil with no mortgaged assets.
A lot of other banks, including An Binh, Techcombank, Military Bank and Habubank, also offer preferences for their clients who collect their salaries at the banks. Owning ATM cards, the salary receivers can enjoy interest on the account balance, can borrow sums of money equal to one-month pay with the soft interest rate of 0.05%/day with no mortgaged assets. Moreover, clients can exchange foreign currencies, pay water, electricity, telephone, and cable TV bills as well.
However, the current technical facilities of commercial banks have not satisfied clients. Except from Vietcombank, which has a wide ATM network, clients of other banks find it hard to withdraw money when necessary if they are far from downtown. Meanwhile, as four card alliances now exist, clients of one bank are not able to use the ATMs of all other banks, thus causing inconvenience to clients.
Source: VNE
State employees at ministries, government agencies, and central People’s Committees will receive their salaries through bank accounts under a newly-implemented instruction passed by the Prime Minister.
In fact, salary payments for retired officials through the bank have been implemented on a trial basis in HCM City since June 2006.
Cao Van Sang, Deputy Director of the HCM City Social Insurance, said that there were 90,000 pension and social allowance beneficiaries in HCM City, who receive VND100bil a month. Therefore, the payment through banks would benefit both the beneficiaries and the city’s social insurance.
Tran Phuong Binh, Director General of East Asia Bank (EAB), acknowledged that the Prime Minister’s instruction was good news for banks.
EAB has been providing payment services to retired state officials in HCM City since April 2007, and now the bank has begun providing the services in Tien Giang province.
In fact, EAB and 20 other banks have been providing payment services to several million labourers of many enterprises in HCM City.
According to the State Bank of Vietnam, to date, 20 banks have issued payment cards with 6.2mil issued cards, four car alliances, which own 3,800 auto teller machines (ATMs) nationwide. If banks and alliances can cooperate with each other well, the salary payments through banks will not be a technical problem for banks.
Commercial banks have applauded the Prime Minister’s decision, which aims to fight against corruption and fulfill the plan on non-cash payment in the 2006-2010 period approved in late 2006. The credit operation director of a bank said that banks would have several million more clients. Banks can collect fees not only from transactions, but also from a lot of other services that the clients will use.
“If clients can be served well, they will think of making deposits, borrowing money and use other services of the banks,” he said.
In fact, many banks have been trying to provide additional services to clients who receive salaries through bank accounts. EAB, for example, allows the overdraft of up to five-month salaries. The bank also exempts them from paying card issuance fees, fees for paying salaries and annual fees for the first two years. Meanwhile, ACB offers them loans worth up to VND100mil with no mortgaged assets.
A lot of other banks, including An Binh, Techcombank, Military Bank and Habubank, also offer preferences for their clients who collect their salaries at the banks. Owning ATM cards, the salary receivers can enjoy interest on the account balance, can borrow sums of money equal to one-month pay with the soft interest rate of 0.05%/day with no mortgaged assets. Moreover, clients can exchange foreign currencies, pay water, electricity, telephone, and cable TV bills as well.
However, the current technical facilities of commercial banks have not satisfied clients. Except from Vietcombank, which has a wide ATM network, clients of other banks find it hard to withdraw money when necessary if they are far from downtown. Meanwhile, as four card alliances now exist, clients of one bank are not able to use the ATMs of all other banks, thus causing inconvenience to clients.
Source: VNE
Rule to tighten cap on insurance company shareholding
A draft Ministry of Finance regulation would limit individuals and organisations to holding no more than 10% and 20%, respectively, of insurance company's total equity.
The policy would apply to both domestic and foreign investors, said the ministry.
The limits would help ensure that insurance companies are not dominated by a few major shareholders and would help maintain sustainable development over the long term for newly created insurance companies, said Phung Dac Loc, general secretary of the Viet Nam Insurance Association.
The director of Ernst & Young Viet Nam's business consulting sector, Allanda McConnell, disagreed, saying that the ownership limits would make investment in domestic insurance companies less attractive to foreign investors.
Local players' capacity in terms of technology, management and business strategy is still limited,. McConnell said. The presence of strategic investors with higher stakes in these local companies was a positive solution to these shortcomings.
A 49-per-cent limit, similar to the rate stipulated for foreign individuals and organisations investing in companies listed on the stock market, would be suitable, she suggested.
Currently, there are only some 40 insurers operating on the market. Many foreign insurers are eyeing the market, and many domestic banks were also developing financial group models to expand their businesses into the insurance arena.
The issuance of stricter regulations on the insurance industry has limited the number of new insurance companies, however, with Agribank Insurance Joint Stock Co, established earlier this month, the only new player on the market.
Earlier this year, the Ministry of Finance issued Decree No 46 stipulating that non-life insurance companies have legal capital of at least VND300bil (US$18.75mil), up from the previous VND70bil. Life insurers were required to have capital of VND600bil ($37.5mil), up from VND140bil.
Source: VNE
The policy would apply to both domestic and foreign investors, said the ministry.
The limits would help ensure that insurance companies are not dominated by a few major shareholders and would help maintain sustainable development over the long term for newly created insurance companies, said Phung Dac Loc, general secretary of the Viet Nam Insurance Association.
The director of Ernst & Young Viet Nam's business consulting sector, Allanda McConnell, disagreed, saying that the ownership limits would make investment in domestic insurance companies less attractive to foreign investors.
Local players' capacity in terms of technology, management and business strategy is still limited,. McConnell said. The presence of strategic investors with higher stakes in these local companies was a positive solution to these shortcomings.
A 49-per-cent limit, similar to the rate stipulated for foreign individuals and organisations investing in companies listed on the stock market, would be suitable, she suggested.
Currently, there are only some 40 insurers operating on the market. Many foreign insurers are eyeing the market, and many domestic banks were also developing financial group models to expand their businesses into the insurance arena.
The issuance of stricter regulations on the insurance industry has limited the number of new insurance companies, however, with Agribank Insurance Joint Stock Co, established earlier this month, the only new player on the market.
Earlier this year, the Ministry of Finance issued Decree No 46 stipulating that non-life insurance companies have legal capital of at least VND300bil (US$18.75mil), up from the previous VND70bil. Life insurers were required to have capital of VND600bil ($37.5mil), up from VND140bil.
Source: VNE
FPT opens cell-phone and laptop shops
FPT Retail Co., a subsidiary of the big information technology firm FPT, launched on Tuesday four shops retailing cell phones and laptops in HCMC and Hanoi, marking its first business activity since establishment early this year.
Le Quang Vu, managing director of FPT Retail, said at the opening ceremony that "the new retail shop chain marks FPT Retail's debut in Vietnam mobile retail market and offers more choices for customers."
He said that after opening the four retail shops in Hanoi and HCMC, the company would continue to open more stores in Can Tho, Hai Phong, Thanh Hoa, Vinh and Da Nang in the coming months as part of a more ambitious expansion plan.
"FPT Retail plans to increase our chain to 100 shops nationwide in the next two years and expects to obtain US$400mil of annual revenue," he added.
Under the FPT Retail shop standard, all the FPT retail shops with the trademark [IN] should cover no less than 300 square meters and has the uniform design model in blue color.
The center mainly distributes products of popular mobile phone and notebook manufacturers such as Nokia, Samsung, Motorola, Lenovo, HP, Toshiba and NEC.
On the occasion of the opening, the company also launched its promotion campaign to offer many gifts worth over VND2bil for clients.
Industry insiders said that with the debut of FPT Retail, Vietnam's mobile and notebook distributing market would see fiercer competition.
The Mobile World Joint Stock Company also launched on Tuesday its new promotion campaign to celebrate its third establishment, offering lucky clients mobile phones manufactured by Nokia, Samsung, and Sony Ericson.
The Mobile World is now the leading company in Vietnam's cell phone segment, holding a market share of over 20% in HCMC. After receiving Mekong Enterprise Fund II investment of US$4.5mil, the company plans to open about 20 more retail shops nationwide.
With the Mobile World's business expansion, the military-run telco Viettel also said that the company has plans to participate in the local mobile phone distribution market.
The company has taken over 15 retail shops of Netra Trading and Investment International Co. Ltd., who lost its foothold in Vietnam in June due to poor business return.
The market survey company GfK Asia Pte. Ltd. (Vietnam) estimated the market growth rate this year for mobile phones at between 40% and 60%.
Source: VNE
Le Quang Vu, managing director of FPT Retail, said at the opening ceremony that "the new retail shop chain marks FPT Retail's debut in Vietnam mobile retail market and offers more choices for customers."
He said that after opening the four retail shops in Hanoi and HCMC, the company would continue to open more stores in Can Tho, Hai Phong, Thanh Hoa, Vinh and Da Nang in the coming months as part of a more ambitious expansion plan.
"FPT Retail plans to increase our chain to 100 shops nationwide in the next two years and expects to obtain US$400mil of annual revenue," he added.
Under the FPT Retail shop standard, all the FPT retail shops with the trademark [IN] should cover no less than 300 square meters and has the uniform design model in blue color.
The center mainly distributes products of popular mobile phone and notebook manufacturers such as Nokia, Samsung, Motorola, Lenovo, HP, Toshiba and NEC.
On the occasion of the opening, the company also launched its promotion campaign to offer many gifts worth over VND2bil for clients.
Industry insiders said that with the debut of FPT Retail, Vietnam's mobile and notebook distributing market would see fiercer competition.
The Mobile World Joint Stock Company also launched on Tuesday its new promotion campaign to celebrate its third establishment, offering lucky clients mobile phones manufactured by Nokia, Samsung, and Sony Ericson.
The Mobile World is now the leading company in Vietnam's cell phone segment, holding a market share of over 20% in HCMC. After receiving Mekong Enterprise Fund II investment of US$4.5mil, the company plans to open about 20 more retail shops nationwide.
With the Mobile World's business expansion, the military-run telco Viettel also said that the company has plans to participate in the local mobile phone distribution market.
The company has taken over 15 retail shops of Netra Trading and Investment International Co. Ltd., who lost its foothold in Vietnam in June due to poor business return.
The market survey company GfK Asia Pte. Ltd. (Vietnam) estimated the market growth rate this year for mobile phones at between 40% and 60%.
Source: VNE
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