State-run Vietnam Development Bank (VDB) has sold 400 billion dong ($24.8 million) worth of 15-year bonds at an auction, with an annual coupon of 8.4 percent, the Hanoi stock market said on Wednesday.
The over-the-counter exchange said three bidders sought to buy the debt at between 8.2 percent and 10 percent on Tuesday, when VDB offered 600 billion dong worth of the bond.
It gave no details of the buyers of the debt which VDB, one of Vietnam's two policy lending banks, will issue on Thursday for maturity on July 26, 2022.
The coupon of the bond sold on Tuesday was higher than the that of the bank's 15-year bond worth 500 billion dong sold on June 18 which carried a coupon of 8 percent.
Source: Reuters
Wednesday, July 25, 2007
Blue chips lifeless as FPT rumours fly
"The downtrend in high-end stocks like FPT or STB does not prove that blue chips are unattractive to investors anymore," said Vo Ngoc Huy, deputy manager of Sacombank Securities’ brokerage department.
FPT fell partially on bourse gossip over whether the company’s deputy chairman Hoang Minh Chau would offload shares.
Chau, who owns more than three million FPT shares, confirmed in an interview he had petitioned market regulators yesterday morning to sell 225,000 shares.
"The petition means that I will have the right to sell shares at any time from July 23, but I will not sell immediately," said Chau, adding the sale should not impact the market since the volume was quite small.
Source: VNS
FPT fell partially on bourse gossip over whether the company’s deputy chairman Hoang Minh Chau would offload shares.
Chau, who owns more than three million FPT shares, confirmed in an interview he had petitioned market regulators yesterday morning to sell 225,000 shares.
"The petition means that I will have the right to sell shares at any time from July 23, but I will not sell immediately," said Chau, adding the sale should not impact the market since the volume was quite small.
Source: VNS
Foreigners dominate retail banking
Despite efforts to compete against foreign rivals in the retail banking market, domestic commercial banks haven’t yet made much of a mark, say industry insiders.
HSBC general director Thomas Tobin admitted that Viet Nam had a huge untapped potential for personal financial services, but domestic commercial banks have failed to capitalise on their advantages in staking out this market.
While a few major State-owned banks, such as Vietcombank, have made a dent in this market, the field is largely dominated by foreign-owned banks such as ANZ Bank and HSBC.
The director of the State Bank of Viet Nam’s Department of Banking Development Strategy, Le Xuan Nghia, attributed the lack of success to domestic banks’ backward and ineffective work habits.
Nghia explained that, while domestic commercial banks have offered retail banking services for years, most still wait for customers to walk into the bank and open an account, instead of marketing to customers.
Echoing Nghia, Tobin said the banks needed to listen to customer needs and provide products and services to meet demands.
However, it was easier said than done for domestic banks to access customers, said Eastern Asia Bank director Tran Dao Vu.
One marketing avenue is to market directly to the employees of large private or State-owned enterprises, Vu said. But the management of such firms remained concerned for their responsibility in allowing staff to access banks’ personal credit programmes.
Vu suggested that domestic commercial banks join hands and co-operate to develop ATM and payment card services.
"Co-operation, for instance, in connecting ATMs among banks, will help local banks cut investment costs and enhance their services," Vu said.
A few banks are making the effort to develop electronic banking services. Asia Commercial Bank has e-Bank, a 24-hour service centre and a 24-hour lending service; it has also launched lending programmes for individuals to finance home and vehicle purchases or small businesses. An Binh Commercial Bank has offered YOUmoney, a mortgage and consumer lending programme aimed at individual customers.
Still, Vu said, "the improvement of services, diversification of transaction methods and customer policies are indispensable to help local banks attract customers."
Foreign banks, meanwhile, have accelerated their campaigns to exploit and hold onto the retail banking market, said Nghia.
HSBC recently made its personal mortgage and credit services more attractive.
Its borrower base is drawn from employees of private and State-owned enterprises as well as staff of joint ventures and foreign enterprises. HSBC has also lowered the minimum monthly salary required of borrowers from VND8-10 million to only VND3 million. These flexible policies have produced impressive results: the bank’s retail customer numbers increased by nearly 580 per cent and its total loans have risen 482 per cent since the beginning of this year.
The appeal of the Visa debit card on the domestic market, a convenience to customers in shopping and in travelling overseas, has spurred ANZ Bank to set up a payment card joint venture with Sacombank, in which ANZ has bought a 10-per-cent stake.
"For domestic banks, especially those operating on a small scale, to survive in the long run as Viet Nam opens its banking market to foreigner competitors, they must make preparations to enhance their strengths now," said the director of the State Bank’s Banks Department, Kieu Huu Dung.
Source: VNS
HSBC general director Thomas Tobin admitted that Viet Nam had a huge untapped potential for personal financial services, but domestic commercial banks have failed to capitalise on their advantages in staking out this market.
While a few major State-owned banks, such as Vietcombank, have made a dent in this market, the field is largely dominated by foreign-owned banks such as ANZ Bank and HSBC.
The director of the State Bank of Viet Nam’s Department of Banking Development Strategy, Le Xuan Nghia, attributed the lack of success to domestic banks’ backward and ineffective work habits.
Nghia explained that, while domestic commercial banks have offered retail banking services for years, most still wait for customers to walk into the bank and open an account, instead of marketing to customers.
Echoing Nghia, Tobin said the banks needed to listen to customer needs and provide products and services to meet demands.
However, it was easier said than done for domestic banks to access customers, said Eastern Asia Bank director Tran Dao Vu.
One marketing avenue is to market directly to the employees of large private or State-owned enterprises, Vu said. But the management of such firms remained concerned for their responsibility in allowing staff to access banks’ personal credit programmes.
Vu suggested that domestic commercial banks join hands and co-operate to develop ATM and payment card services.
"Co-operation, for instance, in connecting ATMs among banks, will help local banks cut investment costs and enhance their services," Vu said.
A few banks are making the effort to develop electronic banking services. Asia Commercial Bank has e-Bank, a 24-hour service centre and a 24-hour lending service; it has also launched lending programmes for individuals to finance home and vehicle purchases or small businesses. An Binh Commercial Bank has offered YOUmoney, a mortgage and consumer lending programme aimed at individual customers.
Still, Vu said, "the improvement of services, diversification of transaction methods and customer policies are indispensable to help local banks attract customers."
Foreign banks, meanwhile, have accelerated their campaigns to exploit and hold onto the retail banking market, said Nghia.
HSBC recently made its personal mortgage and credit services more attractive.
Its borrower base is drawn from employees of private and State-owned enterprises as well as staff of joint ventures and foreign enterprises. HSBC has also lowered the minimum monthly salary required of borrowers from VND8-10 million to only VND3 million. These flexible policies have produced impressive results: the bank’s retail customer numbers increased by nearly 580 per cent and its total loans have risen 482 per cent since the beginning of this year.
The appeal of the Visa debit card on the domestic market, a convenience to customers in shopping and in travelling overseas, has spurred ANZ Bank to set up a payment card joint venture with Sacombank, in which ANZ has bought a 10-per-cent stake.
"For domestic banks, especially those operating on a small scale, to survive in the long run as Viet Nam opens its banking market to foreigner competitors, they must make preparations to enhance their strengths now," said the director of the State Bank’s Banks Department, Kieu Huu Dung.
Source: VNS
Viet Nam’s steel industry firms up
Viet Nam's steel industry is heatening up on the back of foreign investors queuing up to take advantage of the country's expanding economy and increasing demand for steel from the domestic construction sector.
India's Tata Group, one of the six largest steel companies globally exemplifies the interest that overseas firms have in the market. The group is about to get a 3.5 billion USD rolled steel facility underway near the Thach Khe iron mine in central Ha Tinh province that when fully operational will roll out 4.5 million tonnes a year.
Speaking with a Viet Nam News Agency’s correspondent, President of the Viet Nam Steel Association Pham Chi Cuong said the presence of big international steel groups in Viet Nam reinforced the attractiveness of a Vietnamese steel market that has been fuelled by an average yearly domestic demand growth of 40 percent.
Hooking up on a joint venture in Hai Phong to produce steel pipes and rolled steel and another in Ho Chi Minh City to manufacture corrugated iron, the Republic of Korea's Posco Group is now planning to invest in a steel plant with a total output capacity of 3 million tones of rolled steel at the Phu My 2 Industrial Zone in southern Ba Ria-Vung Tau province. Work on the 1 billion USD plant is scheduled to begin in August.
Cuong said Posco has also signed a deal with the Viet Nam Shipbuilding Industry Corporation (Vinashin) to build a steel complex with a capacity of 5 million tonnes of steel plates and rolled steel per year.
India's Essar has also linked up with the Viet Nam Steel Corporation and the Viet Nam Rubber Corporation on a 527 million USD project in Ba Ria-Vung Tau province that will pump over 2 million tonnes of rolled steel per year into the domestic market.
In central Quang Ngai province, Taiwan’s Tycoons and E-United have received the green light from the local authorities to invest 1.8 billion USD in a plant in the Dung Quat Economic zone. Construction of the plant is slated to begin in mid-October.
George E. Kobrossy, General Director of Zamil Steel Viet Nam, which has been operating in the country for over a decade, pointed to a low cost work force, political stability, incentives from the Vietnamese Government and a readiness of local businesses to cooperate as primary reasons for the boom in the industry.
Source: VNA
India's Tata Group, one of the six largest steel companies globally exemplifies the interest that overseas firms have in the market. The group is about to get a 3.5 billion USD rolled steel facility underway near the Thach Khe iron mine in central Ha Tinh province that when fully operational will roll out 4.5 million tonnes a year.
Speaking with a Viet Nam News Agency’s correspondent, President of the Viet Nam Steel Association Pham Chi Cuong said the presence of big international steel groups in Viet Nam reinforced the attractiveness of a Vietnamese steel market that has been fuelled by an average yearly domestic demand growth of 40 percent.
Hooking up on a joint venture in Hai Phong to produce steel pipes and rolled steel and another in Ho Chi Minh City to manufacture corrugated iron, the Republic of Korea's Posco Group is now planning to invest in a steel plant with a total output capacity of 3 million tones of rolled steel at the Phu My 2 Industrial Zone in southern Ba Ria-Vung Tau province. Work on the 1 billion USD plant is scheduled to begin in August.
Cuong said Posco has also signed a deal with the Viet Nam Shipbuilding Industry Corporation (Vinashin) to build a steel complex with a capacity of 5 million tonnes of steel plates and rolled steel per year.
India's Essar has also linked up with the Viet Nam Steel Corporation and the Viet Nam Rubber Corporation on a 527 million USD project in Ba Ria-Vung Tau province that will pump over 2 million tonnes of rolled steel per year into the domestic market.
In central Quang Ngai province, Taiwan’s Tycoons and E-United have received the green light from the local authorities to invest 1.8 billion USD in a plant in the Dung Quat Economic zone. Construction of the plant is slated to begin in mid-October.
George E. Kobrossy, General Director of Zamil Steel Viet Nam, which has been operating in the country for over a decade, pointed to a low cost work force, political stability, incentives from the Vietnamese Government and a readiness of local businesses to cooperate as primary reasons for the boom in the industry.
Source: VNA
Sudico to raise $87 mln through share issue
Vietnam’s leading construction group Sudico is expected to raise at least VND60 billion (US$87 million) through an auction of six million shares next month to raise funds for property projects. Sudico, formally known as Song Da Urban and Industrial Zone Investment and Development Company, has set a reserve price of VND235,000 ($14.5) for the auction on August 10 at the Ho Chi Minh City Securities Trading Center.
The HCMC-listed Sudico (SJS) closed up 3.7 percent Tuesday at VND280,000.
The Hanoi-based company had a chartered capital of VND200 billion ($12.4 million) as of March 12.
Of this figure the state holds 51 percent, its staff 5.21 percent, and outsiders 43.79 percent [including 19.11 percent by foreign investors].
Over 95 percent of the company’s revenues come from construction of apartments and urban areas.
This year it has projected a turnover of VND606 billion ($37.9 million) and profits of VND262 billion ($16.4 million).
The builder earned its revenue of VND351.5 billion ($22 million) last year and more than VND142 billion ($8.9 million) in net profits. The company paid shareholders a dividend of 20 per cent last year.
It has planned to branch out into tourism and insurance services from the core business of construction and to set up new arms to manage its expanded projects nationwide this year.
Projects under construction
Sudico has invested nearly VND1.6 trillion in several mammoth projects in mainly the Northern provinces.
Top of the list is Tien Xuan - Hoa Binh Urban Zone at a total cost of VND1.9 trillion in the Hoa Binh province.
Work kicked off on the project in earlier this year and is expected to complete in 2016.
In the province the company is building Bac Residential Area in the Hoa Binh township, at a cost of VND148 billion investment. Works are set to complete in next March.
The second largest one is the New Urban South An Khanh project at a total capital of VND1.4 trillion in the Ha Tay province, some 30 km from the Hanoi capital.
Construction of the project on a 312 ha site is expected to complete in third quarter 2014. The end of the third quarter this year will see a part of the project coming online.
The 240 sq.m-project is designed to include villa groups and apartment buildings for sales.
The Song Da – Ngoc Vung Ecotourism Zone is under construction in the island Van Don district, Quang Ninh Province.
The 39ha-ecotourism project worth VND248 trillion is set to launch services in August next year.
Its four-star hotel and villa project in the province will come in full service in 2010.
The company is expected to put its VND287 billion-invested My Dinh – Me Tri Urban Area in the capital into full operation in the next two months.
Source: Thanh Nien
The HCMC-listed Sudico (SJS) closed up 3.7 percent Tuesday at VND280,000.
The Hanoi-based company had a chartered capital of VND200 billion ($12.4 million) as of March 12.
Of this figure the state holds 51 percent, its staff 5.21 percent, and outsiders 43.79 percent [including 19.11 percent by foreign investors].
Over 95 percent of the company’s revenues come from construction of apartments and urban areas.
This year it has projected a turnover of VND606 billion ($37.9 million) and profits of VND262 billion ($16.4 million).
The builder earned its revenue of VND351.5 billion ($22 million) last year and more than VND142 billion ($8.9 million) in net profits. The company paid shareholders a dividend of 20 per cent last year.
It has planned to branch out into tourism and insurance services from the core business of construction and to set up new arms to manage its expanded projects nationwide this year.
Projects under construction
Sudico has invested nearly VND1.6 trillion in several mammoth projects in mainly the Northern provinces.
Top of the list is Tien Xuan - Hoa Binh Urban Zone at a total cost of VND1.9 trillion in the Hoa Binh province.
Work kicked off on the project in earlier this year and is expected to complete in 2016.
In the province the company is building Bac Residential Area in the Hoa Binh township, at a cost of VND148 billion investment. Works are set to complete in next March.
The second largest one is the New Urban South An Khanh project at a total capital of VND1.4 trillion in the Ha Tay province, some 30 km from the Hanoi capital.
Construction of the project on a 312 ha site is expected to complete in third quarter 2014. The end of the third quarter this year will see a part of the project coming online.
The 240 sq.m-project is designed to include villa groups and apartment buildings for sales.
The Song Da – Ngoc Vung Ecotourism Zone is under construction in the island Van Don district, Quang Ninh Province.
The 39ha-ecotourism project worth VND248 trillion is set to launch services in August next year.
Its four-star hotel and villa project in the province will come in full service in 2010.
The company is expected to put its VND287 billion-invested My Dinh – Me Tri Urban Area in the capital into full operation in the next two months.
Source: Thanh Nien
Tuesday, July 24, 2007
VN-Index bounces back, HaSTC-Index continues slide
Ho Chi Minh City's bourse bounced back while its Ha Noi-based counterpart lost value again by the end of the July 24 morning trading session.
The VN-Index at the HCM City Securities Trading Centre jumped 3.2 points to finish at 982.43 points. Nearly 5.3 million shares, worth more than 541 billion VND, changed hands.
The session witnessed 26 shares rally for gains, 21 showed no change while 63 fell.
Song Da Urban and Industrial Zone Investment and Development Joint Stock Company (SJC), North Kinhdo Food Joint Stock Company (NKD), Tay Ninh Cable Tour Company (TCT) and Binh Dinh Minerals Joint Stock Company (BMC) were among blue chip shares that recorded big gains by tacking between 8,000 VND -10,000 VND onto their listed prices per unit.
Experts attributed the growth of the HCM City's bourse to the presence of two freshly listed shares, namely Thuan An Wood Processing Joint Stock Company (GTA) and Tay Ninh Rubber Joint Stock Company (TRC). More than 48,600 shares of GTA, worth 64,000 VND per unit, were traded during the second day since they were listed on the exchange.
Potential players like GTA, the Corporation for Financing and Promoting Technology (FPT), Bien Hoa Confectionary Corporation (BBC) and Hai Phong Paper Joint Stock Company (HAP) were among shares that led the market in terms of transaction volume in spite of decline in their listed prices.
The Ha Noi Securities Trading Centre continued to decline with 48 out of the 87 listed shares at the exchange seeing decrease while only 20 stocks made gains and 4 remained unchanged.
The HaSTC-Index slid by 2.18 points to finish at 264.88 points. Only 585,300 shares, valued at 56.5 billion VND, were traded during the day.
Saigon Securities Inc. (SSI) led the market in terms of transaction volume and value, accounting for more than 22 percent and 35 percent of the market in terms of volume and value, respectively.
Source: VNA
The VN-Index at the HCM City Securities Trading Centre jumped 3.2 points to finish at 982.43 points. Nearly 5.3 million shares, worth more than 541 billion VND, changed hands.
The session witnessed 26 shares rally for gains, 21 showed no change while 63 fell.
Song Da Urban and Industrial Zone Investment and Development Joint Stock Company (SJC), North Kinhdo Food Joint Stock Company (NKD), Tay Ninh Cable Tour Company (TCT) and Binh Dinh Minerals Joint Stock Company (BMC) were among blue chip shares that recorded big gains by tacking between 8,000 VND -10,000 VND onto their listed prices per unit.
Experts attributed the growth of the HCM City's bourse to the presence of two freshly listed shares, namely Thuan An Wood Processing Joint Stock Company (GTA) and Tay Ninh Rubber Joint Stock Company (TRC). More than 48,600 shares of GTA, worth 64,000 VND per unit, were traded during the second day since they were listed on the exchange.
Potential players like GTA, the Corporation for Financing and Promoting Technology (FPT), Bien Hoa Confectionary Corporation (BBC) and Hai Phong Paper Joint Stock Company (HAP) were among shares that led the market in terms of transaction volume in spite of decline in their listed prices.
The Ha Noi Securities Trading Centre continued to decline with 48 out of the 87 listed shares at the exchange seeing decrease while only 20 stocks made gains and 4 remained unchanged.
The HaSTC-Index slid by 2.18 points to finish at 264.88 points. Only 585,300 shares, valued at 56.5 billion VND, were traded during the day.
Saigon Securities Inc. (SSI) led the market in terms of transaction volume and value, accounting for more than 22 percent and 35 percent of the market in terms of volume and value, respectively.
Source: VNA
Taniruco shares dip slightly on debut
Shares in Vietnam's Tay Ninh Rubber Company (Taniruco) dipped 3.3 percent on their debut on Tuesday, but held above levels previously seen in the unofficial market.
Shares in the rubber export firm closed at 145,000 dong ($8.98) on the Ho Chi Minh Stock Exchange, having listed at 150,000 dong.
Taniruco, now the 109th listed firm on Vietnam's main exchange, was valued at nearly $270 million.
One broker who declined to be named said Taniruco shares had traded at around 110,000 dong on the grey market, while another grey market quotation on July 21 had the price at between 102,000-105,000 dong a share.
"On the first trading day companies like to have something concrete to make a good image," he said, adding that on their debut shares normally perform within a 5 percent band of their unofficial price.
In Vietnam investors can trade shares within a 20 percent band on their debut date, according to stock market rules.
The VN Index has run out of steam in the last month, losing almost 7 percent. But it is still up around 31 percent so far this year after surging 145 percent in 2006.
Taniruco, based in the southern province of Tay Ninh, said it expects a 40 percent rise in 2007 net profit to 200 billion dong. The first quarter's net earnings totaled 45.6 billion dong ($2.8 million), company reports said.
Source: Reuters
Shares in the rubber export firm closed at 145,000 dong ($8.98) on the Ho Chi Minh Stock Exchange, having listed at 150,000 dong.
Taniruco, now the 109th listed firm on Vietnam's main exchange, was valued at nearly $270 million.
One broker who declined to be named said Taniruco shares had traded at around 110,000 dong on the grey market, while another grey market quotation on July 21 had the price at between 102,000-105,000 dong a share.
"On the first trading day companies like to have something concrete to make a good image," he said, adding that on their debut shares normally perform within a 5 percent band of their unofficial price.
In Vietnam investors can trade shares within a 20 percent band on their debut date, according to stock market rules.
The VN Index has run out of steam in the last month, losing almost 7 percent. But it is still up around 31 percent so far this year after surging 145 percent in 2006.
Taniruco, based in the southern province of Tay Ninh, said it expects a 40 percent rise in 2007 net profit to 200 billion dong. The first quarter's net earnings totaled 45.6 billion dong ($2.8 million), company reports said.
Source: Reuters
Retailers scramble before WTO opens up competition
Domestic supermarket chains are racing to open new stores and nail down market share before the retail sector is opened to foreign competition in January 2009, pursuant to the nation’s WTO commitments.
Sai Gon-Nguyen Kim Co Ltd is the latest domestic concern to stake out a retail niche with the opening of the CMC Plaza shopping centre in Ho Chi Minh City.
The new centre covers an area of 4,000 sq.m and can accommodate 10,000 visitors a day, according to its marketing director, Phan Linh Phuong.
Sai Gon-Nguyen Kim intends that the centre will anchor a nationwide chain of nine supermarkets, Phuong said, in such major markets as HCM City, Ha Noi, Can Tho, and Da Nang as well as Binh Duong province.
As part of the trend of globalisation and the increase in consumer purchasing power, supermarkets were expected to seize up to 20 percent of the nation’s retail market by 2010, Phuong said.
At least five new supermarkets have opened recently in HCM City, including Vinatexmart, Co-op Mart Bien Hoa and Citimart, bringing the latter chain, owned by Dong Hung Ltd. Co, to eight stores nationwide.
Dong Hung deputy director Ngo Van Hai said the boom in new supermarkets in major cities and provinces reflected a race against time to grab market share before the Government allowed foreign-invested enterprises to open supermarkets and increase competition in goods distribution and retail.
There is plenty of room for growth in the retail sector, recently market surveys have suggested.
Consumer demand for home electronics in Viet Nam could reach 3 billion USD a year, while actual retail sales currently only reached 1.2-1.3 billion USD, according to market research conducted by GfK Viet Nam and AC Nielsen Viet Nam.
A recent report by RNCOS, a market research consulting firm, said that the retail sector in Viet Nam would experience rapid changes between 2007 and 2011, becoming one of the seven most profitable retail markets in the world, with overall growth in the retail market faster than anywhere in the world outside of China and India.
With foreign investors at the gate, an issue of worry to both domestic and foreign investors is the shortage of suitable sites in urban areas for developing supermarkets and shopping centres.
A supermarket occupies an average area of 2,000 sq. and needs to be located in an area accessible to consumers.
According to real estate services firm CB Richard Ellis, land lease rates for prime building sites would likely increase 200 percent or more over the next three years, forming a potentially insurmountable barrier for domestic retailers trying to stake out the market.
Closer coordination was needed between owners of ideal locations and retail distributors to establish a competitive domestic retail sector.
Source: VNE
Sai Gon-Nguyen Kim Co Ltd is the latest domestic concern to stake out a retail niche with the opening of the CMC Plaza shopping centre in Ho Chi Minh City.
The new centre covers an area of 4,000 sq.m and can accommodate 10,000 visitors a day, according to its marketing director, Phan Linh Phuong.
Sai Gon-Nguyen Kim intends that the centre will anchor a nationwide chain of nine supermarkets, Phuong said, in such major markets as HCM City, Ha Noi, Can Tho, and Da Nang as well as Binh Duong province.
As part of the trend of globalisation and the increase in consumer purchasing power, supermarkets were expected to seize up to 20 percent of the nation’s retail market by 2010, Phuong said.
At least five new supermarkets have opened recently in HCM City, including Vinatexmart, Co-op Mart Bien Hoa and Citimart, bringing the latter chain, owned by Dong Hung Ltd. Co, to eight stores nationwide.
Dong Hung deputy director Ngo Van Hai said the boom in new supermarkets in major cities and provinces reflected a race against time to grab market share before the Government allowed foreign-invested enterprises to open supermarkets and increase competition in goods distribution and retail.
There is plenty of room for growth in the retail sector, recently market surveys have suggested.
Consumer demand for home electronics in Viet Nam could reach 3 billion USD a year, while actual retail sales currently only reached 1.2-1.3 billion USD, according to market research conducted by GfK Viet Nam and AC Nielsen Viet Nam.
A recent report by RNCOS, a market research consulting firm, said that the retail sector in Viet Nam would experience rapid changes between 2007 and 2011, becoming one of the seven most profitable retail markets in the world, with overall growth in the retail market faster than anywhere in the world outside of China and India.
With foreign investors at the gate, an issue of worry to both domestic and foreign investors is the shortage of suitable sites in urban areas for developing supermarkets and shopping centres.
A supermarket occupies an average area of 2,000 sq. and needs to be located in an area accessible to consumers.
According to real estate services firm CB Richard Ellis, land lease rates for prime building sites would likely increase 200 percent or more over the next three years, forming a potentially insurmountable barrier for domestic retailers trying to stake out the market.
Closer coordination was needed between owners of ideal locations and retail distributors to establish a competitive domestic retail sector.
Source: VNE
Taiwan-backed Vietnam casino to IPO by month end
The Taiwan-backed operator of Vietnam's biggest casino said it will list its shares on the Ho Chi Minh Stock Exchange, raising more than US$100 million, by the end of July, slightly earlier than expected. Royal International Corp (RIC), which runs the casino in Ha Long Bay, will list 8,589,119 shares, or 24.28 percent of the company, on July 31 at an initial price of VND200,000 ($12.4), RIC's Equity Department head Tran Trong Nghia said Tuesday.
The pricing valued the whole company at $438.6 million.
Investors can trade RIC shares within a 20 percent band on their debut date, according to the market rules.
Earlier this month, the company said a paperwork hitch in its listing application would the delay the initial public offering until the first week of August.
RIC, 63-percent-owned by Taiwanese investors, will be the only casino operator listed on Vietnam's stock market which now has more than 100 companies.
The Southeast Asian country is encouraging investors to build high-end hotels, resorts, and golf courses to help sustain a boom in tourism, particularly from South Korea and China.
But casinos are only allowed to cater to foreign tourists as gambling is banned in Vietnam.
So far only two entertainment firms, Phuong Nam and Alta, are listed on the Ho Chi Minh exchange along with one hotel operator, Saigon Hotel.
RIC also operates 130 luxury villas in the UNESCO-Heritage Ha Long Bay, and it has contracts with US hotel operator Starwood Hotels & Resorts to manage two newly built hotels in Ha Long city.
RIC aims to double its 2007 net profit to $10 million from sales of $20 million, up from last year's earnings of $5 million.
Earlier this month Nghia told Reuters that RIC has asked for government permission to invest $300 million in an international airport in Van Don, near Ha Ong Bay in exchange for 1,500 hectares of oceanfront land for other casino and hotel projects.
Foreign investment in Vietnam's burgeoning tourism sector has reached around $700 million so far this year, mostly in hotels and golf courses.
Source: Thanh Nien
The pricing valued the whole company at $438.6 million.
Investors can trade RIC shares within a 20 percent band on their debut date, according to the market rules.
Earlier this month, the company said a paperwork hitch in its listing application would the delay the initial public offering until the first week of August.
RIC, 63-percent-owned by Taiwanese investors, will be the only casino operator listed on Vietnam's stock market which now has more than 100 companies.
The Southeast Asian country is encouraging investors to build high-end hotels, resorts, and golf courses to help sustain a boom in tourism, particularly from South Korea and China.
But casinos are only allowed to cater to foreign tourists as gambling is banned in Vietnam.
So far only two entertainment firms, Phuong Nam and Alta, are listed on the Ho Chi Minh exchange along with one hotel operator, Saigon Hotel.
RIC also operates 130 luxury villas in the UNESCO-Heritage Ha Long Bay, and it has contracts with US hotel operator Starwood Hotels & Resorts to manage two newly built hotels in Ha Long city.
RIC aims to double its 2007 net profit to $10 million from sales of $20 million, up from last year's earnings of $5 million.
Earlier this month Nghia told Reuters that RIC has asked for government permission to invest $300 million in an international airport in Van Don, near Ha Ong Bay in exchange for 1,500 hectares of oceanfront land for other casino and hotel projects.
Foreign investment in Vietnam's burgeoning tourism sector has reached around $700 million so far this year, mostly in hotels and golf courses.
Source: Thanh Nien
Techcombank bond issue to raise $248 mln
The unlisted bank, 15 percent owned by HSBC Holdings Plc., should sell the bonds and use the proceeds in line with a plan approved by the State Bank of Vietnam, a statement on the central bank's website said Tuesday.
Hanoi-based Techcombank, Vietnam's seventh-largest lender by assets, had 24 trillion dong in assets at the end of June, up 38 percent from the end of 2006.
The bank has yet to publish details of the debt issues.
Source: Thanh Nien
Hanoi-based Techcombank, Vietnam's seventh-largest lender by assets, had 24 trillion dong in assets at the end of June, up 38 percent from the end of 2006.
The bank has yet to publish details of the debt issues.
Source: Thanh Nien
Vietnam insurer raises $8.8 mln in 2nd share auction
Vietnam’s biggest insurance firm Bao Viet raised VND14 billion (US$8.8 million) from a public auction of shares left over from its initial public offering last May after bidders defaulted.
However, of the 15.6 million shares remaining from the previous round, it found bidders for just 1.9 million. The amount raised was thus far below the $72 million the company hoped to raise.
The second round saw an average price of VND74,019 against VND73,910 earlier.
Foreign investors bought the lion’s share at the latest auction, snapping up 1.8 million shares.
The insurer set to raise $112 million from its IPO, having set a starting price for bids at VND30,500 each.
According to industry insiders, the giant insurer might now offer the almost 14 million unsold shares to strategic foreign partners.
The company has a registered capital of VND6.8 trillion ($422 million).
Bao Viet's IPO, followed by those of four state-run banks due later this year, is seen as a test of Vietnam's commitment to open its markets following its World Trade Organization membership in January.
Vietnam's insurance sector has grown rapidly in recent years, reflecting the country's robust growth of more than 8 percent in 2005 and 2006. Growth potential in a country of 84 million people is significant as Vietnam spent $10.10 per head on insurance in 2005, compared to $46.3 in China, industry reports show.
The insurer forecast its 2007 net profit would jump almost two-thirds to VND524 billion ($32.5 million) as it expanded into banking and real estate.
Bao Viet is the leader in Vietnam's non-life insurance market with an almost 35 percent share and ranks second in life insurance with 36.5 percent, behind Prudential's 41.6 percent share.
It set to list in Vietnam by 2009 and is considering listing on an unspecified market overseas.
Source: Thanh Nien
However, of the 15.6 million shares remaining from the previous round, it found bidders for just 1.9 million. The amount raised was thus far below the $72 million the company hoped to raise.
The second round saw an average price of VND74,019 against VND73,910 earlier.
Foreign investors bought the lion’s share at the latest auction, snapping up 1.8 million shares.
The insurer set to raise $112 million from its IPO, having set a starting price for bids at VND30,500 each.
According to industry insiders, the giant insurer might now offer the almost 14 million unsold shares to strategic foreign partners.
The company has a registered capital of VND6.8 trillion ($422 million).
Bao Viet's IPO, followed by those of four state-run banks due later this year, is seen as a test of Vietnam's commitment to open its markets following its World Trade Organization membership in January.
Vietnam's insurance sector has grown rapidly in recent years, reflecting the country's robust growth of more than 8 percent in 2005 and 2006. Growth potential in a country of 84 million people is significant as Vietnam spent $10.10 per head on insurance in 2005, compared to $46.3 in China, industry reports show.
The insurer forecast its 2007 net profit would jump almost two-thirds to VND524 billion ($32.5 million) as it expanded into banking and real estate.
Bao Viet is the leader in Vietnam's non-life insurance market with an almost 35 percent share and ranks second in life insurance with 36.5 percent, behind Prudential's 41.6 percent share.
It set to list in Vietnam by 2009 and is considering listing on an unspecified market overseas.
Source: Thanh Nien
Gov’t okays Bao Viet’s bank project
One more economic group, Bao Viet insurance, is moving ahead with its plan to set up a new bank, called Bao Viet Commercial Joint Stock Bank.
On July 23, the Government’s Office released the notice, announcing the Prime Minister’s opinion on agreeing to Bao Viet’s proposal on setting up a Bao Viet Bank, which belongs to Bao Viet Group.
The Prime Minister has assigned the Governor of the State Bank of Vietnam to consider and decide the capital contribution by Bao Viet Group into Bao Viet Bank.
In fact, Bao Viet Group mentioned the intention to establish a bank in early 2006, considering this a very important step in the development strategy of Bao Viet as the bank will support financial activities of Bao Viet.
Bao Viet initially wants to hold more than 50% of the bank’s capital. However, according to a new regulation on bank establishment and operation, every shareholder institution can hold 20% of the total capital. Experts said that the new regulation will force Bao Viet to change its initial plan.
Prior to that, the Government agreed to the proposal by the Vietnam Post and Telecommunication Group (VNPT) to establish a joint stock bank. VNPT has been assigned to draw up the project on setting up such a bank based on the existing Postal Savings Services Company. The project will be submitted to the Prime Minister for consideration and approval.
At the same time, a group of three giants in their fields, including FPT (the Corporation for Financing and Promoting Technologies), MobiFone, a telecommunication service provider, and the State Capital Investment Corporation (SCIC), the powerful corporation specializing in investing state owned capital in businesses, have decided to join forces to set up a bank, FPT Bank.
According to Hoang Minh Chau, Deputy Chairman of FPT, said that the bank would have the initial chartered capital of VND1tril ($62.5mil). Each of the three founding shareholders will contribute 15% of capital each, while the remaining capital will be sourced from individual investors.
Also on July 23, the Prime Minister requested the State Bank of Vietnam to consult with relevant ministries, institutions and individuals on the draft decree on organization, governance and operation of commercial banks. The consultation will be carried out via the government’s website before the final draft is submitted to the Government for consideration and approval.
In related news, the second auction of Bao Viet’s shares on July 23, which aimed to sell the 15mil shares left unsold from the first auction, was, once again, not as successful as expected. The total volume of shares investors registered to buy was very low, less than 2mil shares.
Only 1,917,500 shares have been sold, or 12.24% of the total shares put on sale in the second auction (15,656,286 shares).
Foreign investors could buy nearly all the offered shares, and at the average price of VND1,870,000/share.
Source: VNE
On July 23, the Government’s Office released the notice, announcing the Prime Minister’s opinion on agreeing to Bao Viet’s proposal on setting up a Bao Viet Bank, which belongs to Bao Viet Group.
The Prime Minister has assigned the Governor of the State Bank of Vietnam to consider and decide the capital contribution by Bao Viet Group into Bao Viet Bank.
In fact, Bao Viet Group mentioned the intention to establish a bank in early 2006, considering this a very important step in the development strategy of Bao Viet as the bank will support financial activities of Bao Viet.
Bao Viet initially wants to hold more than 50% of the bank’s capital. However, according to a new regulation on bank establishment and operation, every shareholder institution can hold 20% of the total capital. Experts said that the new regulation will force Bao Viet to change its initial plan.
Prior to that, the Government agreed to the proposal by the Vietnam Post and Telecommunication Group (VNPT) to establish a joint stock bank. VNPT has been assigned to draw up the project on setting up such a bank based on the existing Postal Savings Services Company. The project will be submitted to the Prime Minister for consideration and approval.
At the same time, a group of three giants in their fields, including FPT (the Corporation for Financing and Promoting Technologies), MobiFone, a telecommunication service provider, and the State Capital Investment Corporation (SCIC), the powerful corporation specializing in investing state owned capital in businesses, have decided to join forces to set up a bank, FPT Bank.
According to Hoang Minh Chau, Deputy Chairman of FPT, said that the bank would have the initial chartered capital of VND1tril ($62.5mil). Each of the three founding shareholders will contribute 15% of capital each, while the remaining capital will be sourced from individual investors.
Also on July 23, the Prime Minister requested the State Bank of Vietnam to consult with relevant ministries, institutions and individuals on the draft decree on organization, governance and operation of commercial banks. The consultation will be carried out via the government’s website before the final draft is submitted to the Government for consideration and approval.
In related news, the second auction of Bao Viet’s shares on July 23, which aimed to sell the 15mil shares left unsold from the first auction, was, once again, not as successful as expected. The total volume of shares investors registered to buy was very low, less than 2mil shares.
Only 1,917,500 shares have been sold, or 12.24% of the total shares put on sale in the second auction (15,656,286 shares).
Foreign investors could buy nearly all the offered shares, and at the average price of VND1,870,000/share.
Source: VNE
Vietnam forecasts July CPI up 8.39 pct year on year
Vietnam forecast Tuesday that annual consumer price inflation in July would accelerate to 8.39 percent due to higher costs of food, housing and medicine, up from 7.8 percent in June. Consumers expect outbreaks of pig diseases and bird flu will lead to a surge in food prices in the coming months.
The rise in the consumer price index (CPI) this month is way above the government's initial target to keep annual inflation this year at less than 7 percent.
The Finance Ministry recently revised up the country's 2007 inflation forecast to 7.5 percent to 8.2 percent, after prices in May and June rose beyond the annual target level.
The General Statistics Office released preliminary inflation figures showing food prices in July would be 15.03 percent higher than last July, up from a rise last month of 14.86 percent.
Food prices account for 42.8 percent of the price basket Vietnam uses to calculate inflation. Vietnam's inflation data is not seasonally adjusted.
Vietnam has been confronting a pig disease involving a bacteria that has infected 22 people in northern provinces. Two died during the first half of this year, doctors said.
People infected by the bacteria suffer from rapid internal haemorrhage and high fever after they eat pork from a sick pig or inhale the air near the sick swine.
The Agriculture Ministry said thousands of pigs have been infected by a virus in two central provinces and Da Nang city, and bird flu returned to ducks in a third central province.
The statistics office forecast prices of medicine and health care this month would rise 5.04 percent from last July, higher than the price growth last month of 4.64 percent.
The accumulated CPI growth this month is estimated at 6.19 percent since last December, the statistics office said.
The World Bank earlier this year forecast Vietnam's consumer prices for 2007 would be 6.5 percent higher than 2006 while the International Monetary Fund estimated a year-end inflation rate of 7.1 percent.
Source: Thanh Nien
The rise in the consumer price index (CPI) this month is way above the government's initial target to keep annual inflation this year at less than 7 percent.
The Finance Ministry recently revised up the country's 2007 inflation forecast to 7.5 percent to 8.2 percent, after prices in May and June rose beyond the annual target level.
The General Statistics Office released preliminary inflation figures showing food prices in July would be 15.03 percent higher than last July, up from a rise last month of 14.86 percent.
Food prices account for 42.8 percent of the price basket Vietnam uses to calculate inflation. Vietnam's inflation data is not seasonally adjusted.
Vietnam has been confronting a pig disease involving a bacteria that has infected 22 people in northern provinces. Two died during the first half of this year, doctors said.
People infected by the bacteria suffer from rapid internal haemorrhage and high fever after they eat pork from a sick pig or inhale the air near the sick swine.
The Agriculture Ministry said thousands of pigs have been infected by a virus in two central provinces and Da Nang city, and bird flu returned to ducks in a third central province.
The statistics office forecast prices of medicine and health care this month would rise 5.04 percent from last July, higher than the price growth last month of 4.64 percent.
The accumulated CPI growth this month is estimated at 6.19 percent since last December, the statistics office said.
The World Bank earlier this year forecast Vietnam's consumer prices for 2007 would be 6.5 percent higher than 2006 while the International Monetary Fund estimated a year-end inflation rate of 7.1 percent.
Source: Thanh Nien
Monday, July 23, 2007
Vietnam's bank to sell 600 bln dong bonds on Tuesday
State-run Vietnam Development Bank plans to raise 600 billion dong ($37 million) from auctioning its July 2022 bonds on Tuesday, the Hanoi over-the-counter stock market said in a statement on Monday.
The exchange said it would sell the 15-year bonds on Tuesday for maturity on July 26, 2022 on behalf of Vietnam Development Bank (VDB), one of the country's two state-run policy banks.
At the last VDB bond auction on July 3, the lender sold 175 billion dong worth of its 10-year bonds with an annual coupon of 7.95 percent, or a quarter of the total 700 billion dong on offer.
Last Friday, the Hanoi market sold 600 billion dong ($37 million) worth of 5-year government bonds at an auction with an annual coupon of 7.42 percent.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It assigned a Ba3 rating for the country's dong debts.
Source: Reuters
The exchange said it would sell the 15-year bonds on Tuesday for maturity on July 26, 2022 on behalf of Vietnam Development Bank (VDB), one of the country's two state-run policy banks.
At the last VDB bond auction on July 3, the lender sold 175 billion dong worth of its 10-year bonds with an annual coupon of 7.95 percent, or a quarter of the total 700 billion dong on offer.
Last Friday, the Hanoi market sold 600 billion dong ($37 million) worth of 5-year government bonds at an auction with an annual coupon of 7.42 percent.
In March, Moody's upgraded the outlook for both Vietnam's foreign currency bonds and local currency bonds to positive from stable. It assigned a Ba3 rating for the country's dong debts.
Source: Reuters
Wood processor's shares jump 20 pct on debut
Shares in Vietnam's Thuan An Wood Processing Company (GTA) jumped 20 percent on their Monday debut on the Ho Chi Minh Stock Exchange, while the market eased slightly.
Shares in the rubber wood processor closed at 66,000 dong ($4.08) each, above the starting price of 55,000 dong the company set for the first trading day.
Thuan An, now the 108th listed firm on Vietnam's exchange, was valued at $34.3 million. Other wood industry-related listed companies include furniture exporter Savimex (SAV) and two paper manufacturers Hapaco (HAP) and Vien Dong Paper (VID).
The VN Index edged 0.21 percent down to close at 979.23 points, a 30 percent rise from the end of 2006.
The market capitalisation stood at $12.7 billion.
Thuan An, based in the southern province of Binh Duong, is a subsidiary of Vietnam Rubber Group. It gets 51 percent of its export revenues from the United States, Europe and several Asian countries.
Wooden products are Vietnam's fifth-largest foreign exchange earner after crude oil, textiles, footwear and seafood.
Thuan An's net profit last year jumped 29.9 percent from 2005 to 13.85 billion dong ($858,200) as revenues grew 6.8 percent to 182 billion dong ($11.3 million), the company said in its prospectus.
It has forecast this year's revenues to rise 13 percent from 2006 to 206 billion dong while the net profit would jump 32.5 percent to 18.35 billion dong, thanks to expanded production capacity with a new plant operational in 2006.
Another rubber firm, Tay Ninh Rubber Company which is valued at $240 million on the unofficial markets, is scheduled to debut on the exchange on Tuesday with all its 30 million shares.
Source: Reuters
Shares in the rubber wood processor closed at 66,000 dong ($4.08) each, above the starting price of 55,000 dong the company set for the first trading day.
Thuan An, now the 108th listed firm on Vietnam's exchange, was valued at $34.3 million. Other wood industry-related listed companies include furniture exporter Savimex (SAV) and two paper manufacturers Hapaco (HAP) and Vien Dong Paper (VID).
The VN Index edged 0.21 percent down to close at 979.23 points, a 30 percent rise from the end of 2006.
The market capitalisation stood at $12.7 billion.
Thuan An, based in the southern province of Binh Duong, is a subsidiary of Vietnam Rubber Group. It gets 51 percent of its export revenues from the United States, Europe and several Asian countries.
Wooden products are Vietnam's fifth-largest foreign exchange earner after crude oil, textiles, footwear and seafood.
Thuan An's net profit last year jumped 29.9 percent from 2005 to 13.85 billion dong ($858,200) as revenues grew 6.8 percent to 182 billion dong ($11.3 million), the company said in its prospectus.
It has forecast this year's revenues to rise 13 percent from 2006 to 206 billion dong while the net profit would jump 32.5 percent to 18.35 billion dong, thanks to expanded production capacity with a new plant operational in 2006.
Another rubber firm, Tay Ninh Rubber Company which is valued at $240 million on the unofficial markets, is scheduled to debut on the exchange on Tuesday with all its 30 million shares.
Source: Reuters
Both bourses continued their downward trends
The VN-Index at the Ho Chi Minh City Trading Centre dropped by 2.08 points, or 0.21 percent to close at 979.23 points.
The bourse’s trading value for the day totalled 444.2 billion VND.
Blue chips Tay Ninh Cable Car Tour (TCT), Binh Dinh Mining (BMC) and Financing and Promoting Technology (FPT) recorded the biggest losses during the day, having between 10,000 VND and 14,000 VND wiped off their listed prices.
Deputy Chairman of FPT management board Hoang Minh Chau contributed to the fall in FPT prices by selling off 225,000 of his 3,056,175 FPT shares.
With Hoang's dumping of stock it came as no surprise that FPT led the market in traded volume for the day.
The Ha Noi Securities Trading Centre (HaSTC) also fell as 32 listed shares on the exchange recorded drops, 33 rallied for gains and nine remained unchanged.
By closing, the HaSTC slid by 0.36 points to finish at 267.06 points with more than 742,100 shares worth more than 76.5 billion VND traded.
Saigon Securities (SSI) led the market in terms of transaction volume with 183,600 shares worth 28.5 trillion VND.
Source: VNA
The bourse’s trading value for the day totalled 444.2 billion VND.
Blue chips Tay Ninh Cable Car Tour (TCT), Binh Dinh Mining (BMC) and Financing and Promoting Technology (FPT) recorded the biggest losses during the day, having between 10,000 VND and 14,000 VND wiped off their listed prices.
Deputy Chairman of FPT management board Hoang Minh Chau contributed to the fall in FPT prices by selling off 225,000 of his 3,056,175 FPT shares.
With Hoang's dumping of stock it came as no surprise that FPT led the market in traded volume for the day.
The Ha Noi Securities Trading Centre (HaSTC) also fell as 32 listed shares on the exchange recorded drops, 33 rallied for gains and nine remained unchanged.
By closing, the HaSTC slid by 0.36 points to finish at 267.06 points with more than 742,100 shares worth more than 76.5 billion VND traded.
Saigon Securities (SSI) led the market in terms of transaction volume with 183,600 shares worth 28.5 trillion VND.
Source: VNA
July 16-20: one trading session up, four down
The market remained quiet last week with transactions of shares and fund certificates down considerably.
Only one trading session saw the VN Index increase, while the other four sessions witnessed sharp price decreases. The same scenario happened at both the Hanoi and HCM City Securities Trading Centres.
Foreign investors also reportedly had low trading volume last week. In HCM City, they reduced their volume of purchases, while they sold twice as much as two weeks before.
Analysts say that domestic investors are insecure about the market as foreign investors seem to be not making any moves: they are still waiting for the big IPOs slated for the last five months of the year and early 2008. Investors do not have any information about whether or not the government will delay the IPOs of four state owned banks and 20 big general corporations previously scheduled for 2007.
Most analysts, both domestic and foreign, think that the delay of IPOs, if decided upon by the government, will have negative impacts on the stability of the stock market’s development, and slow down economic growth in the coming years.
Some experts have said that the total sum of VND50tril ($3,125mil), the value of the IPO shares to be issued by four state owned banks and 20 big corporations, is nothing compared to the foreign portfolio investment capital of $4bil to be flown into Vietnam from now to mid 2008. If foreign investment funds are kept waiting any longer, they will feel discouraged and inject their money in other countries rather than Vietnam.
In HCM City from July 16-20, the VN Index once again slid after rebounding the previous week. The VN Index continuously decreased in the last three trading sessions by 24.42 points. HASTC’s Index rose in one session, while fell in the four others by 9.95 points to its record low, surprising every investor.
However, analysts said that penny stocks, especially ones of construction and construction material companies, tended to increase in price.
Several companies have announced their business results for the first half of the year, all of which were very satisfactory, but the optimistic reports could not warm the market up.
At the HCM City Securities Trading Centre, investors registered to purchase 40.34mil units of securities, the same volume as the previous week. There were orders to sell 34.71mil units, down by 3mil.
The five securities items which saw the biggest trading volume under the form of order matching included STB (2.434mil units, down by 200,000 units over the previous week, worth VND150bil or $9.37mil), FPT (1.882mil shares, up by 550,000 units), HTV (0.723mil units), VF1 fund certificates (0.639mil units), and REE (0.630mil, down by 300,000 units).
In HCM City, the volume foreign investors sold increased sharply, while the volume they purchased decreased. They bought 3.45mil shares (- 1mil), worth VND468bil, and sold 2.68mil shares, double the previous week’s level, worth VND583bil.
In Hanoi, the transaction volume of foreign investors decreased over the previous week. They bought 642,300 shares (- 250,000 units), worth VND71.2bil, and sold 112,000 shares, down by 30,000 units, worth VND10.91bil.
Source: VNE
Only one trading session saw the VN Index increase, while the other four sessions witnessed sharp price decreases. The same scenario happened at both the Hanoi and HCM City Securities Trading Centres.
Foreign investors also reportedly had low trading volume last week. In HCM City, they reduced their volume of purchases, while they sold twice as much as two weeks before.
Analysts say that domestic investors are insecure about the market as foreign investors seem to be not making any moves: they are still waiting for the big IPOs slated for the last five months of the year and early 2008. Investors do not have any information about whether or not the government will delay the IPOs of four state owned banks and 20 big general corporations previously scheduled for 2007.
Most analysts, both domestic and foreign, think that the delay of IPOs, if decided upon by the government, will have negative impacts on the stability of the stock market’s development, and slow down economic growth in the coming years.
Some experts have said that the total sum of VND50tril ($3,125mil), the value of the IPO shares to be issued by four state owned banks and 20 big corporations, is nothing compared to the foreign portfolio investment capital of $4bil to be flown into Vietnam from now to mid 2008. If foreign investment funds are kept waiting any longer, they will feel discouraged and inject their money in other countries rather than Vietnam.
In HCM City from July 16-20, the VN Index once again slid after rebounding the previous week. The VN Index continuously decreased in the last three trading sessions by 24.42 points. HASTC’s Index rose in one session, while fell in the four others by 9.95 points to its record low, surprising every investor.
However, analysts said that penny stocks, especially ones of construction and construction material companies, tended to increase in price.
Several companies have announced their business results for the first half of the year, all of which were very satisfactory, but the optimistic reports could not warm the market up.
At the HCM City Securities Trading Centre, investors registered to purchase 40.34mil units of securities, the same volume as the previous week. There were orders to sell 34.71mil units, down by 3mil.
The five securities items which saw the biggest trading volume under the form of order matching included STB (2.434mil units, down by 200,000 units over the previous week, worth VND150bil or $9.37mil), FPT (1.882mil shares, up by 550,000 units), HTV (0.723mil units), VF1 fund certificates (0.639mil units), and REE (0.630mil, down by 300,000 units).
In HCM City, the volume foreign investors sold increased sharply, while the volume they purchased decreased. They bought 3.45mil shares (- 1mil), worth VND468bil, and sold 2.68mil shares, double the previous week’s level, worth VND583bil.
In Hanoi, the transaction volume of foreign investors decreased over the previous week. They bought 642,300 shares (- 250,000 units), worth VND71.2bil, and sold 112,000 shares, down by 30,000 units, worth VND10.91bil.
Source: VNE
Merrill Lynch report sets party table for speculators
While experts and mass media are busy arguing how trustworthy Merrill Lynch’s report is, speculators have time and opportunities to buy shares at low prices as investors try to sell shares for fear of the forecast gloomy prospects for the stock market.
Thoi bao kinh te Vietnam has posted the analysis of Nguyen Duc Thanh, an expert, who has tried to explain why Merrill Lynch’s conclusions about Vietnam were so contradictory.
“The fact that Merrill Lynch withdraws from Vietnam, in case the recommendation of the research team is accepted, does not say much about Vietnam’s market. It says more about Merrill Lynch itself,” the author writes.
If considering the investment portfolio of Merrill Lynch in Asia, one can note that the group has more investments in well-developed markets, including the four Asian tigers (ROK, Taiwan, Hong Kong and Singapore) and Australia, which account for 70% of total investment. Meanwhile, smaller and emerging markets in Southeast Asia (Thailand, Indonesia, the Philippines and Vietnam) are clearly not its priority destinations – 8.5% of total investment only.
The remaining investment proportion has been allocated to China (14%), and South Asia (India 2.5% and Pakistan 2.5%), big markets with big opportunities. Therefore, it is quite understandable why the research team has suggested pushing up investment in India and China.
Mr Thanh has pointed out that the changes in the conclusions of Merrill Lynch about Vietnam’s stock market coincide with changes in the group’s staffs.
The first report about Vietnam’s market was released on February 2, 2006. It was written by Spencer White, Stephane Corry and Willie Chan (all were staffs of Merrill Lynch Hong Kong). As the names of the authors were not listed in alphabetical order, it could be surmised that the head of the research team was Mr Spencer. The report, forecasting a bright future, urged Merrill Lynch to enter Vietnam as soon as possible.
The second report, dated June 29, 2006, was made by the same research team. Though the market went down sharply at this time, the research team was still optimistic about Vietnam.
The third report was launched on October 5, 2006, with the note, ‘corrected’. On the list of the report’s authors, the name ‘Mark Mathews’ appeared just after Spencer, and it is interesting to note that Mark is a staff of Merrill Lynch Singapore, not Hong Kong as the other three members. It was a time when the market began recovering (and increased considerably in the next months as people witnessed). However, the report consisted of some pessimistic conclusions about Vietnam.
More pessimistic conclusions were seen in the latest report, dated July 5, 2007. In this report, the name ‘Spencer’ disappeared, and ‘Mark’ appeared as the head of the research team. The report, as said before, recommends that Merrill Lynch direct its sources of strength into China.
The viewpoint of Merrill Lynch about Vietnam seems to change in accordance with the changes of the viewpoints of the consultants to Merrill Lynch.
As such, Vietnam’s stock market and Vietnamese investors seem to be victims of some kind of ideological conflict, taking place several thousands of kilometers from Vietnam in some small office.
The report has shocked many investors and raised arguments among analysts and experts, but has brought big opportunities to many other investors and speculators.
60-year-old investor Tran Van Minh on SSI trading floor said, “Why should I follow other investors to sell shares at low prices and then have to buy shares later at high prices?” he said, adding that the VN Index would rebound to the 1,000 point level soon.
Other investors also said that it was quite normal to see the VN Index go up and down. Some of them said that they would buy shares in when the prices further dropped, adding that the report would only frighten cowardly investors.
Don Lam, Director General of Vina Capital, has advised investors to keep calm and be rational when making investment decisions. Financial institutions have the right to make their own assessments, and the assessments should be considered thoroughly.
Source: VNE
Thoi bao kinh te Vietnam has posted the analysis of Nguyen Duc Thanh, an expert, who has tried to explain why Merrill Lynch’s conclusions about Vietnam were so contradictory.
“The fact that Merrill Lynch withdraws from Vietnam, in case the recommendation of the research team is accepted, does not say much about Vietnam’s market. It says more about Merrill Lynch itself,” the author writes.
If considering the investment portfolio of Merrill Lynch in Asia, one can note that the group has more investments in well-developed markets, including the four Asian tigers (ROK, Taiwan, Hong Kong and Singapore) and Australia, which account for 70% of total investment. Meanwhile, smaller and emerging markets in Southeast Asia (Thailand, Indonesia, the Philippines and Vietnam) are clearly not its priority destinations – 8.5% of total investment only.
The remaining investment proportion has been allocated to China (14%), and South Asia (India 2.5% and Pakistan 2.5%), big markets with big opportunities. Therefore, it is quite understandable why the research team has suggested pushing up investment in India and China.
Mr Thanh has pointed out that the changes in the conclusions of Merrill Lynch about Vietnam’s stock market coincide with changes in the group’s staffs.
The first report about Vietnam’s market was released on February 2, 2006. It was written by Spencer White, Stephane Corry and Willie Chan (all were staffs of Merrill Lynch Hong Kong). As the names of the authors were not listed in alphabetical order, it could be surmised that the head of the research team was Mr Spencer. The report, forecasting a bright future, urged Merrill Lynch to enter Vietnam as soon as possible.
The second report, dated June 29, 2006, was made by the same research team. Though the market went down sharply at this time, the research team was still optimistic about Vietnam.
The third report was launched on October 5, 2006, with the note, ‘corrected’. On the list of the report’s authors, the name ‘Mark Mathews’ appeared just after Spencer, and it is interesting to note that Mark is a staff of Merrill Lynch Singapore, not Hong Kong as the other three members. It was a time when the market began recovering (and increased considerably in the next months as people witnessed). However, the report consisted of some pessimistic conclusions about Vietnam.
More pessimistic conclusions were seen in the latest report, dated July 5, 2007. In this report, the name ‘Spencer’ disappeared, and ‘Mark’ appeared as the head of the research team. The report, as said before, recommends that Merrill Lynch direct its sources of strength into China.
The viewpoint of Merrill Lynch about Vietnam seems to change in accordance with the changes of the viewpoints of the consultants to Merrill Lynch.
As such, Vietnam’s stock market and Vietnamese investors seem to be victims of some kind of ideological conflict, taking place several thousands of kilometers from Vietnam in some small office.
The report has shocked many investors and raised arguments among analysts and experts, but has brought big opportunities to many other investors and speculators.
60-year-old investor Tran Van Minh on SSI trading floor said, “Why should I follow other investors to sell shares at low prices and then have to buy shares later at high prices?” he said, adding that the VN Index would rebound to the 1,000 point level soon.
Other investors also said that it was quite normal to see the VN Index go up and down. Some of them said that they would buy shares in when the prices further dropped, adding that the report would only frighten cowardly investors.
Don Lam, Director General of Vina Capital, has advised investors to keep calm and be rational when making investment decisions. Financial institutions have the right to make their own assessments, and the assessments should be considered thoroughly.
Source: VNE
Merrill Lynch will not leave Vietnam
The recent report by Merrill Lynch did not reflect its long-term investment viewpoint, just its short-term investment outlook given the relationship between Vietnam’s market and other capital markets in the region, said Spencer White, an expert who once worked for Merrill Lynch.
Now the advisor to the Thien Viet Securities Company, Spencer White was once the head of the research team which wrote one of Merrill Lynch’s reports on Vietnam’s stock market, the one which was published in February 2006 that said Vietnam deserved to be a good investment address.
Mr Spencer talked with a Dau tu chung khoan reporter about the controversial latest report by Merrill Lynch, made by another research team of Merrill Lynch, which suggested reducing the investment level in Vietnam to zero. VietNamNet Bridge briefs the conversation.
Vietnamese investors are puzzled by the latest report by Merrill Lynch, which said that Vietnam is not a good investment address. What do you think about this?
My basic viewpoint on Vietnam’s stock market in terms of long-term investment has not changed since I wrote the report in February 2006. I believe that Vietnam is the top buy market for the next 10 years; it deserves to be one of the most attractive markets in Asia. Since I wrote the report, the VN Index has increased three fold, and the value of shares has also increased considerably.
The latest report by Merrill Lynch did not reflect its long-term investment viewpoint, just the short-term investment on the basis of the relationship between Vietnam and other capital markets in the region. Merrill Lynch’s experts think that in a couple of months, other capital markets, especially China, will see higher growth rates. However, the tendency may change as markets will change in the coming months.
Inexperienced individual investors have rushed to sell shares while foreign investors have been able to buy securities at low prices since the report was released. What would you say about the opinion that the report targeted inexperienced investors?
I can say that no Merrill Lynch report so far has been released to trick individual investors in any market, and Vietnam is not an exception. It would be a big mistake to think that Merrill Lynch’s experts have deliberately done something to influence individual Vietnamese investors. Though the share price has decreased since the report was released, I still have to say that the VN Index began falling down even before the release of the report, because Vietnam’s stock market is in its ‘correction’ period’.
After a long time of overheating, it is quite normal to see the market enter a correction period. The market will remain weak for some more time, but when positive signs of the market appear and listing companies announce their high growth rates, investors will come back to buy more shares.
Merrill Lynch said that it would move its investment capital in Vietnam to China. What do you think the possibility is that the company will leave Vietnam to head for China?
I’m not in the right position to answer the question on behalf of Merrill Lynch, but I think that Merrill Lynch will not leave Vietnam. Merrill Lynch has a long-term, serious investment strategy. I think you will see this in one or two years.
Merrill Lynch simply thinks that the Chinese market will be better than Vietnam in the coming months. The viewpoint will not affect big investment plans or the investment commitments in Vietnam Merrill Lynch has made.
The report has pointed out that the EPS in Vietnam is low, just 10% in 2007, the lowest level in the region, due to Vietnamese companies’ habit of issuing additional shares. What do you think about this?
It is understandable why companies like issuing more shares. By doing so, the companies can avoid paying interest on the capital they can get. However, the companies will have to pay a lot to use the capital, the EPS will be diluted, and the ROE will decrease. Most Vietnamese companies contact banks when they want capital, while there are many other tools they can use to get capital.
Source: VNE
Now the advisor to the Thien Viet Securities Company, Spencer White was once the head of the research team which wrote one of Merrill Lynch’s reports on Vietnam’s stock market, the one which was published in February 2006 that said Vietnam deserved to be a good investment address.
Mr Spencer talked with a Dau tu chung khoan reporter about the controversial latest report by Merrill Lynch, made by another research team of Merrill Lynch, which suggested reducing the investment level in Vietnam to zero. VietNamNet Bridge briefs the conversation.
Vietnamese investors are puzzled by the latest report by Merrill Lynch, which said that Vietnam is not a good investment address. What do you think about this?
My basic viewpoint on Vietnam’s stock market in terms of long-term investment has not changed since I wrote the report in February 2006. I believe that Vietnam is the top buy market for the next 10 years; it deserves to be one of the most attractive markets in Asia. Since I wrote the report, the VN Index has increased three fold, and the value of shares has also increased considerably.
The latest report by Merrill Lynch did not reflect its long-term investment viewpoint, just the short-term investment on the basis of the relationship between Vietnam and other capital markets in the region. Merrill Lynch’s experts think that in a couple of months, other capital markets, especially China, will see higher growth rates. However, the tendency may change as markets will change in the coming months.
Inexperienced individual investors have rushed to sell shares while foreign investors have been able to buy securities at low prices since the report was released. What would you say about the opinion that the report targeted inexperienced investors?
I can say that no Merrill Lynch report so far has been released to trick individual investors in any market, and Vietnam is not an exception. It would be a big mistake to think that Merrill Lynch’s experts have deliberately done something to influence individual Vietnamese investors. Though the share price has decreased since the report was released, I still have to say that the VN Index began falling down even before the release of the report, because Vietnam’s stock market is in its ‘correction’ period’.
After a long time of overheating, it is quite normal to see the market enter a correction period. The market will remain weak for some more time, but when positive signs of the market appear and listing companies announce their high growth rates, investors will come back to buy more shares.
Merrill Lynch said that it would move its investment capital in Vietnam to China. What do you think the possibility is that the company will leave Vietnam to head for China?
I’m not in the right position to answer the question on behalf of Merrill Lynch, but I think that Merrill Lynch will not leave Vietnam. Merrill Lynch has a long-term, serious investment strategy. I think you will see this in one or two years.
Merrill Lynch simply thinks that the Chinese market will be better than Vietnam in the coming months. The viewpoint will not affect big investment plans or the investment commitments in Vietnam Merrill Lynch has made.
The report has pointed out that the EPS in Vietnam is low, just 10% in 2007, the lowest level in the region, due to Vietnamese companies’ habit of issuing additional shares. What do you think about this?
It is understandable why companies like issuing more shares. By doing so, the companies can avoid paying interest on the capital they can get. However, the companies will have to pay a lot to use the capital, the EPS will be diluted, and the ROE will decrease. Most Vietnamese companies contact banks when they want capital, while there are many other tools they can use to get capital.
Source: VNE
Vietnam to have new banks by year end
It is expected that operation licenses will be given to one or two banks by the end of the year, which will be established in accordance with the new laws.
From July 20, 2007, the institutions and individuals that can meet the requirements of financial situation and corporate governance will be able to apply to the State Bank of Vietnam for setting up new banks.
The regulation on licensing banks and stipulating the operation of joint stock banks was published on the official gazette on July 5, thus making the regulation effective as of July 20, 2007, or 15 days after it was available on the official gazette. The regulation sets new strict requirements on financial capability, sources of capital contribution, governance and management skills.
In order to be licensed right in 2007, investors must have at least VND1tril ($62.5mil), which must be sourced from shareholders’ contributions, not from loans.
According to Kieu Huu Dung, Director of the Department for Banks and Non-bank Credit Institutions under the State Bank of Vietnam, nearly 30 applications have been made to the central banks prior to the date the new regulation came into effect, and 20 of them have applied again after the new regulation became valid and the central banks announced that they were receiving new applications.
“Our preliminary consideration shows that several investors can meet the new requirements, and it is expected that one or two banks will get the license by year’s end,” said Mr Dung.
Besides the applications for setting up new joint stock banks, the central bank is now also considering the shifting of the Postal Savings Service Company into a bank. It remains unclear whether the company will shift to operate as joint stock bank or under the mode of a state owned bank.
Mr Dung said that the central bank has received the applications for setting up three 100% foreign owned banks from the Hong Kong Shanghai and Banking Corporation HSBC, ANZ and Standard Chartered Bank. Four other banks in Asia have made the same request, but they have not fulfilled the necessary documents for submission. If meeting the set requirements, 100% foreign owned banks will be licensed five or six months after the day of document submission.
Source: VNE
From July 20, 2007, the institutions and individuals that can meet the requirements of financial situation and corporate governance will be able to apply to the State Bank of Vietnam for setting up new banks.
The regulation on licensing banks and stipulating the operation of joint stock banks was published on the official gazette on July 5, thus making the regulation effective as of July 20, 2007, or 15 days after it was available on the official gazette. The regulation sets new strict requirements on financial capability, sources of capital contribution, governance and management skills.
In order to be licensed right in 2007, investors must have at least VND1tril ($62.5mil), which must be sourced from shareholders’ contributions, not from loans.
According to Kieu Huu Dung, Director of the Department for Banks and Non-bank Credit Institutions under the State Bank of Vietnam, nearly 30 applications have been made to the central banks prior to the date the new regulation came into effect, and 20 of them have applied again after the new regulation became valid and the central banks announced that they were receiving new applications.
“Our preliminary consideration shows that several investors can meet the new requirements, and it is expected that one or two banks will get the license by year’s end,” said Mr Dung.
Besides the applications for setting up new joint stock banks, the central bank is now also considering the shifting of the Postal Savings Service Company into a bank. It remains unclear whether the company will shift to operate as joint stock bank or under the mode of a state owned bank.
Mr Dung said that the central bank has received the applications for setting up three 100% foreign owned banks from the Hong Kong Shanghai and Banking Corporation HSBC, ANZ and Standard Chartered Bank. Four other banks in Asia have made the same request, but they have not fulfilled the necessary documents for submission. If meeting the set requirements, 100% foreign owned banks will be licensed five or six months after the day of document submission.
Source: VNE
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