Bank for Foreign Trade of Vietnam, the country's third largest, said on Thursday its first-half profit fell 22.7 percent but its assets were up 9.8 percent at 183.4 trillion dong ($11.3 billion) at the end of June.
The six-month net profit was 1.02 trillion dong ($63 million), down from 1.32 trillion dong in the same period last year, the unlisted bank, also known as Vietcombank, told the Ho Chi Minh City exchange in a statement.
Hanoi-based Vietcombank, one of four state-run banks ordered to undergo partial privatisation this year, has said it handles about a quarter of Vietnam's trade payments.
The bank's statement did not give a reason for the lower profit, even though its second-quarter net profit jumped 41.6 percent from a year earlier to 726.3 billion dong. It showed operating costs surged 33 percent during the first six months from a year earlier to 586.64 billion dong.
Vietcombank aims for credit growth of 18 to 20 percent per year over the 2006-2010 period while keeping bad debts at 5-7 percent of loans by 2010.
The bank's seven-year convertible bonds are listed on the Ho Chi Minh Stock Exchange.
Source: Reuters
Thursday, August 23, 2007
Wednesday, August 22, 2007
Indices decline
Both the Ho Chi Minh City Stock Exchange (HoSE) and its Ha Noi counterpart reported small losses by the end of the August 22 trading session.
The VN-Index at the HoSE sunk 3.65 points or 0.4 percent from the previous trading session to end the day at 892.07 points with more than 5.8 million shares worth over 516 billion VND being traded. The HoSE saw 35 stocks rallying for gains, 22 remain unchanged and 57 fell.
The newly-listed Thong Nhat Rubber (TNC) topped the list of 35 movers by tacking 40,000 VND per unit onto its listed price, followed by Binh Dinh Minerals (BMC), Tay Ninh Cable Tour (TCT), Sai Gon Hotel Corp. (SGH), and North Kinh Do Food (NKD).
Meanwhile, Hau Giang Pharmaceutical (DHG) was one of the main losers of the day, with a decrease of 5,000 VND being slashed from its stock price. The group of 57 losers also included Da Nang Rubber (DRC), Hoa Binh Construction and Real Estate Corp. (HBC), Materials – Petroleum (COM) and Nam Viet (NAV).
Blue-chip shares like Saigon Thuong Tin Commercial Bank (STB), the Corporation for Financing and Promoting Technology (FPT), Pha Lai Thermal Power Co. (PPC), Song Da Urban and Industrial Zone Investment and Development (SJS) and Refrigeration Electrical Engineering Corp. (REE) were among stocks to lead the market in trading volume.
At the close of trade in Ha Noi, the HaSTC declined 2.33 points to 246.47 points.
Today’s trading volume increased with 828,000 shares worth more than 83.4 billion VND changing hands. Saigon Securities Inc. (SSI) topped the market in terms of transaction volume with 175,000 shares being traded during the course of the morning.
Source: VNA
The VN-Index at the HoSE sunk 3.65 points or 0.4 percent from the previous trading session to end the day at 892.07 points with more than 5.8 million shares worth over 516 billion VND being traded. The HoSE saw 35 stocks rallying for gains, 22 remain unchanged and 57 fell.
The newly-listed Thong Nhat Rubber (TNC) topped the list of 35 movers by tacking 40,000 VND per unit onto its listed price, followed by Binh Dinh Minerals (BMC), Tay Ninh Cable Tour (TCT), Sai Gon Hotel Corp. (SGH), and North Kinh Do Food (NKD).
Meanwhile, Hau Giang Pharmaceutical (DHG) was one of the main losers of the day, with a decrease of 5,000 VND being slashed from its stock price. The group of 57 losers also included Da Nang Rubber (DRC), Hoa Binh Construction and Real Estate Corp. (HBC), Materials – Petroleum (COM) and Nam Viet (NAV).
Blue-chip shares like Saigon Thuong Tin Commercial Bank (STB), the Corporation for Financing and Promoting Technology (FPT), Pha Lai Thermal Power Co. (PPC), Song Da Urban and Industrial Zone Investment and Development (SJS) and Refrigeration Electrical Engineering Corp. (REE) were among stocks to lead the market in trading volume.
At the close of trade in Ha Noi, the HaSTC declined 2.33 points to 246.47 points.
Today’s trading volume increased with 828,000 shares worth more than 83.4 billion VND changing hands. Saigon Securities Inc. (SSI) topped the market in terms of transaction volume with 175,000 shares being traded during the course of the morning.
Source: VNA
Stock market awaiting new investment funds
Experts believe that the current gloomy stock market will become brighter if more investment funds enter Vietnam, calming down domestic investors and raising the securities demand. However, management companies seem to be continuing to wait for their time.
Twelve investment fund management companies were established in 2006. However, only the Hanoi Fund Management Company (HFM) announced the setting up of its VND200bil ($12.5mil) fund – Hanoi Fund. Other companies have not made any move.
The State Securities Commission (SSC) thinks that the best solution to the current gloomy stock market is to develop institutional investors, including investment funds. Meanwhile, only one fund, set up by Manulife, has got the approval from SSC to raise funds worth VND250bil ($15.62mil).
Experts guess that only several management companies will have their funds debut this year. HFM is preparing for the establishment of two new funds, the domestic one with VND500bil ($31.25mil) in capital, and the foreign one with the expected capital of $50-100mil. The funds will aim at both listed and unlisted securities and IPOs. Hanoi Fund, another fund managed by HFM, saw the net asset growth of 70% by the end of June 2007. The dividend HFM plans to give to the investors may reach 30% this year.
Another fund, to be managed by Viet Long Fund Management Company, is expected to be ‘given birth’ to in some days, and is believed to have the capital of VND300bil ($18.75mil).
According to Nguyen Thuc Vinh, Director General of Viet Long Fund Management Company, as the market keeps falling, investors have become hesitant with their investment deals. However, it would be quite different for investment funds, which always aim at long-term investment strategy.
“It is the right time to make disbursement now. I believe that the stock market will see vigorous development in the next five years,” said Mr Vinh.
Saigon Securities Incorporated (SSI) has just set up a fund management company; however, the company has been well preparing its plan to set up a fund. SSI has announced it will set up the fund right in 2007, but has not revealed the scale and the operational time.
Sources said that the Ban Viet Management Company was also moving ahead with its plan to establish a $150mil fund. The Vietnam Fund Management Company is raising funds to set up the VND300bil ($18.75mil) VF2.
Management companies are still trying to set up new funds, though they know well about the difficulties existing funds are facing. The price of VF1 certificate (being managed by the Vietnam Fund Management Company), for example, is now 20% lower than the net value asset NAV. The price of Prudential Management Company’s certificate is just around the face value, while Manulife fund management company is trying hard to raise funds.
Nevertheless, a lot of other management companies seem to be not hurrying with plans to set up funds. It is partially because of the market’s fall. Moreover, experts said, the strict regulations stipulated by the Securities Law have also prompted management companies to delay their plans on setting up funds. These companies now focus on doing business themselves, and doing authorised business.
Under the current regulations, two years after their establishment, management companies can establish member funds (minimum contributed capital VND50bil or $3.12mil, 50 members at least, capital contributors must be legal entities, state owned enterprises are not allowed to make capital contribution with state owned capital).
Source: VNE
Twelve investment fund management companies were established in 2006. However, only the Hanoi Fund Management Company (HFM) announced the setting up of its VND200bil ($12.5mil) fund – Hanoi Fund. Other companies have not made any move.
The State Securities Commission (SSC) thinks that the best solution to the current gloomy stock market is to develop institutional investors, including investment funds. Meanwhile, only one fund, set up by Manulife, has got the approval from SSC to raise funds worth VND250bil ($15.62mil).
Experts guess that only several management companies will have their funds debut this year. HFM is preparing for the establishment of two new funds, the domestic one with VND500bil ($31.25mil) in capital, and the foreign one with the expected capital of $50-100mil. The funds will aim at both listed and unlisted securities and IPOs. Hanoi Fund, another fund managed by HFM, saw the net asset growth of 70% by the end of June 2007. The dividend HFM plans to give to the investors may reach 30% this year.
Another fund, to be managed by Viet Long Fund Management Company, is expected to be ‘given birth’ to in some days, and is believed to have the capital of VND300bil ($18.75mil).
According to Nguyen Thuc Vinh, Director General of Viet Long Fund Management Company, as the market keeps falling, investors have become hesitant with their investment deals. However, it would be quite different for investment funds, which always aim at long-term investment strategy.
“It is the right time to make disbursement now. I believe that the stock market will see vigorous development in the next five years,” said Mr Vinh.
Saigon Securities Incorporated (SSI) has just set up a fund management company; however, the company has been well preparing its plan to set up a fund. SSI has announced it will set up the fund right in 2007, but has not revealed the scale and the operational time.
Sources said that the Ban Viet Management Company was also moving ahead with its plan to establish a $150mil fund. The Vietnam Fund Management Company is raising funds to set up the VND300bil ($18.75mil) VF2.
Management companies are still trying to set up new funds, though they know well about the difficulties existing funds are facing. The price of VF1 certificate (being managed by the Vietnam Fund Management Company), for example, is now 20% lower than the net value asset NAV. The price of Prudential Management Company’s certificate is just around the face value, while Manulife fund management company is trying hard to raise funds.
Nevertheless, a lot of other management companies seem to be not hurrying with plans to set up funds. It is partially because of the market’s fall. Moreover, experts said, the strict regulations stipulated by the Securities Law have also prompted management companies to delay their plans on setting up funds. These companies now focus on doing business themselves, and doing authorised business.
Under the current regulations, two years after their establishment, management companies can establish member funds (minimum contributed capital VND50bil or $3.12mil, 50 members at least, capital contributors must be legal entities, state owned enterprises are not allowed to make capital contribution with state owned capital).
Source: VNE
Market gloomy, idle capital has nowhere to go
The stock market has fallen, bank deposits bring low interest rates, the real estate market remains frozen: investors do not know where to inject their idle money.
It proves to be quite difficult for investors to earn money at this moment. They cannot inject money in stocks any more as the market has been falling for the last three months. Prices of blue chips have decreased by 30-40% compared to March.
Le Dat Chi, Lecturer at the HCM City Economics University, who is also an investor, said that people should not inject money in stocks at this moment. He said that the market had been distorted by some ‘powerful forces’, while investors’ confidence has been lost due to a series of violations by securities companies (15 violation cases have been discovered so far this year).
Mr Chi said that investors should wait until the market bounced back and was on the right track, and for the time being, investors should turn to bank deposits as the safest investment channel.
Experts also said that when the real estate remained frozen and the gold market was risky, the best choice was to make deposits at banks.
However, the advice does not satisfy investors as the low interest rates offered by banks do not bring investors desired profit. In fact, the interest rates have been lowered by 10-20% compared to the end of July, despite the high inflation rate in the last seven months.
Some 10 commercial banks have announced they will lower the interest rates on VND deposits by 0.36%-0.6% per annum, commencing from August. If depositing VND100mil now, depositors will lose VND205,000-281,000 every month due to the decreased interest rates.
Investors have also been advised to inject money in government bonds, a simple investment channel with zero risk.
No investment channel can be seen as optimal nowadays, and if investors make investments in government bonds, buy gold or dollars, or make deposits at banks, they just aim to save their money and wait for their opportunities.
Source: VNE
It proves to be quite difficult for investors to earn money at this moment. They cannot inject money in stocks any more as the market has been falling for the last three months. Prices of blue chips have decreased by 30-40% compared to March.
Le Dat Chi, Lecturer at the HCM City Economics University, who is also an investor, said that people should not inject money in stocks at this moment. He said that the market had been distorted by some ‘powerful forces’, while investors’ confidence has been lost due to a series of violations by securities companies (15 violation cases have been discovered so far this year).
Mr Chi said that investors should wait until the market bounced back and was on the right track, and for the time being, investors should turn to bank deposits as the safest investment channel.
Experts also said that when the real estate remained frozen and the gold market was risky, the best choice was to make deposits at banks.
However, the advice does not satisfy investors as the low interest rates offered by banks do not bring investors desired profit. In fact, the interest rates have been lowered by 10-20% compared to the end of July, despite the high inflation rate in the last seven months.
Some 10 commercial banks have announced they will lower the interest rates on VND deposits by 0.36%-0.6% per annum, commencing from August. If depositing VND100mil now, depositors will lose VND205,000-281,000 every month due to the decreased interest rates.
Investors have also been advised to inject money in government bonds, a simple investment channel with zero risk.
No investment channel can be seen as optimal nowadays, and if investors make investments in government bonds, buy gold or dollars, or make deposits at banks, they just aim to save their money and wait for their opportunities.
Source: VNE
Bank shares prices to bounce back
Bank share prices will recover sooner or later, experts say. However, the prices will not reach previous levels, when the overly hot stock market made shares overvalued.
On the OTC market, bank share prices have been decreasing by 50-60% in the last time compared to the beginning of the year. On the official market, ACB and STB still have not seen any signs of recovery. However, experts assert that bank shares prices will recover, sooner or later.
Don Lam, Director General of VinaCapital, has assured investors by saying that in any case, bank shares will not see further decreases. He said that the price decrease of bank shares in the last three months was inevitable, since prices always go down after a time of escalating.
Director of Dragon Capital Dominic Scriven shared the same view, saying that as bank share prices had been decreasing continuously in the last time it was not likely they would drop further.
Mr Scriven said that banking remained a sector with great potential in Vietnam if compared to other business sectors. Statistics show that the ratio of total credit growth on GDP growth rate is 55% in Vietnam, while the figure is over 400% in the US. To date, only 8% of total population in Vietnam has bank accounts, while the figure is 100% in other countries.
Explaining why bank share prices have been decreasing over the last three months, Mr Scriven said that the profuse supply of ‘commodities’ had made bank shares less attractive. Several banks’ IPOs slated for the third and fourth quarters of the year will certainly lead to the oversupply of bank shares.
Meanwhile, banks now have to cope with a lot of difficulties caused by the high inflation. As the central bank has required higher compulsory reserve ratio for bank deposits, commercial banks now have to pay higher costs for capital mobilisation.
Johan Nyvene, Director of HCM City Securities Company, also thinks that banking remains the good and safe choice for investors. However, he stressed that not all bank share items would recover. Only the banks which have big scale and good business performance will be able to attract investors. He said that investors should learn carefully about banks before deciding to inject money in them, and avoid investments in banks that may be merged with others.
Experts said that a new price level for bank shares would be set up after Vietcombank fulfilled its IPO. However, it remains unclear when Vietcombank’s IPO will take place. It is very likely that the bank’s IPO, previously slated for August, will be delayed due to the falls on the market.
Experts have said that if Vietcombank’s shares are highly valuated, the prices of other bank shares items will bounce back, and vice versa. Investors, both foreign and domestic, institutions and individuals, have gathered big sums of money to inject in Vietcombank shares when the bank’s shares hit the market.
Source: VNE
On the OTC market, bank share prices have been decreasing by 50-60% in the last time compared to the beginning of the year. On the official market, ACB and STB still have not seen any signs of recovery. However, experts assert that bank shares prices will recover, sooner or later.
Don Lam, Director General of VinaCapital, has assured investors by saying that in any case, bank shares will not see further decreases. He said that the price decrease of bank shares in the last three months was inevitable, since prices always go down after a time of escalating.
Director of Dragon Capital Dominic Scriven shared the same view, saying that as bank share prices had been decreasing continuously in the last time it was not likely they would drop further.
Mr Scriven said that banking remained a sector with great potential in Vietnam if compared to other business sectors. Statistics show that the ratio of total credit growth on GDP growth rate is 55% in Vietnam, while the figure is over 400% in the US. To date, only 8% of total population in Vietnam has bank accounts, while the figure is 100% in other countries.
Explaining why bank share prices have been decreasing over the last three months, Mr Scriven said that the profuse supply of ‘commodities’ had made bank shares less attractive. Several banks’ IPOs slated for the third and fourth quarters of the year will certainly lead to the oversupply of bank shares.
Meanwhile, banks now have to cope with a lot of difficulties caused by the high inflation. As the central bank has required higher compulsory reserve ratio for bank deposits, commercial banks now have to pay higher costs for capital mobilisation.
Johan Nyvene, Director of HCM City Securities Company, also thinks that banking remains the good and safe choice for investors. However, he stressed that not all bank share items would recover. Only the banks which have big scale and good business performance will be able to attract investors. He said that investors should learn carefully about banks before deciding to inject money in them, and avoid investments in banks that may be merged with others.
Experts said that a new price level for bank shares would be set up after Vietcombank fulfilled its IPO. However, it remains unclear when Vietcombank’s IPO will take place. It is very likely that the bank’s IPO, previously slated for August, will be delayed due to the falls on the market.
Experts have said that if Vietcombank’s shares are highly valuated, the prices of other bank shares items will bounce back, and vice versa. Investors, both foreign and domestic, institutions and individuals, have gathered big sums of money to inject in Vietcombank shares when the bank’s shares hit the market.
Source: VNE
Rubber firm shares drop 20 pct on debut
Shares in Vietnam's Thong Nhat Rubber Company (TNC) dropped limit down 20 percent on their debut on the Ho Chi Minh City Stock Exchange on Wednesday.
TNC set a starting price at 50,000 dong ($3.1) each for the shares' first day of listing but investors only paid 40,000 dong ($2.47) for each of the total 98,380 shares sold during Wednesday's trading session, figures from the exchange showed.
The closing price valued the firm at nearly $48 million.
Prior to Wednesday debut, shares in TNC, which is based in the southern province of Ba Ria-Vung Tau, were traded in the unofficial markets at 60,000-65,000 dong ($3.7-$4.0), about four times the average prices fetched in the firm's IPO in March 2006.
TNC produces and exports rubber latex from 2,090 hectares (5,200 acres) of plantations.
Natural rubber is Vietnam's second-largest foreign exchange earning farm product after rice. January to July's rubber exports eased 3.2 percent from a year ago to 344,000 tonnes, government figures show.
Vietnam, the world's fourth-largest rubber exporter after Thailand, Indonesia and Malaysia, aims to raise rubber output to 700,000 tonnes from 550,000 hectares (1.36 million acres) under plantation by 2010, including areas in Laos and Cambodia.
It has projected to export 780,000 tonnes of rubber this year, compared with 708,000 tonnes shipped last year, from 490,000 hectares under plantation.
Thong Nhat Rubber Co targets a flat net profit this year of about 23 billion dong ($1.42 million) as 2007's revenues were expected to remain unchanged from 2006 at 127 billion dong ($7.8 million), its prospectus showed.
Source: Reuters
TNC set a starting price at 50,000 dong ($3.1) each for the shares' first day of listing but investors only paid 40,000 dong ($2.47) for each of the total 98,380 shares sold during Wednesday's trading session, figures from the exchange showed.
The closing price valued the firm at nearly $48 million.
Prior to Wednesday debut, shares in TNC, which is based in the southern province of Ba Ria-Vung Tau, were traded in the unofficial markets at 60,000-65,000 dong ($3.7-$4.0), about four times the average prices fetched in the firm's IPO in March 2006.
TNC produces and exports rubber latex from 2,090 hectares (5,200 acres) of plantations.
Natural rubber is Vietnam's second-largest foreign exchange earning farm product after rice. January to July's rubber exports eased 3.2 percent from a year ago to 344,000 tonnes, government figures show.
Vietnam, the world's fourth-largest rubber exporter after Thailand, Indonesia and Malaysia, aims to raise rubber output to 700,000 tonnes from 550,000 hectares (1.36 million acres) under plantation by 2010, including areas in Laos and Cambodia.
It has projected to export 780,000 tonnes of rubber this year, compared with 708,000 tonnes shipped last year, from 490,000 hectares under plantation.
Thong Nhat Rubber Co targets a flat net profit this year of about 23 billion dong ($1.42 million) as 2007's revenues were expected to remain unchanged from 2006 at 127 billion dong ($7.8 million), its prospectus showed.
Source: Reuters
Tuesday, August 21, 2007
VN-Index up, HaSTC-Index down
The Ho Chi Minh City Stock Exchange (HOSE), Viet Nam's largest, continued its recent rebound while its Ha Noi-based counterpart suffered another successive loss, albeit a minimal one, by the end of trading on August 21.
The VN-Index, which measures the value of the HOSE, jumped 5.7 points (or 0.64 percent) to finish at 895.72 points. More than 6 million shares, worth nearly 516 billion VND, changed hands during the day.
The session witnessed 48 shares rally for gains, 27 remain unchanged and 38 fall.
Binh Minh Minerals (BMC) continued to top the list of shares that recorded gains by tacking 20,000 VND onto its listed price, followed by Tay Ninh Cable Tour Company (TCT), Kinh Do Corporation (KDC), Saigon Hotel Corporation (SGH) and the Hau Giang Pharmaceutical Joint Stock Company (SGH).
Meanwhile, Hoa Binh Rubber Joint Stock Company (HRC), North Kinhdo Food Joint Stock Company (NKD), Tan Tao Industrial Park Corporation (ITA) and Song Da Urban and Industrial Zone Investment and Development (SJS) were among the biggest losers of the day.
Saigon Thuong Tin Joint Stock Commercial Bank (STB), SJS, Pha Lai Thermal Power Joint Stock Company (PPC) and the Corporation for Finance and Promoting Technology (FPT) led the market in terms of transaction volume.
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 0.03 points to finish at 248.8 points. Only 732,600 shares, worth more than 73.4 billion VND, were traded.
By closing, 35 shares declined, 8 showed no change while 27 others made gains.
Source: VNA
The VN-Index, which measures the value of the HOSE, jumped 5.7 points (or 0.64 percent) to finish at 895.72 points. More than 6 million shares, worth nearly 516 billion VND, changed hands during the day.
The session witnessed 48 shares rally for gains, 27 remain unchanged and 38 fall.
Binh Minh Minerals (BMC) continued to top the list of shares that recorded gains by tacking 20,000 VND onto its listed price, followed by Tay Ninh Cable Tour Company (TCT), Kinh Do Corporation (KDC), Saigon Hotel Corporation (SGH) and the Hau Giang Pharmaceutical Joint Stock Company (SGH).
Meanwhile, Hoa Binh Rubber Joint Stock Company (HRC), North Kinhdo Food Joint Stock Company (NKD), Tan Tao Industrial Park Corporation (ITA) and Song Da Urban and Industrial Zone Investment and Development (SJS) were among the biggest losers of the day.
Saigon Thuong Tin Joint Stock Commercial Bank (STB), SJS, Pha Lai Thermal Power Joint Stock Company (PPC) and the Corporation for Finance and Promoting Technology (FPT) led the market in terms of transaction volume.
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 0.03 points to finish at 248.8 points. Only 732,600 shares, worth more than 73.4 billion VND, were traded.
By closing, 35 shares declined, 8 showed no change while 27 others made gains.
Source: VNA
Monday, August 20, 2007
The rise in several blue chips today saw the VN-Index climb 2.09 points to end the session at 890.02.
The slight recovery doesn’t mean a boom, but it does put a touch of brightness on the gloom of the previous week, in which prices fell steadily and left investors questioning when the bear market would end.
Among the top market caps, PPC put on an impressive performance, rising VND1,500 to close at VND52,000.
The market’s upturn was also driven by the rising share price of Tan Tao Industrial Zone (ITA), Saigon Cables & Telecommunications Material and FPT (FPT), which added VND5,000 each, and REE Technology (REE), which rose VND2,000.
Small caps performed better after last week’s falls, with Vien Lien (UNI) up VND1,000, Hang Xanh Auto (HAX) up VND500, and Tan Binh (ALT) up VND1,500.
Two exclusive stocks – Sai Gon Hotel (SGH) and Tay Ninh Cable Car (TCT) – extended their steady winning run by rising VND6,000 and VND15,000 to close at VND137,000 and VND317,000, respectively.
However, continuous falls in the three bellwether companies – Sacombank (STB), Vinamilk (VNM) and Vinh Son Hydro Power (VSH) – discouraged brokers.
At the close, STB was down VND1,500 at VND52,000; VNM was down VND1,000 at VND163,000; and VSH was down VND1,900 at VND37,600.
Sacombank in particular alarmed investors as it prepared to issue an additional 200 million shares. Analysts forecast that the market would be affected by STB’s move in the next few sessions.
Kinh Do Corporation (KDC) also suffered another sharp fall, dropping VND6,000 to close at VND240,000 despite its fundamentally bright outlook for the upcoming mid-autumn season.
The slight rise on Monday encouraged some analysts to speculate that the market might rebound to 930 points.
Source: VNE
Vincom to list on HCM City Stock Exchange
Vincom has received regulatory approval to list 80 million shares on the Ho Chi Minh City Stock Exchange, raising its charter capital from 600 billion VND (37.5 million USD) to 800 billion VND.
The company predicts 2007 revenue will reach 220 billion VND, with profit at about 127 billion VND.
Vincom has also received the go ahead to expand into golf course construction and entertainment services.
Source: VNA
The company predicts 2007 revenue will reach 220 billion VND, with profit at about 127 billion VND.
Vincom has also received the go ahead to expand into golf course construction and entertainment services.
Source: VNA
M&A deals booming in stock market age
With the rapid development of the stock market, merger and acquisition (M&A) deals have been booming as enterprises consider this a good way to get bigger.
According to the Ministry of Industry and Trade’s Competition Administration Department (CAD), the value of M&A cases in 2007 may triple 2006. The M&A deals in the first half of the year were worth $626mil, which was double 2006’s value and 15-fold higher than during the same period last year.
The M&A deals were seen not only in domestic owned companies, but in foreign invested enterprises as well. Among the 46 successful deals, there were 16 domestic owned and 30 foreign invested cases. The merged and acquired companies operated in different fields of banking and finance, industrial production, food processing and beverages.
Big M&A deals included Eximbank’s sale of 17.8% of its shares to 16 strategic shareholders worth $248mil. The bank is also going to sell shares to Japan’s Sumitomo.
The second case was the one in which Indochina Capital bought 20% of shares of Hoang Quan Real Estate Joint Stock Company at $20mil, and bought shares of Hoang Quan – Mekong Real Estate Trade and Service Company at $12mil.
People might have heard about the deal in which Japan’s Sojitz purchased 20% of Interflour Vietnam at $80mil to get shares of the second biggest wheat flour company in Vietnam. VinaCapital bought 70% of shares of Omni Saigon Hotel worth $21mil. In April 2007, Anco bought Nestle’s dairy processing workshop in Son Tay. Most recently, in early June 2007, HSBC successfully bought 15% of Techcombank shares, and it is now going to buy another 5%. Deutsche Bank has signed an agreement to purchase 20% of Habubank shares.
The two deals in which Japan’s Daiichi bought Bao Minh CMG and Australia’s Qantas bought 30% of Pacific Airlines were also listed as big deals of 2007. The two deals were not only considered very successful affairs in terms of contract value but also very important in the restructuring of state owned enterprises.
Bui Thanh Nga, Deputy Head of the Legal Department under the State Securities Commission, said that the development of the stock market was the most important factor in the increase of M&A deals. However, she said that Vietnam’s M&A market was now still in an early stage of development.
Source: VNE
According to the Ministry of Industry and Trade’s Competition Administration Department (CAD), the value of M&A cases in 2007 may triple 2006. The M&A deals in the first half of the year were worth $626mil, which was double 2006’s value and 15-fold higher than during the same period last year.
The M&A deals were seen not only in domestic owned companies, but in foreign invested enterprises as well. Among the 46 successful deals, there were 16 domestic owned and 30 foreign invested cases. The merged and acquired companies operated in different fields of banking and finance, industrial production, food processing and beverages.
Big M&A deals included Eximbank’s sale of 17.8% of its shares to 16 strategic shareholders worth $248mil. The bank is also going to sell shares to Japan’s Sumitomo.
The second case was the one in which Indochina Capital bought 20% of shares of Hoang Quan Real Estate Joint Stock Company at $20mil, and bought shares of Hoang Quan – Mekong Real Estate Trade and Service Company at $12mil.
People might have heard about the deal in which Japan’s Sojitz purchased 20% of Interflour Vietnam at $80mil to get shares of the second biggest wheat flour company in Vietnam. VinaCapital bought 70% of shares of Omni Saigon Hotel worth $21mil. In April 2007, Anco bought Nestle’s dairy processing workshop in Son Tay. Most recently, in early June 2007, HSBC successfully bought 15% of Techcombank shares, and it is now going to buy another 5%. Deutsche Bank has signed an agreement to purchase 20% of Habubank shares.
The two deals in which Japan’s Daiichi bought Bao Minh CMG and Australia’s Qantas bought 30% of Pacific Airlines were also listed as big deals of 2007. The two deals were not only considered very successful affairs in terms of contract value but also very important in the restructuring of state owned enterprises.
Bui Thanh Nga, Deputy Head of the Legal Department under the State Securities Commission, said that the development of the stock market was the most important factor in the increase of M&A deals. However, she said that Vietnam’s M&A market was now still in an early stage of development.
Source: VNE
Putting OTC market under management – when?
State management authorities are trying to speed up the compilation of legal documents, based on which, the OTC market will be put under management, expected for early 2008.
State Securities Commission (SSC) plans to put the OTC market under management in early 2008. However, experts fear that the short time left (four months) until early next year will not be enough time as a lot of things still need to be done.
It is necessary to build up a software system for the Hanoi Securities Trading Centre (HASTC) and software for the Securities Depository Centre in charge of managing the transaction registrations by public companies. Moreover, it will also be necessary to install software at securities companies and the system connecting securities companies and HASTC, serving the transfer of information about securities transactions and offset payment among securities companies, the depository centre and HASTC.
In the immediate time, several big companies out of the registered public companies will be selected to be put under the pilot transaction scheme. These might be big companies operating in the fields of banking, insurance and other financial institutions which have good governance systems.
The application of the transaction scheme for other public companies will be applied on a large scale in June 2008 or at the end of 2008, according to Nguyen Son, Deputy Head of the Market Development Division under SSC.
Mr Son said that SSC was considering applying the reference price scheme and trading band for the shares of unlisted public companies. The most feasible scheme and the plan which has been most suggested is the application of the trading band of +/- 20% (the ceiling transaction price must not be 20% higher than the reference price and the minimum price must not be 20% lower than the reference price).
However, problems still exist. Experts still argue about whether or not to draw up the reference price of the first trading session. Moreover, it remains unclear which basis state management authorities will use to draw up the list of fees public companies have to pay to the securities trading centre, securities depository centre and brokerage commission.
According to Mr Son, there are two factors that can decide if the project on putting the OTC market under management can be successful: technology and awareness of enterprises.
According to Mr Son, once the OTC market is put under control, the market regulator will have to manage a big number of companies, much bigger than the number of listing companies now. Will the technologies and facilities at trading centres and securities companies be able to cover such a big number of securities companies?
Mr Son has acknowledged that technology remains the biggest problem and that it needs to be fixed in 3-6 months.
“The core issue is the capacity of transaction systems. The number of public companies may reach several thousand if all the companies register. These include the ones which have very big market capitalisation volume.
“If we don’t make heavy investment in technologies, the project on putting the OTC under management will fail,” Mr Son said.
Source: VNE
State Securities Commission (SSC) plans to put the OTC market under management in early 2008. However, experts fear that the short time left (four months) until early next year will not be enough time as a lot of things still need to be done.
It is necessary to build up a software system for the Hanoi Securities Trading Centre (HASTC) and software for the Securities Depository Centre in charge of managing the transaction registrations by public companies. Moreover, it will also be necessary to install software at securities companies and the system connecting securities companies and HASTC, serving the transfer of information about securities transactions and offset payment among securities companies, the depository centre and HASTC.
In the immediate time, several big companies out of the registered public companies will be selected to be put under the pilot transaction scheme. These might be big companies operating in the fields of banking, insurance and other financial institutions which have good governance systems.
The application of the transaction scheme for other public companies will be applied on a large scale in June 2008 or at the end of 2008, according to Nguyen Son, Deputy Head of the Market Development Division under SSC.
Mr Son said that SSC was considering applying the reference price scheme and trading band for the shares of unlisted public companies. The most feasible scheme and the plan which has been most suggested is the application of the trading band of +/- 20% (the ceiling transaction price must not be 20% higher than the reference price and the minimum price must not be 20% lower than the reference price).
However, problems still exist. Experts still argue about whether or not to draw up the reference price of the first trading session. Moreover, it remains unclear which basis state management authorities will use to draw up the list of fees public companies have to pay to the securities trading centre, securities depository centre and brokerage commission.
According to Mr Son, there are two factors that can decide if the project on putting the OTC market under management can be successful: technology and awareness of enterprises.
According to Mr Son, once the OTC market is put under control, the market regulator will have to manage a big number of companies, much bigger than the number of listing companies now. Will the technologies and facilities at trading centres and securities companies be able to cover such a big number of securities companies?
Mr Son has acknowledged that technology remains the biggest problem and that it needs to be fixed in 3-6 months.
“The core issue is the capacity of transaction systems. The number of public companies may reach several thousand if all the companies register. These include the ones which have very big market capitalisation volume.
“If we don’t make heavy investment in technologies, the project on putting the OTC under management will fail,” Mr Son said.
Source: VNE
IPOs go from dazzling to duds during lengthy market downturn
Now may not be the best time to hold an initial public offering (IPO) or issue additional shares given recent stock failures as the securities market heads further into chaos.
For example, Song Da Industrial Zone and Urban Development and Investment JSC attempted to auction six million additional shares on the Ho Chi Minh City Stock Exchange (HOSE) on August 10 at an initial price of VND235,000 a piece.
Only 26 investors - 22 retail and four institutional buyers - ordered a minuscule 489,600 shares, leaving over five million unsold.
"The current situation [with regard to securities listings] is understandable given the stock market has cooled since the end of last year and investors are no longer as hungry for shares," said a Kim Long Securities analyst.
Companies have even been forced to hold secondary auctions attempting to offload unclaimed or abandoned shares.
In early August, Vincom held a secondary bid for 25,000 shares, while PetroVietnam Insurance sold 810,000 shares in a repeat sale after investors refused to buy the stock during its IPO in June.
The biggest embarrassment, though, was Bao Viet - once hailed as the bourse's next blue chip - which sold only 2mil of the 15mil shares up for sale during their secondary auction.
The golden days when thousands of investors use to clamber for IPOs and new shares have passed.
Nguyen Quang Huy, deputy director of Bao Viet Securities, said when the market was hot stock prices surged on the back of investor expectations. As a result, buyers submitted exorbitantly high bids for new shares.
The trend caused a panic among institutional investors who saw stock prices grossly overvalued, and eventually the bourse hit an adjustment phase, with which investors are still trying to cope.
Small market players have since learnt their lesson and are now more cautious in their bidding strategies, said Don Lam, a VinaCapital fund manager.
Given the current state of the market, some investors are even opting to avoid auctions altogether and wait for the stock to begin trading on the exchange.
Hoang Long, an investor with SSI, waited until Royal International shares, which were sold for VND183,000 a piece during its IPO, entered the market. The stock is now around VND141,000.
Analysts attribute the recent abysmal performance of public offerings primarily to monetary tightening and poor consulting services by brokerages.
A Kim Long Securities analyst said the State Bank of Viet Nam policy to cap lending on securities investments to 3% of total outstanding debt among commercial banks has strangled investor access to capital. As a result, many investors simply can not take part in auctions.
"Moreover, investors are repulsed by public offerings due to low liquidity in many shares," the analyst said.
Vu Hoai Chang, head research and investment at SME Securities, also blames a lack of experience among brokerages in rousting investor interest in public offerings and supplying adequate consulting.
"Consultants play a decisive role in the success of an auction," said Chang. "Consulting services help issuers pick suitable times to host IPOs, set reasonable initial prices and often ensure auctions are financially beneficial by buying a certain per cent of the stock if shares go unsold."
Failure to sell all the shares in an auction not only has a psychological impact on the stock but impacts a company's ability to raise capital for necessary investments and expansion projects, said Chang. Companies, therefore, must choose a consultant carefully.
The current problems on the stock exchange, though, will not last forever, and analysts remain upbeat over the fact that investors have become more cautious in bidding during public offerings.
Source: VNE
For example, Song Da Industrial Zone and Urban Development and Investment JSC attempted to auction six million additional shares on the Ho Chi Minh City Stock Exchange (HOSE) on August 10 at an initial price of VND235,000 a piece.
Only 26 investors - 22 retail and four institutional buyers - ordered a minuscule 489,600 shares, leaving over five million unsold.
"The current situation [with regard to securities listings] is understandable given the stock market has cooled since the end of last year and investors are no longer as hungry for shares," said a Kim Long Securities analyst.
Companies have even been forced to hold secondary auctions attempting to offload unclaimed or abandoned shares.
In early August, Vincom held a secondary bid for 25,000 shares, while PetroVietnam Insurance sold 810,000 shares in a repeat sale after investors refused to buy the stock during its IPO in June.
The biggest embarrassment, though, was Bao Viet - once hailed as the bourse's next blue chip - which sold only 2mil of the 15mil shares up for sale during their secondary auction.
The golden days when thousands of investors use to clamber for IPOs and new shares have passed.
Nguyen Quang Huy, deputy director of Bao Viet Securities, said when the market was hot stock prices surged on the back of investor expectations. As a result, buyers submitted exorbitantly high bids for new shares.
The trend caused a panic among institutional investors who saw stock prices grossly overvalued, and eventually the bourse hit an adjustment phase, with which investors are still trying to cope.
Small market players have since learnt their lesson and are now more cautious in their bidding strategies, said Don Lam, a VinaCapital fund manager.
Given the current state of the market, some investors are even opting to avoid auctions altogether and wait for the stock to begin trading on the exchange.
Hoang Long, an investor with SSI, waited until Royal International shares, which were sold for VND183,000 a piece during its IPO, entered the market. The stock is now around VND141,000.
Analysts attribute the recent abysmal performance of public offerings primarily to monetary tightening and poor consulting services by brokerages.
A Kim Long Securities analyst said the State Bank of Viet Nam policy to cap lending on securities investments to 3% of total outstanding debt among commercial banks has strangled investor access to capital. As a result, many investors simply can not take part in auctions.
"Moreover, investors are repulsed by public offerings due to low liquidity in many shares," the analyst said.
Vu Hoai Chang, head research and investment at SME Securities, also blames a lack of experience among brokerages in rousting investor interest in public offerings and supplying adequate consulting.
"Consultants play a decisive role in the success of an auction," said Chang. "Consulting services help issuers pick suitable times to host IPOs, set reasonable initial prices and often ensure auctions are financially beneficial by buying a certain per cent of the stock if shares go unsold."
Failure to sell all the shares in an auction not only has a psychological impact on the stock but impacts a company's ability to raise capital for necessary investments and expansion projects, said Chang. Companies, therefore, must choose a consultant carefully.
The current problems on the stock exchange, though, will not last forever, and analysts remain upbeat over the fact that investors have become more cautious in bidding during public offerings.
Source: VNE
Petrovietnam service unit sets Sept 12 share debut
Petrovietnam Tourism and Services Company, a subsidiary of state oil group Petrovietnam, said on Monday it would make its debut on the country's main stock market, the Ho Chi Minh Stock Exchange, next month.
The Ho Chi Minh City-based firm, also known as Petrosetco, would list all 25,530,000 shares on Sept. 12, Chairman Tran Cong Tao said in a statement.
The firm is valued at $98.5 million, based on the unofficial market's share price of around 62,500 dong ($3.86).
Petrosetco, 51 percent owned by Petrovietnam, provides various services to Vietnam's key energy industry, operates tours, food processing and warehousing services and deals with real estate.
Vietnam is Southeast Asia's third-largest producer of crude oil, its largest foreign exchange earner.
Under a deal signed with a Petrovietnam urea producer for the sale of 100,000 tonnes of urea annually, Petrosetco has been building a network to deliver the fertiliser to central and southern provinces, a report issued to shareholders said.
Petrosetco said it had formed a subsidiary, PV Telecom, to tap the fast rising telecoms market. In May, it started distributing Nokia mobile phones in competition with the country's top information technology firm, FPT.
It is preparing to start construction of a 39-storey building in Ho Chi Minh City in January 2008. The building would have apartments, office and commercial centre space for rent.
Petrosetco expects its 2007 net profit to soar 586 percent from last year to 31.8 billion dong ($1.97 million) and revenues to jump 280 percent to 2.07 trillion dong ($128 million).
In March, Petrosetco signed a deal with Japan's Itochu Corp. to build a $100 million ethanol plant using tapioca chips, Vietnam's first.
When operational in early 2009, the plant would produce 400 million litres of ethanol that would help meet half the bio-ethanol demand in a country which lacks major refineries.
Source: Reuters
The Ho Chi Minh City-based firm, also known as Petrosetco, would list all 25,530,000 shares on Sept. 12, Chairman Tran Cong Tao said in a statement.
The firm is valued at $98.5 million, based on the unofficial market's share price of around 62,500 dong ($3.86).
Petrosetco, 51 percent owned by Petrovietnam, provides various services to Vietnam's key energy industry, operates tours, food processing and warehousing services and deals with real estate.
Vietnam is Southeast Asia's third-largest producer of crude oil, its largest foreign exchange earner.
Under a deal signed with a Petrovietnam urea producer for the sale of 100,000 tonnes of urea annually, Petrosetco has been building a network to deliver the fertiliser to central and southern provinces, a report issued to shareholders said.
Petrosetco said it had formed a subsidiary, PV Telecom, to tap the fast rising telecoms market. In May, it started distributing Nokia mobile phones in competition with the country's top information technology firm, FPT.
It is preparing to start construction of a 39-storey building in Ho Chi Minh City in January 2008. The building would have apartments, office and commercial centre space for rent.
Petrosetco expects its 2007 net profit to soar 586 percent from last year to 31.8 billion dong ($1.97 million) and revenues to jump 280 percent to 2.07 trillion dong ($128 million).
In March, Petrosetco signed a deal with Japan's Itochu Corp. to build a $100 million ethanol plant using tapioca chips, Vietnam's first.
When operational in early 2009, the plant would produce 400 million litres of ethanol that would help meet half the bio-ethanol demand in a country which lacks major refineries.
Source: Reuters
Friday, August 17, 2007
VN-Index falls below 900-point mark
Both the Ho Chi Minh Stock Exchange (HOSE) and the Ha Noi Securities Trading Centre continued their downward trend by the end of the August 17 morning trading session.
By closing, the VN-Index at the HOSE dropped 12.33 points or 1.38 percent to finish at 887,93 points. Almost 4.4 million shares, worth nearly 428 billion VND, were traded during the day.
The market witnessed 74 shares fall, 21 remain unchanged and only 17 rally for gains.
Tay Ninh Cable Tour Company (TCT) topped the list of shares that recorded gains by tacking 14,000 VND onto its listed price, followed by Saigon Hotel Corporation (SGH) and Sea and Air Freight International (SFI).
Meanwhile, Seafood Joint Stock Company No. 4 (TS4), Kinh Do Corporation (KDC), Binh Minh Minerals (BMC), North Kinh Do Food Joint Stock Company (NKD) and Song Da Urban and Industrial Zone Investment and Development (SJS) were among the biggest losers of the day.
The HaSTC-Index at the Ha Noi Securities Trading Centre slid 2.95 points to finish at 249.4 points. Only 803,400 shares, worth close to 77 billion VND, changed hands.
54 shares fell with giants like BaoViet Securities Company (BVS), Cho Lon Real Estate (RCL) and Song Da 10 Joint Stock Company (SDT) suffered the sharpest decline in their listed prices. Of which, BVS was the biggest loser by having 19,600 VND wiped off its listed price.
Saigon Securities Inc (SSI) continue to lead the market in terms of traded volume with 167,600 shares.
Source: VNE
By closing, the VN-Index at the HOSE dropped 12.33 points or 1.38 percent to finish at 887,93 points. Almost 4.4 million shares, worth nearly 428 billion VND, were traded during the day.
The market witnessed 74 shares fall, 21 remain unchanged and only 17 rally for gains.
Tay Ninh Cable Tour Company (TCT) topped the list of shares that recorded gains by tacking 14,000 VND onto its listed price, followed by Saigon Hotel Corporation (SGH) and Sea and Air Freight International (SFI).
Meanwhile, Seafood Joint Stock Company No. 4 (TS4), Kinh Do Corporation (KDC), Binh Minh Minerals (BMC), North Kinh Do Food Joint Stock Company (NKD) and Song Da Urban and Industrial Zone Investment and Development (SJS) were among the biggest losers of the day.
The HaSTC-Index at the Ha Noi Securities Trading Centre slid 2.95 points to finish at 249.4 points. Only 803,400 shares, worth close to 77 billion VND, changed hands.
54 shares fell with giants like BaoViet Securities Company (BVS), Cho Lon Real Estate (RCL) and Song Da 10 Joint Stock Company (SDT) suffered the sharpest decline in their listed prices. Of which, BVS was the biggest loser by having 19,600 VND wiped off its listed price.
Saigon Securities Inc (SSI) continue to lead the market in terms of traded volume with 167,600 shares.
Source: VNE
Kinh Do bakery buys stake in Sai Thanh software solutions
Commercial baker Kinh Do (KDC), which is listed on the HCM City stock exchange, has expanded its activities into training by buying a stake in the Sai Thanh Solutions Company (SSC).
KDC chairman Tran Kim Thanh said the company had set up its own training centre but needed a professional consulting and training firm to better satisfy staff and client needs.
KDC has acquired 40 per cent of SSC, which specialises in offering solutions for investment, consultation and training in business and management.
Thanh, who is also chairman of SSC, said: "We want to develop SSC into a strong brand with a focus on improving management skills of corporate senior managers. That’s why we entered a co-operation agreement with Singapore Institute of Management (SIM)."
On Tuesday SSC signed an agreement with SIM for a training programme for senior managers as the first step.
SSC also plans to invest VND100 billion (US$) in developing a modern training centre in District 7 in HCM City.
Source: VNS
KDC chairman Tran Kim Thanh said the company had set up its own training centre but needed a professional consulting and training firm to better satisfy staff and client needs.
KDC has acquired 40 per cent of SSC, which specialises in offering solutions for investment, consultation and training in business and management.
Thanh, who is also chairman of SSC, said: "We want to develop SSC into a strong brand with a focus on improving management skills of corporate senior managers. That’s why we entered a co-operation agreement with Singapore Institute of Management (SIM)."
On Tuesday SSC signed an agreement with SIM for a training programme for senior managers as the first step.
SSC also plans to invest VND100 billion (US$) in developing a modern training centre in District 7 in HCM City.
Source: VNS
JP Morgan to advise Vinamilks listing abroad
Dairy company Vinamilk , Vietnam's largest listed firm, said on Friday it had picked JP Morgan to advise on its overseas listing, the first by a Vietnamese firm.
Vinamilk, or Vietnam Dairy Products Company, said in a statement issued through the Ho Chi Minh Stock Exchange that it had chosen JP Morgan as adviser after completing its assessment of bids on Thursday.
The Ho Chi Minh City-based firm did not say where it intended to list, but chief executive Mai Kieu Lien said in March it planned to list more than 8.85 million shares, or 5 percent of the company, on the Singapore stock market this year.
Vinamilk has a market value of $1.8 billion and its diary products and beverages have a market share of 75 percent. The firm also deals in real estate and provides warehousing and transport services.
Shares in Vinamilk fell 0.61 percent on Friday to 164,000 dong ($10).
Source: Reuters
Vinamilk, or Vietnam Dairy Products Company, said in a statement issued through the Ho Chi Minh Stock Exchange that it had chosen JP Morgan as adviser after completing its assessment of bids on Thursday.
The Ho Chi Minh City-based firm did not say where it intended to list, but chief executive Mai Kieu Lien said in March it planned to list more than 8.85 million shares, or 5 percent of the company, on the Singapore stock market this year.
Vinamilk has a market value of $1.8 billion and its diary products and beverages have a market share of 75 percent. The firm also deals in real estate and provides warehousing and transport services.
Shares in Vinamilk fell 0.61 percent on Friday to 164,000 dong ($10).
Source: Reuters
Central bank to issue bonds to check inflation
The State Bank of Vietnam (SBV) plans to reduce excess liquidity in the financial markets by issuing bonds in a move to curb inflationary pressure.
Nguyen Dong Tien, SBV deputy governor, said on August 13 that the central bank plans to continue keeping liquidity in check to rein in inflation, which accelerated to 8.39% year-on-year in July.
His statements came during a press briefing held by Government bodies to announce measures to keep inflation below 8.5% this year. A major cause of rising prices, said Tien, was foreign capital inflows, which the central bank has been forced to eat up in an effort to control the dong exchange rate and increase capital reserves.
“We face a historic problem in the SBV’s monetary management system: foreign capital inflows are too much. We, on several days, purchased up to US $500-600 million daily, while the total amount of foreign capital purchased for the entirety of last year was only US $4 billion,” said Tien.
Capital inflows have been fuelled by foreign direct and indirect investments, official development assistance and overseas remittances.
As a result of SBV buying, foreign currency reserves have doubled since the start of the year and are enough to cover imports for 20 weeks, the Government’s 2010 target, said the deputy governor. Unfortunately, it has also led to excess dong in the market, which helped drive domestic price levels higher.
State Bank officials are now considering issuing short term bonds through open market operations to absorb some of the excess cash floating in the market.
Tien said the central bank would spend the rest of the year withdrawing cash previously used to acquire foreign capital. As much as 82% of cash used to purchase foreign capital in January-July has already been withdrawn from the market.
The Ministry of Finance on August 13 also said it would issue bonds worth roughly VND 18 trillion (US $1.1 billion) in the third quarter to reduce liquidity.
The central bank has already taken steps to cut the amount of capital in the market this year. The State Bank in June doubled reserves requirements for commercial banks to 10%, which took out roughly VND 30 trillion from the market.
Source: VNE
Nguyen Dong Tien, SBV deputy governor, said on August 13 that the central bank plans to continue keeping liquidity in check to rein in inflation, which accelerated to 8.39% year-on-year in July.
His statements came during a press briefing held by Government bodies to announce measures to keep inflation below 8.5% this year. A major cause of rising prices, said Tien, was foreign capital inflows, which the central bank has been forced to eat up in an effort to control the dong exchange rate and increase capital reserves.
“We face a historic problem in the SBV’s monetary management system: foreign capital inflows are too much. We, on several days, purchased up to US $500-600 million daily, while the total amount of foreign capital purchased for the entirety of last year was only US $4 billion,” said Tien.
Capital inflows have been fuelled by foreign direct and indirect investments, official development assistance and overseas remittances.
As a result of SBV buying, foreign currency reserves have doubled since the start of the year and are enough to cover imports for 20 weeks, the Government’s 2010 target, said the deputy governor. Unfortunately, it has also led to excess dong in the market, which helped drive domestic price levels higher.
State Bank officials are now considering issuing short term bonds through open market operations to absorb some of the excess cash floating in the market.
Tien said the central bank would spend the rest of the year withdrawing cash previously used to acquire foreign capital. As much as 82% of cash used to purchase foreign capital in January-July has already been withdrawn from the market.
The Ministry of Finance on August 13 also said it would issue bonds worth roughly VND 18 trillion (US $1.1 billion) in the third quarter to reduce liquidity.
The central bank has already taken steps to cut the amount of capital in the market this year. The State Bank in June doubled reserves requirements for commercial banks to 10%, which took out roughly VND 30 trillion from the market.
Source: VNE
Thursday, August 16, 2007
VN-Index and HaSTC-Index continue slide
The VN-Index at the Ho Chi Minh City Stock Exchange (HoSE) continued to fall by the end of the August 16 morning trading session.
By closing, the VN-Index fell 15.08 points or 1.65 percent to finish at 900.26 points. Nearly 4 million shares, worth close to 392.95 billion VND, were traded during the day.
Blue-chips like the Corporation for Financing and Promoting Technology (FPT), Bien Hoa Confectionary Corporation (BBC), Ho Chi Minh City Infrastructure, Investment Joint Stock Company (CII), Ben Tre Aquaproduct Import and Export Joint Stock Company (ABT), and Bien Hoa Sugar Joint Stock Company (BHS) enjoyed the largest trade volumes on the day.
Lugia Mechanical Electric Joint Stock Company (LGC), Kinh Do Corporation (KDC), the Corporation for Financing and Promoting Technology (FPT), Song Da Urban and Industrial Zone Investment and Development (SJS), and Sea & Air Freight International (SFI) suffered the biggest losses amongst the bourse’s 78 losers.
Meanwhile, only 20 shares increased with Binh Minh Minerals (BMC) recording the biggest increase. It was followed by Tay Ninh Cable Tour Company (TCT), Lam Dong Building Materials Joint Stock Company (LBM), Petrolimex Joint Stock Company (PJT) and ALTA Company (ALT).
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 1.7 points to finish at 252.35 points. However, trade volume increased from the previous day with 965,3000 shares, worth more than 100 billion VND, changing hands. Saigon Securities Inc (SSI) led the market in terms of transaction volume with 317,700 shares.
Song Da Joint Stock Company 5 (SD5), Bao Viet Securities Company (BVS), Vinashin Oil and Gas Investment and Transport Joint Stock Company (VSP), Viglacera Thang Long Tile Joint Stock Company (TLT) and Construction Joint Stock Company No.2 (VC2) were among the biggest losers of the day.
Source: VNA
By closing, the VN-Index fell 15.08 points or 1.65 percent to finish at 900.26 points. Nearly 4 million shares, worth close to 392.95 billion VND, were traded during the day.
Blue-chips like the Corporation for Financing and Promoting Technology (FPT), Bien Hoa Confectionary Corporation (BBC), Ho Chi Minh City Infrastructure, Investment Joint Stock Company (CII), Ben Tre Aquaproduct Import and Export Joint Stock Company (ABT), and Bien Hoa Sugar Joint Stock Company (BHS) enjoyed the largest trade volumes on the day.
Lugia Mechanical Electric Joint Stock Company (LGC), Kinh Do Corporation (KDC), the Corporation for Financing and Promoting Technology (FPT), Song Da Urban and Industrial Zone Investment and Development (SJS), and Sea & Air Freight International (SFI) suffered the biggest losses amongst the bourse’s 78 losers.
Meanwhile, only 20 shares increased with Binh Minh Minerals (BMC) recording the biggest increase. It was followed by Tay Ninh Cable Tour Company (TCT), Lam Dong Building Materials Joint Stock Company (LBM), Petrolimex Joint Stock Company (PJT) and ALTA Company (ALT).
The HaSTC-Index at the Ha Noi Securities Trading Centre dropped 1.7 points to finish at 252.35 points. However, trade volume increased from the previous day with 965,3000 shares, worth more than 100 billion VND, changing hands. Saigon Securities Inc (SSI) led the market in terms of transaction volume with 317,700 shares.
Song Da Joint Stock Company 5 (SD5), Bao Viet Securities Company (BVS), Vinashin Oil and Gas Investment and Transport Joint Stock Company (VSP), Viglacera Thang Long Tile Joint Stock Company (TLT) and Construction Joint Stock Company No.2 (VC2) were among the biggest losers of the day.
Source: VNA
VOSCO to raise $46 mln in IPO
Vietnamese shipping firm VOSCO said on Thursday it would sell about 50 million shares, or a third of the company, in an initial public offering next month to raise at least $46.2 million for fleet expansion.
The shares would be sold in an auction at the Hanoi over-the-counter exchange on Sept. 12 starting at 15,000 dong ($0.9) each, the company said in a statement published by the State Securities Commission.
Foreign investors were not allowed to participate in the auction, the statement said without giving a reason.
Shares in VOSCO, which is 60-percent state owned, were being traded in the unofficial markets at 25,000-40,000 dong ($1.5-$2.5), brokers said.
VOSCO chief executive Vu Huu Chinh said in a prospectus that revenues were expected to grow 14 percent annually in the next three years to about 2.54 trillion dong ($157 million) and forecast a net profit of $6.5 million by 2010.
The Haiphong City-based company, whose full name is Vietnam Ocean Shipping Co, operates 25 ocean-going vessels, including four small oil product tankers, and plans to spend $317 million on 12 more vessels by 2011.
Source: Reuters
The shares would be sold in an auction at the Hanoi over-the-counter exchange on Sept. 12 starting at 15,000 dong ($0.9) each, the company said in a statement published by the State Securities Commission.
Foreign investors were not allowed to participate in the auction, the statement said without giving a reason.
Shares in VOSCO, which is 60-percent state owned, were being traded in the unofficial markets at 25,000-40,000 dong ($1.5-$2.5), brokers said.
VOSCO chief executive Vu Huu Chinh said in a prospectus that revenues were expected to grow 14 percent annually in the next three years to about 2.54 trillion dong ($157 million) and forecast a net profit of $6.5 million by 2010.
The Haiphong City-based company, whose full name is Vietnam Ocean Shipping Co, operates 25 ocean-going vessels, including four small oil product tankers, and plans to spend $317 million on 12 more vessels by 2011.
Source: Reuters
MoF attempting to ease requirements on stock auditors
The Ministry of Finance (MoF) is trying to lower requirements on auditing companies, hoping to settle the problem of the lack of auditors for the stock market.
MoF said it was amending Decision No 76 on auditing companies eligible for the stock market, setting easier requirements on auditing companies. With the new regulation, there would be 23 auditing companies eligible to provide auditing services on the stock market instead of 13 companies as currently.
Under the current regulations, stipulated in Decision No 76, an eligible auditing company must have at least three auditors who have practicing certificates granted by the Ministry of Finance. The directors of the companies must have a certificate and three years of experience.
Bui Van Mai, Director of the Accounting and Auditing Department under the Ministry of Finance, said that Decision No 76 was enacted in 2004, when the stock market was a fledgling one with only 20 listing companies and few transactions. Since 2006, the market has witnessed vigorous development, and the number of institutions which have the demand for auditing has increased by 10 fold compared to 2004.
The problem now is that Vietnam needs more and more auditing companies eligible to provide auditing services for the stock market. And MoF thinks easing the requirements on auditing companies will provide more service providers for the market.
Mr Mai said that in the last time, as only a few auditing companies were accepted, the licenced companies did not have to compete fiercely with each other, which allowed the companies to demand abnormally high auditing fees, while companies did not have many choices.
However, Mr Mai acknowledged that it would be unfeasible to settle this problem by setting up fixed ceiling levels of fee. He said that the government was striving to remove the imposition of prices and fees on goods and services, and MOF could not act contrary to this process.
“Our principle is that MOF only guides the method of calculating fees, while not imposing,” said Mr Mai.
Regarding the concerns of the public that the quality of auditing services would be disregarded once MOF eased the requirements on auditing companies, Mr Mai said that the existence of more auditing companies on the stock market did not mean that auditing quality would become lower.
“We cannot say for sure that a company with more auditors and more experience is better than another one. The most important thing for an auditing company is that it must ensure that it can provide true information.”
Mr Mai said that the existence of more auditing companies on the market would bring more choices to companies and institutions. Big companies and groups will need big and well-known auditing service providers. Meanwhile, as for smaller companies, small auditing companies which can provide services at ‘soft’ fees would be a good choice.
Source: VNE
MoF said it was amending Decision No 76 on auditing companies eligible for the stock market, setting easier requirements on auditing companies. With the new regulation, there would be 23 auditing companies eligible to provide auditing services on the stock market instead of 13 companies as currently.
Under the current regulations, stipulated in Decision No 76, an eligible auditing company must have at least three auditors who have practicing certificates granted by the Ministry of Finance. The directors of the companies must have a certificate and three years of experience.
Bui Van Mai, Director of the Accounting and Auditing Department under the Ministry of Finance, said that Decision No 76 was enacted in 2004, when the stock market was a fledgling one with only 20 listing companies and few transactions. Since 2006, the market has witnessed vigorous development, and the number of institutions which have the demand for auditing has increased by 10 fold compared to 2004.
The problem now is that Vietnam needs more and more auditing companies eligible to provide auditing services for the stock market. And MoF thinks easing the requirements on auditing companies will provide more service providers for the market.
Mr Mai said that in the last time, as only a few auditing companies were accepted, the licenced companies did not have to compete fiercely with each other, which allowed the companies to demand abnormally high auditing fees, while companies did not have many choices.
However, Mr Mai acknowledged that it would be unfeasible to settle this problem by setting up fixed ceiling levels of fee. He said that the government was striving to remove the imposition of prices and fees on goods and services, and MOF could not act contrary to this process.
“Our principle is that MOF only guides the method of calculating fees, while not imposing,” said Mr Mai.
Regarding the concerns of the public that the quality of auditing services would be disregarded once MOF eased the requirements on auditing companies, Mr Mai said that the existence of more auditing companies on the stock market did not mean that auditing quality would become lower.
“We cannot say for sure that a company with more auditors and more experience is better than another one. The most important thing for an auditing company is that it must ensure that it can provide true information.”
Mr Mai said that the existence of more auditing companies on the market would bring more choices to companies and institutions. Big companies and groups will need big and well-known auditing service providers. Meanwhile, as for smaller companies, small auditing companies which can provide services at ‘soft’ fees would be a good choice.
Source: VNE
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