Hoang Anh Gia Lai asks police to investigate rumours

Hoang Anh Gia Lai group on Friday asked the State Bank of Viet Nam and the Economic Security Protection Agency under the Ministry of Public Security to take measures to protect the interests of its over 2,000 shareholders from false rumours.
The group’s Chairman Doan Nguyen Duc said those who have deep knowledge of finance can know of the group’s “health” through its reports, but not many people have access to official information so they might be influenced by rumours. “So we have had to ask appropriate authorities to take measures to protect the legal interests of our shareholders,” Duc said.
Duc said in recent days he had received many phone calls from friends and the press asking about the group’s banking loans. It was even rumoured that he had been put under house arrest because his company owed banks hundreds of billion dong. Actually, Duc was abroad in his own aircraft; meanwhile, the price of Hoang Anh-Gia Lai shares hit the ceiling levels in five consecutive trading sessions.
“I’m holding 55% of Hoang Anh Gia Lai’s shares worth around VND6 trillion ($352.94 million). At the current value of my shares in the stock market, I’m the richest man in the stock market of Viet Nam,” he said.
He affirmed that Hoang Anh Gia Lai doesn’t have any overdue debt. Compared to its net assets worth VND17.1 trillion, its medium- and short-term loans of VND2,514 billion are diminutive.
“I think such rumours came from Hoang Anh Gia Lai’s rivals in order to affect the prestige of myself and my group,” Duc said. (VNE)

Vietnam To Privatize BIDV Bank In 2009

State-run Bank for Investment and Development of Viet Nam, or BIDV, will be privatized within 2009, the government said Monday in a statement.
Deputy Prime Minister Nguyen Sinh Hung has approved Dec. 31 as the bank's valuation date, the government said.
BIDV currently has registered capital of VND7.49 trillion ($440 million), according to the State Bank of Vietnam's Web site. (Dow Jones)

Vietnam licenses Hong Leong Bank, Shinhan Bank

Viet Nam has allowed South Korea's Shinhan Bank and Malaysia's Hong Leong Bank Berhad to set up fully owned subsidiaries in the country, the central bank said in a statement Monday.

Under the licence, Shinhan Bank, a unit of Shinhan Financial Group, will open Shinhan Vietnam Bank with a capital base of 1.67 trillion dong, or nearly US$100 million.

Hong Leong Bank Bhd will establish Hong Leong Vietnam with a capital base of 1 trillion dong, or nearly US$60 million, the central bank said in a statement.

Shinhan Viet Nam Bank will have registered capital of nearly 100 million dollars while Hong Leong Viet Nam will have registered capital of almost 60 million dollars, the State Bank of Viet Nam (SBV) said in an online announcement.

Based in Ho Chi Minh City, the banks will provide services in capital mobilisation, credit, payment and other fund services, SBV said.

Viet Nam has committed to opening up its banking sector after joining the World Trade Organisation in 2007, and has already licensed HSBC, Standard Chartered and ANZ to set up 100-percent-owned local subsidiaries. (AFP)

SCIC to auction 16,218 shares of Hai Duong shoemaker

State Capital Investment Corp (SCIC) will organise a public auction for 16,218 shares out of 54,060 shares at 100,000 dong par of the state capital in Hai Duong Shoes Joint Stock Co with the starting price of 125,000 dong per share.
The firm has a chartered capital of 10.6 billion dong.
The remainder of state owned shares will be sold to Hai Duong shoemaker's employees with the average winning price.
The share auction will be held at Vincom Securities Co, No 191 Ba Trieu St, Hanoi.

EAB to launch SMS Banking for credit card customers

Eastern Asia Commercial Joint Stock Bank (DongA Bank - EAB) recently announced that from December 29 it would launch SMS Banking services and internet Banking for credit card. This solution will bring a sense of security to credit account users.
Thanks to these services, credit card owners can check their accounts via mobile phones. At the same time, they can check transactions and funds transfer and other banking services.

Dragon Capital Group Selects World-Check for Enhanced Risk Management

Dragon Capital Group, the most experienced investment house in Viet Nam, today announced that it has chosen World-Check to enhance its Due Diligence and Know Your Customer (KYC) compliance processes. World-Check is the leading provider of risk intelligence for the screening of customers, transactions, employees, prospective clients and service providers in accordance with globally accepted risk management procedures.

The incorporation of World-Check forms part of Dragon Capital's implementation of international best practice in order to meet its compliance obligations with all relevant anti-money laundering laws in their respective legal and operational jurisdictions.

"With World-Check's risk intelligence we are confident that we are effectively mitigating regulatory, financial and reputational risk across all of our operations", said Mike Temple, Director of Finance Administration Operations of Dragon Capital.

"We are delighted that Dragon Capital has chosen our service and look forward to assisting their compliance teams with their ongoing compliance requirements" said Daniel Peak, Chief Executive Officer of World-Check. "Our research teams regularly identify heightened risk individuals and entities up to seven years ahead of major international sanction lists making us the industry leaders in risk mitigation."

Re-insurer acquisition named ‘Best Vietnam Deal 2008’

Swiss Re’s US$79 million acquisition of a 25-percent stake in the Viet Nam National Reinsurance Corporation (VinaRe) has been named the Best Viet Nam Deal in 2008 by Finance Asia, a Hong Kong-based publication that presents annual achievement awards in the region.

The globally recognised awards commemorate ‘deals’ including equity offerings, mergers and acquisitions or bond issuance on Asian stock markets.

The Swiss Re acquisition was notable for being the first major strategic investment by a global player in Vietnam’s reinsurance sector, the magazine said.

“Swiss Re, a global reinsurer operating in 25 countries, had a business relationship with VinaRe for more than a decade, but that relationship expanded to include Swiss Re offering the Vietnamese company technical assistance in all its businesses, with a focus on further enhancing its reinsurance capabilities,” wrote the magazine.

According to Finance Asia, the deal also helped solidify Credit Suisse’s position as the leading investment bank in Viet Nam.

The magazine also noted the participation of the legal advisors for the deal, which included the local firm, Vision Law, and the foreign law firm Russin & Vecchi.

Recognition as Best Viet Nam Deal 2008 should also help promote the domestic reinsurance market to overseas investors, VinaRe said on its website.

In addition to the Swiss Re-VinaRe deal in Viet Nam, the magazine also recognised Chinalco’s US$14 billion acquisition of Rio Tinto in China, Estisalat’s US$900 million acquisition of Swan Telecom in India, and Petronas’ US$2.5 billion acquisition of the Gladstone LNG project in Malaysia. (VNS)

Late performance disclosures ring exchange warning bell

Late performance disclosures ring exchange warning bell
Late business performance disclosure by listed firms is ringing a warning-bell for market regulators, as it seems to be becoming a phenomenon on the Vietnamese exchanges.
In November, the blue-chip company Pha Lai Thermal Power informed shareholders of zero dividend payments due to profit losses. The impact was deemed serious enough for the HCM City Stock Exchange’s management board to give the company a warning.
Early this month, other listed firms like Construction No.5, or Investment and Construction Development Co made public their altered business results.
Nguyen Thi Hoang Lan, deputy director of Ha Noi Securities Trading Centre, said that it was acceptable for firms to make adjustments in business performance amidst the present market turmoil.
"However, enterprises should make public such information in a timely fashion, to enable investors to make good investment decisions," said Lan.
Nguyen Hoa Binh, Chairman of Vietcombank, confirmed that its disclosure of business adjustment in November was late.
"In the context of market turmoil, however, it is difficult to forecast a company’s future. Actually, I must confess that we deliberated a lot before making public our business performance. I hope there will be sympathy for our late disclosure," he said.
The Bank for Foreign Trade of Viet Nam, known as Vietcombank, has changed the year’s targets for total asset, credit growth and bad debt ratio.
A representative from Construction No 5 Co, who wished to remain anonymous, excused his companies’ late disclosure by saying: "Even at the end of the third quarter, we believed that we could reach the year’s target. But, the fluctuation lasted longer than we expected, along with spending for provision fund. We only recognised the inadequacy of the year’s business result early this quarter."
Nguyen Hong Quan, An Binh Securities’ acting director, said that late disclosure greatly decreases investor confidence.
"Investors are paying more attention to the business results from listed firms, as well as to changes in business performance. The situation will cause serious consequences, if it becomes a trend," said Quan.
The Viet Nam Association of Finance Investors is urging listed firms to make disclosures sooner to protect investors from unexpected loss and to promote transparency. (VNS)

Baseafood to pay 20% dividend in cash for the first phase of 2008

Ba Ria Vung Tau Seafood Import Export Processing Joint Stock Co (Baseafood) announced that it would pay 20% dividend in cash
for the first phase of 2008 between December 25 and 31, 2008.
During the third quarter of 2008, Baseafood reached 179.230 billion dong in net revenue from sales and services and 3.109 billion dong in after-tax profit, bringing the total figure for Jan-November to 432.586 billion dong in revenue, 13.908 billion dong after-tax profit and the EPS of 4,346 dong.

Securities meet links investors, experts

Around 50 foreign and local experts and investors are discussing issues relevant to Viet Nam’s securities market at a two-day conference that began yesterday in HCM City.

Le Dang Doanh, senior economist at the Institute of Development Studies, gave an overview of the country’s current economic situation.

According to him, the first five months in 2008 saw a GDP-growth rate of 7.4 per cent. Export turnover was US$23.4 billion while imports brought in $37.8 billion, creating a trade deficit of $14.4 billion. CPI increased over 19%.

The VN Index declined to less than 400 from around 1,200 in 2007.

The current high interest rate is a heavy burden for the business community, according to Doanh.

Foreign investors believe in the mid and long-term prospects of the economy, but are concerned with the volatility of the economic situation.

Doanh stressed State efforts to re-establish trust for investors.

Viet Nam’s economic growth rate this year is expected tobe between 6.2 to 7.2%.

"Higher disbursement rates of FDI and ODA could contribute to stabilising the international payment balance," he said.

Viet Nam may also push reforms further and accelerate the equitisation of State-owned enterprises.

"The 7.5% economic growth rate in the last 10 years is very impressive and I understand that more recently the stock market has experienced a downturn and the Government has focused on controlling inflation. No doubt this has been painful for investors but it does not appear to lead to withdrawal of foreign investment," said Michael O’Sullivan, President of the Australian Council of Superannuation Investors.

Bui Thu Thuy, Securities Services Deputy Head for HSBC HCM City Branch, singled out market entry as a key issue for foreign investors, and detailed regulations, taxation and the process of starting securites trading in Viet Nam.

Other topics included evaluating trends in the country’s stock exchange, the importance of corporate governance and trasparency in building market confidence.

Today (second working day), human resources, bond markets, alternative investments tools, fund risk and investment techniques for the local securities market will be covered.

The event is co-organised by Singapore-based Informa Finance Asia and local firm Quang Ba I.A.C. (VNS)

Quang Nam road construction firm asks permission to list 1.2m shares on HaSTC

Quang Nam Transportation Traffic Construction Joint Stock Co is asking Hanoi Securities Trading Centre's approval to list 1.2 million shares on the northern bourse.

The company has a chartered capital of 12 billion dong, in which 53.8% held by the state and 46.2% held by internal and external shareholders.

ABBank applies interest rate 18.2% per year

From June 20, An Binh Commercial Joint Stock Bank (ABBank) officially applied deposit rate of 17.8% per year as for one-month term deposit receiving the interest rate at the end of terms, three months at 18%, and from six to 12 months 18.2% per year.

In addition, ABBank also officially applied new interest rate benchmark as for US dollar deposits whereby one-month term will get the interest rate of 7.3% per annum, six months 7.5%, 12 months 7.7% and 13 months 8% per annum.

ABBank also applied the progressive interest rates as for both dong and US dollar deposits, except demand deposits. Particularly, the interest rates as for deposits worth from 100-500 million dong will be added by 0.2% per year, from 500 million-one billion dong by 0.3%, one-five billion dong by 0.4% and from five billion dong and higher by 0.5%

11 firms register to join HaSTC's floor for unlisted public companies

A source said that there are now 11 companies registering transactions on Hanoi Securities Trading Centre (HaSTC)'s floor for unlisted public companies including eight banks and securities companies among 40 enterprises receiving HASTC's invitation.

According to Nguyen Vu Quang Trung, vice director of HaSTC, first off, commodities for the market are mainly selected shares of companies meeting State Securities Commission (SSC)'s requirements on corporate administration and management of shareholder book. Those are mainly securities brokerages, banks, financial institutions and insurers.

"Initially, we estimate that about 40 corporate participants will be divided into many small groups so the registration will depend on depository progress taking about two weeks for each candidate. Currently, over 10 businesses registered to join the HASTC's floor for unlisted public companies just from the first stage", Trung added.

Time by time, HaSTC will bring these companies to depository and trading registration. However, with aforementioned legislation background, shares of unlisted public corporates will be gradually put into centralised transactions with a strict treatment.

Pubic companies must carry out centralised deposit, so if not being put into transactions via the floors, transference procedures of these corporate shares cannot be made. In addition, corporates also can violate regulations on information disclosure.

As reported, legally, the scheme on unlisted public companies was completed already, which gained the Ministry of Finance's approval and was set for forthcoming issue by SSC.

On the other hand, HaSTC also finished the draft rule on distance transaction that will first off be applied on the securities trading of unlisted public companies. This draft rule was sent to seek relevant agencies' opinion.

Systematically, according to Trung, both HaSTC and Vietnam Securities Depository (VSD) Centre are ready for securities transaction of unlisted public companies.

In February 2008, HaSTC piloted the trading model in in-house transactions. In April, distance transaction was trial with VSD and 69 securities brokerages to check the exact and connection quality. (TBKTVN)

SCB increases deposit rates strongly

From June 23, the dong deposit rates at Saigon Commercial Joint Stock Bank (SCB) were increased strongly, especially as for terms of from one week.

In particular, deposits with from one to three week terms will carry the yearly interest rate of 17.4-17.8%, one to three-month terms at 18.1-18.3%, three-nine-month terms at 18.5% and 370 day term 18.8%. The demand interest rates were also increased to 9% per year and from three-six day terms were ranged between 14-14.6% per year.

Also from June 23, customers with the balance worth from 20 million dong as for individuals and 50 million dong as for institutions will be allowed to joined "overnight investment" product with the interest rate of 13% per year.

On the same day, SCB announced that it increased prize-based bills of exchange rates to 18.8% per annum with from 30-day term and introduced "savings with principal interest rates" product with the interest rate of 17.4% per year. Each redeposit will plus by 0.2-18.4% per year of interest rates.

June 25, Stock market remarks three consecutive increases

Influenced from two previous sessions, the stock market today June 25 witnessed another surge with over 80% of shares increasing. The VN-Index of Ho Chi Minh City Stock Exchange (HOSE) ended at 383.78 points after adding 7.81 pts or 2.07% with the total matching order trade of over 9.3 million shares and fund certificates worth nearly 343 billion dong.

Among 152 share codes and four fund certificates being listed on the southern bourse, the stock market saw 127 shares increasing while eight stood still at the comparative price, one with no trades and 20 decreasing.

The sole share with no transactions was BTC.

Out of big shares with the largest market capitalisation, VPL lost 3,000 dong to fall to the floor price while others increasing such as STB, DPM, VNM, PVD, ITA, HPG and PPC.

DHG was the biggest gainer as adding 4,000 dong and followed by DMC +3,000, VIC and VNM up 2,500 and ITA, KDC, PVD and SGH leaped 2,000 dong per share.

Some big losers were DQC, SJS, BBC, SC5 and TTP.

STB reached the biggest trading volume with over 1.5 million shares, REE followed with 581,260, FPT 282,020, VF4 266,390, VTO 214,650, BF1 213,740, PVT 204,930 and others like VSH, PPC, HAP, HPG and NTL.

Similarly, Hanoi Securities Trading Centre (HaSTC) also bounced on the stock market when the HaSTC Index bounded 2.18 points or 1.98% to close at 112.06 pts with the total market trades of 4,690,800 shares worth over 93 billion dong.

Amongst 141 listed shares, the stock market recorded 30 shares decreasing, seven with no trades, five stood still and 99 remain increasing.

Seven with no trades were CID, HBE, HSC, HUT, LBE, LUT and NPS.
Five stood still namely KBC, L43, ONE, S96 and SD4.

MIC performed the strongest increase when adding 2,200 dong, ACB up 1.700 dong, VSP +1,600, RCL and SCJ +1,500, S99 +1,200, BVS, NTP, VC2 and VNR +1,100 dong per share.

SD2 showed the biggest decrease as losing 1,400 dong, L62 slipped 1,300 dong, DTC, HLY, PSC and SNG dropped 1,200 dong per share.

SD7 stood at the first place in trading volume with 515,600 shares, followed by ACB with 479,000, PVI 401,900, KLS 386,700, HPC with 218,500 and PVS with 170,800 shares being traded.

Viet Nam still apple of Singaporean eyes

Despite Vietnam’s slowing economy, more than 300 businesspeople flocked to a conference in Singapore Tuesday to learn about opportunities in the country, with most believing the hard times won’t last long.

The businesspeople, Singaporean investors and representatives of multinationals based in the city-state, discussed the economic situation and prospects at the conference “Doing Business in Viet Nam.”

Many of the attendees said they planned to expand their businesses into Viet Nam, which is becoming more attractive as the Singaporean market has become so crowded and competition in China and India so tough.

Laila Salim, a director of Caden Technologies Pte. Ltd., said she knew many companies had shifted their business to Viet Nam from China.

Viet Nam has been hit by sky-rocketing inflation this year, which hit 25% year-on-year in May.

The once-booming stock market is the world’s worst performing exchange this year, losing 60% of its value since January.

The government has revised down this year’s targeted economic growth rate to 7% from the previous 8.5-9% target band.

However, dozens of businesspeople told Thanh Nien they were still upbeat about the prospects of Vietnam’s economy.

“We are not very worried,” some said, while said they expected “the difficulties will pass in six months.”

Huynh Buu Quang, Head of Commercial Banking at HSBC Viet Nam, said high inflation was inevitable as global food and oil prices continued their remarkable rise.

Speculation and excessive imports worsened the situation, he said.

Quang said Vietnam’s stock market was adjusting itself after several years of being overvalued.

But he assured the audience that the problems, including that of the financial and real estate markets, were “short-term” and the government’s policies were proving effective.

Quang’s opinion was echoed by some of the conference’s other speakers.

Simon Ong, Group Managing Director of Kingsmen Creatives Ltd., an event organizer with a Vietnamese offshoot, said his company was still confident about the business prospects this year and in the future.

With a long-term view and good planning, doing business in Vietnam would be successful, he said.

Meanwhile, Michael Connor, a professor at Nanyang Technological University, criticized some overly negative reports about the Vietnamese economy.

Despite its struggling economy, Viet Nam attracted US$31.6 billion in newly-registered foreign direct investment in the first half of this year, $10 billion more than the amount pledged in all of 2007, the Vietnamese government’s Ministry of Planning and Investment said. (TN)

Japan's Daiwa Securities Corp to buy into SSI

Japanese brokerage Daiwa Securities Group Inc will become a strategic shareholder of the Saigon Securities Inc (SSI) by owning at least 10% of its shares.

Under a strategic cooperation agreement signed between the two sides on June 23, Daiwa committed to providing its Vietnamese partner with technical assistance, technology and personnel training, and to help diversify its products and get access to the Japanese stock market.

The Japanese brokerage will send a member to join SSI’s board of directors.

According to SSI, Daiwa will buy more than 11.68 million shares of SSI which are listed on the Ho Chi Minh City Stock Exchange, bringing the total number of SSI shares owned by Daiwa to 18 million, equivalent to 13.17% of the Vietnamese brokerage’s charter capital.

Apart from Daiwa, ANZ has also become a foreign strategic partner of SSI, holding 17.08 million shares or 12.5% of SSI’s charter capital.

PM calls for strengthening management over stock market

Prime Minister Nguyen Tan Dung has banned individuals and institutions from organising stock transaction floors illegally in order to strengthen the management of the stock market and ensure its sustainable growth.

In his instruction issued on June 23, the PM has forbidden enterprises, which are non-Vietnamese legal entities to offer or sell securities in Vietnam, except for cases that follow the international commitment roadmap signed by the country.

He banned state enterprises from using government, investment development funds and major construction capital to make financial contributions or purchase shares of stock investment funds, including risk investment funds and securities companies.

The PM ordered that all IPOs must register with the State Securities Commission and IPO violations must be stopped and punished in accordance with the law. (VOV)

Saigon Securities, PetroVietnam, Vietnam-Italy Shares On June 25

The Ho Chi Minh City Stock Exchange's VN-Index rose 7.81, or 2.1%, to close at 383.78, the biggest gain since March 10. The following shares were among the most active in the market.

PetroVietnam Drilling & Well Services Joint-Stock Co. (PVD VN), a provider of services to the oil and gas industry, gained 2,000 dong, or 2.9%, to 70,000, the biggest advance since March 26. Crude oil for July delivery yesterday touched $138.75 a barrel, the highest since reaching a record $139.89 on June 16, before settling at $136.74.

Saigon Securities Inc. (SSI VN), Vietnam's biggest publicly traded brokerage, climbed 800 dong, or 2.8%, to 29,400, the highest since June 10. Trading turnover on Vietnam's stock exchange this month averaged 387 billion dong ($23 million) per day, 46% higher than the daily average in May.

Vietnam-Italy Steel Joint-Stock Co. (VIS VN), a steelmaker based in the northern province of Hung Yen, slid 600 dong, or 2.8%, to 20,900, the lowest since the stock started trading in December 2006. Viet Nam will raise export taxes on steel ingots and scrap steel by 10%, from as much as 5%, the Tuoi Tre newspaper reported yesterday, citing a decision signed by Do Hoang Anh Tuan, deputy finance minister.

Interest rate policy putting bankers between hammer and anvil

Truong Van Phuoc, General Director of Eximbank, said that by raising deposit interest rates, banks well know that they are endangering themselves, but there simply is no alternative.

The State Bank of Vietnam on June 19 released Dispatch No 5455 instructing banks to stop collecting loan fees, asking borrowers to pay security on loans and employing other tactics which could indirectly lead to an increase of actual lending interest rates.

The dispatch proves to be bad news for bankers, who expect that banks will face more difficulties in the time to come.

The director of a joint stock bank said that bankers are now between the hammer and the anvil. They have to raise deposit interest rates in order to satisfy depositors in the context of high inflation and lower lending interest rates in order to satisfy the State Bank and businesses.

The director said that banks have to offer the deposit interest rate of 19% per annum, while they cannot lend at more than 21% per annum, which means the margin of profit of 2%, not enough to cover banks’ expenses.

That explains why some banks have stopped providing loans.

He said that banks have to offer high interest rates just to retain their current depositors; they have no hope of bringing in more money.

Truong Van Phuoc, General Director of Eximbank, said that by raising deposit interest rates, banks well know that they themselves are putting the knife to their throats. However, if they don’t do that, they will not be able to retain clients.

Banks continue to adjust interest rates on VND deposits. ACB is now offering 18.9% per annum for 13-month term deposits, a rate which has been applied since June 20. ABBank, once again, announced it would raise interest rates as of June 20, now offering 18.2% on 6-12 month term deposits. One day ago, VP Bank raised the rate to 18.8% for 6-month term deposits.

US$ deposit interest rates have also been increasing in the last few days. Since June 20, ABBank’s interest rates have been 7.3% per annum for 1-month, 7.5% for 6-month, 7.7% for 12-month and 8% for 13-month term deposits.

Ocean Bank is now leading the market with the offered interest rate of 8.4% for 12-month term deposits.

Other banks are also offering very high rates, including SCB 8%/annum, Eximbank 7%/annum, Dong A 7.65%/annum for 24-month term deposits.

Banks have to raise US$ deposits as people rushed to buy foreign currencies recently for fear of further dollar price increases. However, analysts fear that the move will worsen the current situation.

The move will unintentionally make the foreign currency speculation in the market more serious, especially as worries still exist about the further devaluation of the local currency. With such high US$ deposit interest rates, those who keep dollars will get double profit: they don’t need to worry about the currency value decrease, while they still can enjoy high interest. This will encourage more and more people to purchase dollars. As such, banks are now lending a hand to the activity of speculating foreign currencies and dollarisation.

Analysts ask for changes in Securities Law

Monday, June 23, 2008
The current Securities Law needs changing in order to more effectively offer legal protection to every member of the stock market, according to securities analysts.

Over the past year that the law has been in effect, they have analysed its effectiveness, and released the findings earlier this week.

Foremost among concerns, is the need for a legal framework for stock retailing by public firms, as well for the auctioning and listing shares of foreign-invested firms.

Nguyen Van Thanh, an analyst from Da Nang Securities, said, "The number of foreign-invested firms in our country is significant. There should be a regulation allowing them to sell shares in our local stock market."

The opening up of such firms would make the market more active, providing investors with more chances to invest, he added.

The problem however, is that many foreign-invested companies are unsure how to proceed. According to Nguyen Vu Quang Trung, deputy director of Ha Noi Securities Trading Centre, one of the most frequently asked questions by foreign-invested companies in Viet Nam, is how to list shares in the local stock market.

As there is no regulation covering this, the process of listing shares in the market is difficult, Trung said, noting that demands for clearer guidelines are increasing from all sides.

"The rules for stock retailing should be tightened so as to avoid the dilution that occurs when firms offer too many shares at a time," said John Nolan, an analyst from a HCM City fund management company.

He added that strict regulations would help manage the volume of shares in the stock market, preventing it from the share-overload that is currently evident.

The Securities Law also regulates derivatives such as options, margin trading, and future contracts. However, these instruments have not been implemented yet.

Le Ho Khoi, director of Trang An Securities, said that these instruments were the basis of defining a securities company as a real financial institute, not simply by the activities of brokers in each trading session.

These derivatives also help investors reduce risk in securities investment, Khoi added, noting them as an important lever for the future development of the exchange.

Nguyen Trong Nghia, head of the Legislation Division at the Ministry of Finance, said that the Vietnamese stock exchange was young and would naturally experience ups and downs, but these help highlight important matters to the regulators.

As a result, changes in the Securities Law are necessary as it has only been in existence for a year, he added.

Vu Thi Kim Lien, vice chairman of the State Securities Commission, said it would collect the ideas from market members to complete the draft of the revised Securities Law by the end of this year.

She added that those elements which are legally adjustable will be drafted and sent to the Ministry of Finance for permission to implement this year. (VNS)

Seeking a panorama for Vietnam’s economy

Monday, June 23, 2008
Normal people don’t trade stocks, don’t invest in real estate, don’t import luxury cars – so why do they have to suffer the current difficulties?

When international financial institutions make economic analyses, they make comments based on the viewpoint of protecting investors, their customers, so is there anybody to analyse economic prospects for the common interests or the interests of normal people who don’t hold any US dollars or shares?

While foreign reports focus on financial matters, Viet Nam needs a panorama of the economy, based on more basic factors.

Trade deficit: After reaching the record high level of US$14.4 billion after the first five months of 2008, the trade deficit is slowing down due to different factors. Last year share prices surged and many people spent freely, which was proven through statistics of imported cars and luxury commodities.

As money is scarce at present, Viet nam can’t import a great deal of commodities. The quiet real estate market will also result in a lower demand for construction materials. There is some evidence for these propositions: imported cars are selling slowly; imported steel is being re-exported; the sales of locally-assembled cars in May fell by nearly 1,800 units compared to April, which will result in fewer car components being imported.

While the exchange rate is fluctuating towards the trend that the US dollar is revaluating over the VND, importers are having difficulties buying USD so imported goods are more expensive. But how do we encourage exports to reduce the trade deficit when many export items rely on imported materials?

Flexibility in the exchange rate is a way to enhance the competitiveness of Vietnamese goods in the international market – a flexibility in the value of the VND based on a basket of foreign currencies of Vietnam’s fellow traders, not only on the USD. The monetary and public finance tightening policy, if it is performed seriously and resolutely, will also help lessen the pressure of the trade deficit in the remaining months of 2008.

Actually, the trade deficit is going down: from $3.3 billion in March to $2.8 in April and $2.6 billion in May (source: Barclays Capital). This reduction needs to be boosted to create positive influences on other norms, especially the balance of payment.

Inflation: it is difficult for Vietnam to take measures to curb inflation while gas and food prices are increasing highly in the world, which also cause worries of inflation for other countries in the region. Nevertheless, as many experts have said, inflation in Vietnam is much higher because of its loose monetary policy in previous years. Now as credit is being tightened, the supply of money isn’t increasing remarkably; inflation will likely decrease in the upcoming time when this policy begins taking effect.

The World Bank’s data shows that the money supply has fallen by 10% year on year, consistent with a decrease of imports. According to the WB’s Taking Stock report, which was released at the recent mid-term Consultative Group Meeting in Sapa, Lao Cai, if the food factor is excluded, the price index has been falling since March.

It is necessary to note that the people’s expectations for inflation play a significant role in deciding the price tendency. Therefore, the interest rate policy must be linked with inflation control. Interest rates must be raised to ensure profit for depositors, and thus, the monetary policy would be able to take effect quickly.

Other norms: agricultural, forestry and aquatic production are still growing 2.9% year on year. However, Vietnam seems to be not taking advantage of the increase of food prices in the world so farmers don’t benefit much. In fact, they are suffering difficulties because businesses don’t have money to buy their products to export.

Industrial production value in the past five months maintained a growth rate of 16.4%, except for the construction industry. The WB’s report Taking Stock says though Vietnam has reduced its GDP growth rate target this year to 7%, GDP in 2008 will be still higher than the country’s expected number, based on the growth impetus of 2007.

“Though the development pace of the construction sector will decrease to zero percent in the remaining months of the year while other industries will maintain the growth rates of quarter 1, GDP growth rate will be around 7.5% in 2008,” the report says. Though Vietnam will have to pay to struggle against inflation, in the short term, the cost of the growth rate will be not too high. But the government must definitely say ‘no’ to the pressure of maintaining a high growth rate from industries and provinces.

As psychological factors play an important role in stabilising the market, we should review some financial and monetary factors to have an objective view.

Balance of payment: According to Prime Minister Nguyen Tan Dung in his talks with David Fernandez, JP Morgan Chase’s chief economist, Vietnam’s balance of payment in the first five months of 2008 was in surplus, around $1 billion, and it will be $2-3 billion for 2008. Disbursement of FDI projects is over $1 billion a month.

The WB’s report also shows similar figures: deficit of current accounts in 2008 is estimated at $11.3 billion and it will be compensated for by surplus of capital account of around $14.8 billion. Therefore, the balance of payment will be in surplus of around $3.4 billion. These are the figures that the market needs to reject rumours of Vietnam’s crisis of payment balance (see the below table).

However, from this angle, the market needs flexible forex policies to contribute to reducing the trade deficit and enhance the competitiveness of Vietnamese commodities, raising incomes of workers in the foreign-invested sector, whose minimum salary is calculated based on the USD, and revoking speculation tools of the foreign financial circle. The inflation rate must be remembered when the government conducts the exchange rate, not only for the USD but also other foreign currencies.

Impacts on people: financially-powerful interest groups have a strong voice while interest groups representing the poor, especially farmers, nearly don’t exist.

Policy conduct must be kept out of foreign investors’ influences. Vietnam’s statement that it will not devaluate the VND suddenly goes to that direction because if the VND devaluates, there will be strong impacts on inflation, cause difficulties for the monetary tightening policy and the poor will be the major suffers.

Up to 73% of the population lives in the countryside. If policies enhance farmers’ purchasing power, the local market will be the support pillar for small-and medium-sized enterprises.

Portfolio investment flow: foreign investors are holding around 25% of listed firms’ stocks, both on the official and the over-the-counter markets. So the total portfolio investment capital is around $7-8 billion and most of it belongs to closed funds. There is around $2.5 billion of hot capital, plus around $5 billion of bonds owned by foreigners.

“Vietnam’s foreign currency reserve is equivalent to 360% of foreign debts,” comments Dragon Capital. Information about the high increase of NFD (non-deliverable forward) USD/VND exchange rate is not related to the real exchange rate and the people must be informed about this because the fluctuations in the stock market and the forex market are mainly caused by the psychologies of local investors.

The most important thing is once we define the reasons for the current situation are the monetary, fiscal policies and state-owned corporations’ investment, we have to persistently and resolutely perform set solutions.

It is necessary to control the impact of financial activities on production and business. The two have close relations, but in Viet Nam financial activities have just emerged in recent years.

ANZ calls for ending dual dong rate for importers, banks

Monday, June 23, 2008
Viet Nam must narrow the 10 percent difference between its two exchange rates to restore confidence in the dong, Australia & New Zealand Banking Group Ltd. has said.

The dong rate used by some commercial banks has fallen to as low as 18,000 per dollar, ANZ said, compared with the 16,611 rate used by selected importers.

The central bank should intervene with banks to unify the two rates, economist Paul Gruenwald at ANZ wrote.

“Benign neglect of the parallel market is fraught with risks,’’ the Singapore-based Gruenwald, head of Asian economics at the bank, wrote in a research note which he confirmed by telephone.

A weakening of the dong in the unofficial market “could set in motion inflation and capital outflows which may be difficult to manage.’’

Three credit-rating companies have cut Vietnam’s debt rating outlook since May, and Morgan Stanley last month said the dong is set for a “currency crisis’’ as inflation has risen to 25% and the trade deficit has surged.

The government does not plan to let the dong depreciate because it would affect the economy, Finance Minister Vu Van Ninh said June 15.

The central bank weakened the dong reference rate by 2% on June 11 to prevent currency speculation.

The currency is officially allowed to trade 1 percent either side of this.

Central banks intervene in currency markets by buying or selling foreign exchange.

Lost relevance

Forwards contracts are pricing in a 30% drop in the next year, after taking into account interest-rate differentials, according to offshore 12-month non-deliverable forwards at 23,975 per dollar.

Forwards are agreements in which assets are bought and sold for future delivery at prices determined now.

The official rate “has lost its relevance as a price signal,’’ Gruenwald wrote.

Vietnam is unlikely to face a currency depreciation like that of Thailand in 1997 as it has sufficient foreign-exchange reserves to defend the dong, ANZ said.

“The trick is therefore to maintain domestic confidence’’ and prevent conversion of dong assets into dollars, the note said, adding that estimated foreign currency deposits are 25% of total deposits compared to over 40% in 2000.

The central bank should also add to interest-rate increases to increase the allure of the nation’s assets and reduce government spending, Gruenwald wrote.

The central bank has raised the benchmark interest rates three times this year to 14 percent, the highest in Asia, as the government tries to curb accelerating inflation by tightening credit and cutting the supply of money. (Bloomberg)

VPBank Raises Deposit Rate to 18.8%

Monday, June 23, 2008
Viet Nam Joint-Stock Commercial Bank for Private Enterprises, known as VPBank, has raised the rate on deposits held for six months to 18.8%, the Dau Tu newspaper reported.

The State Bank of Viet Nam this month raised its benchmark interest rate to 14% from 12% to cool inflation.

PetroVietnam, Pha Lai Thermal, Sacombank Stocks On June23

Monday, June 23, 2008
The Ho Chi Minh City Stock Exchange's VN-Index rose 2.93, or 0.8%, to close at 368.95, climbing for the first time in four days. The following shares were among the most active in the market.

Financial companies: Saigon Securities Inc. (SSI VN), the country's biggest publicly traded brokerage, rose 800 dong, or 3%, to 27,800. Saigon Thuong Tin Commercial Joint-Stock Bank (STB VN), known as Sacombank and the exchange's fifth-biggest company, climbed 500 dong, or 2.5%, to 20,200.

The State Securities Commission of Vietnam, the nation's market regulator, is drawing up a plan to set up a fund to stabilize the stock market, the Dau Tu Chung Khoan newspaper reported, citing Chairman Vu Bang.

PetroVietnam Drilling & Well Services Joint-Stock Co. (PVD VN), a provider of services to the oil and gas industry, gained 1,500 dong, or 2.3%, to 66,500. Crude oil for July delivery rose 2% to settle at $134.62 a barrel in New York on June 20.

Pha Lai Thermal Power Joint-Stock Co. (PPC VN), Vietnam's largest publicly listed coal-power company, declined 700 dong, or 2.8%, to 24,100. Power station coal prices at Australia's Newcastle port, a benchmark for Asia, climbed to a record, rising 1.5% to $162.66 a metric ton in the week ended June 22, according to the globalCOAL NEWC Index.

Viet Nam May Set Up Stock Stabilization Fund

Monday, June 23, 2008
The State Securities Commission of Viet Nam, the nation's market regulator, is drawing up a plan to set up a fund to stabilize the stock market, Dau Tu Chung Khoan newspaper reported, citing Chairman Vu Bang.

The fund will buy stocks when the market has difficulties and sell shares when the market is doing well, the report said.

The State Securities Commission (SSC) last week lifted a limit for gains or losses on the stock exchange in an attempt to boost trade and improve the market investments.

Vietnam's 1st Half GDP Seen Up 6.7%, Jun CPI Up 2.2%

Monday, June 23, 2008
Viet Nam's economy is projected to have expanded 6.7% in the first half of this year and the consumer price index to have risen 2.2% in June from May.

"The economy is forecast to have grown 6.6%-6.7% in the first six months and will reach the target of 7% growth set by the National Assembly for this year," Viet Nam News Agency said, citing the Ministry of Planning and Investment.

A 2.2% rise in the CPI in June would be slower than the 3.9% increase posted in May, government figures show.

Between January and June, the country issued licenses for foreign investment projects valued at $31.6 billion, exceeding the $21.3 billion recorded in 2007, the agency said.

"This indicated that foreign investors believe in Vietnam's social and political stability," the agency added.

Viet Nam is expected to release its official statistics for the economy next week. (Dow Jones)

Banks afraid to declare profit

Friday, June 20, 2008
A lot of banks are refusing to declare their monthly business results as the happenings of the monetary market have been badly affecting their operations.

Last year, when the national economy performed well, and helped banks reap fat profit, banks regularly made their business public. However, the situation seems to be quite different this year. Though banks still made profit in the first months of the year, their operations were not as prosperous as last year.

The reports released recently by the banks do not contain inflation about pre-tax profit. The reports only emphasise their good liquidity and satisfactory capital mobilisation.

Techcombank announced it obtained satisfactory business results in the first five months of the year. The bank’s total assets by the end of May had reached nearly VND49tril, an increase of VND9tril over the beginning of the year, while its mobilised capital had reached VND42,287bil, up by 21%. Also according to Techcombank’s report, the good capital mobilisation helped the bank maintain high liquidity. However, the bank did not declare the pre-tax profit for the first five months of the year.

The deputy director of a joint stock bank said that it seems that banks are hesitating to declare profit at this moment, both the ones who made profit and the ones who did not.

Explaining this, he said that the banks that made fat profit do not want to reveal their profit at this ‘sensitive moment’, when businesses have to bear very high interest rates. Therefore, the main message banks want to send to the public is that they still are maintaining high liquidity.

People may find it easier to find out information about ACB and Sacombank, the two banks listing on the bourse, since releasing financial reports is a must for listed companies.

Sacombank reaped VND640bil worth of pre-tax profit in the first five months of the year, and the bank expects to obtain VND2tril worth of pre-tax profit this year.

ACB has also reported satisfactory business results for the first five months of the year with VND612bil worth of pre-tax profit. Especially, ACB earned a lot of income from its gold trading floor, which brought about VND1bil a day to the bank.

Eximbank said that though conditions are not favourable, Eximbank still got satisfactory results thanks to its advantages in providing services to import-export companies and trading foreign currencies. The bank hopes to get VND1,200-1,500bil worth of pre-tax profit, nearly double that of last year.

In general, big banks still are maintaining good business results, while small banks are witnessing profit decrease. The representative of a bank in HCM City said that the pre-tax profit of the bank in May decreased by over VND50bil from the previous month.

Banking experts say that the current difficulties may last until the end of the year. However, after that, the banks that have overcome the difficulties will enter a new period of prosperity. (DTCK)

NamA Bank raises dong deposit rates

Friday, June 20, 2008
From June 17, Nam A Commercial Joint Stock Bank (NamA Bank) officially increased the dong deposit rates to the highest level of 18.36% per year to assure the competitiveness amongst banks.

Particularly, 1-3 week term deposits will get the interest rates of 17.04-17.28% per year, 1-3 month terms 17.88%, 4-12-month terms 17.76% and 13-36-month terms 17.64%.

Notably, from one to three-month terms, the interest rate of 18.36% per year will be applied on deposits worth over five billion dong, 18.24% for deposits worth 1-5 billion dong, 18.12% for from 500 million to one billion dong, 18.00% from 100-500 million dong and 17.88% for deposits worth below 100 million dong.

According to the bank, customers with week deposits will not be allowed to withdraw the principal before due. Deposits with from one-month terms will be allowed to withdraw the principal before due but they have to let the bank know earlier one day.

AAA insurer buys 50% stake into Hung Dai Duong Co

Friday, June 20, 2008
AAA Insurance Joint Stock Co recently signed a strategic partnership contract to buy back 50% stake into Hung Dai Duong Co to set up a joint venture named AAA-Hung Dai Duong Joint Stock Co.

Hung Dai Duong specialises in fields of Granite mining and processing.

The joint venture will increase the mining and processing capacity of Hung Dai Duong by five times.

Song Da 4 subsidiary to list shares on HaSTC

Friday, June 20, 2008
Hanoi Securities Trading Center (HaSTC) recently announced that the Song Da 4 Joint Stock Co (coded SD4) would officially list 7.5 million shares on the northern bourse on June 25.

Gia Lai highland central province-headquartered SD4 with a chartered capital of 75 billion dong, of which the state holds 64% of chartered capital, operates in such fields as irrigation and hydropower works construction, road transportation, civil and industrial works construction and 110KV transformer stations and electric wires installation and construction.

Vitcostone finishes selling 750,000 shares to Beira Limited

Friday, June 20, 2008
The Vitcostone high-class Ashlar Facing Stone Co (Vitcostone), a joint venture between Vinaconex Joint Stock Co and Australia-based WK Marble & Granite PTY Co, recently announced that it finished selling 750,000 shares with the price of 45,000 dong per share and 100 billion dong of convertible bonds to Beira Limited-owned by DWS Viet Nam Fund Limited whereby Beira Limited will become the Vitcostone's strategic shareholder.

Vitcostone operates in such fields as construction materials business and production, minerals processing and exploitation and goods transportation services business. The company's products mainly are to export to overseas markets.

During the first five months of the year, Vitcostone made a revenue of over 147.7 billion dong, equalling to 40.91% of the year's plan, and over 35 billion dong from after tax profit or 50.43% of the year's target.

Coc Sau coal firm to list shares on HaSTC

Friday, June 20, 2008
Hanoi Securities Trading Centre (HaSTC) recently announced that on June 26 it would officially list ten million shares of Coc Sau Coal Joint Stock Co under the Vietnam Coal and Mineral Industry Group (Vinacomin) on the northern bourse with the code of TC6.

The Quang Ninh province-headquartered company with a chartered capital of 100 billion dong, of which the state holds 51% of chartered capital specialises in minerals trade and processing, mine works construction, industrial and civil works construction, mine equipment and transportation means processing and reparation, construction materials trade and production, hotel and restaurant service business and material export and import.

Enthusiasm weak on informal share trades

Friday, June 20, 2008
Prices of many shares rapidly have increased again in the first three trading days of the week. The stock market is expected in recovery after a long "hibernation" phase. However, the informal stock market doesn't "wake up" still. Though the pressure of selling out is reducing, the transparency of the formal stock market has not yet been better.

The reason investors apprehend securities investment in the informal stock market was simply that the transparency is very weak. Most of shares are traded not successfully. Mai Bich Phuong, the director of Empower Securities Co, said that the informal stock market is more eventful after some recovery days. However, the transactions are still difficult to come to success.

Buyers are not willing to buy with huge money amount due to the undecided attitude to observe the market whereas sellers want to sell at higher price. Some investors, who have to pay debt to banks, want to offload shares to return the debts, but it is not easy to trade successfully.

Real estate sector shares have seriously been affected by "frozen" of the domestic real estate market. Hoang Anh Gia Lai's share reduced down to 75,000-78,000 dong per share. In additional, there are few others being traded but with low trading value. Among them, Bao Viet Securities Co only saw 100 shares changing hands recently.

Bank shares are considered as the most tradable in the informal market, while investors are very cautious and prudential. Eximbank's share price was up from 21,000 to 27,000 dong/share on 17 June during three consecutive transaction days. Yet, in late same day, the share price stopped increasing and started to decline to 26,000 dong per share.

500,000 Eximbank shares have been traded in the last three trading days. Vietcombank's shares also started to increase and reached the price of 37,000-38,000 dong each. However, investors are still afraid of investing in this market.

The main reason is that monetary-tightening up policies make investors wonder about revenue and profit of banks this year. Practically, there are so many banks facing the difficulties even the affects have just started in the first half of 2008. Most recently, a slew of banks listed the optimistic business results in Jan-May. Such as Eximbank received a pre-tax profit of 588 billion dong and Sacombank earned 600 billion dong. But, it is not easy for small to medium size banks to get satisfactory profits in the first five months of 2008.

According to a director of a foreign investment fund operating in Vietnam, for foreign investors, the banking sector has developed potentially. Yet, it is required that investors must have long-term view because bank shares cannot recover in unstable markets.

The bank shares such as Eximbank, Eastern Asia Commercial Bank, Techcombank, and Military Bank, have attracted investors in the informal stock market except shares of small size banks. The heat of the formal market not only causes negative impacts but also leads to sharp declines in the informal market's shares.

Selling pressure burdened on the informal stock market as the listed stock market rallied. However, as brokerages said the investors' attitude is up and down. A lot of investors, who have money and think that the securities sector is at high potential, but are not willing to buy with huge investment capital.

Quan Duc Hoang, the president of board of director of I.A capital, said that securities investment at the moment is a big opportunity. "Foreign investors are paying much attention to Vietnamese stock market", he continued "but the banking sector is not their high demand, they interested in aquatic sector, mine ores industry, consumer products sector nowadays".

According to specialists, the banks' interest rate of 18-18.5% per annum attracted more funds from the stock market to banks. Many investors afraid of another decline of the stock market in the near future and they kept the money at banks to get high profit, affecting transactions on the informal stock market. The above reasons showed that the informal stock market is still frozen. (TBKTVN)

Telecommunication firm No 1 to list shares on HaSTC

Friday, June 20, 2008
Hanoi Securities Trading Centre (HaSTC) recently announced that on June 25 it would officially list two million shares of the Telecommunication Joint Stock Co No 1 on the northern bourse with the code of ONE.

The Hanoi-headquartered company with a chartered capital of 20 billion dong operates in such fields as production and consumption materials business, trade services, electronic and informatics services and software transformation and production.

Hapaco Hai Au to pay dividend

Friday, June 20, 2008
Hapaco Hai Au Joint Stock Co (coded GHA) yesterday June 18 reported that June 30 will be the registration deadline for the company to close the shareholders list and pay 2007 dividend of 15% in shares (one share for 1,500 dong).

The dividend payment date is on July 22.

The securities depository centre will halt receiving GHA-coded securities depositories on June 27, 30 and July 1.

GHA located in the northern city of Hai Phong with a chartered capital of 13 billion dong specialises in such fields as paper products processing and production and machines, materials and equipment export and import.

Changes in Securities Law and guidance documents mulled

Friday, June 20, 2008
State Securities Commission (SSC) on June 17 organised a seminar to overview the Law on Securities after one-year of implementation. Given public comment that the Law and guidance documents still have some problems needed to be amended.

Information disclosure

Law on Securities and relevant documents have not yet had detailed guidance on operation of share retail of public companies, share sale and listing of foreign entities on the Vietnamese stock market. Meanwhile, in fact, there were some 100% foreign invested companies (with the workforce of less than 100 employees) selling shares to employees and then the share volume was still traded on the informal stock market. Investors in such case will have to face many risks and not be protected whereas the foreign firms do not have responsibilities like domestic firms under current regulations.

We are questioned about legal proceedings relating to foreign enterprises who want to sell shares in Vietnam but it is only answered that Vietnamese laws have not ruled yet, according to Nguyen Vu Quang Trung, deputy general director Hanoi Securities Trading Centre (HASTC).

As estimated, share sales will be tightened up, which also will be enclosed with transaction listing and registration. Decree No 14/2007/ND-CP will be amended that issuers must list and register securities transactions on the formal stock market in parallel with share sakes. This will make changes in so far operations of the informal stock market.

Especially, in order to mass issue and sales of shares with unclear purposes, SSC proposed the finance ministry that securities offering applications must be added approved investment projects and the plan of using capital raised from the public for those projects.

In addition, it is proposed that the regulations on information disclosure should be more particular, including rules on financial institutions and individuals forced to announce information.

For example in Singapore, as an individual that has economic relationship with an enterprise (like one of that firm's director board) also has to announce full information to avoid insider transactions, Trung said.

Represented for PWC Auditing firm, Nguyen Thi Lan again concerned the professional and the trust of audited fiscal reports. She also gave a particular example that her company refused to provide comprehensive auditing service for a corporate, however then that corporate by some way still had an auditing appraisal for its financial report and met full terms to list on the stock market.

Nguyen Vu Quang Trung spoke, the corporate value appraisal needs to be independent because it now depends heavily on enterprises and consultants.

Right time to apply derivative tools

Regarding stock brokerages, the Law on Securities must provides more details on the brokers' position as intermediary finance institutions, Le Hong Khoi�general director of Trang An Securities Joint Stock Co gave his point of view at the seminar.

Securities companies must launch other specifications such as helping investors by lending activity through account depository. So far small investors suffered the most risks because of not protected by financial tools that become popular in the world.

Law on Securities also should expand mentoring over derivative share offerings and the trading market for the kind of share as well as products of new investment funds [fund certificates], Trung proposed again. (Lao Dong)

Recovery raises rumours of bull trap on stock market

Friday, June 20, 2008
Stock market has reversed upward a tad after months of a bear run. However, is this an opportunity? Investors, particularly retail investors, are tired of watching the stock market going down and down day by day. Due to the stock market slide, the capital that should be pumped into the stock market is transferred to other investments such as gold, foreign currencies, even for eliminating the risks some investors deposited their money to banks although they known that real return could be negative despite of interest rate is increasing.

Starting from Hanoi Securities Trading Centre, followed by HCM stock Exchange has witnessed a recovery during some recent days. The question is whether the VN-index and HASTC-index will still be in upward trend in coming days or it is just rally in some trading days in the down trend or a bull trap.

Opportunities

Share prices declined sharply in comparison with the year early, many shares have approached to face value and even others are under face value. The opportunity of buying "cheap shares" with the prices close to face value, which was previously only available for promoters [founding shareholders] or "special shareholders" one or two-years ago, is available to everyone at the moment. Many shares that had priced at 20 times of face value now are currently traded at 40.000 dong each. People said the opportunity of lifetime has come.

An other point of view has been agreed by people is that in the context of real negative interest rate because of high inflation, investors should select securities as a long-term investment channel with a strong faith that the macro economy will stable soon and the economy will continue to develop in next time.

In addition, investments in gold and foreign currencies will not bring in high profits, even it is impossible to make profit by trading in the foreign currency market. So that, securities investment is the most prospective nowadays.

The above optimistic thinking has been contributed by State Securities Commission's recent decision of increasing the stock-trading band for both stock exchange floors. Many investors believe that transparency will be better with a big trading volume.

Threats

The first threat to the stock market will happen when the payment period of T+4 (four days after the transaction finishes) comes, at this time, many shares has increased more than 5% in prices and there will be more opportunity that investors make real profits by selling shares.

Whether the demand for securities will be maintained for next trading days because there is no clear signal for a real recovery of the stock market. Moreover, the Consumer Price Index (CPI) of June is being listed. CPI is a critical factor in making decisions of financial policy makers, and charter accountants.

In addition, even for analysts, it is difficult to find shares that could bring in a dividend higher than banks' interest rate in 2008. Because of paying the capital cost accounting for 20% of money amount that that company has to pay to creditors (if company has debt) is great efforts at the moment.

How many do investors tend to long-term investment nowadays? Even though the macro economy is stable and enterprises reached satisfactory business results, the stock market will grow stably when investors join the markets as the true investors.

It is supposed that the stock market continues growing up and investors are glad to waiting for the day when the new stock trading band is enforced, the opportunity of the increased stock trading band to 3-4% will be enclosed with the threat that it could be reduced with the corresponding fall because many share prices will increase at attractive rate of 5-10% by that time.

Notably, it is hard to find any comments on the stock market from experts for guiding investors some recent days. So identifying opportunities or threats of the stock market depends only on investors. (TBKTVN)

Tan Hoa Plastics lists shares in HCM City

Friday, June 20, 2008
Tan Hoa Plastics Joint-Stock Company listed on June 19 on the HCM City Stock Exchange (HOSE) to become its 152 nd company.

The company saw 520 shares traded on the first day, closing at 44,000 VND (2.4 USD) against a reference of 55,000 VND. A 20 percent price fluctuation is allowed on the first trading day.

Tan Hoa, which makes plastic packaging material, has a charter capital of 80 billion VND (4.8 million USD).

Nguyen Huy Cao An, its deputy chairman, said domestic customers account for 60 percent of his company’s turnover. Supermarkets overseas like Carrefour and Intermache are among the major buyers.

The company targets a turnover of 321 billion VND this year, 42 percent up over last year, and an unchanged gross profit of 15 billion VND.

It plans to move its workshops in HCM City to a new site in Long An province’s Tan Duc Industrial Park in the fourth quarter, tripling its annual capacity to 15,000 tonnes.

The land where the workshops are now situated will be used to develop office buildings and or factories for lease.

An Binh Bank goes live with Temenos T24 model bank

Friday, June 20, 2008
Temenos Group, the provider of integrated core banking systems, today announced that An Binh Commercial Joint Stock Bank (ABBANK), one of Vietnam's largest joint-stock banks by chartered capital, has become the seventh client in the country to go live with TEMENOS T24 (T24). T24 now provides the bank with centralised core banking across its retail and corporate banking operations in 57 branches and is helping the bank to launch a range of new delivery channels including ATM and internet banking.

ABBANK implemented T24 Model Bank, which includes pre-configured products and processes for banking best practice, in order to reduce its implementation time and costs, minimise customisation and lower project risk. This is a Universal Model Bank implementation built on the Vietnamese Model Bank country platform for both retail and corporate operations. Temenos developed the Vietnamese Model Bank over eight months in order to combine T24 functionality with all State Bank of Vietnam (SBV) related requirements as well as meeting all the banking practices in Vietnam. ABBANK is the first local bank project that uses the Vietnamese Model Bank. T24 was deployed jointly by the bank, a local Temenos Professional Services team and other specialist partners over an 11-month period.

Nguyen Hung Manh, vice Chair of ABBANK says: "Because T24 Model Bank is a proven technology, we have been able to benefit from a fast, low-risk implementation. We are now ready with a banking platform that will support the bank as it launches new delivery channels to help us achieve rapid business growth over the next two-years."

T24 will support the bank's plans to increase its customer base from 55,000 accounts to two million by 2010. T24's flexibility and scalability will also help expand its branch network to 200 locations across the country. This exponential growth could not be achieved with the bank's previous system.

During the evaluation period, ABBANK considered several vendors before signing the deal with Temenos in December 2006. The implementation project was initiated in February 2007 and went live on 9 January 2008. Temenos installed T24 core functionality, including comprehensive retail and corporate banking capabilities. The system runs on IBM AIX. T24 replaced GoldRiver, the bank's legacy system.

Andreas Andreades, CEO, Temenos, comments: "The joint deployment with ABBANK is especially important as it demonstrates the quality of our implementation skills combined with our strong local knowledge. As our seventh go live in Vietnam, this project also further confirms our commitment to the Vietnamese market, which we support through our local staff and offices as well as our deep understanding of best-practice banking procedures inherent in Vietnam Model Bank. ABBANK Bank is fast becoming a large retail bank and we are happy to support them in their growth plans. With our increasing focus on retail banking we are now able to offer immense flexibility and richness of functionality combined with a superior cost of ownership. Our fully upgradeable packaged core banking system is highly beneficial for banks that previously had to rely on bespoke and heavily customised solutions."

TEMENOS T24 is a functionally rich, scalable, and proven integrated banking system. It is delivered as a pre-configured Model Bank solution that incorporates industry best-practice, enabling fast and predictable implementations and immediate, measurable benefits. Temenos' Model Bank approach allows a fast ROI and a highly flexible and responsive approach to banking ensuring maximum business agility based on T24's flexible features. T24 offers integrated and comprehensive information on the institution at all times including a single customer view, and a single view of the enterprise including risk and profitability.

T24 incorporates modern technology including a comprehensive Service Orientated Architecture (SOA), fully enabled for standard, SOAP (Simple Object Access Protocol) web services, and BPEL process execution and compliant with industry leading ESBs (Enterprise Service Buses). T24 can be deployed on fully scalable, multi-server n-tier architecture. It provides a full front-to-back solution from electronic delivery channels such as mobile devices and internet banking right through to settlement, general ledger and other back office functions all in a fully integrated, reliable and cost effective environment. Temenos' total commitment to open standards enables its customers to benefit from the latest advances in technology ensuring business agility, continuity, data integrity and reduced downtime delivering a significant, immediate and ongoing return on investment.

About ABBANK

An Binh Joint-Stock Bank (ABBANK), is one of the leading joint-stock banks of Vietnam and one of the ten banks with the largest registered capital of Vietnam. After 13 years of growth and development since establishment in 1993, ABBANK has made great advances in its business performances and results in the last 3 years, marked by significant milestones such as: Electricity of Vietnam Group (EVN) became a strategic shareholder of ABBANK with 30% of shareholdings in 2006, ABBANK and An Binh Securities (ABS) has successfully issued dong 2000 billion bond for EVN in 2006, EVN bond issued by ABBANK has been selected by Asia Money 1.2007 as the best local currency bond of Asia in 2006.

Currently ABBANK has a network of 53 branches and transactional offices in 20 provinces of Vietnam, serving 5,000 business clients and 50,000 individual customers. More information about ABBANK can be obtained at www.abbank.vn.

About Temenos

Founded in 1993, Temenos Group AG is a provider of integrated modular core banking systems to over 580 financial institutions in 110 countries worldwide. Temenos software provides banks with a single, real-time view of the client across the enterprise, enabling banks to maximise returns while streamlining costs. Whether providing 24/7 functionality to the wholesale, retail and private or universal banking sectors, partnering with central banks on core system replacement, or working with the World Bank on solutions for the emerging markets, Temenos knows banking. The company has a transparent approach to its operations and brings to bear its experience, expertise, commitment and professionalism on every project.

Headquartered in Geneva, Switzerland, the company has 42 offices in 31 countries and is listed on the main segment of the SWX Swiss Exchange (TEMN). www.temenos.com

CONTACT: Max Chuard, Temenos, director Corporate Finance & IR Member of the Executive Board Tel: +41 (0) 22 708 1157 e-mail: mchuard@temenos.com Ben Robinson, Temenos Investor Relations manager Tel: +44 (0)207 290 3012 e-mail: brobinson@temenos.com Peter McKenna, Temenos Marketing director Tel: +44 (0)207 423 3842 e-mail: pmckenna@temenos.com Sole Chirco/Alisha Benson, Team 660 Metia for Temenos Tel: +44 (0)203 100 3718 Tel: +44 (0)203 100 3739 e-mail: sole.chirco@metia.com e-mail: alisha.benson@metia.com

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June 20, VN Index ends a week with another 1.94% fall

Friday, June 20, 2008
The Ho Chi Minh City Stock Exchange (HOSE) today closed a week by seeing another decline on the stock market when the VN Index lost 7.25 points or 1.94% to 366.02 pts. After one trading week with two increases and three declines, the VN Index lost total 6.66 points or 1.79%.

The trading volume of shares and fund certificates reached over seven million units worth nearly 230 billion dong, increasing 33.55% in volume and 33.72% in value in comparison with the previous session.

There were over 80% of shares decreasing in the session today. Among 156 share codes and fund certificates being listed on the southern bourse, the stock market saw 13 shares increasing, nine stood still, 131 decreasing and three with no transactions.

Notably, seven share codes reached the ceiling price such as AGF up 700 dong to 25,700 dong per share, KDC leaped 2,000 dong to 78,500 dong, VIC and ITA added 2,000 dong to 80,000 dong and 76,000 dong per share together with others like LBM, SCD, SDN, SSC, TMC, UNI, VID, DXP and CYC.

Three shares with no trades were DMC, BTC and VKP.

SSI reached the biggest trading volume with 2,931,430 shares, accounting for 42% of the total share codes being traded and followed by DPM with 688,760 shares, VIC 272,120, PVD 256,270, STB 251,780, REE 234,510, SBT 154,880 and VNM with 154,500 shares being transferred.

Influenced from the southern bourse, the Hanoi Securities Trading Center (HaSTC) today June 20 also tumbled on the stock market as the HaSTC Index slipped to 110.4 points after losing 2.20 pts or 1.95% with the total market trade of increasing considerably to 1,804,800 shares worth nearly 35 billion dong.

Amongst 139 listed shares on the northern bourse, the stock market witnessed seven shares increasing while 109 others decreasing, one remained unchanged and 22 with no trades.

Seven gainers were L62 up 1,200, NGC +600, SJC +400, S64 and SD6 +300, SJM and VNR +200.

One remained unchanged namely BLF.

MIC showed the strongest decline as losing 2,500 dong per share, ACB slipped 1,700, RCL and SD2 dropped 1,400 and BVS, NVC and VC2 added 1,200 dong per share.

PVS took the first place in trading volume with 479,700 shares, followed by BLF with 153,100 and PVI with 120,600 shares being traded.

Central bank plans further monetary policy tightening

Friday, June 20, 2008
The State Bank of Vietnamese again on June 19 announced a further tightening of monetary policy over the next six months to fight inflation and stabilise the domestic monetary market.

The central bank is determined to keep total credit growth under 30% (year on year) by the end of this year.

It plans to do this through flexible management of exchange – rate instruments, open-market operations and refinancing activities.

The bank said the credit system would be more closely monitored in terms of credit quality, lending for real estate investment, “business on valuable papers,” consumer loans and other trading on foreign currencies and gold.

Credit loans or investment will be saved for effective business, particularly in farm production and the export sector.

Small loans will also be made available for those on low incomes and students in line with recent Government policy.

However, loans will be limited for non-production sectors, at the same time.

The money watchdog also plans to set up a master project to prevent speculation on foreign currency on parallel markets (blackmarkets).

In fact, in the past few months, the central bank has been aggressive on monetary policy, which is seen to have generated positive results.

In an effort to further curb credit expansion and raise the attractiveness of dong deposits, the base rate was further increased to 14% on June 10.

The central bank also responded in a timely way curbing dramatic fluctuation of the US dollar on the parallel market.

It has restricted illegal foreign currency trading and tried to bring the blackmarket rate back toward the official rate.

Previously, the daily trading band was also adjusted from plus or minus 0.75% to plus or minus 1% to reflect the real market.

Sacombank's Nam Says Private Investors Selling Stocks

Friday, June 20, 2008
Nguyen Ho Nam, director of Ho Chi Minh City-based Sacombank Securities Co., the brokerage unit of Saigon Thuong Tin Commercial Joint-Stock Bank, comments on the drop in the Ho Chi Minh City Stock Exchange's VN-Index.

Vietnam's benchmark index today fell 7.25, or 1.9%, after the daily trading limit was widened to 3% from 2% yesterday. The measure closed at 366.02.

``I don't think stocks fell because banks are selling shares. The market is now dominated by private investors. Private investors are speculating among each other. They bought shares a few days ago and that's why the VN Index rose. Now they are selling to make a quick profit.

``I really don't know about the stock market next week, it's so unpredictable.''

Thu Duc export import firm postpones second phase shares issue

Thursday, June 19, 2008
Thu Duc export import firm postpones second phase shares issue

Thu Duc Export Import Trade Joint Stock Co (coded TMC) recently said that it would postpone issuing shares for the second phase to the existing shareholders. These are shares being issued according to the plan of increasing chartered capital from 40 billion dong to 50 billion dong with the price of 18,000 dong per share.

In addition, TMC is also waiting for the company's director board's approval to issue shares to double its chartered capital from 40 billion dong to 80 billion dong when the stock market recovers and could assure the company's shareholder's benefit.

Comeco to pay dividend in shares

Thursday, June 19, 2008
Oil and Gas Materials Joint Stock Co (Comeco-coded COM) recently announced that June 27 will be the registration deadline for the company to close the shareholders list and pay dividend for the second phase of 2007 in shares.

According to the Ho Chi Minh City Stock Exchange (HOSE), the company would offer extra 465,308 shares at the ratio of 6% (six new shares for 100 shares held). The transaction date is scheduled on July 30.

The HCM City securities depository centre branch will halt receiving securities depositories on June 26, 27 and 30.

Techcombank increases dong deposit rates to 18.7% per year

Thursday, June 19, 2008
From June 16, Viet Nam Technology and Commerce Joint Stock Bank (Techcombank) applied a new interest rate benchmark for dong deposits with the possible highest level of up to 18.7% per year.

In particular, as for super-lucky savings with deposits worth over ten million dong and the terms of from at least six months, the interest rate is 18.35% per year, from one to five months 17.85-18.25% per year.

Especially, as for Phat Loc savings (getting the interest rates according to the deposit balance), the highest interest rate could be 18.7% per year. Particularly, more than six-month terms with deposits worth less than 100 million dong will get the interest rate of 18.4% per year, from 100-500 million dong 18.45%, from 500 to below one billion dong 18.5%, from one-three billion dong 18.6% and over three billion dong 18.7% per year.

With the multipurpose savings (flexible principal withdrawal), the interest rate is 18.5% per year for 12-month term and longer and from six to nine-month terms from 18.2% to 18.4% per year.

Southern waterway firm to equitise in 2008

Thursday, June 19, 2008
The Southern Waterways Corp recently announced that the company's equitisation plan was sent and await for some ministries and departments' approval to submit to the government as soon as possible.

At present, the firm completed basic steps for equitisation and auditing. Accordingly, the company's real value is 880.152 billion dong, of which state-owned capital value is 670.993 billion dong.

As the plan, after the equitisation, the company's chartered capital will be 671 billion dong including 342.21 billion dong hold be the state, accounting for 51% of chartered capital, 4.37 billion dong or 0.65% stake will be sold to the company's employees, two billion dong or 0.29% stake will be sold to the company's labour union, 200 billion dong or 29.8% stake is to be sold to the strategic investors and 122.41 billion dong remain or 18.24% stake will be auctioned to the public.

The firm chose Cube Investment Fund Management Ltd Co to be the company's strategic investor to submit to the prime minister's consideration and decision. If everything goes smoothly, the Southern Waterways Corp's equitisation could be completed within this

Vietnam different from Thailand in 1997, says Chinese economist

Thursday, June 19, 2008

A Chinese economist of US based Morgan Stanley said that it is impossible to compare Vietnam's current economic issues with Thailand's monetary and financial crisis that occurred in the late 1990s and it is also so hard to say that Viet Nam could be the start of a new financial recession in Asia.

Firstly, although Vietnam's state bank system and state enterprises have shown big problems, there does not appear any signal of comprehensive depression and bankruptcy. Secondly, foreign investment capital pumped into Vietnamese stock market now only accounts for about 20% equalling to US$6 billion. So the withdrawal of the money amount will not cause strong impacts.

Lastly, Viet Nam's foreign debts remains very small because 90% of this are long-term debts so Viet Nam does not have to suffer high pressure of short-term debt payment. In addition, the country's foreign capital attracting policy currently is fairly flexible and foreign investors' faith in Vietnamese environment has not signalled to be eroded yet, he added.

But, he warned, if the dong continues depreciating against the US dollar and inflation continues climbing without the government's effective intervention, an economic crisis would be hard to be predicted in advance. (VNA)

Widened trading band: some happy, others wary

Thursday, June 19, 2008
The decision by the State Securities Commission (SSC) to raise the daily trading band by 1% on both Hanoi and HCM City bourses has been applauded by some investors, but not those who fear it will result in sharper falls of the stock market.

With the decision, the daily trading band for the Hanoi Securities Trading Centre (HASTC) will be +/-4%, while the band for the HCM City Stock Exchange (HOSE) will be +/-3%.

Huy Nam, a securities expert, said that he once called for the resumption of the initially applied trading band of 10% and 5%, respectively.

“The modest widening shows that SSC is still too cautious with its moves. Wider trading bands bring more good things to the market,” Nam said.

However, Nam added that the decision, in any case, is a good thing for the market. But widening the trading band is just a short-term measure. In the long-term, the stock market needs more than just a wide trading band.

“Wider trading bands will allow stock prices to fall down more sharply or go up more sharply, but this will certainly help improve the liquidity of stocks,” Nam said, adding that more transactions will make the market more bustling.

He said that the low liquidity, which was caused by the measures to tighten the market, was one of the reasons that investors have left the market.

Those investors may return to the market when they hear that the liquidity has been improved.

However, he stressed that widening the trading band only can help invite investors to the market. There still needs to be more actions taken to revive the ailing stock market.

Meanwhile, Tran Huy Duong, Analysis Director of Hoa Binh Securities Company, has expressed his concern that the move by SSC may cause the market to fall more sharply.

Duong said that SSC seemed to be hasty to widen the trading band when the market saw 4-5 trading sessions of increasing. He believes that it is not the right time now to widen the daily trading band, as the market still has a lot of uncertainties.

The wider trading bands will encourage investors to make deals. If they make bank deposits, they will get the maximum profit of 18% per annum, while if they make securities investments, they can get the profit of 3-4% every day. A lot of investors who once suffered losses may come back to the market.

However, Duong can see problems in the SSC’s move.

“We well know that some institutions which hold mortgaged stocks may push up the sale of the mortgaged stocks once the daily trading band increases, which would certainly cause troubles for the market,” Duong said

Duong anticipates that the stock market will see the market prosper for some 4-5 trading sessions after June 19 (the day when the decision on widening the trade band becomes effective). However, the market may go down after that, as the investors who bought shares at low prices before may sell then.

However, Duong agrees with Huy Nam: the market needs long-term measures rather than just a short-term trading band widening. (VNN)

Monetary market sees positive changes

Thursday, June 19, 2008
There have been clear signs of the considerable improvement of the monetary market: the VN Index increases, banks have enough compulsory reserves and their liquidity has improved. Meanwhile, the VND/US$ exchange rate more truly reflects the supply and demand on the market.

Dollar shortage eased

On June 16, the State Bank of Vietnam published on its website the translated version of the report by securities firm Nomura, Tokyo, which said that there is not a high possibility of the VND’s sharp devaluation. The VND will bear modest pressure originating from the trade deficit. The pressure will decrease gradually if the government’s policy on slowing down economic growth has impacts on exports.

By posting a report by a foreign institution on its official website, it seems that the State Bank of Vietnam wants to imply the measures it will apply in the time to come. The report proves to have information that comes in line with the recent announcements by the government.

According to the report, the foreign currency reserves, not including gold, by the end of February 2008 had reached $26.3bil, much more than imports for three months. Meanwhile, the foreign debts by the end of 2007 had accounted for 29% of GDP, much lower than Thailand’s 59.7% seen in late 1996, when the Asian financial crisis took place. Therefore, there is nothing to worry about in regards to the foreign debts of Viet Nam.

The government of Viet Nam has decided to shift its focus from high economic growth to inflation control. Therefore, the forex policy will focus more on fighting inflation rather than improving the competitiveness of export products. The sharp devaluation of the VND would have the opposite effect: it would make inflation more serious. Therefore, the State Bank of Vietnam will not do that.

On June 17, businesses said that the ‘dual exchange rate’ (the official rate announced by commercial banks and the black market rate) situation had improved considerably. The gap between the actual exchange rate and the announced rate was lowered from VND1,200/US$1 to VND800-900/US$1, and then VND600US$1. This spells that the short supply of the dollar has been eased.

Bankers say that the move by the State Bank of Viet Nam on June 10 to adjust the official exchange rate has helped more dollars flow into banks.

Liquidity thirst over

According to the State Bank of Vietnam, in the week of June 9-13, right after the State Bank announced new decisions on interest rates, banks rushed to raise their deposit interest rates. The interest rates hovered around 15.84%-17.5% that week.

Last week, the State Bank offered to purchase valuable papers in big quantities of VND6-15tril per trading session, in order to help improve the liquidity of banks.

After a lot of efforts, the credit market has become more stable with the interest rates staying firmly at 17.5-18%. The 19% interest rate a bank offered several days ago has become abnormally high and the bank has stopped the programme to mobilise capital at this interest rate.

Currently, the interbank market interest rate is staying at 13% per annum, a sharp fall if noting that it once skyrocketed to 20%. (SGTT)

Dong Gains as Standard & Poor's Says No Currency Crisis

Thursday, June 19, 2008
Viet Nam's dong gained as Standard & Poor's said ``extensive'' capital controls and the management of its currency will prevent overseas investors from fleeing the nation.

``Viet Nam is not in a currency crisis,'' Ping Chew, the Singapore-based head of Asian sovereign and corporate ratings at S&P in an interview on June 17. ``There's definitely a bit of hot money that went in. But is it going to leave en masse like that which decimated Asia in 1997? I don't think so.''

The currency gained 0.01% to 16,618 per dollar as of 10:15 a.m. in Hanoi, according to data compiled by Bloomberg. A stronger currency cheapens imports and makes exports more expensive.

Viet Nam's central bank has increased borrowing costs three times this year to 14%, the highest in Asia, as the Southeast Asian nation seeks to tame accelerating inflation. Consumer prices surged 25.2% in May, the fastest since 1992.

The State Bank of Viet Nam set today's reference rate at 16,454 a dollar, compared with the rate of 16,457 yesterday, according to its Web site. The currency is allowed to trade up to 1% on either side of it. (Bloomberg)

Vietnamese Economy `Not in a Crisis,' ANZ Bank Executive Says

Thursday, June 19, 2008
Australia & New Zealand Banking Group Ltd. said Vietnam's economy isn't facing a crisis, with cash still flowing easily through the country's banking system and inflation likely to slow.

Morgan Stanley last month said the Vietnamese dong was heading for a ``currency crisis,'' citing a widening current- account deficit, and warned of the risk of a ``systemic banking crisis.''

Calyon, Credit Agricole SA's investment banking unit, said this month that the exchange rate for dong non-deliverable forwards points to a possible balance of payments crisis in Viet Nam. Citigroup Inc. said in a report this month that the risk of a banking crisis is the primary problem facing Viet Nam.

``It's very interesting to see international commentators, when there is a problem, using the word `crisis','' Alex Thursby, Asian-Pacific managing director for ANZ, told reporters yesterday in Ho Chi Minh City, without citing anyone by name.

``I don't think there's a crisis,'' Melbourne-based Thursby said. ``There's a requirement to bring inflation down and a focus on that, but the Vietnamese economy has many strengths, between domestic demand and continuing investment by organizations that want to export.''

Vietnam's inflation rate accelerated to 25.2% in May, the fastest since at least 1992. Exports rose 27% through May, according to preliminary figures from the General Statistics Office in Hanoi.

`Reasonable Shape'

Vietnam's economy ``is in reasonably good shape,'' buoyed by ``correct'' recent interest-rate increases by the country's central bank as a measure to control inflation and by ``strong'' foreign-exchange reserves, Thursby said. Dong and dollar liquidity in the banking system has been ``strong,'' he said.

``There may be pockets which are not quite as strong as other pockets, but generally the system is still relatively liquid and that all bodes very well for the future,'' he said. ``I don't get a feeling this is as bad as some people would like to suggest.''

While a ``herd mentality'' has led to a loss of confidence in the dong among some Vietnamese, the country's banking system is stable, said Dam Bich Thuy, ANZ's chief executive for Viet Nam.

``We see some people trying to get dollars, but then they still put their dollars back into the banks,'' Hanoi-based Thuy said. ``They don't take money out and put it under the mattress.''

ANZ has a 10% stake in Saigon Thuong Tin Commercial Joint-Stock Bank and a 12 percent stake in Saigon Securities Inc., and wants to further expand its branch network in Vietnam, Thursby said. The Australian lender has branches in Hanoi and Ho Chi Minh City and a representative office in the southern Mekong Delta city of Can Tho. (Bloomberg)

June 19, First session with new stock trading band, VN Index falls strongly

Thursday, June 19, 2008
The cautious psychology of investors in the first trading session being applied the new price vibration amplitude of shares and fund certificates on both floors Ho Chi Minh City Stock Exchange (HOSE) and Hanoi Securities Trading Centre (HaSTC) made the stock market less ebullient. The hope of a market with more recoveries after having four satisfactory trading sessions was extinguished in the session yesterday June 18 when a large volume of shares were offering for sale, a much higher volume against the orders to buy although the demand still being remained at high level.

Ending the session today June 19, the VN Index lost 8.8 points or 2.3% to 373.27 pts with the total matching order trade of 5,243,980 shares worth 172 billion dong, falling one fourth in volume and 72.7% in value in comparison with the previous session.

HOSE today welcomed a new member coded VKP of Tan Hoa Plastic Joint Stock CO with the total volume of shares being listed on the southern floor of eight million shares and the comparative price of 55,000 dong and vibration amplitude of +/-20%, bringing the total share codes being listed on the southern bourse to 152 shares and four fund certificates. The session today witnessed six shares increasing, seven stood still, two with no trades and 141 decreasing.

Among gainers, ITA added 2,000 dong to 74,000 dong per share, AGF up 700 to 25,000, DPR leaped 1,300 to 47,500 and others like COM, BHS and SDN.

With a new vibration amplitude but most of 141 losers fell to the floor price.

The new recruit VKP lost 11,000 dong to 44,000 dong per share with 520 shares being traded.

DPM stood at the first place in trading volume with 935,160 shares, followed by SSI with 361,810, HPG 244,480, PVD 198,840 and others such as PPC, VSH, PRUBF1, VIC and VIP.

Similarly, the Hanoi Securities Trading Center (HaSTC) today June 19 continued falling on the stock market as the HaSTC Index slipped to 112.6 points after losing 1.34 pts or 1.18% with the total market trade of increasing considerably to 1,333,400 shares worth over 26 billion dong.

Amongst 139 listed shares on the northern bourse, the stock market witnessed three shares increasing while 106 others decreasing, one remained unchanged and 29 with no trades.

Three shares increasing were DTC up 1,700 dong, SJC added 700 dong and BLF jumped 300 dong per share.

The sole share stood still namely YSC.

29 shares with no transactions including B82, BHV, C92, CID, CTB, DAC, HBE, HCT, HLY, HPS, HSC, HUT, KMF, L62, LBE, LTC, LUT, NGC, NPS, PSC, SD3, SDY, SIC, SNG, STC, TPH, TST, VC3 and YBC.

KBC was the biggest decliner when losing 3,400 dong, followed by MIC lost 2,600 dong, ACB slipped 1,800 and RCL and SD2 dropped 1,500 dong per share.

BLF reached the biggest trading volume with 153,000 shares and the others with below 100,000 shares being traded.

Saigon Bank subject to BOE issuing time extension

Tuesday, June 10, 2008
The State Bank’s Governor has issued Decision 1279/QD-NHNN which will allow the Saigon Joint Stock Commercial Bank (SCB) to extend the issuance of par value termed bonds worth VND 3 trillion until July 4th, 2008.

Interest rates in Vietnamese Dong were fixed in the Decision 16/2008/QD-NHNN issued on May 16th, 2008 by the State Bank’s Governor.

Any adjustments will be publicly reported to the State Bank by SCB.

Previously, SCB’s termed bonds were issued following Decision 07/2008/QD-NHNN of the State Bank on March 24th, 2008.

EuroCapital securities broker joins HOSE

Tuesday, June 10, 2008
Ho Chi Minh Stock Exchange (HOSE) on June 5 recognised the trading membership status of EuroCapital Securities Joint Stock Co on the southern bourse. Earlier, EuroCapital became Hanoi Securities Trading Centre (HaSTC)'s member from May 15.

EuroCapital addressed at Floor 2, Thanh Cong Tower at 25 Lang Ha, Hanoi's Ba Dinh Dist with a chartered capital of 150 billion dong will have full ranges of securities sector such as securities brokerage, securities investment consultancy, securities self trading, securities depository and corporate finance consultancy.

At present, the company has been providing enough utility trading services like online transactions via internet, making orders trading via telephone, supplying account information via SMS and online shareholders management.

DongA Bank signs cooperation deal with Binh Phuoc Post Office

Tuesday, June 10, 2008
Eastern Asia Commercial Joint Stock Bank (DongA Bank or EAB)'s Binh Phuoc transaction office recently signed the contract of automatic telecom cost payment with Vietnam Post and Telecommunication Group (VNPT) through EAB multi-functional card connected with Binh Phuoc Provincial Post Office.

Through the contract, once registering the automatic telecom cost payment service, customers can pay for cost of fixed telecom provided VNPT, cost for VinaPhone mobile phone service and internet on their EAB accounts.

Tougher rule on foreign currency speculation

Tuesday, June 10, 2008
On June 5, the State Bank of Viet Nam announced the forex rate of 16,117 dong/US dollar but the black market (that is a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided) recorded the forex rate being pushed to 18,400 dong per US dollar, higher 14% than SBV's level.

Last Friday the central bank also confirmed that the changes in forex rate of the informal market in some recent days were mainly for technological factor and speculation. Especially several foreign currency exchange agents of credit institutions in Hanoi and HCM City hiked the US dollar price to seek profit, causing damages for people.

Therefore, SBV announced it would combine with authorities to check and deal strictly with violations on the forex rate regulations and adjust the foreign currency exchange activities under current laws.

Accordingly, foreign currency exchange agents of credit institutions are only allowed to purchase US dollar cash from individuals and disallowed to sell US dollar to the customers. The whole collected US dollar volume must be sold to commercial banks.

In addition, foreign currency flows such as FDI, overseas remittance, foreign tourists are the large supply of US dollar to support the appreciation of the dong against the greenback. Thus, SBV said, the forex rate will continue to be monitored flexibly based on the market's supply and demand within the amplitude of+/-2% under the prime minister's direction.

Prior to such a move, the central bank had signalled forex stabilisation on May 27 when the forex rate reduced by some 800 dong on May 28 compared to all-time high level.

However, right after that the forex rate presented complicated movements with strong upward tendency of some 500-700 dong a US dollar. Particularly, on June 5, the forex rate announced by the central bank was 16,117 dong a US dollar while the rate in the free market was pushed to 18,400 dong a US dollar, rising by 14% against the announced rate.

Given explanation for the phenomenon, the Bidv chair Tran Bac Ha said that this showed not only the gap between supply and demand of US dollar in investments and official payments but also negative affects of rumours and speculations. So there is needed to have strong intervention.

According to Ha, the first reason causing the sudden change in dong/US dollar forex rate is the increasing foreign currency demand of importers mainly in fields of petroleum, steel, pharmaceuticals, luxury consumption goods that are not subject to be given priorities in banks' foreign currency supply strategy.

On the other hand, some foreign institutions released non-luminous assessments about Vietnamese economy in general and dong/US dollar exchange rate as well, so people and enterprises were urged to reserve US dollar despite of monetary market regulators' positive intervention.

SBV needs to have stronger intervention measures in supply of US dollar to commercial banks. With the current US dollar reserve, the central bank totally has enough ability to intervene the market, Ha confirmed. (TBKTVN)