May 27, HaSTC Index loses 2.29 pts, HOSE stock trading hit by computer problem

Tuesday, May 27, 2008
The Hanoi Securities Trading Center (HaSTC) today still kept decreasing impetus on the stock market by falling another 2.29 points or 1.83% to end at 123.17 pts with the total market trade of 555,900 shares worth nearly 16 billion dong.

Amongst 137 listed shares on the northern bourse, the stock market recorded only three shares increasing while 94 others decreasing, two remained unchanged and 38 with no trades.

Three shares increasing were YBC jumped 500 dong, DHI added 300 dong and TBC up 200 dong per share.

Two shares stood still including KBC and STC.
DTC showed the strongest decrease when losing 1,600 dong and followed by ACB slipped 1,500, VSP down 1,400 dong, BVS, RCL and SCJ dropped 1,300 and NBC slashed 1,100 dong per share.

ACB reached the biggest trading volume with 71,100 shares and followed by TBC with 65,000 and VC2 with 58,300 shares being transferred.

The Ho Chi Minh City Stock Exchange (HOSE) today was started with another bearish situation. By the end of the first phase, transactions were halted due to technical problems of STC transaction system.

This problem has not still been repaired yet so today the bourse will suspend matching orders and share transactions.

HOSE will send documents or fax to membership companies to announce the situation.

Experts introduce model for boosting acquisitions abroad

Tuesday, May 27, 2008
The State Securities Commission (SSC) yesterday joined forces with three US-based financial institutions to introduce Vietnamese enterprises to a model for raising capital and engaging in acquisitions overseas.

The model, known as a Special Purpose Acquisition Corporation (SPAC), is a shell corporation formed for the purpose of consummating a business combination with another, operating business. It can also be used to raise capital through an initial public offering (IPO) abroad.

According to data from Chardan Capital Markets, the auction of SPACs has raised US$21.5 billion through 156 auctions on US stock exchanges since 2004, accounting for 23 per cent of IPOs last year.

"This model has become common and has played an effective role as a capital mobilisation channel for foreign enterprises in this market," said Kerry Propper, CEO of Chardan.

The model has worked well in China, helping Chardan raise $811 million through SPACs for investments in China.

"Vietnamese enterprises can also enter US equity markets using this model because your economy is similar to the Chinese. The most important thing is the transparency that your firms create in the overseas market," Propper said.

BBV Viet Nam SEA Acquisition Corporation is the sole SPAC created in Vietnam so far for the purposes of raising capital through an IPO or acquiring an existing business in Vietnam.

"As we know, Vietnamese firms are quite attractive to US investors thanks to the growing economy and the potential that domestic firms have not yet exploited," said Eric Zachs, managing partner of BBV-Asia LLC.

He said the model had yet to become common in Vietnam because the domestic firms had little demand to make IPOs offshore.

The director of the State Securities Commission's international co-operation department, Nguyen Ngoc Canh, said that domestic firms hoping to sell shares offshore faced challenges in terms of incompatible accounting systems and capital and disclosure regulations.

He cautioned domestic firms wanting to auction shares offshore, not only in US markets, to consider carefully the suitable target market before making an IPO.

"The firm itself has to improve its managerial, operational, and financial capacity in order to meet the high requirements of foreign securities markets," Canh said. (VNS)

Tan Binh Culture aims to hold 320,000 shares

Tuesday, May 27, 2008
Tan Binh Culture Co will continue buying back 200,000 ALT shares until June 2, when it should hold a total of 319,995 shares.

Two other companies, PetroVietnam and Thu Duc Housing Development have also decided to buy back a total 1.2 million of their shares.

Yesterday, ALT closed at VND29,700 per share.

Fisheries to list on Ha Noi Securities Trading Centre

Tuesday, May 27, 2008
The Ha Noi Securities Trading Centre (HASTC) last week announced the Bac Lieu Fisheries joint stock company (BLF) would be listed on the Ha Noi bourse with 5 million shares worth a total of VND50 billion ($3.1 million).

Banks, borrowers struggle with tighter credit

Tuesday, May 27, 2008
The recent move by the State Bank of Viet Nam to raise the prime rate to 12% means that commercial banks are allowed to charge customers up to 18% interest on individual or commercial loans.

"An 18-per-cent lending rate is unsustainable for small- and medium-sized enterprises that operate on profit margins of only around 7 or 8% per year," said chairman of the Viet Nam Association for Small- and Medium-sized Enterprises, Cao Si Kiem.

Perhaps even more alarmingly, few borrowers are getting approved, even at this high, 18-per-cent interest rate. Most banks are generally only granting loans to existing borrowers.

"We obviously have to save ourselves before supporting enterprises. If we lack capital, how can we lend to them?" said the director of one HCM City-based bank who requested to remain anonymous.

"If the central bank wants us to give loans to domestic firms, they should pump more money into the system to solve the lack of liquidity," he added. "Pumping in a certain amount of money would be okay and would not harm attempts to control inflation."

Some other commercial banks say that the structure of interest rate regulations, not a lack of liquidity, is to blame for the tightening credit picture.

They point to the need to pay deposit rates of around 15% in order to attract capital to lend, plus other costs of raising and lending capital at a margin of 1.5-2%, so that their total lending costs are about 16.5-17%.

If these same banks are limited to charging no more than 18% interest on loans, the tight profit margins may actually represent losses in some cases, factoring in risks of non-performing loans, operating costs and other considerations, including asset appraisal, obtaining security interests, and collection costs.

Add all these in, they say, and the costs of lending can easily surge to 20% in the present interest rate environment.

Accordingly, lending rates charged to borrowers had surged to as high as 22-23% per year in recent months, until the central bank recently reminded them that prime rate regulations and the nation’s Civil Code mandated that lending rates not exceed one-and-a-half times the prime rate, or 18% per year.

Limiting loans

State Bank of Viet Nam governor Nguyen Van Giau has confirmed to Viet Nam News that the State Bank would soon issue new regulations reasserting this 18-per-cent interest cap.

The commitment is part of an overall Government policy to restrain credit growth to no more than 30% per year, a policy reaffirmed last week.

In other words, banks are under official pressure not to grant credit too freely, and many have begun focusing their lending priorities

Sacombank, for instance, announced that it would priorities loans for core lines of business and production, turning down applications to finance new ventures.

Asia Commercial Bank yesterday announced a new lending policy that would prioritise and limit lending to established customers and specific industries or sectors, although they have not yet announced which would receive this priority designation.

Vietcombank, meanwhile, said it would give lending priority to importers and exporters, customers servicing international loans, and enterprises seeking to invest in overseas markets or projects. (VNS)

Viet Nam to Ensure Dong Rate as Dollar Demand Gains

Tuesday, May 27, 2008
Viet Nam's central bank said it has the ability to ensure an orderly exchange rate after a jump in demand for dollars widened the gap between the official value of the currency and the so-called free-market rate.

``The demand for U.S. dollars is accelerating,'' Nguyen Quang Huy, director of the banking-management department, said in a statement on the bank's Web site late today. The increase was caused by Viet Nam's highest inflation since 1992, Huy said.

The State Bank of Viet Nam today set the daily reference rate for the dong at 16,060 to the dollar. Still, the free-market rate, which is used by money changers, was 17,500 to the dollar, newspaper Thoi Bao Kinh Te Viet Nam reported today.

Viet Nam's inflation accelerated to 25.2% in May, driven by record rice and energy prices, according to a statement from the General Statistics Office in Hanoi today. On a monthly basis, prices rose 3.9% from April.

The ``high demand from certain people for dollars is the main cause of the rising rate in the free market,'' Huy said in the statement, which was released in a question-and-answer format. Still, the scale of the free-market was small and wouldn't disrupt the financial, monetary and business operations of the economy, Huy said.

The government planned to continue carrying out a ``stable exchange rate policy'' within a trading band, Huy said, reiterating existing policy. (Bloomberg)

Vietnam attracts US $8.1 billion worth of FDI in five months

Tuesday, May 27, 2008
Vietnam has attracted a total of US $8.1 billion worth of foreign direct investment in the first five months of this year, according to the Ministry of Planning and Investment’s Department of Foreign Investment.

This include a total of nearly US $7.5 billion worth of investment from 130 newly-licensed FDI projects during the January-May period, plus US $600 million from 132 existing FDI projects that request to increase their investment capital.

Up to 83% of the total registered capital from the newly licensed projects is invested in the service sector. Southern Ba Ria-Vung Tau province took the top position in the country in terms of FDI attraction in the January-May period with a US $4.2 billion Ho Tram tourism and entertainment project invested by Canada’s ACDL Group

Banks get ultimatum

Tuesday, May 27, 2008
The State Bank has warned commercial banks which set mobilisation interest rates “too high” could be punished. Early last week, after the State Bank released new regulations on interest rate management which allowed commercial banks to set mobilisation and lending interest rates not exceeding 150% of the State Bank’s 12% base rate, some banks raised interest rates to the 18% limit. In response, the State Bank sent warning documents to the Bank for Agriculture and Rural Development (Agribank) and Nam Viet Joint Stock bank (Navibank) asking the banks to lower their rates.

According to a State Bank official, if the mobilisation interest rate is set at 18% per year the lending rate should be around 22% to be profitable to a lender. “Thus, setting rates at 18% per year could imply that the bank is in a serious capital shortage or it would have to lend at rates higher than 18% limit,” said the official.

So far, Agribank and Navibank have reduced mobilisation rates to common levels with other peers. At the same time, almost all banks are setting mobilisation rates at around 14-15 per cent. The Southeast Asia Joint Stock Bank (SEA Bank) has offered the highest rate so far at 15.6% per year for 14-month deposits.

Last week, the State Bank also released Official Letters 4426 and 4428/NHNN-VP requesting the State Bank’s branches to strengthen its supervision of commercial banks’ mobilisation and lending services. “Any violation regarding mobilisation and lending at interest rates over 150% of the base rate should be punished and reported to the State Bank. The credit institution that violated the regulation should be investigated accordingly,” the documents stated. (Dau Tu)

HOSE informs temporary trading suspension on May 28

Wednesday, May 28, 2008
In the afternoon of May 27, Ho Chi Minh City Stock Exchange sent an urgent announcement to securities member companies, informing that trading activities will continue to be halted on May 28 session.

The southern bourse announced on its website that its decision to temporary suspend trading activities on May 28 has been approved by the chairman of the State Securities Commission.

The temporary trading suspension is needed as HOSE technicians need time to discover the cause of the technical incident that affected the trading system at 8.53 am May 27th, 2008 and solve the problem.

All transactions on May 27 session on HOSE were cancelled due to an traordinary technical incident which affected the trading system at 8.53 am, May 27th, 2008.

This is the third time the HOSE trading system has experienced technical difficulties. The other two incidents occurred in February 2, 2007 and December 8, 2006.

US Investors will return from holiday with same fears

Tuesday, May 27, 2008
The three-day weekend probably didn't bring much relaxation to investors if they stopped at a gas station on the way to the beach or a barbeque. With the average roadside price of gasoline pushing $3.88 a gallon — and going for well over $4 at filling stations in some parts of the country — energy prices have become a prime worry in the stock market.

That's not to say other concerns have dissipated. As Wall Street heads into this shortened week, it remains anxious about the still-slumping housing market, not to mention the ailing financial services sector. But so much of the economy's performance later in the year will depend on energy costs, so the focus will be on crude until investors see a substantial price retreat.

What's particularly troubling about oil's rise is that everyone knows it will affect the economy, but no one is sure exactly how. Experts are split over whether it will cause broad-based inflation, further economic weakness, or both at the same time.

None of these scenarios are good ones. And the fact that the Federal Reserve says its monetary policy will likely remain on hold until it's clear which situation plays out was a big reason the stock market did so poorly last week. The Dow Jones industrial average dropped 3.91%, while the Standard & Poor's 500 index fell 3.47% and the Nasdaq composite index declined 3.33%.

To be sure, expensive oil isn't necessarily destructive in the long term. If the economy holds up, U.S. consumers may be able to gradually adapt their behavior and spending — a trend that could end up actually controlling inflation.

"There are definitely signs that the high price of crude is destroying demand bit by bit," said Craig Peckham, market strategist at Jefferies & Co. "At this point, we're seeing an economy that is experiencing a headwind from the high price of crude, which at the end of the day could act as a natural regulator of the economy."

But among stock investors right now, "inflation fears have been trumping relatively benign growth numbers," he said.

This four-day week will bring a variety of economic readings on the housing market, consumer spending, business spending, and manufacturing.

On Tuesday, the Commerce Department releases its April data on new home sales, expected to show a decline from March sales, according to economists surveyed Friday by Thomson Financial/IFR. Also Tuesday, the Conference Board's consumer confidence index for May is anticipated to edge lower, too.

Wednesday, the Commerce Department reports on orders for durable goods, which are essentially big-ticket items ranging from cars to refrigerators to computers. April's durable goods orders are expected to have dipped by 1.1% after rising by 0.1% in March.

Then Friday, on top of data from Chicago purchasing managers on manufacturing and from the University of Michigan on consumer sentiment, the Commerce Department will report on personal spending. Economists predict spending rose 0.2% in April, compared with a 0.4% increase the previous month.

That report will include the closely watched personal consumption expenditures deflator, which is a measure of inflation at the personal level. Economists, on average, expect that it was steady in April at an annual rate of 2.2%.

Investors should get an additional sense of how consumers are spending their money in earnings reports this week from Borders Group Inc., Costco Wholesale Corp., Dell Inc., Sears Holdings Corp. and Tiffany & Co. (AP Business)

European, Asian markets mixed despite inflation concerns

Tuesday, May 27, 2008
European stock markets edged higher Monday after key Asian markets fell amid worries about high oil prices and the U.S. economy on a day when U.S. markets were closed for the Memorial Day holiday. Key stock market indicators edged up in Germany and France but the main market gauges fell more than 2% in Japan and Hong Kong after the Chinese government announced an overhaul of its telecommunications sector.

Crude oil futures rose to a record above $135 a barrel last week and were trading above $133 a barrel in electronic trading on Monday after militants in Nigeria said they destroyed an oil pipeline and killed 11 soldiers. The government said none of its troops had died.

In Germany, the DAX was up 0.1% at midday to 6,953.27 amid light trading, a reflection of the bank holiday in the U.S. and United Kingdom, traders said, though automobile stocks like Daimler AG, BMW AG and Volkswagen AG all posted declines after crude oil prices rose higher in trading.

Shares of Daimler were down 1.35% while BMW slipped 1.3%. Volkswagen, Europe's biggest automaker by sales, saw its shares slip 0.88% in late afternoon trading.

In France, the CAC-40 was up 0.28% to 4,947.36, led by France Telecom, which rose 2.2% on news that Finland may be willing to sell its stake in TeliaSonera, the Swedish-Finnish telecom giant.

In Tokyo, the benchmark Nikkei 225 index dropped 2.3% to 13,690.19.

"What underlined selling was ongoing concern over inflation as oil prices still remained very high," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC Co. in Tokyo.

Hong Kong shares were dragged down by a plunge in China Mobile, the mainland's largest mobile service provider, on worries about increased competition after China announced that it was restructuring its telecommunications sector. The blue-chip Hang Seng Index fell 2.4% to 24,127.31.

Traders said turnover has been relatively low lately, indicating trade would remain sluggish in the near future, as oil prices are likely to climb further and the U.S. economy slows.

"Trading is sluggish, as there's no clear picture for both local and regional markets," said Linus Yip, a strategist at First Shanghai Securities.

China Mobile shares tumbled 8.2%. China's three other Hong Kong-listed telecom operators — China Unicom, China Netcom and China Telecom — are also involved in the restructuring, but remained suspended from trading Monday.

On the Chinese mainland, the Shanghai benchmark index fell to a one-month low on renewed worries over further monetary tightening. The benchmark Shanghai Composite Index fell 108.55 points, or 3.1%, to 3,364.54, the lowest since April 23.

Financial shares were among the worst hit, with Haitong Securities plunging by the daily 10% limit and Industrial & Commercial Bank of China sinking 3%.

The Australian share market fell for a third day to an almost three-week low on concerns higher crude oil prices, a stronger Australian dollar and inflation will crimp economic growth and company earnings. The benchmark S&P/ASX 200 index dropped 1.1% to 5,707.

Pakistan's benchmark stock index plunged to its lowest level in eight months amid investor anxiety over political and economic uncertainty. The 100-share benchmark index at the Karachi Stock Exchange tumbled 3.3 percent to 13,011.74, the lowest since Sept. 11, 2007.

In currencies, the dollar was quoted at 103.43 yen midafternoon in Frankfurt, up from 103.28 yen in New York late Monday. The euro stood at $1.5771, compared with $1.5770 in New York. (AP)

Brewer Habeco to adjust chartered capital

Tuesday, May 27, 2008
The deputy prime minister Nguyen Sinh Hung recently singed the Decision No 575/QD-TTg adjusting the chartered capital mechanism for Hanoi Beer, Alcohol and Beverage Corp (Habeco).

According to the government's adjustment, the state will hold 189,592,400 shares or 81.79% of chartered capital, 1,290,200 preferential shares or 0.56% will belong to the company's employees, 36.55 million preferential shares or 15.77% for strategic investors and 4,367,400 shares or 1.88% of chartered capital will be sold to the public.

The government also required the Ministry of Industry and Trade to organise the first shareholders' meeting to set up Hanoi Beer, Alcohol and Beverage Corp and give supplementary for its trade name according to the law.

Tan Dai Hung Plastic producer reports performance

Tuesday, May 27, 2008
Tan Dai Hung Plastic Joint Stock Co recently reported that last year it gained 8.677 tonnes of plastic in output bringing in the total revenue of 290.146 billion dong and 8.776 billion dong in after-tax profit. The figures are expected to reach 7,000 tonnes, 243 billion dong and 21.1 billion dong this year.

Out of the after-tax profit of 8.776 billion dong, 438.810 million dong will be added to the company's finance preventive fund, 877.620 million dong for welfare fund, 7.28 billion dong will be shared under a dividend of 7% in cash to the shareholders and the unallocated 176.776 million dong will be transferred to 2008.

In addition, the company will offer 10.4 million shares worth 104 billion dong from the surplus capital to existing shareholders with a ratio 1:1 whereby total shares will be 20.8 million shares.

Sacombank and ANZ to launch card alliance

Tuesday, May 27, 2008
Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank) is completing last proceedings with Australia and New Zealand Bank (ANZ), Sacombank's strategic partner, to debut their card alliance.

The group expected to receive the license to set up the card alliance with the total initial capital of US$20 million within this quarter. As the plan, Sacombank Group will hold 60% of capital and the remaining 40% belonging to ANZ.

According to Dang Van Thanh, Sacombank Group's chair, the alliance will apply absolutely secure management mode for card system through the network. Thanh added the alliance would create strength position for the group in issuing and expanding the market share of cards.

Up to the end of April, Sacombank has had 315 ATM machines through the network. The bank has also launched 2,000 POS in most of trade centres, restaurants and hotels.

Gold import spending estimated at US$1.5b in Q1

Tuesday, May 27, 2008
During the first quarter of this year, Vietnam's total gold import spending was up to US$1.5 billion, accounting for 50% of the year's gold import quota. If the country imports within limit of 70 tonnes of gold in this year, import spending could be US$2.6 billion, reported the Ministry of Finance (MoF).

One of main reasons making the strong increase of gold import is related to the gold fever and investment situation of population as well as the changes of reservation portfolios of financial institutions.

Thus, MoF made a decision to increase the gold import tariff from 0.5% to 1%.

The decision will take effect from May 26.

Indochina Capital names Mahony as fund manager

Tuesday, May 27, 2008
Terry Mahony, who is currently serving as a non-executive director of Indochina Capital Viet Nam Holdings, has been appointed an executive member of the management of the entity that manages the fund. He will remain on the board of directors of the fund itself. The new appointment is effective June 2.

The closed-end fund, listed on the London Stock Exchange, provides institutional investors exposure to prelisted equity, state-owned entity equity, listed equity, fixed income, short-term instruments and other investments in Vietnam, where it has a nine-year track record.

In his new role, Mahony will serve as co-CIO along with current CIO Tung Kim Nguyen. As well as help run money, he will also play an active role in training the next generation of equity managers at the firm.

"We have a wealth of promising talent available to us in Vietnam," says Peter Ryder, CEO of Indochina Capital Corporation, the parent of Indochina Capital Advisors, the company which manages the fund. "Working with someone of Terry's seniority and experience will accelerate their development." This will also free up Ryder's time to focus on the more strategic aspects of the business.

Mahony has lived in Asia since 1981 in several careers, many focused on emerging-market finance, interrupted by a stint running a Latin American fund for Baring Asset Management. He built HSBC Investments' global emerging-markets capacity in the early 1990s, and then did the same for Trust Co of the West and TCW Asia in the mid-1990s. Since 2000, he has been responsible for asset allocation for global institutional portfolios at Investment manager Selection, a role he continues. (Asian Investor)

State Capital reports 1tr dong pre-tax profit

Tuesday, May 27, 2008
The State Capital Investment Corp (SCIC) recently posted 1.15 trillion dong in revenue and 1.041 trillion dong from pre tax profit in 2007.

Last year, SCIC handed over 7.472 trillion dong of state capital for 845 enterprises. Of which, central departments and ministries transferred capital in 137 enterprises with the total capital of 4.714 trillion dong and provinces and cities was 708 enterprises with the total capital of 2.758 trillion dong.

SCIC sold the state capital part of 34 firms worth 73 billion dong and brought to the state 390 billion dong.

According to the prime minister's direction, recently SCIC bought shares in the stock market in order to stabilise the market situation. However, so far, the exact figures have not unveiled yet.

Central bank urged to cut reserve requirements to boost stocks

Sunday, May 25, 2008
The State Bank of Viet Nam (SBV) should reduce reserve requirements for banks to help stabilize the stock market, the Viet Nam Association of Financial Investors said.

Reserve requirements for commercial banks should be cut to 8% of deposits from 11% at present, the association said in a statement on its website.

The reduction will raise the supply of funds in banks, it added.

“Investors will be more ready to join the stock market then,’’ Nguyen Hoang Hai, general secretary of the association, said in a telephone interview Friday.

Vietnam’s benchmark stock index has fallen 50% this year.

Bank lending rose 14.7% in the first four months, according to the central bank, reaching almost half the 30% cap that the central bank imposed to rein in credit growth and tame inflation.

The investors association represents members such as fund managers and brokers, and its board includes former government officials. (Bloomberg)

Techcombank to raise $309 million via dong bonds

Sunday, May 25, 2008
Technological & Commercial Joint-Stock Bank, 15% owned by HSBC Holdings Plc, has obtained the central bank’s approval to mobilize VND5 trillion (US$309 million) by bond sales this year.

“We will sell debt in Vietnam to local and foreign investors,’’ Nguyen Duc Vinh, chief executive of the bank, commonly known as Techcombank, said this week.

“However, the timing and the way we sell has yet to be decided.’’

Techcombank’s pretax profit more than doubled to VND219.2 billion ($13.5 million) in the first quarter this year, from VND108 billion ($6.6 million) last year, on increased lending and currency trading.

Earnings from outstanding loans were VND25.8 billion, 134% higher than a year ago, the Hanoi-based bank said last month.

Revenue in the three months ending March 31 jumped to VND1.17 trillion, from VND505 billion ($31.1 million) a year earlier.

Total assets doubled to more than VND46.2 trillion ($2.8 billion) as of March 31.

Techcombank, the country’s seventh largest by assets, also plans to sell bonds to the foreign markets, Vinh said. (CPV)

Foreigners brave market nosedive to buy more shares

Sunday, May 25, 2008
Foreign investors showed great faith in Vietnamese stocks, heavily buying shares offloaded by local players this month, brokers said. The VN-Index of 154 listed companies on the Ho Chi Minh Stock Exchange tumbled every day over the past three weeks, losing more than 18 percent, to close at 428.05 points on Friday.

So far this year, the benchmark index has plunged 54% to take out the unfavorable honor of being the world’s worst performing stock market.

Despite the gloomy market that has prompted local traders to jettison their stocks, foreigners remained net buyers.

When the market retreated below 500 points on May 12, foreign traders pumped in VND54 billion (US$3.3 million) into shares.

On May 20, local investors continued their share selling frenzy, sending the VN-Index below another key resistance level of 450 points.

In contrast, foreigners bought shares worth VND19 billion ($1.19 million).

The index dropped further in the next trading day, with 140 stocks falling, as local traders kept bailing out of the market.

Foreigners again continued to defy local player’s panic, notching up shares worth VND19.2 billion ($1.2 million).

They bought shares worth VND65.2 billion ($4 million) on Friday when the VN-Index lost 6.7 points, or 1.54%, to close at 428.05.

Investment fund Anpha Capital Managing Director Louis Nguyen revealed his fund had only lost around 2% over the first three months of the year.

His fund had entered the share market relatively late, favoring other investments in the early months of the year.

Profits from these investments had helped his fund avoid heavy losses, he said.

Despite expecting his fund’s losses from stocks to increase as the market’s free-fall continued, Nguyen said shares were becoming very attractive.

He said Anpha Capital was eyeing shares of five or six companies, which had good earning reports.

Another director of a foreign-owned investment fund in HCMC, who did not wish to be named, said his fund sustained fairly heavy losses as the market slumped this year.

However, he said his fund will still buy more shares on both formal and informal markets.

“We planned to pump more money in the market when it fell below 500 points.

But it kept on falling further, so we decided to wait for a suitable time,” he said.

Healthcare stocks attract investors

Healthcare stocks have moved to centre stage, receiving increasing investor attention in recent weeks. "Healthcare enterprises always post steady profits, even when the economy faces tough times," said Bien Viet Securities Co deputy director Vu Duc Nghia.

The Viet Capital Fund Management Co has also opened a fund dedicated to the sector. The Viet Capital Healthcare Fund targets investments in pharmaceutical, hospital/high-tech clinic, medical device and hospital service stocks.

The fund has total capital in the first stage of VND500 billion (US$31.25 million) with potential for further expansion and is currently open to domestic institutional investors which are reputable enterprises or financial institutions.

"The fund aims not only for long-term, sustainable profits with minimised risks for our investors, but also for opening up a new direction in areas with significant socio-economic benefits," said fund director Pham Gia Tuan. "It will also encourage the introduction of state-of-the-art diagnostic and treatment technology accompanied by high quality services for the Vietnamese people, reducing the burden on the public health sector."

According to analysts of the Viet Capital Fund Management Co, national spending on healthcare in Viet Nam is lower than in other nations, suggesting high potential for this sector’s further development.

Spending on healthcare in Viet Nam is only 1.48 per cent of GDP, while in Thailand it’s 6 per cent and in the US, 15.3 per cent.

Stock brokerages have also found that price-per-earning ratios for healthcare stock were currently around 24, compared to a total market average of 12-13.

"This rate is promising for investors in the future," Nghia said.

An anonimous teacher from the National Economic University noted that the high P/E rate was not decisive for the change of investors into healthcare stocks.

"Traders may be afraid of earning money from hot stocks like property or banking, and then losing it," he said. "Then they change to healthcare stocks."

Domestic pharmaceutical producers were still overdependent on imported materials, making it hard to keep a lid on drug prices, he said.

"But despite that, pharmaceutical enterprises still have a stable market which is enough to ensure investors a steady profit. Less is sometimes more."

Wall Street faces bleaker picture amid oil surge, hawkish Fed

Sunday, May 25, 2008
As Americans kick off vacation season, Wall Street is bracing for a darker outlook with surging oil prices likely to crimp an economic recovery and the Federal Reserve sounding increasingly hawkish.

The stock market, which had been on a strong run in April and early May, now looks increasingly fragile, analysts say.

The Dow Jones Industrial Average took a drubbing in the week to Friday, losing 3.9% to end at 12,479.63 ahead of the three-day US Memorial Day holiday weekend.

The Standard & Poor's 500 broad-market index slid 3.47% to 1,375.93 while the tech-led Nasdaq composite retreated 3.33% for the week to 2,444.67.

The market's tentative rally began to unravel in the past week as crude oil shot past 130 dollars a barrel for the first time ever and briefly hit 135 dollars.

To make matters worse, the markets got a clear message from the Fed that it would not lower interest rates further without a "significant" weakening of the US economic outlook.

That came in minutes from the April Federal Open Market Committee meeting, which indicated that the decision to lower the base rate to 2.0% was "a close call."

Deutsche Bank economist Joseph LaVorgna noted that the Fed's inability to keep stimulating gross domestic product (GDP) growth with rate cuts could mean deeper trouble as energy prices surge.

"The record high made in oil prices seriously complicates the economic outlook," he said.

"Higher energy costs raise the risk of higher headline inflation, lower GDP growth and a Fed which cannot further cut rates for fear of unhinging inflation expectations."

Ed Yardeni at Yardeni Research warned: "If oil prices continue to super-super spike, the outlook for both US and global economic growth would deteriorate."

"Stock prices aren't going up again until oil prices start coming down," he added.

The remaining hope for the markets, the prospect of rate cuts from the Fed, now seems increasingly remote, say analysts.

"The Fed has sent a clear message that it's not inclined to cut rates in June even if the economic picture continues to darken," said Avery Shenfeld, economist at CIBC World Markets.

"Such a darkening seems likely in the coming week's data, with ugly news on house prices, home sales, durable orders and personal income ... Add in soaring gasoline prices, and both equity markets and the dollar could be in for a tough week."

Despite the increasing gloom, market watchers say the stock market may be able to regain its footing, especially if there is some moderation in oil, which according to some is showing signs of a speculative bubble.

Al Goldman at Wachovia Securities said the market could see a rally this year if investors begin to put more cash to work.

"There is a ton of cash on the sidelines receiving a low rate of return," he said.

"Nothing motivates sidelined cash to buy stocks more than a rising stock market. Also, gloom is still pretty thick among investors, which creates the 'wall of worry' that bull markets classically climb. And every clear-thinking person knows that after a recession or economic hard times come economic recoveries."

Bonds edged higher over the past week. The yield on the 10-year Treasury bond fell to 3.831% from 3.850% a week earlier and that on the 30-year bond eased to 4.557% against 4.579%. Bond yields and prices move in opposite directions.

Data due in the holiday-shortened week include a report from the Conference Board on consumer confidence on Tuesday, and an update on first-quarter economic growth on Thursday. Friday, the government releases data on April income and spending, keys to economic activity looking forward. (AFP)

Tan Tao Group to built large urban area in Kien Giang

Sunday, May 25, 2008
Tan Tao Group has started construction of the Hai Au urban area in the An Hao precinct of Rach Gia in the Mekong province of Kien Giang.

Thai Van Men, General Director of the group, said the project is under the auspices of the program to develop the coastal urban areas of the province. It will be built in an area of 199.7 ha, with a total investment of 1,500 billion VND.

The project of luxurious villas, resorts and trade centres is expected to be a new attraction to visitors, with diversified cultural and art activities.

Tan Tao group, specialising in constructing industrial zones and urban areas, built the 4,400 MW Kien Luong thermo power project, which is considered one of the largest thermo power projects in Viet Nam. (NLD)

VIB Bank forecasts profit rise, plans '08 listing

Friday, May 23, 2008
Viet Nam International Commercial Joint Stock Bank (VIB Bank), the country's eighth-largest lender, projected on Friday that its gross profit would jump 65% this year to 700 billion dong.

The Hanoi-based bank said in a statement it would issue new shares to raise its registered capital by 50% to 3 trillion dong, sell part of the issue to foreign investors and consider listing on the Ho Chi Minh Stock Exchange this year.

The stock market has fallen 54% this year, closing down 1.54% at 428.05 points on Friday. The bearish trend has made many listed firms reluctant to go ahead with their new share issues planned this year.

VIB, worth $180 million based on its $0.9 share price it trades at on the unofficial, unregulated market, has also projected raising its assets by 32% to 52 trillion dong by the year-end.

All the targets have been approved by shareholders on Wednesday, the statement said. It did not name foreign candidates who would buy VIB shares.

Vietnam's central bank plans to keep the country's credit growth at 30% this year after loans jumped 54% last year. The economy expanded 8.5%.

VIB said its audited net profit more than doubled to 306.5 billion dong last year and total assets also soared to 39.32 trillion dong from 16.6 trillion dong in the previous year.

VIB's plan to sell a stake to foreign investors follows eight other partly private banks, half of them have each sold a 15% stake to a foreign bank in the past several years. The four others sold 10% each.

The government caps foreign ownership in a domestic bank at 30% and limits strategic investor ownership to 15%.

Now only Ho Chi Minh City-based Sacombank and Asia Commercial Bank among Viet Nam's 36 partly private banks have shares traded on the country's stock markets.

VIB was founded in early 1996 by a number of institutions, including state-run Agribank and Vietcombank, as well as private businessmen. Vietcombank, the country's third-largest lender, owns 2.45% of VIB.

May 23, Foreigners Net Buyers Of VND57 Billion Shares

Friday, May 23, 2008
Foreign investors were net buyers of VND57 billion ($3.56 million) of Vietnamese stocks Friday, out of a total VND267 billion traded, the Ho Chi Minh Securities Trading Center said.

Volume traded totaled 4.95 million shares, with foreigners accounting for 31% of the total, according to the stock market operator. (Dow Jones)

Gold makes a comeback on higher oil, anemic dollar

Friday, May 23, 2008
Gold makes a comeback on higher oil, anemic dollarGold prices surged by over 2% Wednesday, in the process waking up a market that had gone into slumber for a while. Saigon Jewelry Company (SJC) gold went up to VND18.27 million (US$1,134) per tael (37.5 grams) in the morning and continued to move up to close at VND18.31 million ($1,137), a one-day gain of VND380,000 ($23).

Trading volume at the Saigon Gold Exchange jumped by 5.3% to 383,700 taels worth more than VND7 trillion ($435 million).

A HCMC trader said he would have earned VND52 million ($3,200) Wednesday if he had sold the 100 taels he bought last Friday.

“But the price will possibly move up in the coming days, so I won’t sell now,” he said.

Nguyen Thi Cuc, deputy general director of Phu Nhuan Jewelry Company, said the recent hike in gold price had slowed down sales of jewelry and boosted trading in mini gold bars this month.

She also said the firm sold 3,850 taels and bought 2,610 during the day.

An SJC representative said his company sold 2,000 taels and bought 5,000 on the same day.

Internationally, the precious metal moved up to $925.25 per ounce from $920.

It has soared 6% in the last four days.

Experts from the Vietnam Export Import Commercial Joint Stock Bank, or Eximbank, said the gold price gain was sparked by growing inflation worries after oil climbed to a new record high.

Oil prices soared past $130 a barrel for the first time amid anxiety about stretched supplies and strong demand for energy, and a weakening dollar, AFP quoted analysts as saying.

A weakened dollar also gave gold some lift as investors across Asia gained more buying power against US dollar-denominated bullion, Reuters said in a report Wednesday.

“The combination of oil and the currencies spells more interest in gold,” the media quoted a metals dealer at an Australian bank as saying, adding there was a risk profit-takers could take some of the air out of the rally if the dollar regained some strength.

Banks mobilize gold

After the central bank abandoned the 12% deposit interest rate cap last Saturday, local banks have pushed up the gold deposit interest rate alongside the dong and dollar rates.

Eximbank has raised its gold deposit interest rate by 1.5% per year across the board.

The lender is offering 3.5% per year for one-month deposits, rising all the way up to 5.5% for 12 months.

Housing Development Bank has raised its three-month term deposit rate from 4.5 to 5.5% per year.

Huynh Trung Khanh, vice chairman of the Viet Nam Gold Trading Association, said the banks raised the interest rates in the hope of selling gold abroad to mobilize more dollars.

Vinamilk to list in Singapore in H2

Friday, May 23, 2008
Vinamilk, Viet Nam's leading dairy processor, will list on the Singapore Exchange Limited (SGX) in the second half of this year, while several other Vietnamese giants will likely follow suit, an executive of the exchange said here on Wednesday.

Simon Lim Yong Hiang, Listings Director of SGX, told a seminar on Wednesday at the New World Saigon Hotel that paperwork for Vinamilk listing was being finalized.

"Vinamilk is now close to completion, and we expect the listing will come in the second half of this year. Other companies Kinh Do Corp. and Saigon Securities Inc. will also join the process soon," he said, adding several other Vietnamese companies from manufacturing, real estate and financial areas are also eyeing the chance there.

Singapore has two securities platforms - the Main Board and the Catalist, the latter being launched in last November. Given the current distressed situation of the financial sector in Vietnam, listing in Singapore can be a good choice as this will give them another gate to the capital pool.

"Singapore Exchange is the gate to the capital pool in Asia as we are open to many economies like Japan, Hong kong, South Korea, India and China among others," Lim said.

Regarding Vietnam's current bearish stock market, Lim said he is still optimistic as ups and downs are normal phases of an emerging market.

"Vietnam is not the unique case. It happens around the world. In my personal viewpoint, it will come back again soon" he told the gathering.

The seminar was held on the occasion the Hochiminh Stock Exchange, Hanoi Securities Trading Center and SGX signed a memorandum of understanding on promoting cooperation. The event was co-organized by State Securities Commission, ICH-Singapore and Alliance Group. (SGT)

Restrain credit growth, but do it step by step: WB

Friday, May 23, 2008
It is necessary to restrain credit growth, but this should not be done too rapidly, Chief Economist of the World Bank in Viet Nam Martin Rama said.

In a recent interview with Tuoi tre newspaper, Mr Rama said that Viet Nam’s economy is now safe thanks to the state’s policy of prioritising macroeconomic stability.

The big trade deficit may be a disadvantage to the national economy, but exports have also been increasing considerably. Viet Nam is now benefiting from the world’s food price increases. The stock market is sliding with few transactions, but it will recover, sooner or later.

When asked to comment about the country’s interest rate policy, Mr Rama said that the World Bank supports the government of Viet Nam’s policy to restrain the credit growth rate as the credit has been overly hot. However, he stressed that this work should not be carried out too rapidly as it could shock people and businesses. The government should explain to people about what it is doing and what it aims to do.

He said that interest rates are now overly high. The inflation rate is now at 21%, which includes the prices of food, which are always high and unstable. Meanwhile, non-food price increases are now at some 10% only, and he said that the government should consider the non-food price increases to define suitable interest rates.

“Interest rates should be bearable for businesses. The government should avoid setting overly high interest rates,” Mr Rama said.

The sharp credit growth reduction may badly influence payment capability. The government wants to reduce the credit growth rate from 58% in 2007 to 30% in 2008, but everything should be done in a suitable way to reach the soft credit growth reduction.

Viet Nam seems to be going in the right direction to overcome current difficulties: i.e. it has good policies. However, it will still need good skills to resolve its difficulties.

The World Bank highly applauds the government’s policies on prioritising macroeconomic stability and reducing public expenditures. However, it will be very difficult to implement set policies, and Viet Nam will certainly meet challenges on its way.

In fact, challenges in macroeconomic management skills prove to be a part of development. Viet Nam has never before had to face such a large volume of portfolio investment capital and large number of banks (100) as nowadays.

Mr Rama said that the policies on macroeconomic stability are good; one the other hand, he stressed, Viet Nam still needs to think of longer-term reforms. For example, there are latent risks for economic groups investing in the real estate sector.

It is clear that Viet Nam’s system of managing portfolio investment remains problematic. It can reckon the money inflowing into Vietnam, but it does not know if the capital is short- or long-term. Meanwhile, the State Bank of Viet Nam should know when and how much money has come in and whether the money will stay in Viet Nam or be withdrawn a short time later. (Tuoi Tre)

La Nga Sugar chairman gives up position

Friday, May 23, 2008
Chairman and General Director of La Nga Sugar Company Pham Nhu Hoa has resigned from his post after the company’s shareholders’ meeting concluded that he caused the loss of VND7bil to the company due to unprofitable securities investment deals.

Hoa was discovered to have used VND17.7bil of the company’s money to make investments in securities without getting permission from shareholders.

Acting Chairman of the Management Board of the Sugar Corporation II Tong Thong has been appointed the new chairman of La Nga Sugar Company, while Deputy General Director of La Nga Sugar Company Tran Van Nga will become the new General Director.

At the shareholders’ meeting, the La Nga Sugar Company’s Supervision Board reported that the sum of money Hoa injected in the shares of 10 securities companies had decreased by nearly VND7bil by April 17 (the time when the case was discovered) due to the market’s falls.

Hoa admitted his mistakes to the shareholders, saying that he did not follow the necessary administrative procedures (he did not get permission for investments from the management board) when using the company’s money to invest in securities.

Hoa suggested using his own money to compensate the company for 3% of the losses caused by the securities investment deals. The shares will be all sold later when the stock market recovers, to take back capital.

Prior to that, in early May, during a working session with the management board and representatives of shareholders, Hoa also admitted mistakes and proposed his resignation.

La Nga Company’s shareholders were split when they were asked to decide whether to sell shares to take back capital right now, or sell later when the prices go up again. 45.49% of shareholders agreed to sell later, while 54.27% do not want to keep the shares indefinitely. However, as the votes were less than the necessary proportion of 65%, the problem still needs the opinion of the 2008-2012 term management board to be settled.

Meanwhile, 96% of shareholders did not agree with the proposal by Hoa to pay 3% of the loss (the share price decrease) with his own money.

Foreign strategic investors still bullish on local banks

Friday, May 23, 2008
Overseas financial institutions are increasing their stakes in domestic commercial banks even as shares in these banks have underperformed, following the overall downward trend of the nation’s stock market.

Earlier this year, London-based Standard Chartered increased its stake in Asia Commercial Bank to the 15-per-cent maximum that a foreign strategic investor is allowed by law to hold. Meanwhile, Singapore’s OCBC is obtaining regulatory approval for its acquisition of 15% of Viet Nam’s VPBank.

Most recently, the State Bank of Viet Nam granted special approval to Eximbank to sell 25 per cent of its shares to four foreign strategic investors, including Japan-based Sumimoto Bank.

"Not counting the credit problem which your domestic banks are facing, the banking sector in Viet Nam has many opportunities to develop more strongly in the future," said John Nolan, an analyst with a HCM City fund management board.

Foreign investors can see this potential more clearly than local stock traders, Nolan said, because they are experienced in other stock markets.

They were attracted by the good business performance of domestic banks even as banking stocks have been declining.

"During the first quarter of this year, business performance of domestic banks was quite good, and these are the factors on which foreign institutions base decisions to pour money in," Nolan said.

Sacombank in the first quarter of this year posted a profit of VND435 billion (US$27.18 million), a year-on-year increase of 44 per cent. VPBank in the same period earned VND105 billion in profits.

"Compared with previous years, these profit figures are lower. But, at a time when inflation is high and credit growth slowing, these profits sounded fine," Nolan said.

"The investment of four financial institutions in Eximbank is an example. It’s clear that those partners have seen the financial capacity of Eximbank," he added.

Now, domestic commercial banks were entering another potential, highly-publicised interest rate war, giving them an opportunity to draw even more attention from foreign institutions.

Independent analyst Nguyen Tien Dung said, "In competition, the banks with strong financial power will survive and thrive, while the others will go bankrupt or be acquired by larger banks."

This would lead to even higher quality commercial banks in the future, Dung said, as well as better prices for banking stocks. (VNS)

Investor fined for rigging Sacombank's shares price

Friday, May 23, 2008
The State Securities Commission (SSC) Wednesday slapped a fine of VND100 million (US$6,250) on a trader for unduly “influencing” the Ho Chi Minh City stock market.

Truong Dinh Khoi regularly placed huge buy and sell orders for Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank - coded STB) between January 28 to February 22.

Between just February 20 and 22, for instance, placed sell orders for 1,252,100 Sacombank stocks, accounting for 13.32% of the market volume.

He placed 107 sell orders, switching from negotiated settlements to order-matching to create new opening and closing prices for the stock, causing fluctuations in both its price and the VN-Index.

Dong-Dollar Rate May Balloon to VND17,000/USUS$1 Soon-Report

Friday, May 23, 2008
Viet Nam dong may depreciate to VND17,000/US dollar or more in the coming days after it set a new record high over the past two weeks due to thin greenback supply in the foreign exchange market and soaring demand of local importers, the state-run Tuoi Tre (Youth) newspaper said on May 19.

A banker said higher VND/U.S. dollar was largely attributed to higher demand of local importers and foreign banks. Foreign banks buy greenback to sell back to their clients while local importers need more greenback to import gold and other essential goods, the Viet Nam Investment Review newspaper said.

A Ho Chi Minh City-based bank director said speculation was also in part blamed for current inflating rate in Viet Nam.

The current situation is contrast to two months ago when greenback keepers were pushed to sell and banks were reluctant to buy, causing the rate to drop to VND15,300/U.S. dollar.

To cope with the situation, the State Bank of Viet Nam May 18 decided to abolish the ceiling interest rate of 12 per cent per annum and apply a new cap on commercial loans at 18% per annum, and increased base rate to 12% per annum from 8.75%, the Viet Nam Economic Times newspaper said.

Liquidity crunch signals are seen in Viet Nam’s banking sector and the Southeast Asian country is forecast to incur current accounts deficit to jump 19% of its GDP this year and the following years, the newspaper noted.

Viet Nam imported more than US$1.2 billion worth of gold in the first months this year, and total gold imports could reach US$4 billion for full year.

Viet Nam to Re-check Foreign Indirect Investment

Friday, May 23, 2008
The Ministry of Finance has proposed the State Bank of Viet Nam (SBV) coordinate with the ministry in re-checking total foreign indirect investment capital to help complete the draft regulation on foreigners’ transactions in Viet Nam’s stock market.

In an effort to foster the plunging stock market, the Finance Ministry proposed that the SBV should temporarily relax the supply of capital for the stock and property markets, the newspaper said.

The SBV is also asked to re-check total loans in foreign currencies and short-term loans.

The draft regulation on foreign securities transactions will give mechanism for foreign investors to make reports about indirect investment capital automatically. It will enable foreign investors to set up 100% foreign owned fund management companies in Viet Nam sooner than the country’s WTO commitments. (Securities Investment)

Card payment system connection makes debut

Friday, May 23, 2008
Customers of Viet Nam’s five major banks can now withdraw money from other banks ATMs, thanks to the connection of Viet Nam ’s two largest ATM card payment systems. The State Bank of Viet Nam (SBV) on May 23 officially launched the connection of Banknetvn and Smartlink to promote cross-bank ATM transactions.

Previously restricted to withdrawing money from their own bank’s specialised ATM, now customers can withdraw money from any of the five participating bank’s ATM’s - the Bank for Foreign Trade (Vietcombank), the Bank for Agriculture and Rural Development (Agribank), the Bank for Investment and Development (BIDV), the Industrial and Commercial Bank (Vietinbank) and Technological and Commercial Joint Stock Bank (Techcombank).

According to SBV Deputy Governor Nguyen Toan Thang, the connection of the two ATM card alliances, which hold 80% of the country’s card market share, is the premise for a nationally connected card system in the future.

By March 2008, the five above banks’ total ATMs numbered over 3,600, accounting for 64% of ATMs in the Vietnamese market. Their total number of issued cards was 8.6 million, making up 80% of the local market’s cards.

Banknetvn and Smartlink plan to cooperate in connecting with remaining member banks by the third quarter of this year.

At that time, the two card alliances will have more than 4,500 ATMs, accounting for about 80 percent of the domestic market.

SBV’s Payment Department Head Bui Quang Tien says Vietnam issued over 10 million payment cards by the first quarter of 2008.

He said the country strives to have 15 million issued cards and the rate of cash payments below 18 percent by 2010.

The respective figures will be 30 million cards and under 15% ten years later. (VNA)

Bao Minh Insurance moves to legal Microsoft software

Friday, May 23, 2008
The Bao Minh Insurance Joint Stock Corporation is set to have an information technology overhaul based on state-of-the-art Microsoft technology.

Bao Minh signed the upgrade deal with FPT Information Systems, a Microsoft partner and subsidiary of the Corporation for Financing and Promoting Technology (FPT), in Ho Chi Minh City on May 21.

FPT’s Ho Chi Minh City branch and Microsoft Vietnam will be responsible for the IT overhaul, making Bao Minh a national pioneer in implementing company-wide copyrighted software.

Microsoft Vietnam General Director Christopher Desriac applauded the company’s move to apply copyrighted software and said he hoped more local businesses will abide by the copyright law, thereby improving their international competitiveness.

Viet Nam Banks More Cautious, HSBC Country Head Says

Friday, May 23, 2008
Vietnamese banks are becoming more cautious in lending to industries such as real estate as rising interest rates increase the risk of defaults, said the head of HSBC Holdings Plc's operations in the country.

``With interest rates going up, liquidity being tight, it's only prudent to constrain lending to those with fundamental projects rather than to speculative purposes such as property development,'' Thomas Tobin, HSBC's chief executive officer in Viet Nam, said in a phone interview yesterday.

The benchmark stock index has fallen for 15 straight sessions, tumbling 18% since April 29, as concern mounted that soaring interest rates will cripple Viet Nam's economic expansion. Banks are forced to extend loans at rates as high as 22% to make a ``meaningful profit,'' fund manager Vinacapital Investment Management Ltd. said last week.

Viet Nam's credit growth reached 50% last year as banks extended loans to retail investors for buying securities while a real estate boom fueled demand for mortgages. The credit expansion, coupled with rising commodity and energy prices, pushed inflation in the Southeast Asian nation to the highest in at least 15 years.

Prime Minister Nguyen Tan Dung this week told the nation's central bank to focus interest-rate policy on fighting inflation, suggesting the government is more concerned about rising prices than economic growth. The central bank on May 19 boosted its base rate to 12% from 8.75%, and commercial banks raised borrowing costs the same day.

Viet Nam's Economy

HSBC, the world's third-largest bank by market value, owns 15% of Viet Nam Technological and Commercial Joint Stock Bank. The London-based bank in December 2005 agreed to pay $17.3 million for a 10% stake. It has agreed to raise the holding to 20 percent, pending government approval.

As loans dry up, the Ho Chi Minh City Stock Exchange's VN Index has tumbled 53% this year, making it Asia's worst performer. Residential prices in Ho Chi Minh City have dropped as much as 40 percent since the end of last year, according to Morgan Stanley.

Viet Nam's economy expanded 7.4% in the first quarter from a year earlier. Last year, gross domestic product grew 8.5%, the fastest pace since 1996.

`Good Story'

Viet Nam's ``strong growth potential'' hasn't been diminished by its current difficulties, Helen Qiao, an economist at Goldman Sachs Group Inc. in Hong Kong, said in a Bloomberg Television interview on May 21.

``Things are tougher than they were before, but Viet Nam really has a good story in the medium and long term,'' said Tobin, citing the nation's infrastructure and a young and skilled workforce.

Asia Commercial Bank has slumped 66 percent this year in Hanoi trading. Saigon Thuong Tin Commercial Joint-Stock Bank has fallen 60 percent in Ho Chi Minh. The two are the only listed Vietnamese banks.

HSBC isn't planning to take advantage of falling valuations to make acquisitions in Viet Nam, said Tobin.

``There probably are opportunities if you look at the prices,'' he said. ``We aren't really looking around.'' (Bloomberg)

May 23, Stock Market Continues Drop

Friday, May 23, 2008
The VN Index today closed the third decreasing week by seeing another 6.7-point fall or 1.54% to 428.05 pts with the total matching order trade of nearly five million shares and fund certificates worth 266.7 billion dong. After 15 declines, the VN Index lost 94.31 points in total.

Among 151 shares and three fund certificates being listed on the southern bourse, the stock market saw three shares increasing, three others stood still, five with no trades and 143 shares decreasing with most decliners reaching the floor price.

Three gainers were ICF up 200 dong, LGC added 800 dong and SGT jumped 700 dong per share.

Three others stood still at the comparative price namely CYC, marking the lowest trading price on the stock market at 10,200 dong per share, ITA and VPL.

Meanwhile, DPM lost 800 dong to 42,600 dong, STB slipped 500 dong to 25,400 dong, PPC dropped 600 dong to 30,900 dong and VNM down 2,000 dong to 112,000 dong per share.

VIC took the pole place in trading volume with 774,950 shares, SSI followed with 262,790, ANV with 241,850, HPG 202,170, DPM 159,700 and PVD with 119,810 and others like NKD, VHC and DPR.

Foreign investors bought 63 share codes and one fund certificate with the total volume of over two million shares. Of which, SSI reached the biggest trading volume with 481,590 shares, DPM with 355,670, ANV 241,740, HPG 201,500, NKD 115,100 and VHC with 104,190 shares being transferred.

The Hanoi Securities Trading Center (HaSTC) today May 23 kept decreasing impetus on the stock market by falling another 2.42 points or 1.86% to end at 127.93 pts with the total market trade of 700,400 shares worth over 17 billion dong.

Amongst 137 listed shares on the northern bourse, the stock market recorded three shares increasing while 101 others decreasing, four shares stood still and 29 shares with no trades.

Three shares increasing were L62 added 900 dong, YBC leaped 500 dong and DHI up 200 dong per share.

Four shares stood still namely CJC, KBC, LTC and S96.

MIC was the biggest loser when losing 2,700 dong and followed by ACB lost 1,600 dong, VSP down 1,500, BVS slipped 1,400, RCL and SCJ dropped 1,300 dong, NBC tumbled 1,100 and CDC, NTP and NVC plunged 1,000 dong per share.

TBC reached the biggest trading volume with 138,100 shares, others like QNC (48,700 shares), HNM (34,900 shares) and XMC with 28,400 shares being traded.

Stock market may stay low until third quarter

Friday, May 23, 2008
Price fluctuation is normal in every stock market and Viet Nam’s market may not recover until the third quarter, said stock market analysts.

The market has dropped so much that it is impossible for it to go down much further, an analyst said. This is a good time to buy in order to make a profit when the market goes up.

The problems in the stock market must be solved as stocks play an important role in attracting capital for many projects and allow state-owned companies to equitize.

Dr. Nguyen Van Ngai, head of the Economic Department of the Ho Chi Minh City University of Agriculture and Forestry explained for the poor performance of the stock market is due to a herd mentality that causes investors to simultaneously buy or sell shares in great amounts. This has deeply affected the stock market’s balance, causing it to fluctuate dramatically.

There are three reasons for the gloomy state of the market.

Most domestic investors are not yet able to analyze the market’s situation and fail to buy in or sell shares at the right time. The failure of some investors discourages their peers, so the stock market is unable to find new investors. Moreover, the fluctuating domestic and global economies create risk and make it more difficult to increase the demand for stocks.

As long as inflation remains high, the stock market will continue in its downward trek, said Dr. Le Vu Nam of the HCMC University of Economics. Moreover, the sluggish stock market will cause construction to stagnate, domestic business to deteriorate, slow the country’s economic growth, and make Viet Nam less attractive to foreign investors.

Therefore, drastic measures must be taken to regain the faith of investors. Inspections must be strengthened to ensure the transparency of the stock market and of trading activities. (Sai Gon GP))

Techcombank and HSBC complete ATM co-operation deal

Friday, May 23, 2008
Viet Nam Technological and Commercial Joint Stock Bank (Techcombank), Viet Nam’s third largest joint stock commercial bank by equity, and its strategic partner HSBC, one of Viet Nam’s leading foreign banks, have successfully linked their Automated Teller Machine (ATM) networks together to bring greater convenience to retail banking customers.

Currently, Techcombank has 260 ATMs around the country and HSBC has 57. By the end of 2008, the total number of machines in the shared network is expected to reach over 450. Over the coming three years, HSBC plans to invest approximately US$28.55 million to expand its self-service banking facilities in Viet Nam, including multifunctional ATMs that can take cash deposits.

The ATM linkage also aligns with the two banks’ strategy for retail banking development. With the ATM linkage, customers of both Techcombank and HSBC in Viet Nam who hold credit cards, deposit and current accounts will be able to withdraw cash and check their bank balances and latest transactions at either banks’ ATMs with ease. In addition, customers will be able to carry out these transactions absolutely free of charge.

Techcombank, long acknowledged as one of the most dynamic banks in Viet Nam’s retail banking market, has developed value-added products and services to serve individual customers, including its new credit card launched in March 2008.

Mr Nguyen Duc Vinh, President and CEO of Techcombank, said, “As one of the fastest growing banks in the country, we are glad to reach such an agreement with our strategic partner HSBC, which aligns perfectly with Techcombank’s retail banking strategy as well as our vision and mission for the development of the financial market in Vietnam. This ATM linkage agreement validates our efforts in expanding our ATM network, not only with domestic but also international ATM card alliances. We believe that this agreement with a major international bank such as HSBC is the first of many to come that will provide added convenience and accessibility to our customers in the banking sector."

Following the launch of credit cards by HSBC in March 2008, the shared ATM network demonstrates HSBC’s commitment to expanding within Viet Nam’s retail banking sector. The move is especially important to HSBC as it was the first bank to introduce ATMs in Viet Nam in 1996.

“The joint ATM network, a first for HSBC in Viet Nam, is the latest in a progressive series of developments that we have made to ramp up our personal financial services. We see ATMs as a core aspect of our retail banking services and we believe such a network will become an increasingly important component of our distribution channel as we reach out to a broader base of customers,” said Thomas Tobin, President and CEO of HSBC in Viet Nam. (The Asian Banker)

Foreign banks buying up foothold in Viet Nam

Friday, May 23, 2008
Foreign banks are gaining a strong foothold in the Vietnamese market by buying up domestic bank shares at a time when prices are at an all-time low.

Many foreign banks with contracts to purchase local bank shares are using the opportunity to increase their stakes to 15%, a level capped by the government.

The OCBC Group, one of leading financial institutions of Singapore, and the Viet Nam Private Bank (VP Bank) on May 14 finalised a proposal to obtain permission from the State Bank of Viet Nam (SBV)’s to raise OCBC’s stake in VP Bank to 15%.

The two sides agreed on a price 4.5 times higher than the nominal value (45,000 VND per share) despite the fact the price of shares, including the banks’ shares, are on a downward slide.

According to VP Bank General Director Le Dac Son, the transaction is expected to be completed by the end of May.

The UK ’s Standard Chartered Bank, a strategic partner of the Asian Commercial Bank (ACB), also bought ACB shares from the International Finance Company to increase its investment to 15% of shares and 15.86% of convertible bonds.

In March, Malaysia ’s Maybank inked a strategic cooperation agreement with the An Binh Joint Stock Bank (ABBank) and bought 15 percent of the ABBank’s charter capital (close to 2.14 trillion VND) at a price five times higher than the nominal value of the bank’s shares.

The Hong Kong-Shanghai Banking Corporation (HSBC) also increase its property at its strategic partner Viet Nam Technological and Commercial Bank (Techcombank) from 10% to 15%, or 539 billion VND.

Meanwhile, the Oriental Commercial Bank (OCB) and the Southern Bank have announced that their partners, France ’s BNP Paribas and Singapore ’s UOB, intend to raise their ownership stakes to 15%.

The moves illustrates foreign financial groups’ increasing interest in Vietnam as they eye its potential for business expansion.

In 2007, foreign-invested credit organisations in Viet Nam own 215 trillion VND.

According to the central bank, 37 branches and 53 representatives offices of foreign and joint-venture banks are operating in Viet Nam. (VNA)

Western Bank continues increasing deposit rates

Friday, May 23, 2008
Western Commercial Joint Stock Bank (Western Bank) on May 21 continued increasing deposit rates, marking the bank's third interest rate adjustment.

Particularly, one and two-month terms will get yearly interest rates of 13.8%, 3, 6 and 9 months 15% and as for terms of from 12 months and longer, the interest rates will be ranged between 13.8% and 14.1% per year.

Within May, Western Bank has also been providing interprovincial money delivery service free of charge to all the bank's customers. Accordingly, customers can freely deposit and withdraw money from their accounts at Western Bank.

Military Bank to hike chartered capital to 3.4tr dong

Friday, May 23, 2008
Military Commercial Joint Stock Bank (MB) recently announced the plan to scale up its chartered capital to 3.4 trillion dong within this year.

The bank's shareholders' meeting held on May 19 passed this year's growth targets with 735 billion dong from pre tax profit, up 21% on 2007, its total asset would increase by 52%, total deposits and total outstanding loan 34% each, the overdue debt rate at 2%, the ensured debt rate accounting for 78% and the medium and long-term debt rate accounting for 38% of total outstanding loans.

The bank's plan of increasing chartered capital will be broken into four phases. Accordingly, in the first phase MB would increase 363.76 billion dong through paying dividend to shareholders at the ratio of 30% in shares on June 2.

In the second phase, MB would raise 316.24 billion dong in the fourth quarter of 2008 via paying bonus shares to shareholders and the bank's employees. The third and the fourth phases will be carried out in December. Of which, the third phase will hike 220 billion dong by transferring 2006 bonds to shares and the fourth phase will increase 500 billion dong by selling shares to domestic and foreign strategic shareholders and potential shareholders with the negotiation price.

MB also plans to pay 7% dividend in cash in advance for the first phase of 2008 on May 26. the time to close the list of shareholders book to is on May 23

Tribeco report Q1 performance

Friday, May 23, 2008
Saigon Beverages Joint Stock Co (Tribeco-coded TRI) recently announced the fiscal report in the first quarter of the year with 79.06 billion dong in net revenue from sales and service provision, up 5.4% or 4.051 billion dong on the same period of last year and 135.3 million dong from pre tax profit, falling 84.71% or 749.7 million dong against last year.

Imexpharm Pharmaceutical Joint Stock Co (coded IMP) also reported the business result in the first quarter of the year with 130.59 billion dong in net revenue from sales and service provision, rising 24.36% or 25.58 billion dong against 2007 and 16.11 billion dong from after tax profit, a year-on-year increase of 31.83% or 3.89 billion dong. The company's EPS in the first quarter of 2008 was 1,382 dong.

Saigon-Hanoi Bank adjusts deposit rates of both dong and US dollar

Friday, May 23, 2008
From May 21, Saigon Hanoi Commercial Joint Stock Bank (SHB) officially applied the new deposit rates of both dong and US dollar.

In particular, as for dong, the terms of from four months to 13 months get the interest rates of 15% per year, from 24 months to 36 months 13.5% per year and one and two-month terms 14.5%.

The demand interest rates remain unchanged at 5% per year.

As for US dollar, terms of from one-month to three months, the interest rates is 6.5% per year, six months 7.0%, 24 months 7.15% and 36 months 7.2% per year.

Pharimexco reports business targets for 2008

Friday, May 23, 2008
Cuu Long Pharmaceutical Product Joint Stock Co (Pharimexco) reported gaining 367 billion dong in revenue, 43 billion in after-tax profit and ratio of profit on chartered capital of 53%, and a dividend of 20% including 10% in cash and 10% in shares in 2007. The figures are expected to reach 745 billion, 57.15 billion and a dividend of 20% also this year.

In 2008, the company plans to offer 810,000 shares at 10,000 dong par for 10% dividend of 2007, another 810,000 bonus shares, sell 405,000 shares to existing shareholders in line with the ratio of 20:1, another 405,000 shares to key employees and 1,070,000 shares to external shareholders. The share offering aims to hike the company's chartered capital from 81 billion dong to 116 billion dong.

Share supply on HOSE increases sharply

Friday, May 23, 2008
The Ho Chi Minh City Stock Exchange (HOSE) recently approved four companies to list more shares on the southern bourse with the total volume of nearly 15 million shares.

Particularly, Sao Ta Food Joint Stock Co (coded FMC) was approved to list one million ordinary shares at 10,000 dong par. These shares were issued to strategic partners with the volume of 900,000 shares and the remaining 100,000 shares to the company's key employees.

Hanoi Maritime Commercial Joint Stock Co (coded MHC) would list 2.4 million shares. These shares are to sell to the existing shareholders at the ratio of one new share for two shares held and the selling price of 20,000 dong per share.

Hoa Phat Group Joint Stock Co (coded HPG) would list 8.26 million ordinary shares worth 82.6 billion dong.

Ho Chi Minh Metal Joint Stock Co (coded HMC) would list 5.2 million shares worth 52 billion dong.

The whole these shares were officially listed on the southern bourse from May 21.

USAID trains securities regulators

Thursday, May 22, 2008
The US Agency for International Development (USAID) will continue providing training courses for the professional staff of the State Securities Commission, the commission said on its website yesterday.

The courses will focus on improving the commission’s supervisory capacity in order to promote the transparency of the domestic stock market.

Commission chairman Vu Bang said, "Transparency plays an important role in market development. As market regulators, we will try hard to build this quality by tightening our supervision of trading activities on the market."

He said that the USAID training was a basis for better supervision in the future.

The US office would also help the commission complete the legal framework governing the stock exchange by co-operation with the State Securities Commission on proposed revisions to regulations in the Law on Securities.

"Along with an analysis of the actual situation on the stock market, we will work together to complete the legal framework soon to adequately meet international standards," Bang said.

He said that co-operation with USAID would contribute to making the stock market a more effective channel for the mobilisation of capital. (VNS)

Minister pep talks investors

Thursday, May 22, 2008
Minister of Finance Vu Van Ninh tried to speak some encouraging words to stock market investors yesterday, noting that the prolonged decline of many shares, in combination with the strong business performance of many listed enterprises, had resulted in highly advantageous price-per-earnings (P/E) ratios for many shares .

The P/E ratios suggested that investors could buy with confidence that their investments would bear fruit over time, Ninh said.

But Nguyen Thanh Nam, an investor and information technology professional, said, "The constant shedding of the index has left me feeling ill-at-ease, and I have decided to withdraw money from stocks to pour into commercial banks now that deposit interest rates are higher, at 12 per cent or more."

With most domestic stock traders apparently feeling much the same way, the VN-Index continued its slide yesterday for the thirteenth straight trading day, losing another 7.49 points, or 1.67 per cent, to close at 441.75.

In its current rout, the Index has lost a total of 80.61 points, or 15.52 per cent of its value.

Volume in yesterday’s trading was 4.85 million shares, worth VND212.8 billion (US$13.3 million). Foreign investors were net buyers of over 2.5 million of those shares.

There were only two gainers on the day, while another 140 codes hit their floor prices.

Ninh continued to assert that the difficulties were temporary and the Government was trying its best to stabilise and encourage the recovery and development of the stock market.

"Domestic investors who have bartered away a mass of shares will now have greater influence on the stock market," Ninh predicted.

He reminded investors that, although curbing inflation was the top official priority currently due to its strong influence on the economy and society as a whole, the stock market would continue to play a vital role in the development of the economy.

In Ha Noi yesterday, the HASTC-Index closed down 2.46 points, or 1.82 per cent, to 132.75, its fourteenth consecutive day of losses, during which period the index has lost a whopping 25 per cent of its value.

Trading volume also saw a decline of 18 per cent yesterday, with only a measly 933,940 shares changing hands, for a total value of VND31.7 billion ($1.98 million).

Asia Commercial Bank was the most-active share on the Ha Noi bourse yesterday, at over 200,000 traded, but still closed at its floor price of VND57,500.

Foreign investors were net buyers, but of only 63,000 shares, a drop of 71 per cent from foreign investor activity on Tuesday.

PetroVietnam Insurance (PVI) still manage to lure foreign investors, but at a volume about one-fifth of Tuesday’s.

Lilama, SHB bank reach cooperation deal

Thursday, May 22, 2008
The Vietnam Machinery Erection Corporation, known as Lilama Corp, and the Saigon-Hanoi Commercial Joint Stock Bank (SHB) have reached an agreement on their long-term, comprehensive cooperation.

Under the agreement, signed in Hanoi on May 22, SBH will give Lilama and its subsidiaries loan priority while Lilama pledges to use the bank’s services, including international and salary payments and share and bond issuances.

The two sides also agreed to focus their cooperation in constructing power plants, trading centres and office buildings for rent.

Commercial Banks rush to lift interest rates

Thursday, May 22, 2008
Commercial banks pushed up deposit interest rates on May 21, to above 15% per annum just two days after the State Bank of Viet Nam announced new interest rate regulations based on the newly imposed 12% basic interest rate.

Saigon-Hanoi Commercial Joint Stock Bank (SHB) said as from of May 21, its depositors will enjoy a 14.5% interest rate for 1-2 month terms, 15% for the 4-13 month terms and 13.5% for 24-36 month terms.

Southeast Asian Commercial Joint Stock Bank (SeABank) meanwhile raised their annual deposit interest rate for a 14 month term to 15.6%, the highest deposit rate so far among commercial banks.

Six to nine month terms at the bank now have an interest rate of 15.36% and under six month deposits will get 15%.

Two days before, An Binh Bank (ABBank) offered a peak annual interest rate of 14.4% for deposits of more than 13 months, while Dai Duong Commercial Joint Stock Bank (OceanBank) increased its annual interest rate for 12-13 month deposits to the maximum 15%.

Oriental Commercial Bank (OCB), Viet Nam Commercial Bank for Private Enterprises (VP Bank) and Nam Viet Commercial Joint Stock Bank (Navibank) have also lifted their deposit interest rates to the 15% limit.

Banking analysts predicted the common deposit interest rate will range between 13.5-15%, depending on short or long term strategies of local banks. They said a new wave of interest rate increases was possible, but a prolonged race like earlier this year was unlikely.

According to the central bank’s regulations, deposit interest rates offered by local commercial banks are not permitted to exceed 150% of the basic interest rate.

May 22, Foreigners Net Buyers Of VND113 Billion Of Shares

Thursday, May 22, 2008
(Dow Jones)- Foreign investors were net buyers of VND113 billion ($7.07 million) of Vietnamese stocks Thursday, out of a total of VND487 billion traded, the Ho Chi Minh Securities Trading Center said.

Volume traded totaled 2.88 million shares, with foreigners accounting for 36%, the stock market operator said.

Investment funds cutting investments

Thursday, May 22, 2008
Investment funds have become more cautious in making investment deals, though most of them still have good thoughts about the bright prospects of Viet Nam’s economy and stock market.

The strategy of private investment funds or investment companies is to buy stakes of companies to become strategic shareholders with the hope of taking back capital within several years. In general, the investors choose operational companies, which have been showing good business results, to inject money in.

Last year, when Viet Nam was considered the hot spot for investments, a lot of foreign private investment companies eyed the market, looking for companies to inject money in. However, many investment funds did not find their opportunities in Vietnam as they believed that the share prices were too high.

However, nowadays, the overly low share prices also proven to be an unattractive call for the investment flow, though Vietnamese private companies are very thirsty for capital and ready for receiving capital. The fact that Standard & Poor’s lowered Vietnam’s credit rating from stable to negative has dampened many investors’ enthusiasm. Many of them have been trying to sell stocks.

Foreign investment funds in Vietnam like Dragon Capital and VinaCapital have also been cutting investments. Andy Ho, Managing Director of VinaCapital, said that the fund is still seeking new investment opportunities, but it has become more cautious with the deals as the current economic difficulties also mean higher risks for investments.

“We have talked with many companies which want capital. However, we have to think carefully before making investment decisions,” Ho said, adding that previously, the fund invested 10 VND, and now it invests 3 or 4 VND only.

Nguyen Bao Hoang, General Director of IDG venture fund, which has poured money into 33 companies, said that there will be no changes in Vietnam’s economic development in the long term; however, the national economy is facing difficulties for now and the next 12 months.

One of the reasons that makes private investments scarcer at this moment is the uncertainty of the financial market. Analysts said that the low liquidity has been the biggest problem which has made investment funds hesitate to inject money in projects. Therefore, even the companies with low prices cannot attract the investment funds. The companies, which have been operating well do not really have financial difficulties, while the companies which need a lot of capital always bring high risks.

Hoang said that last year, financial investors seemed to ‘go too fast’, while they are now going too slowly as they have become too cautious. Hoang said that now is the most suitable time to buy stakes. (SGTT)

May 22, Stock market sees 14th consecutive decline

Thursday, May 22, 2008
The Ho Chi Minh City Stock Exchange (HOSE) continued falling, marking the 14th consecutively decreasing session. The VN Index dropped another 7.00 points or 1.58% to close at 434.75 pts with the total matching order trade of over 2.9 million shares and fund certificates worth 125 billion dong. After 13 declines, the VN Index lost 87.61 points in total.

Among 151 shares and three fund certificates being listed on the southern bourse, the stock market saw three shares increasing, four others stood still, two with no trades and 145 shares decreasing with most decliners reaching the floor price.

Three gainers were CII, HMC and SSC when adding 300 dong and HMC hit the ceiling price.

Two shares with no trades were ST8 and TCT.

DPM continued reaching the biggest trading volume with 483,300 shares, followed by DPR with 350,360, PVD with 155,050, SBT with 152,980, MPC with 131,380, SSI with 117,330, VIC with 90,660, IFC with 85,830 and others like ITA, HPG, KDC, NKD and ANV.

Foreign investors bought 60 share codes and two fund certificates with the total volume of 592,400 shares, of which DPM with 524,140 shares, SSI with 301,460, PPC with 200,200, PVD with 190,860, DPR with 190,200, MPC with 128,500, HPG with 104,170 shares being transferred and others like VIC, VSH, ITA and KDC.

The Hanoi Securities Trading Center (HaSTC) today May 22 still kept decreasing impetus on the stock market by falling another 2.4 points or 1.81% to end at 130.35 pts with the total market trade of 481,000 shares worth over 12 billion dong.

Amongst 137 listed shares on the northern bourse, the stock market recorded six shares increasing while 91 others decreasing, one share stood still and 39 shares with no trades.

Six gainers were YBC rose 500 dong, NVC and VTS increased 400, CTB up 300 dong, S99 +200 and L62 added 100 dong.

One share remained unchanged namely PPG.

MIC was the biggest loser when losing 2,700 dong, followed by ACB lost 1,700, BVS and VSP slipped 1,500, SCJ jumped 1,400 and NBC dropped 1,200 dong.

There were no shares reaching the trading volume of over 100,000 shares. TBC reached the biggest trading volume with 52,000 shares, followed by SVC with 44,200 and S99 with 40,400 shares being traded.

Military Bank to boost charter capital

Thursday, May 22, 2008

Military Bank to boost charter capitalMilitary Commercial Joint Stock Bank’s shareholder meeting on May 20 resulted in a decision to raise the bank’s charter capital to 3.4 trillion VND (212.5 million USD).

The bank will also increase total assets to 46.5 trillion VND (2.9 billion USD), 1.5 times higher than last year.

The charter capital increase will be carried out in four phases.

Interfood sets up three subsidiaries

Thursday, May 22, 2008
The Ho Chi Minh City Stock Exchange (HOSE) on May 20 reported that International Food Joint Stock Co (Interfood) has received investment licenses for its three subsidiaries including International Food Packaging Joint Stock Co (Interfood Packaging) with the total investment capital of 513.6 billion dong and chartered capital of 160.05 billion dong. Of which, Interfood holds 90% of total shares.

Interfood Packaging is expected to start operation by February 2009.

The second one is the Northern International Food Joint Stock Co (Northern Interfood) with the total investment capital and chartered capital of 583.2 billion dong and 178.2 billion dong respectively. Of which Interfood also owns 90% of chartered capital. The company plans to begin operation by March 2009.

The last one is Ava Food Joint Stock Co, which was transferred from Ava Food Industry Joint Stock Co with the total investment capital and chartered capital of 259.2 billion dong and 81 billion dong respectively. In which, Interfood owns 90% of total shares.

Work starts on Lu Gia apartment, office project

Thursday, May 22, 2008
Lu Gia Mechanical Electric Joint-Stock Co commenced work on a 20-story apartment and office building in HCM City's District 11, which will cost 357 billion dong, or some US$22 million.

The Lu Gia Plaza at 70 Lu Gia Street will have 166 apartments covering 69157 square metres each, and more than 4,200 square metres of office space will be available for lease, said the developer, which is a venture between Lu Gia Mechanical Electric Joint-Stock Co holding a 75% stake and the HCM City Infrastructure Investment Joint Stock Co (CII).

The building will include a shopping mall, a restaurant, a games section and internet cafe, a beauty salon and fitness centre on the ground and first floors. Other amenities include gas supply, water heating, television, telephone and internet lines, as well as fire fighting systems.

The two companies will build some public facilities like an international standard kindergarten, sports facility and park, said the two companies.

It will be finished after three-years of construction, said the developer. This is the first luxury apartment building invested by Lu Gia Mechanical Electric Joint-Stock Co and it will be ready by late 2010.

The project site was formerly the premises of a factory of Lu Gia Mechanical Electric Joint-Stock Co The factory will be relocated to the southern province of Dong Nai, as Lu Gia early this month started work on a workshop at Nhon Trach 5 industrial park in the province with the investment capital of 55 billion dong.

REE reports 1.27b dong loss in Apr

Thursday, May 22, 2008
The Ho Chi Minh City Stock Exchange-listed Refrigerating and Electrical Engineering Shareholding Co (coded REE) recently reported the business result in April with 140.53 billion dong in total net revenue and lost 1.27 billion dong from after tax profit.

During the first four months of this year, REE made a total net revenue of 438.6 billion dong, equalling to 39.87% of the year's plan and lost 107.47 billion dong from after tax profit.

VIBBank hikes saving rates

Thursday, May 22, 2008
Vietnam International Commercial Joint Stock Bank (VIBBank) announced that from May 20, it officially increased the interest rates of both dong and US dollar.

Accordingly, VIBBank's 12-month term saving rates will be 15% a year in dong and 6.5% pa in US dollar, nine months 14.5% and 6.8% pa, six months at 14.5% and 7.0% pa, three months at 14.5% and 6.8% pa and one-month at 13.5% and 6.5% pa respectively.

Recently, the bank launched the programme of "close customer care" to all individual customers whereby as for each saving worth one million dong within one-month, saver will receive 50 bonus points. The bonus points will be added together and converted to valuable presents.

Eximbank increases deposit rates

Thursday, May 22, 2008
From May 20, Viet Nam Export Import Commercial Joint Stock Bank (Eximbank) officially applied the new interest rates of dong, US dollar and gold. In comparison with the previous benchmark the new interest rates were raised by 0.225% per month in dong, 1.3% per year in US dollar and 1.5% per annum in gold.

Particularly, the interest rates of dong are ranged between 1.167% and 1.183% per month. Accordingly, 1, 2, 3 and 6 month terms will get the interest rate of 1.167% per month, nine and 12 months 1.183% per month.

As for US dollar deposits, the interest rates are ranged between 6.5% and 7% per year. In particular, the interest rate for one-month term is 6.5% per year, two months 6.6%, three months 6.8% and 6, 9 and 12 months 7% per year.

Also, the interest rate of gold was increased to 3.5%-5.5%. The interest rate difference between terms is by 0.5% per year.

In addition, the bank still applies the progressive interest rates for savings worth at least 100 million dong, US$5,000 and 10 ounces of gold and higher, marking the highest level of the bank so far.

Ending four first months of this year, the bank gained 347 billion dong from pre tax profit, 38.791 trillion dong in total asset, 26.150 trillion dong in total deposits and 21.953 trillion dong in total outstanding loans.

As the plan, Eximbank could reach between 1.3 and 1.5 trillion dong in profit within this year, nearly twofold increase against 2007.

Eximbank's shareholders' meeting recently also passed the plan to hike its chartered capital to 7.38 trillion dong from the current of 2.8 trillion dong within this year.

VFMVF1 price closes to face value

Thursday, May 22, 2008
VFMVF1 coded fund certificate yesterday remained at 11,700 dong each after 12 consecutive declines. However, according to the report on May 15, the net asset value (NAV) of each VF1 fund unit still reached 20,661 dong.
Therefore, VFMVF1 is being traded under far its NAV.
As compared with May 8, the NAV decreased nearly 8%.
Similarly, the price of MAFPF1 yesterday stood at 5,600 dong each against the NAV of 6,100 dong/unit reported on May 15.

Vinaconex No 9 to list shares on HaSTC

Thursday, May 22, 2008
Vinaconex's Construction Joint Stock Co No 9 recently passed the plan to list shares on Hanoi Securities Trading Center (HaSTC) in the last half of the year.

This year, the company targets 380 billion dong in revenue, up 35% on 2007 and 16.1 billion dong from pre tax profit, rising 79% against the previous year and a dividend of 14%.

Song Da 6 to pay dividend of 15% in cash

Thursday, May 22, 2008
Song Da 6 Joint Stock Co (coded SD6) announced that the company plans to pay a 2007 dividend of 15% in cash on June 20. The registration deadline is on May 30.
The securities depository centre will halt the deposit of SD6-coded shares on May 29, 30 and June 2

VinaCapital buys over 30% into MobisCom

Thursday, May 22, 2008
The DFJ VinaCapital Investment Fund— DFJV, the investment firm specialises in technology information sector, on May 20 singed an investment cooperation contract with MobisCom Co, the multimode security solution provider to transactions via cell phone whereby DFVJ will hold 30% stake in MobisCom. The value of the contract has not been revealed yet.

At present, MobisCom is developing an international unique technology product named OTAC (One Time Authentication Certification) enabling users to carry out transactions safely and usefully via sending messages or connecting to WAP and mobile phone network system, hand-held equipments and individual computer.

Together with OTAC and MobisStock, MobisCom plans to launch other solutions like MobisPay and MobisBank.

In the third quarter of this year, MobisCom plans to inaugurate new product named MobisCafe.

Techcombank pioneers automatic depositing

Wednesday, May 21, 2008
Automatic Teller Machines (ATM) that enable customers to securely deposit money into their account and have it automatically credited have been successfully launched in Viet Nam.

Viet Nam Technological and Commercial Joint Stock Bank (Techcombank) have collaborated with Germany-based Wincor Nixdorf group to pioneer the new service for the country.

Techcombank Deputy General Director Le Xuan Vu said the launch was part of the bank’s effort to provide its customers with convenient, time-saving banking services.

Wincor Nixdorf Asia Pacific Marketing Director Karsten Kemma echoed the banks statement, saying the project was an important move for the Vietnamese banking sector.

The machines can currently accept 50,000 VND and 100,000 VND notes. (VNA)

Korea Times: Viet Nam Fund Investors Sustain Big Loss

Wednesday, May 21, 2008
Investors in Viet Nam equity funds are having sleepless nights as the Vietnamese bourse has dropped around 60% from its peak last year. Analysts advise investors to keep in mind that investment in emerging markets such as Viet Nam entails risk.

Funds investing in the Vietnamese bourse have been popular here from around 2006, following the launch of such funds by Korea Investment Trust Management Corporation and others. Seoul funds investing in the Vietnamese bourse total over 1.8 trillion won, which is equivalent to about 10% of the total market cap there.

The Vietnamese stock market, however, dropped nearly 60% from its peak last year. This contrasts with other global equity funds, which are slowly recovering from the U.S. subprime mortgage woes. Many of the Vietnamese funds have recorded over a 30% loss from the beginning of this year.

The concern is especially augmented following the release of a report by Daiwa Securities. The report points out that Viet Nam's macroeconomic fundamentals have deteriorated dramatically over the past half-year. ``With inflation at 21.4% year-on-year for April, and the 12-month rolling sum of the trade deficit soaring to $21 billion, Viet Nam needs a bout of severe austerity to restore stability, in our view,'' it said.

``Given the absence of palatable policy choices, we think Vietnam will be obliged to turn to the International Monetary Fund (IMF) for assistance within the next few months. Until it does so, we suggest investors be zero-weighted in Viet Nam.''

The Vietnamese government pulled up the interest rate to subdue inflation, which caused tight liquidity on the stock market.

However, there seems to be few options for investors.

Most of the Vietnamese funds here are closed-end funds, from which investors cannot withdraw money. Such closed-end funds are often listed on the exchange, but few people are willing to buy them.

Park Hyun-chul, a fund analyst at Meritz Securities, said the outlook isn't good for this year. ``On top of the inflation, other economic indices are bad. The government lowered the GDP growth target by 2 percentage points. And the trade deficit concern is growing.''

He said the Vietnamese government isn't as competent as other governments in coping with such economic problems. ``It's like the Korean bourse in the 1960s and 70s. It has huge growth potential, but the capital market falls behind economic growth.''

Still, analysts advise that investors should wait and see instead of withdrawing money. ``The fund was sold closed-end as they determined that the long term growth potential is good despite the risk,'' Park said.

Goldman Sachs estimated the real GDP to grow 7.3% this year, which is solid compared with other emerging countries.

Park said turmoil like this can happen in any emerging market. The problem is that investors have little information about markets like Viet Nam. ``There is cognitive dissonance among fund investors. They only take the attractive points, and ignore risky factors. Emerging markets entail risk. It is even more so with frontier market funds.'' (KoreaTimes.co.kr)