Government’s solutions synchronous and comprehensive: expert

Tuesday, April 8, 2008
Truong Dinh Tuyen, former Minister of Trade, now the Member of the National Advisory Council for Finance and Monetary Policies, talks about inflation and the measures to fight inflation.

What do you think about the current situation? Do you think that inflation is really as worrying as experts say?

The inflation now is not as high as the galloping inflation seen in late 1980s of the last century. At that time, the inflation rate was over 700%. International institutions all say that Vietnam has a firm foundation for high growth in the medium and long term. However, the inflation rate of 12.63% in 2007 was really worryingly high and we must reduce the rate in 2008.

The high inflation in Vietnam has been caused by the combination of the monetary policies (the high total payment instruments and high credit), push cost (the domestic prices have been pushed up due to the higher prices in the world. Vietnam’s export turnover was equal to 160% of GDP, while import turnover 90% of GDP), and demand push (higher domestic consumption and investment demand and higher demand in the world, which both lead to higher export price and higher domestic prices).

Some experts said that the world’s price increases have impacts on all countries in the world, but the inflation rates in other countries are not as high as in Vietnam. In fact, the prices are skyrocketing in all those countries.

The Government has put forward a lot of measures, determined to restrain inflation. Do you think that the ‘remedies’ are suitable for the national economy?

The measures to fight inflation mentioned in the Prime Minister’s article prove to be synchronous and comprehensive. However, the success of the measures depends on the implementation of the measures. For example, we know that it is necessary to tighten the monetary policies, but how tight should the monetary policies be?

We need to tighten the monetary policies, but we must ensure the liquidity and create favourable conditions for export and production.

The State Bank applied strong measures to tighten the monetary policies, but the measures badly affected the liquidity. And the State Bank had to spend money to improve the liquidity. Luckily, the problem was settled. I think this was the reason why the Prime Minister, in his article, emphasized that we need to tighten monetary policies, but ensure the liquidity.

I think we also have to think carefully about cutting the investments by state owned enterprises and the public investments which account for 45% of the total society’s investments. How much should they cut investments? There has been no exact figure, but I think the Government needs to fix the investment ratios.

What is your comment about the suggested solutions that the Government should cut off 20% of ineffective state-funded investment projects?

The experts might have their arguments while making the suggestions. However, I cannot comment about the ratio of 20% because I have not heard their arguments.

I agree with Dr Nguyen Dinh Cung (head of the Macroeconomic Management Division under the Central Institute for Economic Management) that the Government should decentralize in slashing investments. Local authorities are the bodies which grant investment licenses and they know which are ineffective ones and need to be cut.

What would you say about the current stock market?

I don’t think that the stock market is the thermometer of the economy, because our market is quite small with few listed companies and low value in comparison with GDP. I don’t think that it is necessary to use administrative measures to interfere with the market. I have to say that I personally think that it is necessary to control the portfolio investments by foreign investors and I still have doubts about the policy that allows foreign investors to pay in dollars for share transactions.(DTCK)

Vincom to sell $125 mln bonds on April 18

Tuesday, April 8, 2008
Property developer Vincom (VIC), Viet Nam's seventh-largest listed firm, said on Tuesday it would raise 2 trilion dong ($125 million) via a bond sale later this month to further fund projects in Ho Chi Minh City.

Vincom started work on building a office and hotel complex, underground parking and a commercial centre in Ho Chi Minh City last year with investment totalling $300 million.

The five-year bonds would be issued on April 18 and advised by Agriseco, the securities broking arm of Viet Nam's largest lender, Agribank, the Hanoi-based Vincom said in a statement.

Vincom said the bonds would carry a fixed coupon for the first year and a floating rate for subsequent years, subject to agreement with investors later, while the total funds expected could expand to 2.6 trillion dong depending on actual demand.

Proceeds would go to the construction of the projects in Ho Chi Minh City's downtown area, Vincom's management board said in a separate document seen by Reuters.

The bonds issued this month will be the company's second corporate debt on sale. Last October, Vincom raised 1 trillion dong via a five-year bond to finance the Ho Chi Minh City's $300 million property project.

The debt carried an annual coupon of 10.3%.

Shares in Vincom closed up 1.69% at 90,500 dong ($5.67) each on the Ho Chi Minh Stock Exchange (HOSE) on Tuesday, valuing the company at nearly $454 million, the seventh-largest among the 153 listed firms on the exchange. (Reuters)

April 08, Huge number of stock brought onto the market

Tuesday, April 8, 2008
The Ho Chi Minh Stock Exchange (HOSE) today April 08 continued increasing on the stock market as the VN-Index jumped 6.23 points or 1.14% to end at 548.56 pts with the total matching order trade of 25,603,980 shares and fund certificates worth over 1.244 trillion dong, marking a new record of trading volume and turnover in comparison with the earlier record of 25,046,350 shares on March 10.

Among 153 shares and fund certificates being listed on the southern bourse, the stock market recorded9shares hitting the ceiling price, 12 others remained unchanged and 43 shares decreasing.

Out of key stocks, SSI lost 500 dong to 59,000 dong per share and FPT slipped 1,000 dong to 98,500 dong per share. Others like STB and PPC up 700 dong to 39,700 dong and 40,000 dong per share, HPG and DPM leaped 1,000 dong to 70,500 dong and 52,000 dong per share, VNM, VPL and PVD jumped 2,000 dong to 117,000, 127,000 and 113,000 dong per share.

SSI took the pole place in trading volume with over 3.7 million shares being traded and followed by STB with over 3.6 million shares, DPM with 2,428,410 shares and others like PPC, HPG, FPT and REE.

Foreign investors bought over five million shares with the biggest trading volume of 892,990 SSI-coded shares and followed by DPM with 616,290 shares and other Blue-chips.

The Hanoi Securities Trading Center (HaSTC) tumbled on the stock market when the HaSTC Index fell 0.78 points or 0.39% to end at 197.55 pts with the total market trade of 13,141,500 shares worth over 576 billion dong.

Amongst 132 listed shares on the northern bourse, the stock market saw 25 shares decreasing while 95 others increasing, 11 shares stood still and one share with no trades.

The sole share with no trades was HSC.

11 stood still including BBS, BHV, BTS, LBE, PPG, SD7, SDY, SJE, TKU, TLC, TXM, VFR and VNR.

KBC was the biggest decliner when losig 2,400 dong and followed by VSP lost 1,100 dong and others lost below 1,000 dong per share.

KLS reached the biggest trading volume with 1,419,600 shares, followed by ACB with 983,700 shares, PVS with 893,100, PVI with 696,600, TBC with 608,500 and HPC with 540,200 shares being trade.

STT will bid in delayed Viet Nam sell-off

Tuesday, April 8, 2008
Singapore Technologies Telemedia (STT) has confirmed that it will bid for a stake in state-owned Vietnamese cellco MobiFone, but said that it is not expecting the auction to take place until 2009.
MobiFone is the country’s second largest cellco by subscribers, with an estimated eight million at the end of 2007. The government is planning to sell 49% of the shares in the company to foreign and domestic investors through an auction on the Hanoi stock market. The sale was originally slated for June this year, but the government is keen not to rush its programme of privatisation and potentially make mistakes. It has yet to confirm the appointment of sale advisers, leading STT to believe the auction may well be delayed.
STT controls 75% of Asia Mobile Holdings, a company that owns 40% of Indonesia's second-largest cellco, PT Indonesia Satellite Corp (Indosat). STT is wholly owned by Temasek Holdings which also owns a 56% stake in Singapore Telecoms (SingTel), which in turn owns 35% stake of Indonesia's largest cellco, PT Telkomsel. As a result, Indonesia's Business Competition Supervisory Commission (KPPU) has accused STT of monopolistic practices; under Indonesian competition law, a foreign business may hold no more than 50% of any Indonesian telecoms operation. (TeleGeography)

2008 – a good chance to invest in Viet Nam

Tuesday, April 8, 2008
The year 2008 is a good chance for foreign investors to launch business activities in Viet Nam despite potential risks, said a senior executive from the BIDV-Vietnam Partners Investment Management Joint Venture Company (BVIM).
BVIM General Director Bradley Lalonde delivered the message at a seminar opened in Ho Chi Minh City on April 8, pointing out positive changes in the country’s economic structure, more open investment policies and strong development of financial institutions as clear evidences.
The executive forecast that some 2,000 firms will list shares on Vietnam ’s stock market and its capital is likely to increase to 200 billion USD within the next five years.
However, Lalonde said, BVIM and other investors, particularly newcomers are keeping an eye on the government’s move to control inflation, manage the capital market and ensure stability of the investment policies. These are factors that have decisive impacts on their long-term investment strategies, he stressed.
During the two-day event, participants are scheduled to discuss investment alternatives like real estate investment, financial sources for infrastructure projects, the equitisation process, and share experiences in carrying out projects.
Many investors also spoke of Viet Nam ’s advantages after joining the World Trade Organisation (WTO), especially its new legal framework designed to create more favourable conditions for foreign businesses.
The Ministry of Planning and Investment took this occasion to introduce prioritised fields calling for foreign investment, and policies regarding infrastructure, hi-tech industry and stock market development, as well as regulations on the management and recruitment of skilled workers from abroad.
The 2nd annual seminar, dubbed “Choices to invest in Vietnam ”, brought together close to 100 foreign investors. (VNA)

Securities trading volumes up as VN-Index sees tenth consecutive increase

23:03' 08/04/2008 (GMT+7)
VietNamNet Bridge - On the second day the new trading margins in validity, the market indicators of southern and northern bourses had opposite development. The VN-Index gained while the HASTC-Index dropped. Trading volumes on both bourses both sharply increased.
The Ho Chi Minh City Stock Exchange saw 98 gainers against 43 decliners while 12 others stayed unchanged.
The VN-Index gained for the tenth consecutive session, up 6.23 points to close at 548,56. Total market trading volume increased impressively with 26.8 million shares worth VND 1.37 billion. Of these, 25.6 million units were traded through matching method for VND 1.24 billion.
Top gainers included DHG, IMP, KDC, TAC and PVD. DHG increased by VND 3,000 a share while the other four saw a gain of VND 2,000 a share each.
SSI topped the list of most traded stocks with over 3.7 million shares changing hands, followed by STB (3.6 million units), DPM (over 2.4 million units), PPC (673,000 units) and HPG (670,000 units).
The HASTC-Index of the Hanoi bourse dropped 0.39% or 0.78 points to close at 197.55. the bourse also saw a stunning increase in trading volume with over 13 million shares changing hands for VND 576 billion. There were reportedly 93 increasing, 25 declining and 14 staying still stocks.

(Source: Nhan Dan)