Sai Gon Cable Co to list 30 million shares

Wednesday, April 23, 2008
Sai Gon Cable joint Stock Co plans to list 29.7 million shares at the Ha Noi Securities Trading Centre (HaSTC) worth VND297 billion (US$18.6 million).
The company manufactures cable and telecommunications equipment and has charter capital of VND300 billion ($18.75 million).
The State holds a 31.14% stake in the company.

Construction begins on new condo towers

Wednesday, April 23, 2008
The HCM City-based Binh Chanh Construction and Investment Joint Stock Company (BCCI) kicked off construction yesterday for a residential project in Binh Tan District.
Two years from now, the two 12-storey Nhat Lan towers will offer 166 apartments ranging from 45.5 to almost 89sq.m. The project will also have a swimming pool, fitness centre, basement parking and green space to give residents a comfortable environment.

Hanoi returns 'to value' via freefall

Wednesday, April 23, 2008
In the small Mekong Securities office tucked in narrow central Hanoi alley, a handful of Vietnamese investors peer glumly into laptop screens, watching the sluggish downward trading on the Ho Chi Minh City stock exchange.

Just a year ago, Mekong Securities, like most Vietnamese brokers, was packed each morning with local investors, pouring savings into a market that rose 144% in 2006.

These days, the office is almost deserted, except for those still trying to pull out of a market down a precipitous 42.4% so far this year.

Among them is 27-year-old Le Thu Ha, who in October 2006, amid pervasive market euphoria, quit her job at an import-export company to devote herself full-time to managing her stock portfolio. She poured about $31,000 into the market back then, but this has now mostly dissipated.

"I want to escape from this market, but it's not the right time," she says. "It's too late."

For many Vietnamese investors, the recent plunge of the eight-year-old stock market has been a big financial blow, which could potentially affect long-term long appetites for equity investment.

"Many of the new entrants into the market have the feeling they lost a huge amount of money within a very short period of time," says Le Song Lai, deputy general director of the State Capital Investment Corporation, which manages Hanoi's interests in some listed state companies.

"They tried to recoup their loss, but the more they tried, the more they lost."

Yet Viet Nam's stock market appears to have been the inadvertent collateral casualty of Hanoi's recent rearguard action to fight soaring inflation and to cool the frothy property market, through a sharp monetary tightening.

"The sucking of liquidity out the market has frozen the real estate market, but the unintended consequence has been to hit the stock market," says Dickon Verey, head of trading at Mekong Securities.

The market - which hit its all-time high in March 2007 - was already losing steam late last year, amid restrictions on bank lending for share purchases, a slew of new rights issues and worries about the impact of a global economic downturn on Vietnam. The market still ended 2007 about 25% up.

But stockbrokers and fund managers say the February decision by the State Bank of Viet Nam, the central bank, to suck $1.26bn out of the financial system - through a mandatory bond issue to commercial banks - sent the market into freefall.

Foreign investors were also shut out from purchasing shares by their inability to access local currency, as the central bank stopped buying dollars.

Since then, regulators have been frantically trying to bolster investor confidence, with measures including narrowing the daily trading band.

In early March, the SCIC also begun selectively buying shares as a "public service" to shore up the market, though Mr Lai said he was barred from providing details of the purchases.

Foreigners are once again picking Vietnamese blue chips, which are now trading at average attractive P/E multiples of 13 times earnings, compared with multiples of about 35 at the market's peak.

"For a long-time, the price of many shares was inflated - it did not reflect the true, intrinsic value of the shares," said the SCIC's Mr Lai.

"Now the market is returning to its true value. We do not say 'it's a downturn' but it's a return to the true value."

But Vietnamese investors trade on sentiment, and getting them to look at value won't be easy. (Amy Kazmin - Financial Times)

IP development company expands cooperation

Wednesday, April 23, 2008
IP development company expands cooperation

The Industrial Park and Urban Development Corporation (IDICO) will choose the Civil Engineering Construction Corporation No.8 (CIENCO 8) as its partner in developing IDICO’s invested transport and infrastructure projects.

An agreement to this effect was signed between the two companies in Ho Chi Minh City on April 23.

IDICO will also invest in CIENCO 8’s projects as well as join hand with the construction company in property development.

The same day, IDICO inked a cooperation deal with VinaCapital, an infrastructure investment fund.

Under the agreement, VinaCapital will provide legal and financial consultancy relating to infrastructure development for IDICO and invest in IDICO projects as a strategic partner.
IDICO has been building 17 industrial parks at a total cost of nearly 10 trillion VND. (VNA)

An Giang fisheries angles for nets of $3.4 million

Wednesday, April 23, 2008
An Giang fisheries angles for nets of $3.4 million
An Giang Fisheries Import Export Joint Stock Co is aiming to earn revenue of VND1.4 trillion (US$87.5 million) and pre-tax profit of VND55 billion ($3.4 million) this year.
In 2007, the company earned VND39.5 billion in profit on revenue of VND1.2 trillion. It plans to pay a dividend of 12%.

BNP Paribas to buy 5 pct more in Oricombank

Wednesday, April 23, 2008
Viet Nam's Oricombank, 10% owned by France's BNP Paribas, said on Wednesday it would issue 20 million new shares this year to allow its French partner to increase its ownership to 15%.

The Ho Chi Minh City-based bank, also known as Phuong Dong Commercial Bank, will also sell part of the new shares to other foreign investors, it said in a statement after shareholders approved business targets for 2008 on Tuesday.

Oricombank gave no dates for the share issue. BNP Paribas has said it wants to double its stake in Oricombank to 20%.

Viet Nam caps foreign ownership in a domestic bank at 30%, with a 15-percent limit for an individual strategic investor. Any individual strategic investor needs government approval to increase its stake to 20%.

At a meeting on Tuesday, shareholders also agreed to slow profit growth and lending after Viet Nam's central bank imposed a cap on credit growth for the sector this year in an effort to control inflation.

Oricombank's statement said the bank's gross profit would grow only 36% this year to 315 billion dong ($19.7 million) and loans were projected to rise 32%.

Last year Oricombank reported its audited gross profit jumped 63.3% to 231 billion dong as lending surged 62% to 7.56 trillion dong.

The bank's new growth target compared with growth of 72% projected in February, and is more in line with the State Bank of Vietnam's tighter money supply policy as it seeks to control inflation at a 12-year high.

Vietcombank, the country's third-largest bank by assets and the first among its 5 state-run banks to conduct an initial public offering last December, owns 8.7% in Oricombank.

Top brewer Saigon Beer Alcohol Beverage Corp (Sabeco) has a 5-percent stake in Oricombank.

Oricombank said, apart from the share issue for BNP Baribas and outsiders, the lender would also issue 36.34 million new shares to existing shareholders as part of a plan to raise its registered capital by 53% to 1.7 trillion dong this year.

The bank would also issue convertible bonds to raise 600 billion dong this year to existing shareholders.

The bank has not said if it was going to list shares in 2008. (Reuters)

Carlsberg buy of stake in Habeco confirmed

Wednesday, April 23, 2008
Carlsberg buy of stake in Habeco confirmed

Carlsberg said on Wednesday its planned purchase of 16 percent in newly privatised Vietnamese state-owned brewer Habeco had been confirmed.

Carlsberg will pay a total consideration of $115.6 million for its holding, the same price per share as other investors who took part in the initial public offering. (Reuters)

Domestic Gold Price Rises as World Price Slips

Wednesday, April 23, 2008
Tuesday’s world gold price was nearly US$10 per troy ounce below that of a month ago despite a surge in crude oil prices. Unlike the world gold price, the domestic price gained by VND30,000 to close at VND18.10 million per tael (US$1,126). Why does the domestic gold price increase while the world price decreases?

Crude oil prices set a new record. A barrel of crude rose to US$117.76, an increase of US$17 compared to the same period the previous month. The world gold price, instead of following the path of oil prices, still hovers at US$915.80, nearly US$10 below what it was a month ago.

Despite the lower world gold price, the domestic price rose as a Saigon Jewelry Company one-tael ingot went up by VND30,000 to close at VND18.10 million.

Analysts blamed the rise in the domestic gold price and the increased demand for SJC gold on the fact that many investors have decided to shift to gold due to the current slump in the stock market. Since the beginning of the year, more than 1 million taels of SJC gold, equivalent to 40 million tonnes, were reportedly sold. The total volume of gold traded on the market was 11 million taels.

Another reason for the hike in the domestic gold price is that gold entrepreneurs have had to buy U.S. dollars at higher prices on the black markets to import gold, resulting in higher costs.

Analysts predicted that the domestic gold price will continue to rise due to the fact that a number of gold companies, securities companies and banks including SJC, Ha Thanh Securities, SJC Securities and Eximbank, Sacombank, and Intergold Company are establishing gold trading floors, which will attract a larger volume of transactions and a wider variety of ingots.

Aside from the popular ingots produced by SJC and PNJ, others brands include ACB and PNJ-DABank. (Sai Gon GP)

Choosing strategic partners: Vietcombank at disadvantage

Wednesday, April 23, 2008
Vietcombank is thought to be at a disadvantage in negotiating with foreign investors to choose strategic partners, especially in relation to share prices.

One of the most important topics to be raised at the shareholders’ meeting of Vietcombank, slated for April 26, will be the selection of foreign partners.

In fact, there is one special thing in Vietcombank’s equitisation process: the government decided to make IPO first and then look for strategic partners. The change ‘at the last minute’ originated from difficulties in negotiating about stake sale prices with candidates.

As Deputy Prime Minister Nguyen Sinh Hung instructed, the stake prices for strategic partners must not be lower than the average IPO price. And the instruction has been putting big difficulties on Vietcombank.

Vietcombank’s shares are selling at VND53-55,000/share only on the OTC market, much lower than the average IPO price at VND107,572/share, and even lower than the preferential price level at which stakes were sold to Vietcombank’s staffs.

A question has been raised for Nguyen Hoa Binh, Chairman of Vietcombank: if the low price of Vietcombank’s shares on the market puts Vietcombank at a disadvantage when negotiating with candidates, could candidates take advantage of this to force the price down?

Binh said that Vietcombank has anticipated this, but declined to give an answer, reasoning that the issue was not listed among the issues he was authorised to provide information about.

However, Binh said that the low price of Vietcombank’s shares on the OTC market would be an advantage to the sellers. He said that share price decreases are undeniable, and that the price is decided by the market’s supply and demand.

Binh declined to give information about the prices candidates offered.

Besides sale prices, the time to sell stakes is also a problem for Vietcombank, indirectly creating advantages for candidates. It is clear that in the first shareholders’ meeting, Vietcombank will still not have foreign strategic partners, and it is highly possible that it will not have them when it lists on the bourse.

The prolonged process of selecting foreign strategic partners will affect shareholders’ thoughts, as shareholders want to inject money in a company where everything is ready. Therefore, the presence of strategic partners at the listing moment has significance.

However, Binh said that Vietcombank will settle the problems step by step, with the priority to be given to urgent matters.

Binh said that Vietcombank will not get strategic partners at any cost. He said that the selection of strategic partners must serve the benefit of Vietcombank’s shareholders and the country, while the bank will not aim to seek short-term financial sources.

No exact date has been set about when Vietcombank must finish selecting strategic partners; therefore, the time to sell stakes is not an issue at the negotiating table. However, Binh has revealed that the bank wants to complete the work in 2008.

In fact, many foreign investors have expressed interest in buying Vietcombank stakes. Besides the negotiations with existing candidates, Vietcombank is also working with new names.

Binh has confirmed that despite the difficulties, Vietcombank will not ease the requirements on strategic partners. (TBKTVN)

Viet Nam lowers 2008 growth target amid record inflation, widening trade gap

Wednesday, April 23, 2008
The Vietnamese government lowered its economic growth target to 7.0% this year as the country fends off a record inflation rate and a widening trade deficit, official reports said Wednesday.

The government initially targeted growth of 8.5% to 9.0% for 2008.

But after lower year-on-year GDP growth for the first three months of the year, record inflation and a wider trade deficit, the government began talking down economic prospects for the year.

Last month Vietnamese Deputy Prime Minister Nguyen Sinh Hung said the country should strive for annual growth of 7.5%.

Investment and Planning Minister Vo Hong Phuc gave a new growth projection on Tuesday at a meeting at the National Assembly.

Viet Nam reported 7.4% GDP growth in the first quarter, against 7.8% for the same period in 2007.

For the first three months of the year, the consumer price index rose more than 16% from the same quarter last year and Viet Nam reported a trade gap of $7.4 billion. (Thomson Financial)

Northern banks vote to maintain 11% ceiling interest rate

Wednesday, April 23, 2008
Twenty-two of 23 banks, members of the Viet Nam Banking Association (VNBA), promised to maintain the 11% ceiling interest rate, which has been applied since April 2, 2008, after four hours of arguing.
This was really a difficult decision by the banks as many of them have been facing low liquidity and finding it hard to mobilise capital.
Finally, banks decided to maintain the ceiling interest rate scheme, as the interest rate war in February 2008, in which interest rates escalated day by day, was a useful lesson.
The General Director of a Hanoi-based joint stock bank said that if the ceiling interest rate scheme is removed, the market will be chaotic as some banks may offer abnormally high interest rates of 15-16%.
A representative of a state owned bank said that if the ceiling interest rate scheme is removed, the banking system will have safety problems.
However, some bankers have expressed concerns that if they do not raise deposit interest rates they will not be able to mobilise capital. Meanwhile, they cannot borrow money in the interbank market due to high interest rates. A banker revealed that in the last few days, if a client deposited VND5bil and demanded the interest rate of 14% per annum, he had to accept the high rate.
Three solutions were put up for discussion: 1. Maintaining the agreed ceiling interest rate 2. Raising the ceiling interest rate to 12% as stipulated by Decision 02 by the State Bank of Vietnam (the 11% ceiling interest rate was the voluntary rate agreed upon by VNBA’s members) 3. Applying three different ceiling interest rates for three groups of banks (different in operation scale; the smaller banks could apply higher interest rates).
At first, many banks advocated the second solution, saying that the 11% interest rate is not high enough to attract depositors anymore. Therefore, it would be better to raise the ceiling interest rate by 1% in the immediate time and make adjustments later if necessary.
However, big banks (Vietinbank, Military Bank and Techcombank), said that the ceiling interest rate should be maintained in order to avoid chaos in the monetary market.
Finally, the majority of the banks at the meeting yesterday voted to maintain the ceiling interest rate of 11% after the Director of the Monetary Policy Department under the State Bank of Viet Nam Nguyen Ngoc Bao made strong commitments to help banks improve their liquidity.
Bao said that the demand for selling valuable papers from commercial banks will be met by the State Bank through open market operations. Banks which do not have valuable papers but need support to improve liquidity will also get support from the State Bank, which will give specific solutions with required conditions. In all cases, banks must promise that they will only use the loans from the State Bank for ensuring liquidity, not for expanding credit.
Bao also said that his department will give necessary support provided that VNBA releases an official document to the State Bank, stating that its members need support.
VNBA will convene a similar meeting in the south on April 25. If the southern members agree with northern members, the notice about maintaining the 11% ceiling interest rate will be sent to all members on April 26. If not, northern members will have to gather again and re-discuss the issue. (VNN)

Asian Governments Must Combat Inflation, ADB Chief Tells Paper

Wednesday, April 23, 2008
Inflation is the greatest threat to Asian economies and regional leaders must make combating it a priority in 2008, Asian Development Bank President Haruhiko Kuroda said in an interview published on Wednesday.
"The greatest macroeconomic danger is inflation. Given than food and fuel are the basic elements of the budgets of Asian families, the recent rise in prices will create inflationary pressure," he told the Cinco Dias newspaper.
"The rise in prices of these products will have a disproporionate impact on the poorest people," Kuroda said.
"The main challenge for regional political leaders in 2008 is to limit the impact of these price rise on the poorest people, without compromising macroeconomic stability."
The ADB is to hold its 41st annual meeting in Madrid on May 3-6.
World Bank President Robert Zoellick said earlier this month that millions of people could be at risk because of soaring food costs and urged governments to act now so that a bigger price would not have to be paid later. (AFP)

Vietcombank assets shrivel during first quarter

Wednesday, April 23, 2008
Vietcombank’s assets shrank slightly during the first quarter of the year, according to business reports issued on April 22 in advance of Saturday’s general shareholders meeting.
As of March 31, total assets of the Hanoi-based bank had fallen to 195.58 trillion VND (12.22 billion USD), down 0.3% from the same day last year.
This was the first time Vietcombank has witnessed a decline in total assets in the past 45 years, said bank chairman Nguyen Hoa Binh in a press conference on April 22 announcing the results.
”The situation has been affected by slower growth in global economies and rapid changes in the nation’s monetary market,” Binh said.
Vietcombank has targeted total assets of 211.08 trillion VND ( 13.19 billion USD) by the end of this year, up 7.7% from last year’s total. The bank projects total assets of 30 billion USD by 2015.
The bank’s outstanding loans by the end of March were up 10.1 percent to 105.6 trillion VND (6.6 billion USD), of which non-performing loans accounted for 1.4%. The bank targets this figure to gain 29.2% through the end of the year, to reach 123.91 trillion VND (7.74 billion USD) by December 31.
Profits in 2008 are projected to increase 11.68 over 2007, to 3.38 trillion VND (211.43 million USD).
Vietcombank currently has 12 trillion VND (750 million USD) in charter capital. Based on its approved equitisation plan, that figure will be increased to 15 trillion VND (937.5 million USD).
The bank has plans to issue 3 trillion VND (187 million USD) in shares to strategic investors this year, but is still in the process of negotiating with potential partners. None of these possible strategic partners has yet been named.
Binh on April 22 re-affirmed that Vietcombank shares would be listed on the HCM City Stock Exchange sometime this year but declined to release further details.
Vietcombank, newly equitised in 2007, will hold its first-ever general shareholders meeting on Saturday at the National Convention Centre in Hanoi .
The bank has over 15,000 shareholders eligible to attend.
The meeting will discuss personnel issues regarding the seven-member executive board and five-member supervisory board and the bank’s 2008 business plan.
Individuals or institutional shareholders representing ownership of at least 5% of equity in the bank are eligible to propose issues for discussion in the shareholders meeting. (VNA)

April 23, Stock descend again, VN Index slips to below 530pts

Wednesday, April 23, 2008
Ending the trading session today April 23, the 1772nd trading session of the Vietnamese stock market, the Ho Chi Minh City Stock Exchange (HOSE) continued falling when the VN Index lost another 8.67 points or 1.63% to 521.95 pts with the total matching order trade of 4,422,390 shares and fund certificates worth over 190 billion dong, marking the fourth consecutive decreasing session on the stock market.

Among 154 shares and fund certificates being listed on the southern bourse, the stock market recorded 15 shares increasing, nine others remained unchanged, three shares with no transactions and 127 shares decreasing.

Some share codes increasing were ABT, SBT, SHC, LBM, TTC and HIS.
Particularly, VNM and PVD lost 2,000 dong to 126,000 dong and 114,000 dong per share respectively, STB and PPC dropped 700 dong to 36,100 dong and 38,500 dong, FPT and VIC slipped 1,500 dong to 87,000 and 90,500 dong and DPM, ITA, HPG and SSI lost 1,000 dong per share.

DPM reached the biggest trading volume with over one million shares and followed by SBT with 626,230 shares, VNM with 189,200, VTO with 164,470 and others including TTC, DPR, PVD and SSI.

Foreign investors bought in 63 share codes with the total trading volume of 1,927,010 shares. Of which, DPM-coded shares reached the biggest trading volume with 760,490 shares, VTO with 181,680, VNM with 145,870 and others like SSI, ANV and PVD.

Influenced from the southern bourse, the Hanoi Securities Trading Center (HaSTC) today April 23 kept falling impetus on the stock market as the HaSTC Index slipped another 3.86 points or 2.22% to end at 170.4 pts with the total market trade of 1,948,900 shares worth nearly 76 billion dong.

Amongst 135 listed shares on the northern bourse, the stock market saw 13 shares increasing while 107 others decreasing, five shares stood still and ten shares with no trades.

Five shares remained unchanged including HEV, KBC, L18, SAP and SD5.

Ten shares with no trades were C92, CID, DST, HSC, HUT, KMF, NGC, NPS, SD3 and VE9.

13 shares increasing included BHV up 700 dong, DAC +800, DCS +400, DTC +1,600, HLY +1,100, HPS +400, LBE +100, LTC +300, MIC +2,400, SCC +200, SDY +400, VNR +100 and VTS leaped 1,000 dong per share.

Meanwhile, S99 was the biggest decliner as losing 2,700 dong and followed by ACB lost 2,500 dong, BVS slipped 2,400, VSP dropped 2,300, RCL slashed 2,100 and SCJ down 2,000 dong per share.

ACB took the first place in trading volume with 216,600 shares, followed by DBC with 171,700 shares, NTP with 156,500 and NVC with 116,100 shares and others with below 100,000 shares being traded.