Thanh Cong apparel firm to issue 1tr dong of convertible bonds

Tuesday, May 6, 2008
Thanh Cong Garment and Textile Joint Stock Co recently announced that it plans to issue one trillion dong of convertible bonds separately to mobilise investment capital for its realty projects from 2008 to 2010 with the total volume of 10 million three-year bonds and the coupon rate of 12% per annum.
The convertible rate in the first year will be 1:3 or one bond will be converted into three ordinary shares, the rate will be 1:2 in the second year and 1:1 in the third year.
These bonds will be issued to both domestic and foreign individual and institution investors.
Creditors owning from 15,000 convertible bonds and higher will receive preferential rights in buying apartments in the company's realty projects.

Truong Hai Automobile targets 2008 dividend of 45%

Tuesday, May 6, 2008
Truong Hai Automobile Joint Stock Co's shareholders' meeting recently passed the business plan this year with over 6.98 trillion dong in revenue, 554.411 billion dong from after tax profit and planed to pay 2008 dividend of 45%.
The shareholders' meeting also reported business result last year with 2.692 trillion dong in revenue, 244.82 billion dong from after tax profit and EPS was 4,780 dong per share.
The company would pay dividend of 19% in cash and 12% in shares for the second phase of 2007.
This year, Truong Hai Co plans to invest in large-scaled automobile installing and manufacturing complex in Chu Lai open economic zone and develop spare part manufacturing mills and showroom system.

SMC posts over 20b dong profit in Q1

Tuesday, May 6, 2008
The listed firm on Ho Chi Minh Stock Exchange, SMC Trade and Investment Joint Stock Co (coded SMC) recently reported the business result in the first quarter of this year with 1.007 trillion dong in revenue and 20.1 billion dong in profit, equalling to 40% of the whole year's target.
The company's business result in the first quarter of this year increased 89.6% in comparison with the same period of last year.
Notably, in April, the SMC signed two contracts to distribute 13,000 tonnes of steel for Taiwan-based Bao Gia Joint Stock Co's Bao Gia office building and another 9,000 tonnes for the first phase of Korea-based GS Engineering & Construction Corp's XI RiverView Palace apartment project in HCM City.

LienViet Bank signs two strategic partnership agreements

Tuesday, May 6, 2008
Lien Viet Commercial Joint Stock Bank (LienViet Bank) recently announced that on May 3 it inaugurated its branch in the southern province of Hau Giang and signed strategic cooperation agreements with two domestic big partners namely Dong Thap Petroleum Trading Co (Petimex) and Agriculture Bank Insurance Joint Stock Corp (ABIC).
Accordingly, LienViet Bank will take full advantage of petroleum, hotel and seaport service sectors of Petimex. Conversely, Petimex will use LienViet Bank's banking and financial services.
As for ABIC, the two signatories pledged to use services of each other. Of which, ABIC pledged to open principal accounts and carry out payment activities frequently via Lienviet Bank.

Bank shares lose lustre on capital raising drives

Tuesday, May 6, 2008
With the plans to increase by two or three times in chartered capital, most banks decide to offer preferential shares to employees with an aim to hold qualified workforce. Compared with the previous year, the preferential volume of bank shares for employees now seems to be more superfluous. However, due to the less attractiveness of bank shares, many employees are not too much keen on their bank shares though with very preferential prices.
Among 458 million ordinary shares with par value of 10,000 dong that Eximbank plans to issue to raise the chartered capital from 2.8 trillion dong to 7.38 trillion dong within this year, the bank will sell 12 million shares to employees with the price of no less than the face value. According to Eximbank, the share issue aims to set up a share fund for the policy of attracting qualified human resources called "Human Resources Development Fund" that will be maintained until 2010.
Similarly, in line with the approved plan, Asia Commercial Bank (ACB) will offer 2.5 million bonus shares among forthcoming 372.57 million shares at 10,000 dong par to its employees. This is a part of the bank's plan to hike the chartered capital from the current 2.63 trillion dong to 6.355 trillion dong in 2008. As estimated, about 2,500 employees are allowed to join the share offering under ACB's bonus share regulation.

Meanwhile, in the plan to increase the chartered capital up to 6.048 trillion dong from 4.449 trillion dong at the moment, Sacombank will issue three million shares worth 30 billion dong on par to its key employees with the selling price of 15,000 dong per share. Yet, the employees must pledge to hold preferential shares and derivative rights within three-years from the issue date.

For HCM City Housing Development Bank (HDBank), as a part of the plan to hike the chartered capital from one trillion dong to two trillion dong in this year, five million shares worth 50 billion dong on par enclosed with preferential interests will be offered to employees with the issue price of 10,000 dong per share equalling to the par value of the bank share. But, buyers are only members of director board, supervision board and management board of the bank. Additionally, the buyers must commit to hold these preferential shares within six months and derivative rights from the bank gains authorities' approval on capital increase. Also, Pacific Bank will offer 60,000 shares [accounting for 3% of the share volume in the plan to reach a chartered capital of two trillion dong] to its employees.

Factually, not all employees are enthusiastic with bonus shares or preferential shares of banks in forthcoming capital increases. Two-years ago when bank shares were still considered "king shares" in terms of attractiveness, a lot of employees expected to buy banks' bonus or preferential shares even at that time, issue price was higher 4-5 times over par. But currently, the selling price that equals to 1-1.1 times over par still does not satisfy employees because of the stock market slump. In fact, prices of bank shares were down 70-80% sharply as compared with the same period of 2006. Typically, the STB coded share price of Sacombank in April ever stood at only over 30,000 dong each while the bank announced to sell shares to employees at the price of 15,000 dong. Therefore, at present, the issue of preferential shares to increase chartered capital is unlikely an investment opportunity for employees, even it can become the challenge for many banks' leaders.

Song Da 909 subsidiary to pay dividend in shares

Tuesday, May 6, 2008
Song Da 909 Joint Stock Co (coded S99) recently announced that it would hike chartered capital via paying 2007 dividend in shares and offering more bonus shares to the existing shareholders.
In particular, the registration deadline for the company to close the list of shareholders book to is on May 16 so as to offer 1,473,970 shares to the existing shareholders at the ratio of one new share for one share held.
Of which, the company plans to pay 96% dividend in shares with the total volume of 1,415,011 shares and offer more 4% or 58,959 bonus shares.

Song Da 909 subsidiary to pay dividend in shares

Tuesday, May 6, 2008
Song Da 909 Joint Stock Co (coded S99) recently announced that it would hike chartered capital via paying 2007 dividend in shares and offering more bonus shares to the existing shareholders.
In particular, the registration deadline for the company to close the list of shareholders book to is on May 16 so as to offer 1,473,970 shares to the existing shareholders at the ratio of one new share for one share held.
Of which, the company plans to pay 96% dividend in shares with the total volume of 1,415,011 shares and offer more 4% or 58,959 bonus shares.

May 05, Foreigners Net Buyers Of VND44.3 Billion Of Shares

Monday, May 5, 2008
Foreign investors were net buyers of VND44.3 billion ($ 2.77 million) of Vietnamese stocks Monday out of a total VND227.4 billion traded, the Ho Chi Minh Securities Trading Center said.
Volume was 4.8 million shares, with foreigners accounting for 24.4% of the total, the stock market operator said. (Dow Jones)

Regulators ban new stock brokerages, fund managers

Monday, May 5, 2008
Viet Nam has too many stock brokerages according to SJC Securities Joint Stock Co general director Huynh Anh Tuan.
"With the current small size of the stock market, the number of existing securities companies is too much," said Tuan.
"In recent months, the number of newly-founded securities firms has been higher than the number of new listings on the bourse," he said.
Eighty-seven brokerage houses currently operate nationwide, giving Viet Nam a much higher proportion of brokerages than other nations in the region.
According to figures from the Economic Committee of the National Assembly, China now has 107 securities firms, Malaysia 37, Thailand 31, Singapore 27 and South Korea 50.
Meanwhile, the applications of dozens more firms are pending at the State Securities Commission.
As a consequence, the commission suspended the acceptance of further applications on April 28, including requests to form new fund management companies.

The interim move was intended to improve the service quality and effectiveness of existing brokerage houses and fund management firms.

Some have argued that the rule was anti-competitive and that the entry of new brokerages onto the market, and the resulting competition, would generate better services.

Many have also questioned the ban on new fund management companies. Fund management companies are professional investment institutions which pool the capital of individuals to invest in securities. Most market watchers believe it is a type of professional institution that should be encouraged, not stymied.

There is wider support in the industry for the ban on new stock brokerages, however, as many have been set up merely as vehicles for companies to trade securities on their own behalf. The end result, however, has been than many brokerage houses are facing bankruptcy now that the stock market has dropped.

Not only have these firms lost money on their own investments, their income from trading fees has also slowed to a trickle. Tighter daily trading bands on the nation’s stock exchanges has slowed trading volumes, but membership fees that securities companies pay to both the HCM City and Ha Noi exchanges have remained as high as before.

Meanwhile, fixed operating costs of these securities firms, including rents and wages, continue to rise. Some analysts expect a wave of mergers among securities firms over the next year as many struggle to survive. (VNS)

May 05, Stock market sees slight decline in first trading session in May

Monday, May 5, 2008
After a long holiday, the domestic stock market dropped on the first trading session in May today with the market indicators as well as trading volumes and values on both bourses dropping and a majority of listed stocks suffering losses.

Ending the third order matching phase today, the VN-Index today lost 1.08 points (0.2%) to close at 521.88 though it managed to gain slightly in the first two matching phases with only over 4.8 million matched for more than VND 227 billion, plus 1.4 million other units traded through negotiations worth VND over 90 billion.

Up to 98 stocks listed saw falls while only 43 gained, eight others maintained their reference prices and five had no trading at all.

The five top gainers included three pharmaceutical companies, DHG, DMC and IMP. The other two were KDC and VNM. DHG increased by VND 3,000 a share while the other four stocks were up by VND 2,000 a unit each.

Other large-cap stocks that gained included PVD, HPG, ITA, PPC and VPL while STB, SSI, FPT, VIC and DPM were losers.

STB lost 600 dong to 32,900 dong, SSI slipped 900 to 48,100 dong, FPT dropped 1,500 dong to 79,500 dong, DPM lost 1,000 to 52,500 and VIC down 1,500 to 92,000 dong per share.

STB took the pole place in trading volume with 661,830 shares and followed by DPM with 536,630, PPC with 244,730, HPG with 227,270, VNM with 208,760 and VSH, VTO, FPT and SSI.

Foreign investors bought 68 share codes with the total volume of over 1.1 million shares. Of which, DPM reached the biggest trading volume with 174,550 shares, PPC with 147,410, VNM with 146,960, VSH with 104,850 and others with below 100,000 shares.

Conversely, the Hanoi Securities Trading Center (HaSTC) today May5 kept decreasing impetus on the stock market as the HaSTC Index lost another 2.06 points or 1.22% to end at 167.05 pts with the total market trade of 1,878,600 shares worth over 76 billion dong.

Amongst 135 listed shares on the northern bourse, the stock market saw 17 shares increasing while 102 others decreasing, two shares stood still and 14 shares with no trade.

Two shares remained unchanged including DBC and DTC.
14 shares with no trade were B82, BTH, C92, CID, HSC, HUT, KMF, L62, NGC, NPS, S12, TJC, TPH and YSC.

17 shares increasing included BHV up 800 dong or 2.79%, CTB +500, DAC, LTC, MEC and VFR +300, HJS and HNM +400, KBC, PSC, STC and VNR +100, LBE +200, LUT and NVC +700, MIC +2.800 and VSP jumped 1,400 dong per share.

Meanwhile, S99 showed the biggest decrease when losing 2,400 dong and followed by ACB lost 2,300 dong, BVS dropped 2,100, NBC slipped 1,700, VDL plunged 1,600, RCL, SCJ and SD2 slashed 1,500 dong and SD7 and SDA tumbled 1,400 dong per share.

ACB reached the biggest trading volume with 232,500 shares and followed by PVS with 161,500 shares, NVC with 123,500, PVI with 123,000, DBC with 118,700, HNM with 114,600 and others with below 100,000 shares.

Foreign ownership: more room will be provided, but how much?

Monday, May 5, 2008
There are many signs that show that more room will be provided for foreign investors in local companies. However, it remains unclear how large the rooms will be.
Decision No 745 by the Ministry of Finance on the action programme to stabilise the market and curb inflation in 2008 stipulated that the Department for Enterprises’ Finance and State Securities Commission are assigned to amend Decision 238 on foreign ownership ratio in listed companies, and the report must be submitted in May 2008.
The currently applied Decision 238 dated September 29, 2005 stipulates that the maximum foreign ownership ratio in local listed companies is 49%.
As such, the plan to raise the foreign ownership ratio in Vietnamese listed companies from the current level of 49% is being considered.
Providing more room for foreign investors is considered desirable in the context of Vietnam’s deeper integration into the world’s economy. As the market is falling, domestic investors are trying to sell shares to cut losses. However, foreign investors still want to buy more shares.

The state has not wanted to offer a higher proportion for foreigners as it fears that a withdrawal of foreign investors from the stock market could lead to the collapse of the market.

However, the viewpoint should be reconsidered. In fact, if the market falls unexpectedly, investors of all nationalities would want to escape from the market.

A lot of foreign investment funds are willing to hold more than 50% of stakes of a company so that they have the right to be involved in planning business for the company and optimise profit. The most important thing for a company is business results, not the nationality of its members.

There are three scenarios for increasing foreign ownership ratio:

1. The ratio is raised from 49% currently to 50%. This would discourage investors as they expect a higher increase; therefore, there would be no active response in the short term.

By April 26, the room for foreign investors in 13 companies was fully occupied. 12/13 companies are not listed among the top 10 companies that have the highest market capitalisation.

If the ratio increases by 1% and foreign investors buy all the stakes they are allowed to buy, this will not be able to make the VN Index increase in the short term.

2. The ratio is raised to 50%, while the roadmap for further raising foreign ownership ratio is announced.

This would bring long-term positive effects. Foreign investors would know the details of the roadmap on raising foreign ownership ratio so that they could create suitable investment plans.

3. The ratio is raised above 50%. The demand will be higher from foreign investors, which will also help push domestic demand up. In 2005, when the foreign ownership ratio was raised to 49%, the market became prosperous right after that.

Nevertheless, analysts have warned that investors should not expect the foreign ownership ratio increase too much. The 13 companies which have the current foreign ownership ratio of nearly 49% may still be the choices of foreign investors. However, the foreign demand increases will not help much in making the market prosperous, as the VN Index is being influenced by the share items of the 10 companies with the biggest market capitalisation value, not the 13 share items with the highest degree of foreign participation.

13 share items on HCM City Stock Exchange that have no more room for foreign investors

Foreseeable losses for banks’ financial investments

Monday, May 5, 2008
A lot of securities companies and commercial banks have reported losses on their securities investments as the stock market has been falling since the end of 2007.

The Refrigeration Engineering Enterprise (REE), which reaped several hundred billions VND from securities investments in 2005, 2006 and the first three months of 2007, has reported the loss of VND100bil for the first quarter of 2008. The La Nga Sugar Plant, which injected VND17.7bil in 10 share items, has also reported heavy losses.

All securities investments bringing losses

In 2007, Eximbank sold VND500bil worth of stakes to 17 strategic partners at a price 8 times higher than the face value (VND4tril or $250mil). However, as Eximbank’s share price has dropped to VND36,000/share (- 50%), the said 17 partners have suffered the loss of VND2,200bil ($137.5mil).

A lot of securities companies have reported losses on securities trading deals. Six securities companies are offering themselves for sale after a period of suffering losses. Sources say that the director of a state owned bank’s securities company borrowed money from the company to make private trading deals, and since the deals failed, the director has had to leave his post.

Financial reports show that all joint stock banks have investments in securities, and it is certain that the financial reports will show big losses for the investments due to the falling stock market.

ACB seems to be the leading securities investor. Its audited financial report shows that by December 31, 2007, the bank’s total investment value in stocks had reached VND9,636bil ($602.25mil), equal to 23.2% of the total outstanding loans and investment value of the bank (VND41,446bil or $2,590.37mil).

South East Asia Bank had the total investments in securities of VND3,968bil ($248mil) by December 31, 2007, while VIB bank VND6,676bil ($417.25mil), Military Bank VND2,169bil ($135.56mil), and Techcombank VND6,842bil ($427.62mil).

Being a joint stock bank with a modest scale of operation, An Binh Bank, which has shifted to operate as an urban bank from a rural bank, also had investments in securities of up to VND3,569bil ($223.06mil), equal to 52.55% of its total outstanding loans (VND6,800bil or $425mil).

Lessons for business strategy should be drawn

Stock prices have decreased by 50% compared to the end of 2007, and it remains unclear when the market will recover. Therefore, it is foreseeable that joint stock banks will incur losses for securities investments in 2008.

In principle, enterprises in general and commercial banks in particular should only make investments in securities with a certain proportion, while they should focus on their main business fields. However, the high profit gained in the early 2007 made them forget the principle.

They may also well understand that in all investment cases, they have to make provisions in anticipation of price decreases. However, some banks seemed to ignore this principle as well. (VNE)

Standard Chartered ups stake in Asia Commercial Bank to 15%

Monday, May 5, 2008
Standard Chartered Bank has increased its stake in Asia Commercial Bank to 15%.
Standard Chartered acquired a 6.16-per-cent interest from the International Finance Corporation (IFC), raising its holdings from 8.84% to the maximum of 15% allowed to be held by a single foreign strategic investor.
Under the deal, the London-based bank also increased its holdings in Asia Commercial Bank's outstanding convertible bonds from 8.76% to 15.86%.
The acquisition is subject to appropriate regulatory approvals.
Ray Ferguson, regional CEO of Standard Chartered in Southeast Asia, said his bank was impressed with Asia Commercial Bank's growth over the past three years, a rate far higher than the industry average in Viet Nam.

"Standard Chartered's move to increase its shareholding is a vote of confidence in ACB's growth strategy and potential," he said.

ACB chairman Tran Mong Hung expected that, as a major shareholder, Standard Chartered would be able to provide further technical support, benefiting ACB in its operations.

"With Standard Chartered acquiring a larger stake and strengthening its strategic partnership with ACB, the role of IFC, particularly in supporting ACB's transition into a leading commercial bank in Vietnam, is fulfilled," said Richard Ranken, IFC director for East Asia and the Pacific.

Standard Chartered has been a shareholder and strategic partner of ACB since July 2005. As of December 2007, the ACB's assets were worth US$5.4bil. (VNS)

Vietnamese firms chomp at bit to list

Monday, May 5, 2008
Around 30% of privately-owned companies in Viet Nam expect their business to be up for public listing in the next three years, according to a report produced by Grant Thornton.
Only China, India and Malaysia have a higher rate, according to the recent annual International Business Report.
The survey was conducted on 7,800 private businesses in 34 countries.
The report also states that despite the current turbulence in the world financial markets, 44% of privately held businesses globally are planning to grow through acquisition in the next three years. Of those, 23% anticipate a trans-national deal.
These businesses see domestic and international mergers and acquisition as a key strategic tool to push growth, according to the report.
Domestically, about 29% of private businesses plan to growth through acquisition, whereas only three percent plan to sell their business in the next three years.

Viet Nam to curb credit growth to battle inflation

Monday, May 5, 2008
Viet Nam, where annual inflation rates have been in double digit figures for six consecutive months, is stepping up efforts to rein in price pressures by limiting loans to stock and property investors and consumers, the central bank said.
"Strict control will be applied to monitor credit growth as well as credit quality and measures to curb loans to stock trading, real estate investment and consumer finance will continue to ensure the safety of commercial banks," Nguyen Van Giau, the governor of the central bank, said in a statement seen on Monday.
Giau said credit grew in the first four months of 2008 by 14.73% from the end of 2007. In the same period of 2007 it grew 9.79%. The government wants to limit credit growth this year to 30%. (Reuters)