Hung Viet fund management firm licensed

Friday, May 9, 2008
The State Securities Commission (SSC) on May 6 granted business license No 33/UBCK-GP for Hung Viet Fund Management Joint Stock Co (HV Capital) located at No 63 Pham Ngoc Thach Street, Ward 6 in HCM City's District 3.
HV Capital with a chartered capital of 25 billion dong will specialise in securities investment fund management, securities investment enterprises and securities investment portfolio management.

Vietcombank finance leasing arm to raise chartered capital

Friday, May 9, 2008
Vietcombank Finance Leasing Co has been approved to raise the chartered capital from 100 billion dong to 200 billion dong, according to SBV's Decision No 1016/QD-NHNN dated May 6, 2008.
In addition, the company also was licensed to amend regulations after completing necessary procedures to register the new-chartered capital under current laws.

Businesses fail in securities investment

Friday, May 9, 2008
In the difficult period of the stock market at the moment, not only many small investors but also financial institutions, investment funds and banks now have a big headache of big losses in securities business.

During 2006-2007, a slew of banks, funds and financial institutions considered corporate shares to be sure gain for the future. Even a lot of strategic partners gained agreements to buy back corporate shares at a price much lower than the trading price and listing price. But since March 2008, these strategic partners have been very surprised at unexpected losses due to a quick slump in share prices.

By the end of 2007, Tan Tao Industrial Zone Joint Stock Co (coded ITA) offered to sell 20 million shares to strategic partners with the lowest price of 85,000 dong per share. On May 5, ITA share price remained at 73,000 dong each and if strategic partners buy all shares, the loss will be 240 billion dong.

Seemly, ITA's strategic partners are still luckier than Vietnam Eximbank's 17 strategic partners who earlier purchased 500 billion dong of the bank's chartered capital at a price higher eight times over par value meaning that the total value of share sales reached four trillion dong. At present, the bank share stands at 50% of the par value and it is easy to see a loss of up to two trillion dong.

Many financial institutions and foreign banks perhaps now felt relief after the deny of taking Vietcombank's shares at an average price of 108,000 dong per share by the last year end. If not, with the current price of 50,000 dong per share, they [financial institutions and foreign banks] could loss at least a half of their investment capital spent on the share.

Listed firm Refrigerating and Electrical Engineering Shareholding Co (REE) previously earned a profit of hundreds of billions of dong a year thanks to securities investment, but during the first quarter of 2008, it announced a loss of over 100 billion dong in the field.

Not only domestic strategic investors but also foreign investors are not exception in the stock market slump. Two investment funds including Vietnam Dragon Fund Limited and Vietnam Opportunity Fund last May bought 1.2 million DMC coded shares of Medical Import Export Joint Stock Co at 130,000 dong per share. Based on the market price of the share code on May 5, 2008, two funds lost more than 100 billion dong.

Similarly, the US' Chip Eng Seng and Citadel Investment Fund�Hong Kong Branch who took one million HBC coded shares of Hoa Binh Real Estate Construction and Trading Joint Stock Corp now also are suffering a big loss of 250 billion dong. As estimated, over two trillion dong of investment funds was evaporated on the stock market.

Even the majority of thousands of billions of dong in banks' achieved profit that was earned from securities self-trading in 2006-2007 was poured into securities business and now these banks are under the heavy pressure caused by the slide of the stock market.

Leading among commercial banks in terms of total capital amount pumped into securities investment is ACB with 9.636 trillion dong, followed by VIBank 6.676 trillion dong, Techcombank 6.842 trillion dong, South-eastern Asia Commercial Bank (SeABank) 3.968 trillion dong, ABBank nearly 3.6 trillion dong, Maritime Bank 2.169 trillion dong and VPBank with 1.678 trillion dong.

Currently, a lot of banks raced to offload mortgaged shares of investors and their shares, due to this State Bank of Vietnam was forced to propose banks to stop offloading of mortgaged shares.

Securities analyst Tran Ngoc Nam assessed, by the middle of 2007, the stock market was frozen and expected to rally between the end of 2007 and the start of 2008. Due to the predication, many banks poured a huge capital into securities investment. And now most of them see big losses.

According to the economist Nguyen Quang Hung, losses from banks' financial investment have not been revealed yet thanks to the recent interest rate fever. Moreover, in these lenders' financial report, they only publicised "nice figures" without detailed results from the business field. (Tien Phong)

Fund in the red but still upbeat on share punts

Friday, May 9, 2008
VietNam Asset Management Ltd (VAM) recently announced losses in the first quarter of 2008 but they confirmed to continue investing in Vietnamese stock market.

Deep correction of the stock market pushed many share prices back to the real value, even lower. This is also the good opportunity for investors, including VAM, assessed the fund's general director Nguyen Xuan Minh.

Which factors of Vietnamese stock market attract foreign capital?

Foreign investors as pouring money into any country always focus on political and social factors, economic growth prospects as well as investment policies and rules. Viet Nam has a stably political and social background as compared with other emerging counties such as Thailand, Philippines, or Indonesia. Viet Nam's open door policies and rapid economic growth in many years are advantages to attract foreign investment capital. The shape and development of Vietnamese stock market is also similar to that of emerging markets of China, Russia, India, Thailand and Latin America. As the market remains young, small and inexperienced investors usually trade shares in line with the psychology of the crowd mentality and in short-term rather than securities investment with a careful consideration and analysis. This caused sudden changes and instability of the stock market. Many share prices are now adjusted down to their real value. In my opinion, the stock market slump is not totally the cause of the reduction in foreign capital inflow into Viet Nam. The proof is that global well-known large sized groups managing hundreds of billions of dollar, like Franklin Templeton, Dubai Investment Group started to pay more attention to Viet Nam with the faith in a healthy and equal stock market.

Which funds is VAM managing? How about favourite investment sectors of VAM?

VAM is managing three investment funds including Viet Nam Emerging Market Fund, VAM Vietnam Strategic Fund with the participation of two strategic shareholders of Dubai Investment Group and UOB KayHian, and a public fund in Malaysia. We can invest US$3-15 million in a company through strategic investment by buying additionally issued shares or convertible bonds based on that company's operation, administration ability and financial strength with a clear development strategy and independence with its parent company. VAM now is focus on key sectors such as petroleum, energy, real estate, infrastructure, natural minerals, telecommunication, consumer goods, agriculture and finance.

From Viet Nam recognised to be "the best grower in Asia" last year, it is proposed that there should not to invest in the stock market because domestic investors and foreign funds as well received huge losses due to the strong slide of VN Index during the recent time. How does VAM suffer affects from this?

During the last one-year, the VN Index dropped by 50%. Most investment funds that invested in listed shares received big losses. Even some lost over 40% of their initial capital. Particularly funds of VAM, their investment results remained good as compared with the slump of VN Index and other funds. Because, when the stock market was overheating with a sharp rise in listed shares, we decided to adjust our investment portfolio to shift to unlisted companies with cheap shares. After a period, these unlisted companies reported a good performance so our funds were not affected much due to the drop in the stock market. In particular, our one fund only lost 6% against the fall of 50% of the stock market and another earned a profit of over 20% during the last one-year.

What is VAM's assessment on the correction period of Vietnamese stock market recently as well as growth prospects in the future?

The recent correction of Vietnamese stock market is essential correction that any global market must face after a too overheating development period. On the other hand, US economic depression and global inflation situation also have affected strongly to most finance markets and Vietnam is not an exception. However, above factors are temporary only. VAM still is very optimistic about the strong growth of Vietnamese stock market in the future and believes that Vietnam's securities investment environment will be clearer and participants will have a better corporate administration culture.

Can your please reveal what VAM's investment commitments in Viet Nam are?

We will continue investing in Viet Nam market and currently promoting the capital mobilisation in foreign countries. Especially, we are prep rating to raise capital from Asia, Europe and Middle East for a new fund that will be listed on an Asian stock market. Moreover, VAM is cooperating with two Japanese finance companies to set up a Vietnamese fund with an aim to help Japanese investors enter the Vietnamese stock market more easily and effective. (TBKTVN)

Minh Viet Capital established

Friday, May 9, 2008
State Securities Commission (SSC) yesterday granted the establishment license to Minh Viet Securities Investment Fund Management Joint Stock Co called Minh Viet Capital with a chartered capital of 50 billion dong.
Minh Viet Capital is licensed to operate in fields of setting up and managing securities investment funds, securities investment companies and securities investment portfolio.
The firm's general director is Bui Quang Thanh.
Company address: Floor 11, Northern Asia Building at No 9A Dao Duy Anh St, Hanoi's Dong Da Dist.

Bac Ninh Agricultural Product firm to offer shares

Friday, May 9, 2008
Bac Ninh Agricultural Product Joint Stock Co (coded DBC)'s shareholders' annual meeting recently passed the plan to offer 16.55 million shares to hike its chartered capital to 260 billion dong in two phases.

In the first phase, DBC plans to offer 9.45 million shares to the existing shareholders at the ratio of one new share for one share held with the price of 15,000 dong per share, 70,000 shares will be sold to the key staff, 50,000 shares will be offered to the company's new staff and 350,000 shares will be allocated to the directors board's members with the price of 17,000 dong per share.

In the second one, DBC would retail 6.63 million shares to strategic partners with the price of 80% of the average trading price of five consecutively trading session and not below 23,000 dong per share.

The capital being mobilised from the share issue will be invested in big project and support business capital.

Particularly, the company plans to invest in Dabaco 2 plant project worth 42.292 billion dong in Khac Niem industrial zone in Bac Ninh, 35 billion dong to establish Dabaco Song Hau (Hau River) Joint Stock Co, 60 billion dong to build a warehouse for lease in Dai Dong industrial zone and 12.448 billion dong to support business capital.

In the second phase, the company would invest 115 billion dong in Que Vo 3 industrial zone and 37.49 billion dong to support business capital.

In addition, the shareholders' meeting also passed the plan to change its name to Dabaco Vietnam Joint Stock Co and offer 100 billion dong of corporate bonds at 100,000 par separately to invest 50 billion dong in infrastructure in Que Vo III industrial zone and the remaining 50 billion dong will be invested in the project to build a warehouse for lease.

These bonds with terms of from three-years to five years have fixed interest rate of 13-15%.

This year, the company has been striving to achieve over 1.515 trillion dong in total revenue, 50.346 billion dong from pre tax profit, 44.051 billion dong from after tax profit and dividend of 15%.

Song Da subsidiary to offer 3m shares

Friday, May 9, 2008
Song Da Development and Investment Joint Stock Co (SIC)'s shareholders' meeting recently passed the plan to offer three million shares to hike its chartered capital from the current of 50 billion dong to 80 billion dong and invest in some big projects in this year through two phases.

In the first phase, the company plans to offer one million shares to the existing shareholders at the ratio of one new share for five shares held and the price of 10,000 dong per share. In the second one, SIC would auction two million shares to the public with the initial price according to the average price of 15 trading sessions earlier.

This year, the company plans to continue its investment in some big projects including Song Da Tower project worth 45.8 billion dong, 36.4 billion dong Krong K'mar hydropower project, Hiep Binh Chanh residential area project valued at 800 million dong, four billion dong invested in Song Da Ban Me Joint Stock Co, eight billion dong in Dac Nong Trade and Mineral Joint Stock Co, 100 billion dong in Song Da Riverside Hiep Binh Phuoc-Thu Duc-HCM City project, 20 billion dong in Nhon Trach-Dong Nai urban zone project and 50 billion dong in Song Da IDC-Ha Tay project.

Last year, the company made a revenue of 92.94 billion dong and 15.155 billion dong from after tax profit.

This year, SIC set a target of 85.6 billion dong in revenue, decreasing nearly 7.9% against 2007, 10.1 billion dong from pre tax profit, falling 33.35% from 2007 and a dividend of

Song Da 9.01 subsidiary to pay dividend of 16% in cash

Friday, May 9, 2008
Hanoi Securities Trading Center (HaSTC) recently announced that the registration deadline for Song Da 9.01 Joint Stock Co (coded S91) to close the list of shareholders book to is on May 16 to pay dividend of 16% in cash on June 16.

In the fourth quarter of 2007, the company brought 6.832 billion dong in revenue from sales and services provision and 1.789 billion dong from after tax profit, bringing the total figures for the whole year to 28.776 billion dong and 4.583 billion dong respectively.

This year, S91 targets 99.028 billion dong in revenue, 6.866 billion dong in profit and dividend of 17%.

Ending the trading session on May 7, S91-coded shares lost 600 dong or 2.78% to 21,000 dong per share with 200 shares being traded.

Hai Phong Cement Trading and Transportation to offer shares

Friday, May 9, 2008
The State Securities Commission on May 5 issued Decision No 301/UBCK-GCN approving Hai Phong Cement Trading and Transportation Joint Stock Co (HP CTT) to offer 1,041,558 ordinary shares at 10,000 dong par to the existing shareholders under the consultancy of Bao Viet Securities Joint Stock Co.
The share offering must be implemented within 90 days from being licensed.
HP CTT has a chartered capital of over 10.415 billion dong.

Tien Phong bank licenced

Thursday, May 8, 2008
TienPhong Commercial Joint Stock Bank (TienphongBank) on May 7 was licenced by the State Bank.
The bank has the chartered capital of VND 1,000 billion, 15% of which is held by FPT Technology Investment and Development SJC; 12.5% is held by VMS Mobifone; 12.5% is held by Vinare; and the rest belongs to other shareholders.
According to Tienphong Bank’s General Director Dao Trong Khanh, the bank will operate in Hanoi, Ho Chi Minh City, Danang, Can Tho and Hai Phong from June following the ISO 9001:2000 management standards.
Under its plan, after one year operation, the bank’s chartered capital will be increased to at least VND 3,000 billion.
According to State Bank Governor Nguyen Van Giau, Vietnam currently has 5 state-owned commercial banks, 2 state-owned credit institutions of prior loans, 34 commercial joint stock banks, 44 branches of foreign banks, 5 joint venture banks, 13 finance leasing companies, 9 financial companies, 54 representative offices of foreign banks and nearly 1,000 people’s credit funds. (TBKTSG)

Foreigners Net Buyers Of VND121.2 Billion Of Shares

Thursday, May 8, 2008
Foreign investors were net buyers of VND121.2 billion ($ 7.58 million) of Vietnamese stocks Thursday out of a total VND304 billion traded, the Ho Chi Minh Securities Trading Center said.
Volume was 5.4 million shares, with foreigners accounting for 57.7% of the total, the stock market operator said. (Dow Jones)

HOSE to organise ATIC@HCM City 2008

Thursday, May 8, 2008
The Ho Chi Minh City Stock Exchange (HOSE) has co-operated with NextView Co to organise the second exhibition of ATIC@ HCM City 2008, to be held between May 31 and June 1.
According to HOSE, the participants, including investors and financial intermediaries, will have a chance to exchange experiences and information. (VNS)

Stricter control imposed on opening new bank branches

Thursday, May 8, 2008
As of May 14, banks that want to open new branches, transaction points or representative offices will have to obey Decision No 13 on the regulations on the networks and operations of commercial banks – a stricter decision than its predecessor.

Under the decision, banks can only open new branches, transaction points one year after their date of opening, if they meet the requirements set by the State Bank of Viet Nam. The banks must make profit in the year before the year when they ask for permission to open new branches. They must meet requirements in capital adequacy ratio and other financial indices. They must have a bad debt ratio of less than 3% of total outstanding loans.

Banks can open overseas branches and representative offices when they meet the requirements as follows: have the operation period of five years at least, make profit in the three years prior to the year when they want to open branches. Moreover, they cannot have been fined VND30mil ($1,875) or more by State Bank inspectors the year prior to when they want to open branches. Additionally, the countries in which the banks want to open branches must have agreements with Viet Nam on cooperation in supervising and inspecting Vietnamese banks.

Commercial banks must have VND100bil ($6.25mil) at least for every new branch to be opened in Hanoi or HCM City (it was VND20bil or $1.25mil under the previous regulation), and over VND50bil ($3.12mil) for every branch to be opened in other localities (it was VND10bil or $0.6mil under the previous regulation).

Analysts say that with the new regulation, commercial banks will have to increase their chartered capital in order to meet the financial requirements to expand their networks.

Eximbank’s representative, for example, said that the bank is planning to have 110-120 branches and transaction points in 20 cities and provinces nationwide by the end of 2008. Therefore, the bank has to increase its chartered capital from VND2,800bil to VND7,380bil this year.

As for Sacombank, it plans to open six more branches in Vietnam (two in Hanoi, two in northern provinces, and two in HCM City). Moreover, it also plans to set up branches in Laos and Cambodia.

ACB also has an ambitious plan to enlarge its operation network. It intends to open 93 branches and transaction points by the end of the 2008 fiscal year. If successful, ACB’s network will have 204 branches and transaction points. However, the bank’s representative said that the newly promulgated regulations may force them to reduce their plan.

In fact, not every bank is ready to open more branches and transaction points at this moment. The central bank’s tightened monetary policy makes them think that opening more branches at this moment may bring loss. Credit activities of banks have been narrowed due to higher capital mobilisation costs and capital shortage; meanwhile, the fee for workshop premise leasing is increasingly high. (DTCK)

Forex policy as fickle as weather

Thursday, May 8, 2008
While the State Bank of Viet Nam (SBV) affirms that the foreign currency market has been stabilized, commercial banks still complain that they cannot buy dollars and the central bank has to put billions of dollars into circulation.

In March 2008, SBV’s forex policy saw a change: it let the VND revaluate against the dollar. As the result, the dollar depreciated sharply at that time, once dropping to VND15,882/US$1.

However, the policy could not last for long time. The dollar value unexpectedly increased sharply, forcing the central bank to pump dollars into circulation to restrain the price increases.

The dollar shortage is now not so serious and obvious on the market, but it has been threatening the commercial banks that are keen on import-export payment services. Those banks complain that they cannot buy enough dollars to sell to clients due to the fixed exchange rates. Importers and commercial banks can pay more to get dollars from dollar holders, but they dare not do that.

The only dollar supply source importers and banks are relying on is the central bank. However, the supplies from the source just come in dribs and drabs.

Businesses and individual dollar holders, who can be the big dollar suppliers to banks, now tend to keep dollars in hands as the tool of saving assets.

Analysts said that people now tend to keep dollars for fear about the trade deficit. According to the Ministry of Planning and Investment, Viet Nam’s trade deficit reached $11bil in the first four months of the year ($18.26bil worth of export turnover and $29.36bil worth of import turnover), or 60.8% of export turnover. The prediction that the US may stop slashing US$ interest rates has also prompted people to keep dollars as the dollar value may increase again.

The trade deficit showed the signs of slight decreases in April 2008, and will decrease further if the Government takes drastic measures to control imports. However, the drastic measures may cause other side effects.

The demand for dollars is increasing also because of the more expensive imports (petrol, steel and fertilizer). It is expected that the trade deficit may hit $20bil or higher, therefore, the dollar shortage always ‘lies in wait’.

Commercial banks have been trying to buy more dollars and attract dollar capital. Many banks have raised the US$ deposit interest rate to over 6% (higher than the ceiling interest rate agreed among banks). However, the dollar capital flowing to banks remains modest.

What will VND/US$ exchange rate be like?

Analysts said that the most important factor that decides the VND/US$ exchange rate is the trade deficit level. The Government is attempting to raise taxes and use technical barriers to limit imports.

A foreign banker in Viet Nam gave an optimistic forecast about Viet Nam’s trade deficit this year. It said that Viet Namese enterprises imported big quantities of steel and equipment in the first months of the year (up by 56% over the last year’s same period), and they won’t do that in the remaining months, which also means that the trade gap will be improved in the coming months.

In principle, the deficit of dollars due to the trade gap can be offset by other supplies of dollars (foreign investment, official development assistance capital and overseas remittance). The Ministry of Planning and Investment is trying to speed up the disbursement of foreign direct investment.

The VND/US$ exchange rate is also decided by another factor, the health of the dollar. The currency, which once depreciated in the world market, is now showing the signs of recovery.

Which forex policy is best?

Experts said that the State Bank of Viet Nam was not good at regulating the foreign exchange policy. That explained why the market once saw the dollar excess at one time and then the dollar shortage at other time.

In March 2008, the State Bank said that the VND revaluation will make imports cheaper, which can help curb inflation. Realizing that the central banks would not keep the weak VND any more to encourage export, businesses and people rushed to sell dollars. As a result, the dollars were in excess with hundreds of millions of dollars unable to find buyers. Meanwhile, the State Bank ignored the demand to sell dollars from businesses and the public, and exporters had to claim directly to the Prime Minister.

Just a couple of weeks later, the dollar witnessed an upturn. The State Bank had to sell dollars to stabilize the market (the sold volume was $1.2bil in April). However, it is clear that the central bank is applying the new forex policy under which the VND is weakening against the dollar. (Tuoi tre)

When will it be time to test the sovereign bond?

Thursday, May 8, 2008
The Viet Nam government decision to once again postpone its US$1bil sovereign bond issue has sparked questions about how to pick the time to enter the market.
Prime Minister Nguyen Tan Dung told the National Assembly meeting on Tuesday: "The sovereign bond issuance will be done at a suitable time."
The Finance Ministry's external financing department director Nguyen Thanh Do told Viet Nam News yesterday: "The words 'suitable time' might apply when the global credit crisis eases; the domestic financial market is rejuvenated and inflationary pressure retreats.
morning
"These are three major reasons for the waiting. I don't think the Government will issue bonds until they change for the better."

With the fighting of inflation the priority, raising more dollars and then pumping more money into projects would mean more money in circulation and more inflation, he said.

The statement announcing the delay earlier last month said: "In the short term and current circumstance, the issue of sovereign bonds abroad will not proceed so as to focus the forex sources already available in the country."

Proceeds from any final sale of bonds will be used to finance the building of an oil refinery, two hydropower plants and buy ships.

The money will be lent to the Viet Nam Oil&Gas Group, or PetroVietnam, the Viet Nam Shipping Lines Corporation (Vinalines); Song Da Corporation and the Viet Nam Machinery Installation Corporation (Lilama).

But external financing department director Nguyen Thanh Do believes the postponement is not likely to adversely affect any of these projects because the corporations have raised investment capital from other sources and work is underway.

The cost of waiting

Waiting longer could well cost Vietnam more because the global credit crisis is expected to get worse before it gets better and the Government may have offer more if it is to persuade investors to risk their capital.

It will have to pay much more to sell its bonds than it would have at the end of 2007.

And, most importantly, the country will now face much higher borrowing costs.

Nevertheless, the decision has its supporters.

Many want to buy Viet Nam bonds but the Government determine the appropriate time," the managing director of a HCM City-based foreign investment fund, who declined to be identified, told Viet Nam News by telephone yesterday.

"Meantime, I think it's sensible."

Bankers and fund managers say they do not expect the bonds to go to market before June 30 given the global credit-market turmoil and Vietnam's preoccupation with containing consumer prices.

These rose 21.42% year on year in April, their highest for 17 years.

Others think the sale may be shelved until next year.

External financing department director Nguyen Thanh Do believes that if the market turmoil continues into 2009 or even the year after the issue can be delayed until it ends.

"Timing will also be fixed by how well the country's battle with skyrocketing prices goes," he says.

"It's difficult to forecast exactly when the bonds can be offered given the chaos in world markets."

Another factor is likely to be the availability of foreign currency.

The burgeoning trade deficit could make money more difficult to raise while Official Development Assistance and remittances are tipped to decline.

So will foreign currency be scare if the Government does not issue sovereign bonds?

External financing department director Nguyen Thanh Do concurred.

"If we really needed dollars, we could raise commercial loans in the international market or issue bonds," he said.

Viet Nam's bond sale of October 2005 attracted strong international demand and raised $750mil.

Orders totalled $4.5bil, six times higher than the eventual sales total, as investors sought entry to an economy growing at about 7 to 8%. (Viet Nam News)

Singapore’s Templeton to open rep. office

Thursday, May 8, 2008
Singapore-based Templeton Asset Management Ltd has begun operations in Viet Nam under a representative office in Ho Chi Minh City approved by the State Securities Commission (SSC).
The office is allowed to cooperate with Vietnamese enterprises related to the securities market as well as promote the implementation of contracts between Templeton and Vietnamese financial institutions.
Templeton’s representatives, approved to work in Viet Nam for an initial five years, intend to launch an enterprise scholarship project which invests in fledgling Vietnamese firms involved in the local securities market.
During its term of operation in Viet Nam , the Templeton representative office is not allowed to implement any securities investment or trading in the local market, neither may it offer securities services such as brokeraging or consulting in the local exchange. (VNA)

Buying treasury stocks? Not a big help

Thursday, May 8, 200
Several months ago, a series of listed companies announced a plan to buy their treasury stocks in an attempt to stimulate the demand and restore investors’ confidence. However, it seems that the action has not helped much in rescuing the falling stock market.

Making announcements to reassure investors

Previously, the stock market once saw share prices down in three months in 2007. At that time, the State Securities Commission sat together with the market’s members discussing the solutions to rescue the market. They agreed that listed companies would buy treasury stocks to restore investors’ confidence.

And the solution proved to be very effective. Right after listed companies announced the plans to buy treasury stocks, the share prices immediately stopped decreasing and began recovering.

The same remedy has been used to treat the stock market, which has been sliding for the last few months. However, unlike the previous year, the remedy proves to be unsuccessful. The share prices keep decreasing despite the efforts by listed companies.

The State Securities Commission (SSC), when turning the green light on listed companies buying treasury stocks, has promised to create favorable conditions for the companies to do that.

For example, SSC considers the purchase of treasury stocks as the action to rescue the stock market, not a normal behavior, so it gives preferences to the companies.

Vu Bang, Chairman of SSC said that strict regulations are set up for the purchase of treasury stocks and the listed companies which purchase treasury stocks. For example, the companies will only be able to increase capital six months after they buy treasury stocks.

However, as considering this the action to serve the common interests, not private interests, the Prime Minister has allowed them to ignore the regulations.

According to the HCM City Stock Exchange, 23 listed companies announced a purchase of treasury stocks in the first quarter of 2008. The companies registered to buy 8,552,770 shares, while no company announced that it was selling stocks. Some more listed companies also registered to buy treasury stocks in April, 2008.

However, it is quite a surprise that some companies registered to buy 50,000 shares only (HAS, DXP). It seems that the companies buy stocks just ‘for fun’. The companies began buying stocks since early April, but the purchase had not been completed by May 5, 2008.

Some companies registered to buy millions of shares (SSI, STB, VIC, DPM), but they are the minority.

However, to date, the treasury stock purchases still cannot help prevent stock prices from sliding. It seems that the purchases can bring the only effect of reassuring investors, while they cannot bring the desired effect of stopping the price decreases.

The director of a securities company, which has been authorized to buy treasury stocks for a listed company, said that the everyday trading volume of treasury stocks proves to be very ‘modest’, which cannot help stop the price decreases. In fact, the small purchases mean nothing if compared to the huge supply of stocks.

SSI, for example, registered to buy 3mil stocks commencing from April 16, and it had purchased 970,000 stocks by May 5. As such, SSI purchases 80,000 stocks only for every trading session, a very small figure if compared to the average trading volume of 750,000 shares per trading session in the last 15 sessions.

Do treasury stock purchases help?

Securities companies frankly said that one should not think that the purchases will help the stock prices recover. With a very big volume of shares in circulation, no fund is considered big enough to buy all the stocks to turn round the situation.

However, the action of purchasing treasury stocks can bring certain effects, especially, it can help reassure investors. More treasury stocks mean fewer stocks in circulation, which also means less pressure to pay dividends to boards of directors. Once the volume of stocks in circulation decreases, the EPS would be higher, thus making enterprises more valuable.

Treasury stocks can serve as the place to reserve capital, and when necessary, enterprises can sell the stocks to get capital for investments. Besides, enterprises can hope to get profit in case the share prices increase. (Lao dong)

Bien Hoa Sugar to report its business result in Q1

Thursday, May 8, 2008
Bien Hoa Sugar Joint Stock Co (coded BHS) recently announced its business result in the first quarter of this year with 229.33 billion dong in revenue from sales and services provision, up 31.06% against the same period of last year and 10.5 billion dong in profit, rising 49.4% against the fourth quarter of 2007 and falling 42.24% from the same period of previous year.

Tien Phong Bank had business license

Thursday, May 8, 2008
FPT Commercial Joint Stock Bank project yesterday May 7 received business license from the State Bank of Vietnam with the trading name of Tien Phong (Pioneer) Commercial Joint Stock Bank (TienPhongBank) located in Hanoi's Cau Giay District.

10-20% gold import tax increase proposed

Thursday, May 8, 2008
The Viet Nam Association of Financial Investors (VAFI) has suggested raising the import tax on gold by 10-20% in order to control the gold market after massive gold imports were pointed out as the main reason behind the dollar shortage.

VAFI thinks that raising gold import tax at this moment will help curb inflation and ease the dollar shortage, while it will help improve the state budget collection.

The latest report by the Viet Nam Gold Business Association showed that up to 43 tonnes of gold were imported to Vietnam in the first four months of the year, worth $1.2bil, which is equal to ½ of the total imports in 2007.

Analysts said that if the current speed of gold import is maintained, Viet Nam will have to spend nearly $4bil for gold imports, an overly high figure.

VAFI has anticipated that some experts may fear that the gold tax increase may pave the way for smuggling. However, VAFI thinks that in the current conditions, Vietnam needs to accept this as the price to be paid for reducing the trade deficit. Meanwhile, the gold smuggling can be minimized if the Government takes necessary measures. For example, the Government can request gold trading companies not to buy gold from the supplies with no clear origin, and set heavy punishments for violators.

VAFI has also asked state management agencies not to allow commercial banks and gold trading companies to establish gold trading floors.

According to VAFI, most investors on trading floors now purchase gold not for hoarding as assets, but for speculation, as they hope to sell later to get profit when the prices go up. As such, big sums of idle money are being poured into gold trading floors, while a lot of gold is needed to serve the increasingly high demand.

The gold transactions by nature, are a type of gambling, while gold trading floors become legal casinos. Big sums of money have been put into the casinos, while they should be put into production.

“It is the right time for the State Bank of Viet Nam to put an end to the existence of gold trading floors,” VAFI concluded. (Tien phong)

May 08, VN-Index drops 7.32 points

Thursday, May 8, 2008
The Ho Chi Minh City Stock Exchange (HOSE) today May 8 continued falling on the stock market when the VN Index slipped another 7.32 points or 1.42% to 507.94 points with the total matching order trade of nearly 4.4 million shares and fund certificates worth nearly 215.6 billion dong, marking the third consecutively decreasing session.

Among 154 shares and fund certificates being listed on the southern bourse, the stock market recorded four shares increasing while eight others stood still at the reference price, 141 shares decreasing and one share with no transactions.
One share with no transactions was CLC of Cat Loi Joint Stock Co.

Most blue-chip shares fell to floor price with big trading volume including STB, SSI, FPT and REE.

Four shares increasing were VPL up 1,000 dong, TMS leaped 1,000 dong to 68,000 dong, SCD up 200 to 19,700 dong and DPR added 500 dong to 54,500 dong per share.
DPM took the pole place in trading volume with 835,170 shares, followed by PPC with 398,510 shares, SHC with 240,510 shares, PVD with 229,810 shares and others like VSH, VHG, HPG, VTO and DPR.

Foreign investors reduced buying volume with 71 share codes reaching the total volume of 2,652.800 shares. Of which, DPM reached the biggest trading volume with 451,000 shares, PPC with 377,870, PVD with 157,860, VHG with 153,130 shares and others like VSH, VTO, FPT, HPG and SSI.

Similarly, the Hanoi Securities Trading Center (HaSTC) today May6kept decreasing impetus on the stock market as the HaSTC Index lost another 3.19 points or 1.99% to end at 157.42 pts with the total market trade of 798,700 shares worth nearly 26 billion dong.

Amongst 136 listed shares on the northern bourse, the stock market saw four shares increasing while 106 others decreasing, one share stood still and 25 shares with no trade.
One share stood still namely VNR.
Four shares increasing were MIC added 3,100 dong, HPC up 600 dong, LTC leaped 400 dong and KBC up 300 dong per share.

HSC was the strongest decliner when losing 6,000 dong and followed by ACB and S99 lost 2,300 dong and VSP slipped 2,000 dong per share. Others dropped below 2,000 dong per share.

TBC reached the biggest trading volume with 177,400 shares and others with below 100,000 shares like PVS with 64,100, VFR with 62,200, BCC with 53,600 and NVC with 44,600 shares being traded.