BIDV raises 2.2tr dong from prize-based promo drive

Tuesday, May 13, 2008
The Bank for Investment and Development of Viet Nam (BIDV) on May 9 announced the results of the prize-based saving programme for the first phase of this year with the total prize value of up to 8.2 trillion dong.
In particular, the programme including one special prize valued at one billion dong, nine first prises worth 90 million dong each, 15 second prises worth 13 million dong each and thousands of other valuable prises was awarded to winners.
According to Nguyen Manh, BIDV's capital source' director, the programme lasting from January 28 to April 27 mobilised 8.2 trillion dong including US$47 million, exceeding 2.2 trillion dong against the expected plan.
This was the bank's seventh prize-based saving programme since the year 2004.

Vinpearl issues bonds

Tuesday, May 13, 2008
Vinpearl Tourism and Trading Joint Stock Co (Vinpearl JSC) reported that on May 6, it issued separately 500 billion dong in three-year bonds and another 500 billion dong in five year bonds for the first phase of 2008.
The coupon rate of three-year bonds is 15% per annum and that of five year bonds is 16% pa.

VPBank launches largest promotion programme

Tuesday, May 13, 2008
Viet Nam Joint Stock Comercial Bank for Privite Enterprises (VPBank) is on May 12 to launch the largest promotion programme so far with the total value of prises of nearly three trillion dong, including the first prize is worth one billion dong.
The programme will be slated for 90 days ending August 9, 2008.
Le Dac Son, the bank's general director said that the promotion programme is to thank all customers on the 15 establishment years of the bank on coming August 12.
Also, VPBank also started to apply the dong deposit rate with a term of 1, 2 and 3 weeks at 10%, 10.3% and 10.5% per annum.

Banks shun SBV's directive to curb lending growth

Tuesday, May 13, 2008
Since the start of this year, the State Bank of Viet Nam has taken a series of monetary tightening measures and warned commercial banks of limiting credit growth under instructions of the prime minister. However in a bid to gaining high profit, many commercial banks still continued promoting credit activities strongly, resulting higher and higher risks. Therefore, the central bank started taking specific actions to tighten credit activities.

According to initial statistics, in the first four months, the banking system's credit growth reached over 14% against the end of last year, far higher than the increase of 9% in the same period last year, or equal to 50% of the credit growth target of 30% that the prime minister assigned to the central bank at the start of this year. Meanwhile, an official from the central bank said that the growth of deposits slashed significantly against last year whereby many commercial banks were short of capital.

According to a leader from a state owned bank said that the reason for the shortage of capital at small banks was that they were unable to borrow capital from the interbank market. In 2007, because commercial banks all were abundant of capital, interest rates in the interbank market was mainly under 10% and some banks borrowed capital from the interbank market and then relent capital in the market.

"In 2008, impacts of the monetary tightening policy have made large-scaled banks not abundant of capital any more, interest rates in the interbank market highly increased up to 40% some time," said the leader. Over the last time, interest rates in the interbank market still stayed at high level, some 25%.

The leader added that some commercial banks are now using short-term loans to offer medium and long-term loans, breaking the central bank's regulations. This is the biggest risk, which can make commercial banks loose liquidity.

Recently, the central bank issued Instruction 03/2008/CT-NHNN asking Banking Inspectors to closely supervise activities of credit organisations, build quarterly, monthly supervising reports, and continue inspecting and supervising securities, real estate and consumer lending activities.

As for credit organisations, the central banks required them to promote their management, internal management capacity, follow regulations on safety ratio, categorise loans and set aside risk provisioning funds under current rules.

According to the official from the central bank, in the upcoming time, the central bank will have detailed statutes on criteria of risk management for credit organisations, which will be used as a basis for inspection.

He added that the central bank will take measures to control credit growth of commercial banks in order to ensure the growth of 30% or less in the whole system.

In 2007, the credit growth of 53% was considered to be the reason for all-time high growth of consumer price index (CPI) of 12.63%. By the end of April, CPI jumped by up to 11.6%. (DTCK)

SeABank awarded Global Transaction Banking Award 2007 by HSBC

Tuesday, May 13, 2008
The Hong Kong and Shanghai Bank (HSBC) recently granted the Global Transaction Banking Award 2007 to South Eastern Asia Commercial Joint Stock Bank (SeABank). Earlier, the local bank received the similar prize from the US Wachovia Bank.

Last year, the international payment revenue of SeABank reached 4.026 trillion dong, rising 213% year-on-year. The figure is estimated at over 20 trillion dong in 2008 while the receivable international payment can reach 30 billion dong.

In 2008, SeABank targets to expand network to 85 transaction offices nationwide, raise the chartered capital to five trillion dong, reach total asset of 40 trillion dong, total outstanding loans of 27 trillion dong, a profit of 852 billion dong and total deposits of 35 trillion dong.

Bao Viet Insurance's fund management firm releases fiscal report

Tuesday, May 13, 2008
Viet Nam Insurance Corp (Bao Viet Insurance)'s Fund Management Ltd Co (Bao Viet Fund) recently released its 2007 brief fiscal report with nearly 76.45 billion dong in total assets, of which fixed assets was over 3.103 billion dong and over 28.66 billion dong in ownership capital and its chartered capital was 25 billion dong.
Last year, the company earned nearly 39.2 billion dong in revenue from business activities, over 6.8 billion dong in revenue from finance activities, over 33.1 billion dong from after tax profit.

Banks boost revenue from service provision

Tuesday, May 13, 2008
The stock market has slumped due to global affects whereby most small investors now feel worried and puzzled about share prices. Banks in general and Sacombank in particular adjusted their business plans to accommodate to economic changes at the moment.Since the end of 2007, based on the forecasted that the world's finance situation and Vietnam's will face many difficulties, Sacombank has built suitable growth targets for 2008 and defined safety targets given high priorities in their operation. During the first four months of this year when the world economy signalled depression leading to high inflation and many consequences, heavy pressure of capital scarcity on commercial banks, but Sacombank urgently implemented synchronic measures to stabilise its operation, such as halting credit growth, enhancing monetary business, developing services, restructuring asset and finance, lending and investment portfolio, increasing revenue and reducing spending. Thanks to these, the local bank reached a profit of 102 billion dong in April, bringing the total figure in Jan-April to 537 billion dong, up 30% yoy while its total asset was 73.247 trillion dong, jumping 114% yoy. In addition, as for the property lending field, Sacombank is trying to control the ratio of 17.1% of total outstanding loan. In which the bank's loans for real estate projects accounted for 2.7%, that for consumer real estate lending made up 14.4%.
Moreover, the bank's securities lending was less than 20% on total chartered capital in line with State Bank of Vietnam's regulation. The bad debt ratio was kept at 0.2% and the capital adequacy ratio reached nearly 10%, showing that the bank's business portfolio was very effective, safe and matched with business trend of foreign lenders that have boosted business from non-credit field.

MB reports nearly 80b dong profit from securities investment in Jan-Apr

Tuesday, May 13, 2008
Military Commercial Joint Stock Bank (MB) recently announced that during the first four months of this year, it earned more nearly 80 billion dong in profit from shares investment and that was 228 billion dong in the whole year 2007.

According to MB, during first months of this year, while many commercial banks have to face many difficulties in terms of transparency, the bank's transparency risk was limited from that securities investment activities earlier.

Most of shares invested by MB were liquid assets which helped MB limit maximum transparency risk and brought nearly 80 billion dong in profit during such a difficult period, said MB's representative.

Last year, the bank's total securities investment portfolio was 2.767 trillion dong, of which investment stocks accounted for 2.476 trillion dong and business stocks was 291 billion dong.

MB's 2.476 trillion dong invested in securities sectors included G-bonds, State Bank of Vietnam-issued bonds, treasury bills and other financial institutions' bonds.

This is a safe investment form due to these stocks have no risk of price and not to be effected by stock market's tendency, according to MB.

Bibica confectionary firm to sell shares

Tuesday, May 13, 2008
Bien Hoa Confectionary Joint Stock Corp (Bibica) recently announced the business result in the first quarter of this year with 132.16 billion dong in total revenue or 20.9% of the year's plan, over 8.1 billion dong from pre tax profit and nearly 6.4 billion dong from after tax profit, equalling to 13.6% of the year's target.

Bibica also announced that it would sell shares to the public for the second phase to mobilise 43.6 billion dong in total.

The transaction date is scheduled on September 8.

The company plans to sell shares to the existing shareholders at the ratio of three new shares for 10 shares held. The registration deadline is on May 21.

Earlier, Bibica sold shares to the public for the first phase from February 26 to March 5 to mobilise 279 billion dong.

Reportedly, the capital being mobilised from the share issue will be invested in projects of the North Bibica one member Ltd Co and Western Bibica one member Ltd Co.

Saigon Tourist Securities broker licensed

Tuesday, May 13, 2008
The State Securities Commission (SSC) on May 8 granted establishment and business license for Saigon Tourist Securities Joint Stock Co (STSC) with a chartered capital of 290 billion dong.
The newly securities broker will have full ranges of securities sectors like securities brokerage, securities self trading, securities investment consultancy and securities depository.s

Listed firms report performance in Q1

Tuesday, May 13, 2008
A slew of listed firms recently announced their performance in the first quarter of 2008 with both profit and big losses from business, typically Tan Tien Plastic Packing Joint Stock Co (coded TTP) posted a pre-tax profit of nine billion dong, falling by 24.8% against the figure of 11.9 billion dong in the last quarter of 2007 due to a sudden increase in prices of input materials for production.

Similarly, Saigon Telecommunication and Technology Joint Stock Co (coded SGT) also showed the after-tax profit only equalling to 74.91% of the previous quarter because the business of some northern branches and office is seasonal. In addition, a surge in prices of several materials for business and production led to a sharp drop in profit and the ratio of profit on revenue.

As for Taicera Ceramic and Porcelain Industry Joint Stock Co (coded TCR), its pre-tax profit in Jan-March declined by 34.68% against the fourth quarter of last year due to a reduction in revenue after the Tet Holiday and large costs for maintaining equipments, changes in US dollar/dong forex rate.

Meanwhile, Tan Binh Culture Joint Stock Co (coded ALT) in the period posted an after-tax profit of 2.9 billion dong, down 39.3% from the last year end due to a sharp fall in the company's other profits that were recorded at 3.3 billion dong in Q4 of 2007 and only 285.6 million dong in Q1 of 2008.

In Q1, the listed firm Engineering and Construction Joint Stock Co No 1 (coded CMC) reached 12.3 billion dong in total revenue and 1.07 billion dong in after-tax profit against 54 billion dong and 8.4 billion dong in the last quarter of 2007.

A seafood processor's general director said that the price of materials rose 15-20% whereas product price only surged only 10% at most, excluding effects caused by costs for salary, corporate administration and bank debt interest rate. Therefore, a reduction in profit in Q1 is avoidable.

Conversely, there were some listed firms keeping their high growth rate in the period. Particularly, Vietnam-Italy Steel JSC (coded VIS) reported 618.5 billion dong in net revenue, up 15.8% from Q4 of 2007 and 10.7 billion dong in after-tax profit, up 78%. The company said that the performance is thanks to a 15% increase in output and a fall of nearly 1.2 billion dong in fixed costs such as discount cost, cost for long-term bank loans. Additionally, the firm imported 46,863 tonnes of steel billet with the average price of 11.2 million dong a tonne while the selling price of steel product was averaged at 13.9 million dong a tonne. Similarly, Bien Hoa Sugar and Sugarcane Joint Stock Co (coded BHS) also announced the after-tax profit of 10.5 billion dong in Q1, growing by 49.38% against Q4 of 2007. Saigon Maritime JSC posted a total revenue of over 37 billion dong, up 83% yoy and a 430% growth in profit thanks to the 14 billion dong contract of leasing SHC Pioneer ship.

In particular, commercial banks recently suffered many affects from the economy and the financial market, however business results of Saigon Thuong Tin Commercial Bank (coded SBT) in Q1 were good with pre-tax profit of 435 billion dong (equalling to the figure in Q4 2007), rising 44% year-on-year, total asset of 75,205 trillion dong, increasing 135% yoy. Followed by Asia Commercial Bank, its total asset in Q1 was estimated at 100 trillion dong while total deposits were 81 trillion dong, total outstanding loans reached over 40 trillion dong and pre-tax profit posted at 501 billion dong. As compared with the same period of last year, ACB's total asset increased two fold, total deposits up 1.8 times and pre-tax profit grew by 1.2 times.

Operation result of a quarter has not reflected business of an enterprise in a financial year exactly. But, this is also the important base for investors to refer in advance before offering investment decisions. Notably, according to specialists, general difficulties of the economy will really impact to operation of enterprises in coming months.

Most recently, Vietnam Association for Finance Investors (VAFI) proposed some measures to stabilise the stock market, in which listed firms were required to soon report their own business results with revenue and profit targets in order to avoid price speculation.

July unlucky month for securities investors

Tuesday, May 13, 2008
July proves to be an unlucky month for securities investors, according to Ho Quoc Tuan and Phung Duc Nam at HCM City Economics University.

Analyses of the periods of the stock market in other countries in the world show that there exist months that prove to be unlucky for securities investors.

In the US, people say “Sell in May and go away”, in reference to the so-called ‘Halloween effect’. The stock purchases in the period from November to April always bring higher profit than the purchases in the period from May to October.

It is quite a surprise that the thing is true not only in the US, but in other countries, where Halloween is not a tradition, like in Japan or Australia.

In the US, profitability is often the highest in January, which is explained by the fact that investors sell stocks in December, when the fiscal year ends, and purchase stocks in January. However, the ‘January effect’ exists in other countries where the fiscal year does not end in December.

And so, it has been asked if the effect exists in Viet Nam.

It seems that the ‘Halloween effect’ exists in Viet Nam as well. Statistics show that profitability from May to October is always low compared to profitability from November to April.

The most interesting thing from our discovery is that the profitability is very high in January and November, while the profitability in July is very low. The ‘January effect’ also exists in Vietnam as the profitability in this month proves to be the highest. Even when the stock market falls like this year, and the profitability is negative, the profit in January 2008 was less negative than February and March.

We have also found out that July is the month when the profitability is always the lowest. No July has seen positive profitability since Viet Nam’s stock market began operating. And the ‘July effect’ is not seen in any other stock market.

To explain the ‘Halloween effect’, people say that investors always go on summer vacation in May; therefore, the market liquidity is always low in this month and there are few transactions.

No convincing answer has been found to explain the ‘July effect’ in Viet Nam, though.

Is it because companies all pay dividends in July and issue new shares in July? We don’t have enough materials and data about the share issuances that took place in the past.

However, experts say that companies do not issue shares or pay dividends only in July. Hmm… (TBKTSG)

Equity research key to informed investors

Monday, May 12, 2008
The VN-Index has dropped from over 1,000 to just 500 within a few months. How could that happen?

The right question to ask may be: since, from January 2006 to early 2007, the VN-Index outperformed the regional index (MSCI Asia excluding Japan) by about 100%, is there any way to explain such a bullish market?

A market anomaly, most would say, and, unsurprisingly, it was corrected.

From outside Viet Nam, observers would probably put forward a contagion effect following the subprime crisis to explain the dramatic drop in the Vietnamese market. Vietnamese, however, know they also have to blame themselves. The next question is: how to turn this crisis into an opportunity?

It is true that foreign direct investment jumped by nearly 70% to $20 billion last year, but the 8.5% growth of the economy last year was essentially driven by domestic demand largely fed with a spur in lending. The price to pay today is inflation, calling for a tightening of monetary policy, and raising the issue of foreign exchange policy, to cool down an overheating economy.

A victim of its eagerness to grow and catch up with regional ASEAN partners,Viet Nam may now have to accept a short-term slowdown to remain on track for a brilliant future.

No need to insist on the importance of an efficient capital market to guarantee a proper allocation of funds within a growing economy, as a corollary when "madness" prevails – and most admit it was the case on the stock market in Viet Nam – the market does not fulfil this essential function. The broad, some would say anarchic, diversification of leading Vietnamese companies is a good example of misallocaltion of funds. The dramatic increase in the money supply not only boosted demand for goods and services, resulting in inflation, but also for financial assets, feeding a bubble – a kind of inflation in paper.

With easy money, local investors did not hesitate to borrow and speculate with the conviction of getting rich quick by buying shares and selling them soon after. A common practic which the Vietnamese seemed to have favoured, leading the VN-Index to unsustainable heights.

One other possible explanation for this "stock market fever" probably lies in Viet Nam’s well-developed IT skills and a natural enthusiasm for all the uses of IT. Numbers of online trading sites are now available, creating a sort of informal OTC market, allowing for quick decisions at any time... and quick profits.

Unfortunately, without proper regulatory oversight, this kind of environment is likely to become a realm of opportunistic behaviour in which information asymmetry and manipulations dominate. It reflects a lack of proper information available to investors due to a series of factors, such as the ambiguity of published financial information and a shortage of qualified auditors and financial analysts. In other words, due to a lack of it, the market creates its own information – rumours – that drive up prices and provide opportunities for speculative gains.

The stock market downturn is a good opportunity to put an end to that situation and take the necessary actions conducive to achieving the objective of efficiency. The remedies are well known: improved corporate governance, an appropriate regulatory framework, transparency. But, as far as transparency is concerned, providing investors with sufficient and reliable information is not enough. One also needs to reduce "bounded rationality" by enhancing the capacity of market players to analyze and use this information to take or recommend rational, well-documented decisions. So doing, one could expect stock prices to reflect corporate fundamentals rather than wishful thinking.

Equity research aims at providing this valuable information based on insightful analysis of market trends, industry prospects and performance of companies in comparison with their peer group in order to advise individual investors on the most efficient strategies. Today in Viet Nam, while the stock market faces the need to make a new start after a tough correction, building capacity in the field of equity research is essential.

Though evolving, equity research is based on a core of well-accepted concepts, models and tools that global financial institutions tend to disseminate through their networks of branches, subsidiaries and partnerships. However, when applied to emerging markets, one needs a domestic contribution to integrate all kinds of intangible elements that purely technical experts may not be able to identify. Providing adequate training programmes to meet this need for domestic expertise is therefore essential. (VNS)

Viet Nam Money - Dong falls as hefty imports boost dlr demand

Monday, May 12, 2008
The Vietnamese dong (VND) fell to a seven-month low against the U.S. dollar on Monday due to increased demand for the foreign currency from importers because of a widening trade deficit, bankers said.

The dollar hit 16,125 dong on Monday, the highest since October 4, 2007 when it stood at 16,126 dong. The central bank also allowed the dollar to rise to 15,995 dong in its official exchange rate, the highest for nearly two months.

"There has been a shortage of U.S. dollars in banks recently," Ho Huu Hanh, head of the State Bank of Viet Nam's branch in Ho Chi Minh City told Thanh Nien newspaper over the weekend.

The Finance Ministry-run Viet Nam Financial Times newspaper said on Monday that the central bank has sold more than $800 million to banks in the past month to meet demand from customers, mainly for imports of fuel, steel, cars and electronic parts.

Viet Nam's trade deficit in the first four months of 2008 jumped nearly four times from a year earlier to $11.1 billion as January-April imports surged 71% to $29.36 billion, government figures show.

Commercial banks have started various promotions to attract dollar deposits.

The Military Bank said on Monday it has started selling short-term dollar bills to raise $20 million over two months and the Ho Chi Minh City-based Eximbank announced prizes to attract savings in dollar, gold and the Vietnamese dong.

Dong funds have also been tightening. Major banks offered overnight dong loans at 9% to 11% on Monday, up from 5-10% in late April VNIBOR.

Rates on six-month dong loans also rose to between 10% and 14% on Monday, from 10-13% on April 28.

The Vietnam Financial Times newspaper report said the central bank planned to absorb 10 trillion dong from the market in near future as a measure to control inflation, a move that further tighten dong liquidity. (Reuters)

IPOs should not be delayed any longer

Monday, May 12, 2008
Experts, once again, have urged big corporations, which intend to make IPO, to go ahead with their IPO plans instead of delaying them because of the market’s falls.

eThe Ministry of Finance considers the IPO delays as a necessary solution to prevent the stock market from further falling. However, experts think that it is now the right time to reconsider the delays, as the delays have not helped prevent the VN Index from falling (it is now flirting with the 500 point threshold), while a lot of big corporations have missed their IPO appointments.

Nguyen Minh Phong of the Hanoi Institute for Socio-Economic Research and Development said that the delays of the IPOs of 20 big corporations and nearly 400 enterprises and banks since the end of 2007 have made the market uninspired with no new commodities, especially good commodities. The trading of the familiar share items has made the market less attractive in the eyes of investors, especially foreign investors, who aim to buy stakes of equitised corporations. If the situation cannot be improved, investors will leave the stock market for other investment channels.

“In the context of the current cold stock market, it is necessary to provide new commodities for the market to heat it up,” Phong said.

Dr Nguyen Thi Mui of the Finance Research Institute under the Ministry of Finance also does not think that delaying IPOs is a good solution as he believes it would slow down the equitisation process set by the government.

“State management agencies should keep a long-term vision on the stock market’s development,” Mui said.

Sharing the same view, Lawyer Vu Xuan Tien of VFAM consultancy firm said that civil authorities are claiming oversupply to delay the implementation of the equitisation task. “The delays would be indefinite if state management agencies and businesses thought that they had to wait until share prices soared to the 2006-2007 levels to make IPOs,” he said.

Meanwhile, Nguyen Son, Head of the Market Development Division under the State Securities Commission (SSC), said that SSC only recommends delaying IPOs, while enterprises should make decisions themselves on whether to make IPOs right now or wait longer.

When asked about the possibility of big names like Vietcombank, BIDV or Habeco listing on the bourse this year, Son said that the companies will list on the bourse, sooner or later, as the equitisation and IPO process has been approved by the government.

The problem now for them is to draw up suitable methods of asset appraisal and issuance. Son said that companies should not overvalue their assets and expect to sell all shares. The Ministry of Finance, learning lessons from Vietcombank’s IPO, is now drawing up a mechanism on offering stakes to strategic partners.

On the concerns about a possible ‘share dilution’, which could lead to share oversupply and make the market colder, Nguyen Danh Ky, Secretary General of the Association of Securities Business, said that suitable prices of shares will attract investors. Ky said that offering prices 10-15 times higher than face value proves to be unfeasible. However, prices 2-3 times higher than face value will successfully persuade investors to open their wallets. (DTCK)

People returning to dollars, but don’t expect fat profit!

Monday, May 12, 2008
People and businesses are now preparing for the scenario of the dollar appreciating, again.

The greenback is showing signs of recovery after it fell sharply in the last one year. If it revaluates again as many investors expect, this would help change the face of the world’s economy, affect Viet Nam’s economy and dollar holders.
Waiting for US to raise US$ interest rates

In order to prevent the US economy from slumping into a recession, the US FED in the last one year several times reduced the US$ basic interest rate from 5.25% to 2%, and applied a series of measures to restore investors’ confidence in the US financial market.

The measures have brought about satisfactory results. Low interest rates have helped enterprises reduce production costs and stimulated the economy towards recovery. The retail sector, labour market and especially the stock market have had active responses to FED’s solutions. Investment capital flows are coming back to the US. FED thinks that the economy will show signs of recovery in the second half of 2008 and regain the growth impetus in early 2009.

In the world’s market, the exchange rates of the dollar and other currencies are also reflecting optimism about the dollar’s revaluation. The EUR/US$ exchange rate has fallen from US$1.6/EUR1 to $1.535/EUR1, while the £/US$ has fallen from US$2.01/£1 from US$1.95/£1.

With the current interest rate of 2%, it seems that FED has nearly reached its goal of stimulating the economy. However, the world is now expecting FED to raise the interest rate with the US economy showing signs of recovery and facing inflation.

Want dollars? Don’t expect fat profit

Banking experts say that if the greenback appreciates again, other currencies will devaluate. However, the devaluation levels would still depend on the monetary policies of countries.

In Viet Nam, the dollar’s revaluation means the devaluation of the VND, which benefits exporters. However, experts believe that sharp price increases won’t occur as the State Bank of Viet Nam always keeps control over the VND/US$ exchange rate.

According to Eximbank, the demand for US$ in cash is increasing these days as people are rushing to buy dollars in anticipation of the dollar’s appreciation. However, US$ deposits are not increasing as expected. At Eximbank, deposits have even decreased by $1-2mil some days.

Bankers say that as businesses find it hard to buy dollars from banks, they are buying dollars from the black market to make payments on imports. However, the dollar purchases of the businesses have not been big enough to cause the market to tense up. The State Bank is still purchasing dollars to ease the demand-supply tension, but just in dribs and drabs.

Vu Thi Vang, Deputy Chairwoman of East Asia Bank, said that the tendency of keeping dollars has returned. However, Vang does not think that the US$ price will increase sharply as the State will take action to stabilise the price.

The Deputy General Director of an investment fund said that people are tending to keep dollars instead of gold because they fear gold prices will fluctuate, while they firmly believe in the dollar’s stable upturn. There are two factors that support the dollar’s revaluation: the dollar price increases in the world’s market, and the big trade deficit, which will prompt the central bank to follow the weak-VND policy to encourage exports.

In fact, keeping dollars proves to be the safest way to keep money as the exchange rate seems to be insured by the central bank. However, experts say that dollar holders should not expect to get fat profit.(Tuoi tre)

SBV reconsidering gold quota imports to reduce trade deficit

Monday, May 12, 2008
The Ministry of Finance (MOF) is considering adjusting the import taxes of commodities that are believed to have impacts on the trade deficit and foreign currency payment balance.

MOF is joining forces with the Ministry of Industry and Trade and the State Bank of Viet Nam to take a series of measures in an effort to curb inflation.

The State Bank is considering adjusting the quota on gold imports in order to limit imports and stabilise the domestic market.

Gold in Asia’s market this morning saw prices increase for the third consecutive trading session on the firmly high oil price at over $125/barrel and the slight decrease of the dollar against the euro. The market seems to be waiting for more information to create bigger changes.

At 10 am, the gold price with spot delivery in Asia was $885.8/oz, up by $1/oz (0.1%) over the previous trading session. Meanwhile, the price for later deliveries has surged by $0.4/oz to $886.2/oz.

The domestic market did not see big changes this morning. SJC gold prices are quoted at VND17,380,000/tael (purchasing) and VND17,450,000/tael (selling). While the purchasing price remains unchanged, the sale price saw the slight increase of VND10,000/tael over Saturday.

Bao Tinh Minh Chau gold is now trading at VND17,400,000-17,540,000/tael (purchasing and selling), increasing by VND20,000 and 40,000/tael, respectively.

Last week, the Vietnam Association of Financial Investors (VAFI) proposed raising the import tax on gold from 10% currently to 20%, and closing gold trading floors.

However, the proposal has not been applauded by experts, who called this the coercive measure of investors.

It is the right of investors to choose kinds of assets to hold. Therefore, measures that force investors to give up one kind of asset to hold another must not be applied.

Chu Van Hoc, Deputy Business Director of SJC Hanoi, said that the trading volume of the company did not see any changes after the said proposal by VAFI.

Hoc said that the proposal does not come in line with the gold market tendency and comes contrary to Vietnam’s WTO commitments.

“Raising the tax will bring losses to people, who need gold as a tool to protect them in times of high inflation,” Hoc said.

Hoc added that the domestic gold price is equal to the world’s level. Currently, gold importers are purchasing dollars from commercial banks at VND16,200/US$1.

The world’s oil price, though witnessing a slight decrease, is staying firmly above $125/barrel. At 10 am this morning, light sweet oil with delivery in June 2008 was traded at $125.5/barrel. At the same time, one euro is converted to $1.54.

Hoc has declined to give any forecasts about the gold price for this week.

Meanwhile, Bloomberg gave different forecasts about gold prices. Quoting an investment expert, Rowan Menzies with Sydney-based Commodity Warrants Australia, a newswire forecasts that the dollar is becoming stronger against the euro, which may lead to a gold price decrease.

A survey conducted by the same newswire showed that 9 of 19 polled investors advocated purchasing gold this week, six selling gold and four had a neutral viewpoint.

On Saigon Gold Trading Floor, the trading volume reached 133,550 taels.

The dollar value keeps rising on the domestic market. Vietcombank quotes prices at VND16,140/US$1 (purchasing) and VND16,155/US$1 (selling). Eximbank’s quotes are VND16,130/US$1 and VND16,155/US$1, respectively. However, the prices slightly decrease. Bao Tin Minh Chau purchases dollars at VND16,290/US$1 and sells at VND16,340/US41. (VNE, TBKTVN)

Financial investments: banks not squandering money on stocks

Monday, May 12, 2008
After local newspapers reported that joint stock banks have made big financial investments and forecast big losses for the investments due the falling stock market, bankers have denied the losses, saying that they are not stupid enough to waste money on stocks.

An Binh Joint Stock Bank confirmed that its total securities investments are worth VND3,659bil, but said that the investments are safe as 70% of the investment money (VND2,560bil) has been injected in government bonds (considered the safest investment channel), bank bonds and corporate bonds (issued by big general corporations).

As for the VND1,098bil worth of securities ready for sale, the debt securities issued by the government are worth VND650bil. Equity securities (contributing capital to other companies or purchasing stakes of other economic institutions) are worth VND448bil only, and the money has been injected in the bank’s member companies (An Binh Securities, An Binh Fund Management Company) or the bank’s strategic partners.

An Binh Commercial Joint Stock Bank leaders affirm that in such uncertain conditions, the bank only eyes low-risk investments with stable profit, not high profit and high-risk investments.

In fact, the bank’s investments in securities so far this year have decreased by 50% compared to 2007, and thus now accounts for a very small proportion in the investment portfolio of the bank. Its leaders say the bank still holds the securities investments it made in late 2005, and if it sold the stocks at this moment, it would still make profit as it bought the stocks at low prices in 2005.

As for VIB Bank, investments in debt securities account for 99.37% of its total investments worth VND6,676bil, while equity securities just account for 0.63% of total investments. VIB Bank said that the bank did well in the first quarter of 2008, with total assets up by 110%, mobilised capital up by 90%, pre-tax profit up by nearly 80% compared to the same period of 2007.

In a letter sent to local newspapers to clarify issues relating to ACB’s investments, the bank wrote that the total sum of money it had injected in stocks by December 31, 2007 was VND1,177.973bil, only 2.8% of its investment portfolio and 1.38% of its total assets. Meanwhile, the other VND8,474.348bil has been injected in State Bank bonds, government bonds and securities issued by state owned banks and the bank for social policies, and electricity bonds. The securities prove to have no risk for the holders and they are not influenced by the current ups and downs of the stock market.

In 2007, ACB earned profit from stock investments equal to 105% of total investment value. The bank said it has recovered all of its investments from 2007.

Techcombank, citing the financial report audited by KPMG, also said that it has focused on bonds (government bonds, corporate, State Bank and commercial bank bonds), which bring the bank fixed profit, independent of the stock market’s fluctuations. Meanwhile, equity securities just account for 3.5% of total investments.

Therefore, Techcombank affirms that the conclusion that the bank will suffer losses from big investments in securities is unreasonable. (TBKTVN, DTCK)

May 12, Stock market drops below 500 points

Monday, May 12, 2008
The Ho Chi Minh City Stock Exchange (HOSE) today May 12 opened a new week by seeing another fall on the stock market when the VN Index slipped another 8.29 points or 1.65% to 492.04 pts with the total matching order trade of nearly 2,205,280 shares and fund certificates worth 102 billion dong.

Among 154 shares and fund certificates being listed on the southern bourse, there was no shares increasing while one share stood still namely VPL, one share with no trades was BTC and the remaining 152 shares decreasing. Of which, 150 share codes reached the floor price.

DPM reached the biggest trading volume with 1.2 million shares and followed by STB with 126,130, SSI with 99,240, SHC with 71,710, ITA with 58,800 and VHG with 50,450 shares.

Foreign investors still kept buying in with 52 shares and one fund certificate with the total trading volume of 1.356 million shares. Of which, DPM reached the biggest trading volume with 794,530 shares, SSI with 164,920 shares, VHG with 50,000 shares, FPT with 44,560 shares, TRC with 36,000 shares and others like VTO, ITA, VNM, HPG and RAL.

The dull performance the stock market has put on for the last few days causes many observers to expect it to drop even further down in the following sessions.

Investors are losing faith in the stock market and halt buying in more stocks. Many of them even choose to stay away from the stock market as none of them want to see more red color on the electronic boards.

Major factors behind the gloomy sentiment of the stock market are believed to be the recent consumer price hike, high rate of inflation and the bustling gold market which has caused many investors to leave the decreasing stock market.

Like the southern bourse, the Hanoi Securities Trading Center (HaSTC) today May 12 kept decreasing impetus on the stock market as the HaSTC Index lost another 2.96 points or 1.92% to end at 151.27 pts with the total market trade of 558,400 shares worth over 25 billion dong.

Amongst 136 listed shares on the northern bourse, the stock market saw five shares increasing while 100 others decreasing and 31 shares with no trade.

Five gainers were DAC, HPC, L62, MIC and XMC.
ACB and S99 showed the strongest decliner when losing 2,100 dong per share. Others lost below 2,000 dong per share.

There was no shares reaching the trading volume of over 100,000 shares. NVC took the pole place with 84,100 shares, MIC with 78,800 and BCC with 43,200 shares.

Market stalls, as Index nears 500

Monday, May 12, 2008
Market stalls, as Index nears 500In last week's trading, the HCM City Stock Market showed some signs of life in the first two days of the week, particularly in strong investor purchases of healthcare and consumer goods stocks.

This small enthusiasm, however, was unable to sustain the market through the remainder of the week, as trading volumes and values trailed off and, in the final two sessions of the week, most shares plunged to their floor prices, with damage limited only by the tight, two-per-cent daily trading band.

By Friday, the scene around most stock brokerages came to resemble a death watch, as investors largely stopped trading and waited to see whether the Index would fall below the psychological barrier of 500 points.

The VN-Index ended the week at 500.33, a loss of 20.95 points or 4.01%.

Volume was a sluggish 29.2mil shares for the whole week, with a total market turnover of VND1.24tril (US$77.75mil).

FPT Securities Co's analysis department opined that untimely information during the week cooled what little investor interest there had been, including Standard & Poor's adjustment of Vietnam's credit rating from stable to negative and the Central Institute of Economic Management's prediction that inflation for the year would total 19.4%.

World oil prices also hit a new record of US$126 a barrel, causing regional stock markets to wilt, and the Vietnamese market was no exception.

"Domestic investors are still too green to stay calm when bombarded with bad news," said one analyst. "That's why they act unpredictably as they did this week."

While over 90% of listed codes on the HCM City Stock Exchange suffered losses, PetroVietnam Drilling (PVD) was a big loser, dropping 22.2% to VND91,000, as the exdate for its dividend payout passed.

FPT also lost 9.26% to end the week at VND73,500, while Tuong An Vegetable Oil (TAC) slipped 8.84% to VND103,000.

Only 13 codes posted gains on the week, including Vinpearl Tourism and Trading (VPL), which advanced 5.12% to VND123,000, and Tan Tao Industrial Park (ITA), up 6.99% to VND76,500. Both were buoyed by strong foreign investor interest.

Sacombank (STB) regained its spot as most-active share on Friday, after announcing strong first-quarter business results.

As the trading week ground to a close on Friday, a few investors expressed hopes that a VN-Index falling to 500 would signal a rally in the coming week, as it has in the past.

In the northern market, the HASTC-Index also lost 7.67% to end the week at 154.23. Trading turnover was VND276.23bil ($17.26mil) on a volume of 7.19mil shares.

Asia Commercial Bank (ACB) was the most-active share, with 731,100 shares changing hands. (Viet Nam News)

Stock market to remain jittery: analysts

Monday, May 12, 2008
Analysts see no sunshine for the benchmark stock market in the week ahead, after stocks on the Ho Chi Minh City index experienced another gloomy week.

“Sentiment was hurt last week as there was bad news about the country’s economy,” said analysts from FPT Securities, who asked not to be named.

“We think the VN-Index will extend its losing run next week.”

In the same week Vietnam’s credit rating was downgraded by an international ratings agency, analysts raised expectation of more economic pain ahead, with record oil prices expected to increase inflationary pressure.

Last week the Ho Chi Minh Stock Exchange VN-Index of 154 listed companies fell every day, losing 4% to close at 500.33.

The benchmark index, which has dropped more than 46% this year, remains the world’s worst performing stock market in 2008.

The VN-Index began the week with a slight drop on Monday, slumping more as the week progressed.

On the first three trading days of the week, stocks in the inflation-defensive sectors of food, medicine and construction materials performed well, while shares of finance and property companies declined by the daily limit of 2 percent.

All stocks dipped into the red on Thursday and Friday as investors lost further confidence.

The average volume in terms of shares traded this week accounted for nearly 5.2 million a day, half of previous week’s average of 9.6 million.

Standard & Poor’s downgraded Vietnam’s credit rating outlook to negative on May 3, blaming the overheating economy.

The rating company affirmed the country’s BB long-term foreign currency rating, which is two levels below investment grade and one rating above those given to the Philippines and Indonesia.

“Hectic investment activity in recent years appears to have pushed the economy to the limits of its capacity,” S&P said in a statement.

Ever-increasing oil prices mean the domestic fuel price are likely to increase in June, when the government’s price freeze is lifted.

The looming gasoline price hike has intensified fears inflation will leap again, after rising 21.4% year-on-year in April, the highest rate in 16 years. (TN)

Banks deny rumors of heavy share trading losses

Monday, May 12, 2008
Local banks have denied rumors circulating since last Tuesday that some lenders had taken heavy losses on stock investments because of the share market’s 46% plunge this year.

Asia Commercial Bank, the only bank listed on Hanoi’s exchange, slipped VND2,300, hitting the 3% daily trading limit, to close at VND76,900 on Wednesday.
In a bid to reassure investors, Asia Commercial Bank Investment Board Chairman Nguyen Duc Kien Thursday said the bank’s exposure to the share market was small.

“Asia Commercial Bank has invested VND1.18 trillion (US$111.4 million) in shares, of which VND674 billion ($41.7 million) was used to buy shares of strategic partners at preferential prices,” Kien said.

“These investments, which make up only 1.38% of the bank’s total asset, are long-term and not affected by market moves.

Last year, we earned VND1.2 billion ($74.2 million) from investing in shares and also reclaimed all of the starting capital pumped in the sector.

“We are now investing in bonds. We bought bonds worth VND200 billion ($12.4 million) two days ago.”
Also on Thursday, Viet Nam International Commercial Joint-Stock
Bank, an unlisted bank known as VIB Bank, revealed it had invested 99.37% of VND6.67 trillion ($412 million) in the government’s bonds and bills last year, with the remainder used to buy shares.

The bank’s share price on the informal market, known as over-the-counter (OTC) market, fell to VND16,000-VND17,000 from VND17,000-VND18,000 last Wednesday.

The Hanoi-based bank said its business in the first three months of the year was stable, with total assets increasing more than 110 percent year-on-year.

The share price of many unlisted banks on the OTC market slumped Wednesday because of the rumors banks were overexposed to the share market.

Last Wednesday, Vietcombank dropped to VND38,000-VND40,000 from VND46,000-VND48,000, Military Bank fell to VND18,000-VND19,000 from VND23,000-VND24,000, An Binh Bank slipped to VND10,000-VND11,000 from VND12,000-VND13,000 and Export-Import Bank declined to VND26,000-VND27,000 from VND30,000-VND31,000. (Thanh Nien)

FPT Securities to offer online OTC trading

Monday, May 12, 2008
The FPT Securities Joint Stock Co introduced its service for the online trading of unlisted stocks, named EzOTC.
Investors can place buy and sell orders on OTC shares from anywhere with internet access after opening their accounts, as well as trade directly without middlemen.
EzOTC will cooperate with EzTrade and EzLink to help investors order and look for online shares and accounts.

BT6 to pay dividend on 2007 profits

Monday, May 12, 2008
620 - Chau Thoi Concrete Joint Stock Corp. (BT6) has announced its deadline for registering to receive the dividend payment for the second phase of its 2007 profits.
The last day for registration will be May 19. Shareholders will receive payment by June 10. The dividend ratio will be 8 per cent. Shareholders can receive their dividends at the offices of the securities companies at which they have their accounts.

HOSE metes out punishment for brokers

Monday, May 12, 2008
The Ho Chi Minh City Stock Exchange (HOSE) decided to punish two trading agents for cancelling orders illegally during an order matching period of the May 7 trading session.
Following the decision, the HOSE sent out official dispatch No968-969/SDGHCM-TV warning the two trading agents, one from Sai Gon Securities Inc. (SSI) and the other from the Bao Viet Securities Joint Stock Co (BVSC), of the action being taken against them.

PVFCCo and Morocco firm sign 600 mln USD fertiliser plant deal

Monday, May 12, 2008
PetroVietnam Fertilizer and Chemical Joint Stock Company (PVFCCo) and the Office Cherifien des Phosphates (OCP) of Morocco have signed an agreement to build a fertiliser plant valued at 600 million USD in the African country.
T he plant will be capable of producing from 660,000 to 1 million tonnes of diamonium phosphate (DAP) fertiliser to supply to Viet Nam and other regional markets, sources from the Viet Nam National Oil and Gas Group (PetroVietnam) said on May 10.

The DAP plant, which will be built soon, is slated to begin operations by 2011, becoming Viet Nam ’s largest project invested abroad so far.

The agreement, signed in the witness of PetroVietnam Chairman Dinh La Thang and OCP Chairman Mostafa Terrab, also outlined a joint plan to build an ammoniac plant in Viet Nam or a third country if there are enough natural gas supplies for the project.

During their recent meeting at the OCP headquarters, both Thang and Terrab affirmed the resolve to successfully carry out the inked project, describing it as a symbol of cooperation between the two groups and a landmark in ties between Viet Nam and Morocco. (VNA)